Makers vs Takers

Summary :  The Future of Capitalism : "From world-renowned economist Paul Collier, a candid diagnosis of the failures of capitalism and a pragmatic and realistic vision for how we can repair it. Deep new rifts are tearing apart the fabric of the United States and other Western societies: thriving cities versus rural counties, the highly skilled elite versus the less educated, wealthy versus developing countries. As these divides deepen, we have lost the sense of ethical obligation to others that was crucial to the rise of post-war social democracy."

Summary : The name of this blog comes from this book by Mariana Mazzucato which is essential reading. "Who really creates wealth in our world? And how do we decide the value of what they do? In modern capitalism, value-extraction - the siphoning off of profits, from shareholders' dividends to bankers' bonuses - is rewarded more highly than value-creation- the productive process that drives a healthy economy and society. We misidentify takers as makers, and have lost sight of what value really means."

Summary : The essence of my submission is that the approach taken by the Interim Report - which presumes existing laws are largely sufficient and focuses on how to minimise future breaches of them - will not address the broadest and most significant adverse impacts of the financial services industry on Australians, especially on those most vulnerable and least financially savvy. Misconduct is just the tip of a much larger iceberg of adverse impacts of the financial services industry on Australians. It is entirely feasible to operate "efficiently, honestly and fairly" within existing Australian laws and industry codes and primarily extract wealth from people rather than create value for them and be compensated for it. The key big picture issue is that modern capitalism is plagued by currently-legal activities whose core purpose is to extract value rather than create it.