This critical analysis highlights the disastrous effects of using unrealistic mathematical models of human, organisational and market behaviour, to guide economic policy. It flags up the destruction of real economies, markets, firms, jobs and people, all caused by unwarranted trust in unregulated markets, the naïve adoption of maximisation targets, including acceptance of the falsely based focus on serving shareholder interests above everything else. Wholesale displacement of this ‘bad theory’ is shown as prerequisite to a sustainable future.
Though real markets work better than known alternatives, Pearson makes the crucial distinction between the real and the corrupted speculative-financial, where totally different realities apply. Failure to make that distinction has transformed financial sectors from supportive of the real economy, to the predatory, inequitable and often fraudulent reality experienced today.
Briefly reviews how the resultant greed-enabled, growth-focused culture is magnifying the impact of global population growth and unsustainable inequality, resource depletion and pollution of finite earth.
Pearson argues that these destructive impacts could be reversed by the adoption of more co-operative systems of corporate governance to protect the real economy from predation by finance and to positively engage all stakeholders in the future sustainable development of industry and business. A comparative analysis is provided of corporate governance theory, law, and practice in different jurisdictions, including UK and USA, Japan, Germany and the emerging economies of China and India. It is shown that outside Anglo-American jurisdictions, greater care is exercised to protect and develop real economic strengths.
The Road to Co-operation proposes realistic changes in policy and practice, which would facilitate different degrees of co-operation. These extend from employee involvement in specific corporate decisions, through various approaches to governance, including different co-operative formats, to full-on co-ownership. Change in this direction would be prerequisite to recapturing real long term economic success on a non-exploitative and co-operative foundation.
Ed Mayo: Secretary-General, Co-operatives-UK: “I simply loved reading this book. While some of the subject matter was familiar territory (as a former Chief Executive, for eleven years, of the New Economics Foundation), I thought it was wonderfully written with a deft touch and very great authority. The result is something that is a real contemporary classic, in terms of articulating the case for an economy that, as the title echoes, can generate shared and sustainable freedom.”
Professor John Hassard, Manchester Business School: ‘This fascinating book offers a provocative reappraisal of the role of enterprise management in the world’s advanced and advancing economies. Eschewing economic rhetoric, Gordon Pearson provides a refreshing re-analysis of the theory and practice of management in which, on the one hand, he confronts head-on the nature of greed in corporate life and, on the other, suggests opportunities arising for, and the virtues of, increased cooperation. Characterised by clarity, depth and insight the book should be required reading for those who seek to shape and regulate the economic environment.’
Professor Peter Lawrence, Keele Management School: ‘Pearson mounts a convincing critique of the neoclassical economic foundations of management theory and makes a compelling case for a new cooperative economic paradigm. This should be required reading for business academics and practitioners seriously interested in reversing the damage done to business and society by erroneous theory and practice.’
Professor David Leece, Manchester Metropolitan Business School: ‘For anybody who thought that maximising shareholder value is and should be the main focus of our understanding of governance and business, think again! Pearson provides a cogent, entertaining and thoroughly compelling critique of governance and corporate policy while offering practical alternatives for a post credit crisis world’.
Professor Martin Parker, Warwick Business School: ‘In an era when management is celebrated and damned in equal measure, it is exciting to find a book which offers sensible but radical suggestions for actually doing something about it. Gordon Pearson’s diagnosis of the problems of short term shareholder focus and management greed are spot on, and this is a book I would recommend to anyone who wants to build a collective and fairer future.’