Angry Bear explains how mistaken thinking in the US business community from 1960’s onward set the stage for the loss of world-wide economic and technology leadership in many industries.
A fable: The Guitar Player who sold his gear or, Bruce Henderson vs. Gordon Moore ~ Angry Bear.
I spent much of my career from the late 70’s through 2000 as a corporate planner and strategy consultant. It gave me a ring-side seat to the mind-battles described in this “fable”. I have to agree with the author of the fable. US business leaders blew it. They fell in love with the finance gin-game: buy businesses, milk ’em, sell’em a few years later. True builders of value and pioneers of innovation and infrastructure lost out because they couldn’t put a faith in an unknown future into spreadsheets.
Nobel winner Joseph Stiglitz explains why GDP is NOT a good measure of society’s well-being and offers ideas on better measures. It’s a good critique of GDP.
National income statistics such as GDP and gross national product were originally intended as a measure of market economic activity, including the public sector. But they have increasingly been thought of as measures of societal well-being, which they are not. Of course, good statisticians have warned against this error. Much economic activity occurs within the home – and this can contribute to individual well-being as much as, or more than, market production.
What we measure affects what we do. If we have the wrong metrics, we will strive for the wrong things. In the quest to increase GDP, we may end up with a society in which most citizens have become worse off. We care, moreover, not just for how well off we are today but how well off we will be in the future. If we are borrowing unsustainably from this future, we should want to know.
I strongly recommend reading the entire article here: FT.com / Comment / Opinion – Towards a better measure of well-being.
The Boston Globe notes that not all economists failed to see the crisis. Some are now rediscovering (or discovering for first time) Hyman Minsky and his post-Keynesian writings.
via Why capitalism fails – The Boston Globe.