Why capitalism fails - The Boston Globe

Why capitalism fails - The Boston Globe

Have you heard about Hyman Minsky? Well, you're not the only one.
This economist described with prescient clarity the unstable nature of capitalism. He claimed that the very nature of capitalism means that periods of economic stability set the stage for crises. As things go well, borrowers pay their debts on time. Lenders then start assuming bigger risks int he hope of making more money. "Succes breeds a disregard of the possibility of failure". Progressively more risky borrowers join the party (call them subprime mortgages, for example). Things continue to evolve with higher leverage, less attention to risk management, higher competitive pressure for lenders to assume more risk...Until one day a sudden fear starts to spread: people start to fail to pay their debts, asset prices start going down which forces more sales and a negative spiral in asset prices kicks in (sounds familiar with current real state bubbles). That marks the moment of spill over from a financial crisis into a real economy crisis and near collapse of the financial system.

Read his book, "Stabilizing an unstable economy" highly recommended

Edge Perspectives with John Hagel: Shifting Identities - From Consumer to Networked Creator

Edge Perspectives with John Hagel: Shifting Identities - From Consumer to Networked Creator

I liked very much this post from John Hagel. I find that it describes smartly the shift that is occuring in front of our eyes: given the new tools available to everybody, people are finding ways to express themselves in ways that were unknown before. Not only creating to express yourself, but also sharing, which in turn connects you with more people that share your passion. This creates a positive feedback loop that only accelerates as you put more effort into it. Many more people can now find a connection deep inside to discover more and develop their talents.

This has transforming power and brings significant consequences.

Putting time and energy in creating things you feel passionate about can become a conflict with other parts of your personal identity, namely your firm's identity. You start to feel the broken link between your identity and your passion and in some cases feel pushed to convert your passion into your profession.
I feel that this is underlying a massive movement in the work force these days. Not to mention the way younger generations deal with social networking.

The conflict is served. If you cannot accomodate your passion with your work, you will have difficulty coping with the growing pressure and competitive forces. The challenge is to create organziations that allow us to merge our professional and personal identities, so people find the meaning and fulfilment that is needed.