Capital Wars: The New East-West Challenge for Entrepreneurial Leadership and Economic Success

257 Pages·2014·2.16 MB·English

by  Daniel Pinto

Capital Wars
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Capital Wars
The New East-West Challenge
for Entrepreneurial Leadership
and Economic Success
Daniel Pinto
First published in France in 2013 by Odile Jacob as Le Choc des capitalismes: Comment
nous avons été dépossédés de notre génie entrepreneurial et comment le réinventer
Original French copyright © ODILE JACOB, 2013
First published in Great Britain 2014
Copyright © Daniel Pinto, 2014
Bloomsbury Publishing Plc
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Bloomsbury Publishing
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All rights reserved; no part of this publication may be reproduced, stored in a
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or otherwise, without the prior written permission of the Publisher.
No responsibility for loss caused to any individual or organisation acting
or refraining from action as a result of the material in this publication
can be accepted by Bloomsbury Publishing or the authors.
A CIP record for this book is available from the British Library.
ISBN: 9-781-472905055
10 9 8 7 6 5 4 3 2 1
Design by Fiona Pike, Pike Design, Winchester
Typeset by Hewer Text UK Ltd, Edinburgh
Printed and bound in Great Britain by CPI Group (UK) Ltd, Croydon CR0 4YY
For Isaac Jack Pinto
in loving memory
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Contents
Introduction 1
Part One – From the capitalism of creators to the capitalism
of apparatchiks: the rise and fall of the West
1 The end of our illusions 11
1. Illusions, the drivers of our decline 11
2. The opposing forces 14
3. ‘You have the growth, we’ll have the debt!’ 15
4. Banks and States: both arsonists and fifire-fifi ghters 17
5. A rope to hang ourselves or to pull ourselves out of the rut? 21
2 The impossible gamble of redistribution without growth 27
1. The implosion of Western social models 27
2. Powerless governments: too fast for the economy,
too slow for the markets 31
3. European deconstruction 33
4. The crumbling city on the hill 37
3 From empire-builders to administrators:
chronicle of a death foretold 41
1. The end of the empire-builder, the root of the West’s demise 41
2. Can we still make elephants dance? 48
3. The rise of the nomadic investor 51
4. From fifi nancial myopia to the erosion of our competitiveness 55
5. Divergent interests as a system 60
6. Corporate governance: when the tree hides the forest 63
7. Litigation culture and risk-aversion 67
8. Requiem for an entrepreneur 68
9. The end of the partnership and the triumph of the
Banker-King: ‘Heads I win, tails you lose’ 72
viii Capital Wars
Part Two– Their conquests, our recipes: how emerging powers
made our entrepreneurial capitalism their own
1 Emerging powers: how the war was (almost) won 85
1. Two winning models, one horizon 85
2. The secrets of Statentrepreneurial capitalism 90
3. The comeback of family capitalism 102
4. The domestic victory: the creation of the new middle class 117
2 How we were robbed of our own capitalism 125
1. The Entrepreneur-State-Market triangle: a Western invention 125
2. The architects of yesterday and tomorrow 130
3 The new geopolitics of money 137
1. The weapons of fifinancial dissuasion 137
2. The assault on international organisations 139
3. The dangerous temptation of protectionism 147
4. Currency wars 151
5. How to buy a continent: the example of Africa 154
6. Intellectual property: the last bastion of the West 159
7. Environmental protection: might makes right 162
Part Three – Rebuilding upon the ruins of Western capitalism 167
1 First step: bring down the myths 169
1. Emerging countries are winning the economic war,
but can they reign? 169
2. The economic Maginot Line fantasy:
one man’s wealth is not another man’s poverty 179
2 Turning the apparatchik CEO back into a real entrepreneur 183
1. Reconciling our listed companies with the long term 183
2. CEOs must think like business owners:
‘put your money where your mouth is!’ 187
3. Appraise and compensate business leaders over time 190
4. Re-energise corporate boards and redefifi ne
the ‘standards of good governance’ 193
5. Rebuild bridges with shareholders and increase
their loyalty 195
Contents ix
3 Transformingfifi nance from an end to a means 197
1. Retool but don’t punish fifinance 197
2. Putting the client and the economy back at the
heart of banking 203
3. Making non-bankfifinance accountable too 211
4. To stabilise thefifi nancial system, encourage competition,
and bring back the partnership mindset 213
4 Repositioning the business-creator as the cornerstone
of capitalism 219
1. No entrepreneur, no capitalism 219
2. Fiscal and administrative moratoria for young
entrepreneurs 221
3. Facilitate the transmission of family-held businesses 224
4. Make entrepreneurship commonplace from
student age onwards 225
5. Rebuild bridges between large corporations and SMEs 227
6. Incentivise banks to lend to SMEs 231
7. Boost venture capital 233
Conclusion –Reinvent the magic triangle 237
Acknowledgements 239
Index 241