This interview was conducted by Javier Toro.
Paul Collier, CBE, FBA, is Professor of Economics and Public Policy in the Blavatnik School of Government at the University of Oxford. His latest book is The Future of Capitalism: Facing The New Anxieties.
It certainly has not always been like that. Capitalism has been going for about two hundred and fifty years, and for most of that time it has enabled rising standards of living for most people. But capitalism today is not working for all; it has had at least three big derailments. One of the derailments started about forty years ago. Even though during the last forty years capitalism has still increased GDP —the national income— it has not raised the living standards for most people. This is unusual and worrying, because the same process that has produced big benefits for some people has actually hit other people.
The basic tenet of capitalism, and the reason why it has worked remarkably well for most of its history, is decentralized decision taking. In capitalism economic decisions are taken by thousands and thousands of different firms and people. It is this decentralized decision structure and competition what drive firms to try to do better and gradually bring economic efficiency. So, capitalism has the potential to make everybody better off. And it is not intrinsically ethical or unethical, that depends on what people do with it.
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