Capitalism and Crises
Regulation has been getting a bad press. It will be diluted in the US under the Trump administration, it will be curtailed in the EU to revive flagging European economies, and it is blamed for failures in privatized utilities in the UK. An instrument that is supposed to be at the heart of policy formulation […]
Colin Mayer is Emeritus Professor of Management Studies at the Blavatnik School of Government and Saïd Business School at the University of Oxford. This post is based on his recent book.
Regulation has been getting a bad press. It will be diluted in the US under the Trump administration, it will be curtailed in the EU to revive flagging European economies, and it is blamed for failures in privatized utilities in the UK. An instrument that is supposed to be at the heart of policy formulation has become a source of social division and political polarization around the world.
Why is this happening? My most recent book, Capitalism and Crises: How to Fix Them, explains this. It argues that at the heart of the problem is the fuel that drives capitalism – profit. Profit is the source of the resources that power and incentivize firms. Without profit there is no capital in capitalism. In many cases, profit promotes benefits for us as individuals, societies and the natural. But in some cases, it does not – it creates detriments, not benefits, in the form of pollution, global warming, biodiversity loss, inequality and social exclusion.
