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Big biz leaders say capitalism needs to be reformed

New Zealand's Prime Minister, Jacinda Ardern, admits capitalism has failed Kiwis on low incomes.
New Zealand's Prime Minister, Jacinda Ardern, admits capitalism has failed Kiwis on low incomes. Nick Perry

CAPITALISM is in desperate need of reform and modernisation, having been hurt by management greed, corporate tax dodging and investor short-termism, according to some of the UK's top business leaders.

Speaking on a panel for the Financial Times, former minister Baroness Shriti Vadera, chairwoman of the Santander UK banking group, said "the underlying promise of Western capitalist economies - that a rising tide lifts all boats - has been broken” and a "better model” was needed.

Others echoed her remarks.

Robert Swannell, former chairman of retailer Marks and Spencer, said capitalism had "lost its way” and companies and their investors had become much too focused on short-termism.

Confederation of British Industry director-general Carolyn Fairbairn said capitalism had taken a number of "wrong turnings”.

"The financial crash, a fixation on shareholder value at the expense of purpose, and the toxic issues of ... payment of tax and executive pay stand in the way of redemption,” she said, according to the FT.

The chairmen of Barclays and Lloyds and the former chairman of HSBC also levelled criticism at the emergence of short-termism.

Anne Richards, chief executive of asset management company M&G, said: "In the current era, best described as 'the age of anxiety', we will see capitalism rejected unless it finds a way of fundamentally addressing this anxiety.”

Last week former Greek finance minister Yanis Varoufakis said capitalism was coming to an end because it was making itself obsolete.

Speaking at University College London, he said artificial intelligence would spell the end of capitalism in its current form.

"Capitalism is going to undermine capitalism, because they are producing all these technologies that will make corporations and the private means of production obsolete,” he said, according to the FT.

On the weekend, New Zealand Prime Minister- elect Jacinda Ardern said homelessness and poverty were proof that capitalism had failed New Zealanders on low incomes.

"Wages are not keeping up with inflation and how can you claim you've been successful when you have growth at roughly 3per cent but you have the worst homelessness in the developed world?” she said on TV3's The Nation.

Topics:  artificial intelligence business leaders investor short-termism jacinda ardern management greed



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