Sir Mike Rake, one of the UK’s most influential business figures, has revealed doubts about the future of capitalism in its current form and revived the concept of a “third-way” as a solution.
“Does capitalism really work? A recent survey in East Germany revealed that 60 per cent of people preferred life under communism,” he told BusinessBecause last night.
He was speaking in front of alumni of Cambridge University’s Judge Business School at the Oxford & Cambridge Club.
While he criticized business schools and strategy consulting firms for “not seeing the financial crisis coming”, Rake hinted that there are ways they could help build a more robust system for the future: “[Business schools'] entire system is under question. But can they address this by offering a third way between capitalism and communism?”
Rake is chairman of telecom giant BT Group'. He is also chairman of the UK Commission for Employment and Skills, and a director of Barclays Bank, McGraw Hill and the Financial Reporting Council. For five years he was chairman of KPMG, one of the world’s Big Four auditing firms.
Rake called for a “global and pragmatic approach” from world leaders. “Rhetoric - particularly from G20 [leaders] - needs to be turned into action,” he said.
The G20 heads of state met in London in March. Tens of thousands of people marched through the British capital demanding action on poverty, climate change and jobs.
As part of the reforms being made in the wake of the financial crisis, Rake suggested “long-term” policies for debt and economic growth, and “rules-based regulation” of fiscal policy.
He argued that global business leaders should influence the political system by playing a more significant role in driving growth and wealth-creation as well as addressing what went wrong.
He also warned the UK not to pursue populist measures against immigration, the European Union, and the finance industry, which have contributed to the country’s growth.