Capitalism

Volkswagen’s share price crash shows that markets are working. Companies behaving unethically ultimately face the toughest judge there is: their customers.

What superficially looks like a Volkswagen affair, is actually a more systematic problem of German industrial policy.

Despite having some of the world’s greatest companies, Europeans still wonder what these have ever done for them. They will find out the answer the day that some of these despised corporates decide to get out of anti-corporate Europe.

Capital markets are not loquacious storytellers. They condense the world into simple numbers. For this reason, the surge in Greek, Italian and Spanish bond yields could be mistaken for a mere technicality, a simple recalibration between the forces of demand and supply that happens in markets every day.

After World War II, Europe became a continent of great expectations and little ambitions. For decades, governments had promised their peoples a life free of worry. Free education and healthcare, good infrastructure, a social-security safety net, lifelong jobs in the public sector followed by generous pensions – that’s what Europeans expected from the state.

The Occupy Wall Street movement has polarised public opinion: Either you regard the protestors as the new political avant-garde or as just plain silly. Either you believe they have a serious message or you think they are a bunch of nutters. But what if the truth is a bit more nuanced than that? Perhaps the nutters have a point?

If capitalists realise that there is more to doing business than just making money, if they learn the lessons of monkey capitalism, then the market economy, this fantastic engine of creating wealth and prosperity, will survive.

Complicated times provoke simple answers. As the global financial crisis keeps unfolding, the no less global intellectual elite has readily identified the culprit. Political and religious leaders, artists and even some economists are convinced greed is to blame for our economic problems. A combined Google search for “global financial crisis” and “greed” delivers no fewer than 87,900 results. But is greed really the culprit or just a convenient scapegoat? And is greed an economic category at all?