Wednesday, July 11, 2007

New Capitalism , or just Old Capitalism in new clothes

The "new capitalism" of private equity and hedge funds is helping to fuel unease about income inequality in western societies, meaning business can no longer take political support for granted, Richard Lambert , the director-general of the CBI warned . Developments in the financial sector along with globalisation and technological advances were creating a "triple-whammy" .
He had found "a level of unease in the business community about our economic future" and "a sense of unfairness, in the midst of visible economic prosperity".
Despite the substantial benefits of globalisation, it had contributed to a "a public sense that incomes are being skewed in an unfair fashion" as rewards at the top, but not at the bottom, were pulled upwards.
Technology was potentially having an even bigger impact in reinforcing income disparities between the skilled and the unskilled.

He added: "In a globalised financial market characterised by a high level of company takeovers, small numbers of highly-incentivised managers are able to earn large multiples of their employees' wages. An even smaller number of financiers can realise fortunes running into billions of dollars in a remarkably short period of time. In this way, the new capitalism is adding to the general sense of insecurity and unfairness."

Have things really changed ? Is this a new Capitalism ?

Just seems like the same old system to me . Don't business leaders read economics of history ?

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