Nobel Prize winning economist Amartya Sen examines the current drive to create a "new capitalism" and finds its origins in the classic work of Adam Smith.
It is often overlooked that Smith did not take the pure market mechanism to be a free-standing performer of excellence, nor did he take the profit motive to be all that is needed.
The economic difficulties of today do not, I would argue, call for some “new capitalism”, but they do demand an open-minded understanding of older ideas about the reach and limits of the market economy. What is needed above all is a clear-headed appreciation of how different institutions work, along with an understanding of how a variety of organisations – from the market to the institutions of state – can together contribute to producing a more decent economic world.
For the full text of Dr. Sen's analysis, check out the original New York Review of Books version or the shorter Financial Times version.
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