Harvard Business Review discovers the Ethical Economy

in a fascinating posting Umair Haque of Bubblegeneration, and now the Havas Media Lab, points at some directions for overcoming this recession. They center on what he calls ‘authentic value’ meaningful, long term. and genuinely productive economic activities:
How should boardrooms respond to the macro crisis? Is it just a case of recession-as-usual: budget-paring, personnel-slashing, and portfolio-trimming?
Not a chance. The tactics of recession-as-usual are neither necessary nor sufficient for firms to weather the global economic superstorm – because it’s no ordinary squall, but a once-in-a-lifetime gale ripping up the very foundations of the global economic order. Rather, the macro crisis requires decision makers to confront fundamental transformation on three levels.
The first and simplest level is a change in global patterns of savings, investment, and consumption. For too long, the poor have financed the rich. China and other emerging markets have lent to the US so Americans could buy Hummers, McMansions, and Frappuccinos. But this never made sense — it was deeply unsustainable; the macroeconomic equivalent of a giant planetary fossil fuel engine. The days of export-led growth — and it’s flipside, force-fed consumption — are numbered.
Strategists in the boardroom face a new global macroeconomic picture. Overconsumption in developed countries must slow sharply, and capital must be redirected to long-run investment, especially in public goods. Conversely, emerging markets must shift from financing consumption in developed countries, and begin investing in the basic institutions of a vital microeconomic environment and power long-run growth.
On a second, and deeper level, strategists must rediscover the lost art of authentic value creation. Authentic, long-run value isn’t created through arbitrage or gamesmanship — what we too often confuse strategy for. Games of off-balance sheet accounting, currency hedging, capital structuring, so-called labour arbitrage — where corporations simply shift to the lowest-cost, or most poorly regulated, sources of manpower — don’t create value. They just shift it around. Corporations who play this game of economic musical chairs are in for a rude awakening – because the music just stopped. And so they must rediscover the simple fact that value creation flows from making economic activities not just profitable in the short- run — but meaningful over the long-run.’
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