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The Timid Corporation
Why business is terrified of taking risk
Benjamin Hunt


James Heartfield

For hundreds of thousands of years men watched the sun and the moon cross the skies, unaware that they were really seeing the rotation of the Earth they were standing on. Financial journalist Benjamin Hunt's fine book dispels a similar confusion about modern capitalism.

Hunt shows that the overwhelming perception that financial markets are 'out of control' or that runaway capitalism is locked into an 'irrational exuberance' of uncontrolled growth is wrong. Hunt makes a more telling criticism: the present-day corporation is retreating from growth, timidly submitting to unjustified constraints and a destructive regime of self-regulation.

Based not just on a surprisingly eclectic range of written sources, but also on some excellent interviews with CEOs and other insiders, Hunt's book explains our misunderstanding of contemporary business arises from changed expectations of our own, expectations that are influenced by those of industry leaders. It is, he explains, the overwhelming caution that has overtaken business that exacerbates the climate of suspicion we have towards business. Industry's desire to forestall criticisms, arising from an inflated fear of them, only serves to aggravate public distrust.

Hunt explains how events like the Enron collapse add to the overwhelming perception that business is out of control, even when this is not so. In fact, he says, it is the avoidance of risk, exemplified in attempts to insure against loss, or to tie customers into the 'comfort zone' of brands, that is characteristic of economics today. The treatment of the issues behind such buzzwords as Corporate Responsibility, Shareholder Value and Risk Management is a real advance on our understanding of contemporary capitalism.

 

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