Who We Are
“If America is to continue to be the place where ordinary people find stimulation, challenge, novelty and fulfillment, our business sector will need more dynamism and inclusion than it has shown lately. This will require a restructuring of the financial sector to serve business innovation. The tiny band of "angel investors" and venture capitalists can't do it all. Also, the next administration must act to stimulate jobs for the disadvantaged. … I have long advocated that a subsidy be paid to each firm employing low-wage workers as a way of training them, raising their pay and stimulating their employment. Barack Obama's planned hiring subsidy is a step in that direction. But we have miles to go to get back on the track for dynamism and inclusion.”
Professor Edmund S. Phelps, Interview MSNBC, October 2008
The Center brings together leading scholars in economics, business, finance, and law to study capitalist institutions, their effectiveness and their weaknesses, in order to get some answers to such basic questions about capitalism—its working, its dynamism and the instability it may cause, its inclusiveness or lack of, and its role in a democracy. The goal is to turn capitalism from an article of faith, or an object of hate, into a reasonably well understood system of institutions and mechanisms whose social foundations can be evaluated in a rational, enlightened fashion.
The analytical work of the Center represents a significant shift from the study of markets—perfect or imperfect—which held center stage until recently, to a focus on ownership, corporate control and governance, venture and other capital, the discovery process, entrepreneurship and innovation. While most present-day research on productivity and innovation is conceptually narrow, the Center’s members bring a broader social scientists intellectual approach to this work. At the same time, while business school research on these issues is generally from the micro-perspective of shareowners, the research of the Center focuses on how these issues affect the dynamism and inclusion in the economy as a whole.
The members of the Center, largely faculty of Columbia University and a few other top universities have formed a collective entity with the critical mass necessary to give their findings greater visibility. Many of the Center's members have made significant contributions to the study of capitalism, some stretching back to the 1960s. All came to the subject with fresh eyes in the 1990s under the stimulus of the collapse of communism in Eastern Europe and the beginning of a transition in some of the countries there toward some sort of capitalist economy. The Center members are interested in trying to identify the economic policies, institutional changes and cultural attitudes that would generate greater economic dynamism with inclusion in the United States and across the world.
Although the Center's members differ on several matters of economic policy and even on the effectiveness of this or that capitalist institution, we are united in believing it is time for economics to go beyond the mainstream models of markets (both the miracles and the failures) to a serious study of capitalism—to the questions about its dynamism and about it stability—and to compare capitalism with regard to these issues with its rivals, corporatism and market socialism. Such a study is imperative because a country needs to have a more thorough and reliable understanding of how some market economies do much better than others and how the least dynamic are able to stay close behind the more dynamic if the country is to make institutional choices that will further them in the directions in which they want to go. For all of the Center's members it is striking that so much about how capitalism works and how it would work differently if its institutions were modified in this way or that is not yet understood. This is particularly relevant amidst the financial crisis which requires a restructuring of the financial institutions.