This week, PS talks with Bertrand Badré, a former managing director of the World Bank and the current CEO of Blue like an Orange Sustainable Capital.
Project Syndicate: In your latest PS commentary, you, Ronald Cohen, and Bruno Roche compare post-war multilateralism and financial capitalism to “various systems of exploitation” throughout history, which “have built empires and amassed great wealth while performing atrociously in terms of human wellbeing and social capital.” The latter systems’ collapse “represented moral progress,” you wrote, “because it allowed for a new era in which human rights and shared prosperity could prevail.” What makes you think capitalism can be “refashioned,” rather than that it will or should be replaced?
Bertrand Badré: It was less a comparison than a reminder and, I hope, a wakeup call. Systems do not last forever. They evolve, collapse, get replaced. If the systems are highly unjust or exploitative, this can be a very good thing. But if they are merely flawed, there is no guarantee that what replaces them will be superior.
I believe that the market economy is the best system we have found to allocate scarce resources – financial, human, social, and environmental – within constraints. So, unlike the empires to which I referred, it does not need to be fully abandoned.
In my view, our best bet is to uphold the market economy’s core principles, while addressing its constraints – market expectations (such as from consumers, investors, or workers) on the one hand, and regulations and citizen expectations on the other – so that it tackles issues like inequality and climate change. If we fail, another system could arise to replace the market economy, and it could leave us worse off.
We ask all our Say More contributors to tell our readers about a few books that have impressed them recently. Here are Badré's picks:
by Paul Collier
This book helped me to understand better how the model of capitalism we have chosen has undermined solidarity among people – within communities, countries, companies, or other organizations. The forces unleashed by utilitarianism, in particular, are powerful and devastating. But there is a way forward.
by Colin Mayer
The core message of this essential book is that we must urgently upgrade the way we do business. Maximizing shareholder value has reached its limits as a governance model. In the twenty-first century, business should focus on finding profitable solutions to the problems facing our planet and its people. By Mayer’s logic, profit is a means to an end – not an end in itself.
by Jill Lepore
As a native Frenchman who has now lived in the US for 11 years, I have been watching recent events in the country unfold with a mixture of interest and unease. Lepore’s history is built around the “truths” that, according to the Declaration of Independence, the US holds “to be self-evident”: that all men are created equal and are endowed with certain unalienable rights, including life, liberty, and the pursuit of happiness. To what extent has the country lived up to this claim? It is fascinating reading, which left me feeling less innocent in my temporary home.
From the PS Archive
Badré proposes steps to ensure that the financial sector is serving the economy, not vice versa. Read more.
Badré warns that the window is closing for reforms needed to avert social upheaval and climate catastrophe. Read more
Around the web
In this livestreamed conversation with Devex Editor-in-Chief Raj Kumar, Badré lays out the challenges that the COVID-19 pandemic is posing for impact-oriented businesses and investors, as well as the opportunity to use this crisis to transform the sector. Watch the video.