11 Nov

The Relationship of Relationships to Productivity

productivity

Connecting the Dots

Economist Paul Mills gave a remarkable speech at the annual conference of the Relational Thinking Network in Cambridge at the end of September. He examined a range of subjects, offering “relational solutions” to global financial instability.

It was fascinating to see the connections made between seemingly unrelated matters, showing that our current economic model is geared towards proliferating and exacerbating the pains of ordinary people suffering at the hands of an inherently flawed and unjust economic system.

In his talk, Paul connected the dots on a range of topics – the housing market, household debt, wage stagnation, income inequality, structural flaws in the banking model, corporate structure, the implication (and responsibility of) limited liability, taxation, the intergenerational crisis, and so on. Against each of the key areas, some relationally grounded solutions were briefly explored. Several days later, the implications of all that are still sinking in.

The most surprising fact however, lay tucked away in a one of the presentation slides:

“the declining rate of productivity growth”

Productivity Growth

Why is this significant? Because growth in productivity can be regarded as one essential factor which could help to dig us out of the current global economic doldrums.

I later learned I wasn’t the only one to have picked up on it. While discussing the day’s events over a drink at the pub, several of us mentioned our surprise at the notion of declining productivity growth which we all assumed was at an all-time high, given the age of technological proliferation in which we are living.

I had asked Paul about this during the coffee break and he explained that “most of the low hanging fruit” of technological innovation had already been “picked”, and that what lay next on the technological horizon was costlier progress in areas such as energy and transport – requiring far greater infrastructural investments.

My Experiences

This is where I got to thinking and to connecting what Paul had said to my personal experiences as a business consultant working in the relational field, and helping organisations to achieve growth in the three domains of culture, profit and social impact.

My experience has been that individual and team performance is underpinned by engagement and motivation. We know from numerous polls (Gallup, KPMG, Deloitte etc.) that workplace engagement is roughly stagnant around 35-40%. That means ~60% of the average workforce are either actively dis-engaged or only passively engaged – with immense and perhaps obvious implications for individual productivity and company performance. My experience (and the research bears this out) has also been that engaged people represent more productive (as well as happier) people. My experience has also been that good relationships lie at the very heart of well-functioning teams and thus are critical to engagement and productivity. This is the common thread of all facets of the Relational movement, that relationships underpin healthier, happier, more productive people and societies.

In other words, we may be overlooking our greatest opportunity for growth in productivity. Instead of looking to technology alone to fuel growth in productivity, is it time we reversed the equation and looked to relationships to fuel productivity and technological growth?

Consider the invention of smartphones. No doubt, these are an outstanding technological innovation with immensely positive implications for growth in productivity. Yet, that growth in productivity, can (and has) been turned on its head when the use of that technology overtakes its intended optimum: overuse of a smartphone can cause chronic back and neck pain, especially in the cervical spine due to the lengths of time we hold it in positions which are un-ergonomic. Lengthy exposure to the electro-magnetic fields that it emits are considered by many to be harmful to health and can deplete energy. One only has to do a quick Google search to learn about the detrimental impact of smartphone overuse on face-to-face relationships, even marriages. Smartphone overuse has also been linked to sleep deprivation, depression, anxiety and several other disorders. Thus, our relationship to technology can not only serve to increase our productivity, but it can also threaten and undermine our productivity!

My point is this. The next phase of growth in productivity should come from deeper engagement with ourselves and our contexts; with our friends, class mates, families, colleagues and the strangers we have the opportunity of meeting.

The Relational Lens

Thankfully the relational model offers a clear pathway for doing this through the Relational Health Audit – a tool designed to assess the health of key business relationships and for developing those relationships to increase engagement and productivity. The 5 dimensions or pillars of successful relationships are:

  1. Directness – the nature and style of communication
  2. Continuity – the degree to which a relationship shares a common thread of past, present and future
  3. Commonality – the degree to which a relationship shares common goals
  4. Parity – the balance of power in a relationship
  5. Multiplexity – the variance in the contexts within which you know or have known someone

The tool measures the perception of relationships in respect of the above dimensions and the difference in perception is where the gold dust lies. As Rob Loe pointed out during his talk on the Relational Schools project at the Cambridge conference: “perception is reality”. Thus, understanding and comparing individual perceptions of a relationship provides the essential first step to understanding its strength. The differences in perception provide the areas of focus for exploration and they in turn give rise to the powerful interventions which can be applied to improve a relationship.

So while we continue to navigate the treacherous waters of global financial instability, we can start to make strides in a positive direction by expanding our relational lens to increase engagement, productivity and the raft of other associated benefits in the workplace. Perhaps a return to solid relationships will be our greatest weapon in the battle to return to long term financial and social stability.

Nashak Billimoria
Founder, BeUnlimited
http://www.be-unlimited.org/

28 Apr

The rise of the machines: the risks of robots in financial markets

rise of the machines

Introduction

The title of this article is borrowed, in part, from the third instalment of the Terminator movie franchise, released in 2003. The movie tells the story of a robot that returns to the year 2018 from a post-apocalyptic world with intent to destroy humanity’s ability to stand in the way of a future ruled by hostile machines by taking control of world’s computer systems. Far fetched? Perhaps, but there are some interesting similarities to that storyline with what researchers and market watchers are starting to observe looking at the gyrations taking place across the world’s financial markets over the past few years.

‘Flash’ Crashes

In May 2010, all the key US market indices experienced a massive collapse and then a swing to recovery, close to previous levels, in little more than half an hour. All this happened in the early hours of the morning before the trading floor was even open. The Dow Jones in particular experienced a loss of 1000 points in just a few minutes, equating to trillions of dollars in value. In 2013, a similar crash was experienced on the Singapore exchange that lost nearly US$7 billion in market capitalisation over 3 days. More recently in August 2015, another flash crash took place in the US with another 1000+ point drop precipitated by sell-offs in China and index drops in Europe prior to the opening on trade in the US. Major stock markets are not the only ones affected. At the start of 2016, Bloomberg reported on the flash crash of a 10% drop in the value of the South African Rand in the matter of minutes of one morning.

There is a lot of speculation as to the causes behind these changes from highly publicised examples of individual rogue traders all the way through to the panic-induced retail investor. As debates have evolved and research has discovered, there is an increasingly common denominator starting to emerge. A CNBC report from January 2016 recognises the US trading regulator CFTC’s (Commodity Futures Trading Commission) findings that “One of the key connections is the rapid placement and withdrawal of trading orders that lies at the core of high frequency trading (HTF)…this activity was at least significantly responsible for order imbalances in the derivatives market, which in turn affected the stock market.”

The Rise of the Machines

So where are the evil robots? The same CNBC report goes onto point out: “These crashes are caused by institutional trading from exchange traded funds (ETFs) and HFT. They are not caused by mums and dads trading because mums and dads simply do not act in such a coordinated fashion in such a short timeframe. Mums and dads also do not have the leverage to shift markets in this way within 30 minutes or an hour. That power lies in the hands of large-scale derivative traders.”

Large scale derivative trading is an increasingly automated process. Traders, ultimately human decision-makers, develop and instruct automated systems to make decisions on their behalf in times, places and frequencies that would not be humanly possible. Powerful institutions equipped with the capital, skills, information and infrastructure seek and extract return across global capital markets. As has been identified, the losers in this war are the retail investor and those institutions that are unable to compete with the sophistication and speed that these powerful robots have at their disposal.

It is not the robots that are evil, it’s the set of rules and algorithms that determine their behaviour to buy or sell that are the real problem. These rules do not apply discretion beyond what they are coded to do. Scarily, they are able learn by these rules and market movements to serve their masters for effectively and efficiently in future. Unsurprisingly, it’s the masters of the machines that stand accountable.

A relational view on robotic trading

The world’s financial markets are a clear example how relationships between nations, regions, industries and asset classes can impact each other through complex interconnections. Robotic trading is a mechanical attempt to identify these connections and derive an information advantage in a market to deliver financial return by trading assets based on rule-based assumptions. Essentially, this mechanical process looks to transform the observed dynamics of a relationship into a tradable transaction for gain for those who command it.

The unsettling reality is that investigators and researchers still do not know to what extent robotrading affects the world’s markets because of the pervasiveness of systems and the herding effect that they induce when it comes to other institutional investors trying to follow the lead of their more sophisticated peers. What is clear though, is that there are casualties in the process. Mums and dads do not have the speed and information to make decisions like robots do, but there still remain many millions of families across the world that invest their savings into markets to pay for school fees, retirement and rainy days. Attempting to make sense of market information so skewed by machines can be a fearful and potentially fruitless pursuit.

Colin Habberton is CEO of PayProp Capital in Stellenbosch in South Africa. Before that he was CEO of the GivenGain Foundation South Africa (GGFSA).

14 Apr

‘Big government’ anti-relational? Not when it comes to income inequality!

Goldfish income inequality for RTN website

Over the last decade, research on well-being has increased exponentially. While the main focus of economists is on the relationship between well-being and GDP per capita, they are becoming increasingly aware of the role of income inequality. This is an important topic for relational thinking as well, since income inequality is closely related to social cohesion and trust within a society. While relational research often focuses on interpersonal relationships directly, the structure and organization of societies and their economies can be a major source of stress. The impact of poverty is widely understood, yet income inequality can put relationships under a similar kind of pressure. Much is still unknown about how inequality affects well-being and what can be done about it. This blog aims to give a first glance at ongoing research on the matter, from a relational perspective.

When discussing income inequality, we should first ask ourselves what do we mean, and why is it worth to be studied? A classic approach is to look at absolute income differences within a country. Yet, as humans are social beings whose well-being depends on interaction and comparison with others, it is relative income inequality that social scientists should be most concerned about. A commonly used measure is the Gini-coefficient, a complex mathematical function that unfortunately tends to overestimate inequality between incomes in the middle of the distribution. Due to the nonlinear nature of income inequality, a better alternative is to look at the % of national income that is earned by the richest 10% of the population of a country. For European countries this number ranges from about 24% in Denmark, up to more than 40% in the UK. This means that on average one third of all income in a country goes to 10% of the population, leaving two thirds to the remaining 90% . This may not sound very alarming. Yet a similar pattern can be seen within the 90% group. In the end, high inequality means that a relatively large group is left with relatively little income. Several researchers have argued that the current level of inequality causes polarization of societies, as different income groups tend to become isolated from one another through consumption patterns, education, and even residential areas. When inequality is furthermore perceived as a sign of unfairness, it can pose a serious threat to social cohesion and mutual trust, even further deteriorating relationships.

Closer investigation of the matter shows that while perceptions of inequality are important, countries with higher levels of income inequality have lower average life satisfaction irrespective of cultural differences. This is especially true for countries with relatively high standards of living, and the relationship is causal. The question is then what causes income inequality, and can it be influenced without major distortions to the functioning of the economy. Ideally, productivity should determine one’s income. Productivity can however not be directly observed, while differences between supply and demand of labor may lead to unequal bargaining positions. Thus, market structure and government institutions have a major impact on the distribution of income. More formally, these are called the degree of economic freedom of a country. As an indicator, economic freedom is usually divided into five sub-indices, being size of government (consisting of government expenditures and fiscal policy), the quality of the legal system, sound money, free trade, and the degree of regulation of capital, labor, and credit markets. Of these sub-indices, tax policies and low regulation have a strong and very significant impact on income inequality. As suggested by Piketty (2014), a country’s tax structure has an important signal function regarding what kind of earning system and income distribution are acceptable to a society. In addition, government regulation of an economy strengthens the bargaining position of the weak and poor and offers them protection against abuse of power. In addition to its potential direct positive impact, this leads to more equal outcomes, strengthening both work and family relationships.

What does this mean for relational thinking? While a lot of things can be left to the responsibility of local communities, sound macroeconomic structures are essential to contain income inequality, strengthening these communities and supporting healthy relationships. Thus, how paradoxical it may sound, ‘big government’ is not always such a bad idea!

Bjorn Lous is a second-year PhD-student at Tilburg University, studying the relationship between economic freedom, income inequality and life satisfaction.

22 Jan

A Response to WEF/ Davos and to Jeremy Rifkin

David Cameron at WEF for blog

The World Economic Forum’s annual meeting in Davos began this week and runs until Saturday 23rd. It brings together some 2,500 top business and political leaders, as well as some selected intellectuals, journalists and the occasional celebrity.

Prior to this year’s forum, Klaus Schwab, the founder of the World Economic Forum, argued that we are on the cusp of a fourth industrial revolution.  In ‘Industry Week’, Jeremy Rifkin has argued that this is wrong; what is happening around us should be seen as a continuation of the third industrial revolution.

The following is a response to this by Professor Prabhu Guptara:

I agree with Jeremy that it doesn’t really matter whether we call it a 3rd or 4th (or indeed Xth) revolution.

I also agree that what matters is whether we can create “a global commitment to … create a more prosperous, equitable, humane, and ecologically sustainable society.”

What many people fail to do (or deliberately don’t do) is to analyse why our global systems have strayed further and further away from such goals over the last 30 years or so.

And the Relational Thinking movement is exactly for such analysis – as well as a programme of action consequent on that analysis.

Our conclusion is that the increased distance between such goals and the reality of global systems is created by the licencing or approval of greed, individualism and materialism in our culture, and the increased trend towards embedding these in our global, national, regional and local structures and systems.

The solution, says the Relational Thinking movement, is to systematically prioritise and embed the Relational approach into global (and specifically corporate) structures and systems, so as to have some chance of actually realising the promise of our new technologies and therefore in fact to create a more equitable, humane and ecologically sustainable society.

On this website, you will find the basics of applying Relational Thinking to companies, governments, inter-governmental organisations, technology, criminal justice, education, civil society, and so on.

Join the dialogue – and, equally important, join the action!

Image: David Cameron at World Economic Forum 2014 by Number 10 on Flickr.

20 Feb

In pursuit of happiness

beach 2
By Lorna Zischka

All things considered, how satisfied are you with your life as a whole?

1=very satisfied
2=fairly satisfied
3=neither satisfied nor dissatisfied
4=fairly dissatisfied
5=very dissatisfied

Life-satisfaction or ‘happiness’ questions like this one are becoming increasingly popular in surveys of public life. This is because of the suspicion that the standard, materialistic measures of welfare (GDP/income levels) don’t necessarily deliver a better life.  The logic goes that if money isn’t making us happy, why measure it as an indicator of wellbeing? Why not measure happiness directly? This sounds fair enough on one hand, unless of course happiness indicators generate their own problems in misdirecting our attentions…? In seeking answers on these issues, let’s start with income measures of wellbeing.

It certainly seems to be the case that although buying more ‘stuff’ can give us a short-term happiness boost, the feeling does not last. Research suggests that our expectations quickly adjust to our new status, and then we are left feeling no better-off than before… until the next input boost of ‘stuff’ that is, which is to put us onto a kind of materialistic treadmill. This isn’t the only complication: we can easily get so that more ‘stuff’ only makes me happy if my stuff is at least as good as or better than that of my peers. And since they probably feel the same, we all end up in a ‘stuff’ competition and are unable to feel content with the things we have if others around us have more. Some people are even driven to borrowing in order to keep up, so that today the heaviest consumer countries in the world are the ones where private borrowing levels are highest; it is not people in the neediest countries that have the biggest debts! Despite all the effort and sacrifice put into the accumulation of goods, life-satisfaction levels are dropping fastest in the most consumeristic societies! Once a country is outside the bounds of real deprivation (around only US$15,000/year income on average), there is no relationship whatsoever between that country’s average income and the average happiness of its population. A race for more ‘stuff’ doesn’t seem to be the way to happiness – not only because it doesn’t do the job efficiently, but also because its pursuit destroys the planets resources and is becoming increasingly unsustainable as a collective lifestyle. So then, what does lead to happiness?

Ask the average Brit and nearly 60% of respondents will mention some kind of relational connection as being most important to happiness – family first and also friends. No other factor comes even close. Health, the next biggest factor gets a mention by only 24% of respondents. Financial security and living conditions get far less mentions. (fig.1)

 

pie chart updated

 

 

 

 

 

 

Fig.1: Factors influencing subjective wellbeing
Source: Sustainable Development Commission, 2009

This gut reaction is backed up by plenty of evidence. The New Economics Foundation (NEF) came up with ‘five ways to wellbeing,’ which are a distillation of masses of evidence on what matters to happiness (fig.2).

Flowchart

Fig.2 Five ways to wellbeing.

Source: New Economics Foundation

Of the five factors, two are directly oriented to other people, giving and connections. And these two are also linked to one another – connections for example depend on giving time to people!

The relationships we have with others are certainly good for our own sense of wellbeing, but there are wider implications also. We live in an interconnected society and we could not even have a functioning economy without trustworthy interactions between people. When rules are fair, enforceable and where opportunistic people are not constantly trying to find loopholes, trust can flourish and with it, our ability to collaborate.  Collaboration is vital to our productivity, since our joint outcomes when we work together, each doing what we do best, is far greater than the sum of what we could achieve as separate individuals. Mutually beneficial and supportive relationships make us more secure too. What goes around comes around, and since we are not being capable of independence and self-sufficiency at all times, we do better in connected communities where we help one another out.

Having said all that, how did you feel when you first read the ‘happiness’ question at the beginning? Does the whole question of ‘increasing happiness’ turn your thoughts turn inward (what I need to make me happy) or outward (how can we make the world a happier place)? If your thoughts turned inward, it suggests there might be a flaw in ‘happiness measures.’

The psychologist Carol Ryff offers perhaps a more profound definition of happiness based on the ancient concept of Eudaimonia or ‘flourishing’. Eudaimonia emphasises ideals of belonging and benefiting others as one part of the big wellbeing mix; a concept which again enshrines the importance of relationships between people. Ryff pinpoints six items which are found to improve psychological wellbeing:

–          Autonomy
–          Personal growth
–          Self-acceptance
–          Purpose in life
–          Environmental mastery
–          Positive relations with other

So whilst a hedonistic approach to happiness might seek whatever maximizes my own personal pleasure for the moment, Eudaimonia emphasises wholeness as a person and within a society. Thus whilst a hedonist might value extra material goods or free sex or lying one’s way out of trouble because of the pleasure it maximises and the pain it avoids, Eudaimonia puts these things into the context of environmental damage or family break-up or a loss of trust in society. So some individual ‘good’ in the short term might have to be renounced for something of greater (and maybe communal) value in the long term. Enter then the concept of virtue. Virtue is about moral ‘goodness’. Wikipedia says in its definition, ‘personal virtues are characteristics valued as promoting collective and individual greatness’. Those exercising virtue contribute to a happier society.

There is an odd thing about virtues however. Researchers find that although virtues are instrumental in improving the wellbeing of society, they have to be exercised for their own sake. If the goal of a person is happiness, that person probably won’t find happiness by trying to be virtuous. However, if that same person loves virtue and is virtuous for its own sake, then they are almost certain to find happiness as a side-effect!

We’ve seen how important relationships between people are to human flourishing, and we can discover in study after study that giving people (people putting resources into relationships) tend to report higher levels of happiness and life satisfaction than those who just spend their money on themselves. So maybe instead of asking ourselves how happy we are, we should be asking ourselves what we are doing for others, to make them happy. That is the question that matters for a flourishing society!!

Lorna Zischka is a PhD student in Economics at Reading University.

Image by Sias van Schalkwyk

13 Feb

What to do about Greece’s Debt?

debt

The election of Greece’s left-wing government on a promise to reduce the country’s mountain of debt, has brought the issue of what to do with Greece’s debt firmly on the agenda.

The journalist Gillian Tett recently wrote about this in the Financial Times. She recollects a meeting where Economist Benjamin Friedman discussed whether Greece should have its debts forgiven. Some argue that as Germany received forgiveness for its debts, so Greece should be forgiven. Others argue that it’s immoral to forgive Greece its debts – “how can you forgive debt when a country has a retirement age of 50?”

Gillian Tett writes:

Either way, what became clear that night was that the question of how to handle Greece is a deeply emotional issue, not just a matter of economics — even (or especially) among central bankers. In one sense, that is no surprise.

As David Graeber noted in his seminal book Debt: The First 5,000 Years, credit is a social and political construct. And whenever societies have operated in the past with few constraints on how much credit they can create, this has invariably caused debt to spiral until it either triggered social implosions or the society has used rituals to forgive that debt. In the past, there have been many such safety valves, be it the debt jubilees used in biblical Israel or the practice of “wiping the slate clean” (that recorded debts) in ancient Mesopotamia.

The issue of Greek debt and whether it should be forgiven, is a strong reminder of the relational issues surrounding debt.

Earlier this week in The Daily Telegraph, there was a discussion about whether the current low interest rates should be an opportunity for people to pay off their mortgages, or to borrow more for a greater financial return. As well as ignoring the financial problems that taking on more debt causes, the article doesn’t take into account the relational implications of debt.

Firstly, the relationship between lenders and borrowers, at any level, is inherently unequal. There is a lack of parity between the parties. When unexpected events leave the borrower unable to service the loan, calamity often ensues.

Secondly, debt finance does little to reduce relational distance between corporate borrowers and corporate lenders. It is seldom associated with close involvement by the lender in the affairs of the borrowing company because the security provided for the loan acts as a convenient substitute for close monitoring.

Thirdly, increases in national debt in effect constitute a promise that future generations will meet the cost of the interest payments and eventually repay the debt.  What would be considered a grossly unfair transaction between contemporaries is waved through because future generations have no voice.

Finally, financial difficulty, and particularly debt, is a major cause of stress.  A Barclays survey showed that money was the most frequently cited reason for arguments between partners.  The psychological pressure resulting from personal debt is linked directly with child abuse and physical violence between adults in households.

Whatever decision is eventually taken on Greece’s debt, the impact of debt on relationships is clear.  As Graeber notes, when there have been few constraints on debt,  there has either been a social implosions or the society has used rituals to forgive debt. Debt is not a relationally neutral financial action. One hopes that with all the discussions surrounding Greece’s debt, society will wake up to the relational impact of debt and will be far more reluctant to borrow.

08 Dec

Relationships as the key to a more resilient economy

Relational Ratings Agency

YORK/CAMBRIDGE – What would you do if you had a million pounds? In a quest to find out what a more resilient economy could look like, the Friends Provident Foundation asked 13 experts for their opinion. In answering that question  Dr Michael Schluter expressed his desire to start a ‘Relational Ratings Agency’, scoring companies on the quality of relationships they have with all the people that are key to success of the business: from employees to shareholders, from customers to regulators: “We look at things through the lens of relationships rather than just the lens of money. The reason we do that, is that behind every financial transaction there is a relationship. And it is the relationship that determines the long-term success and impact  of what goes on in terms of finance and money. So if you really want a successful economy you’ve got to get behind the financial transactions, the sheer money, to the relationships that are underneath it”, he says.

Watch Michael Schluter explain ‘Relational Thinking™’ in the context of a more resilient economy here.

 

27 Oct

The inconvenient truth about immigration

1170737_36181879

CAMBRIDGE – UK Defence Secretary Michael Fallon has backtracked over comments he made about some parts of the UK becoming ‘swamped’ by migrants if there were no changes to EU rules on free movement.

Faced with the inexorable rise of the eurosceptic political party UKIP, there is renewed urgency among politicians in the main parties to offer answers to the perceived problems of EU membership and uncontrolled immigration – particularly the influx of unskilled economic migrants from Eastern European countries. What might a relational approach to immigration look like?

The phrase ‘no reward without responsibility, no profit without participation’ is one you may have heard in the context of a relational answer to capitalism, but it’s equally apt for immigration. After all, a free market for labour is a core principle of capitalism.

As a society, we are quite happy to accept ‘the brightest and the best’ migrants – those who fill a skills gap, pay for tuition, create jobs or otherwise offer clear economic advantages to us, their host country. The NHS can only function due to its huge number of migrant healthcare professionals. These often come from countries whose own healthcare systems are badly understaffed and underfunded (Malawi being a prime example).

Though we collect the rewards of immigration, we are not so interested in accepting its responsibilities. We are reluctant to welcome those who might prove to be a financial burden in any way. As a culture, we are consumeristic about immigration, as we are about almost everything else: it must work for us.

The national narrative around immigration is of a group of people who come to our country expecting something for nothing. That’s not an accurate picture, but there’s an awkward and ironic truth hidden in that statement: our approach to immigration is one of attracting those who will benefit us, without considering the other side of the coin.

 By Guy Brandon

09 Oct

How relationships impact economic outcomes

Hands

CAMBRIDGE – Lorna Zischka, a PhD Student in Economics at Reading University, has written a paper called ‘The Hidden Asset: How relationships impact economic outcomes’, where she argues that “Consideration for others as well as oneself also represents a more desirable basis than individualistic self-interest on which to found the development of society.”

In Relational Thinking, this is familiar territory.  See Dr Michael Schluter (together with Jonathan Rushworth and Paul Mills): After Capitalism: Rethinking Economic Partnerships and Transforming Capitalism from within: A relational approach to the purpose, performance and assessment of companies.

In her paper Zischka explains the need for consideration for others and how this provides a stronger basis for economic theory than individualistic self-interest. She writes:

“Greed is commonly perceived to be a factor precipitating the 2008 financial crisis. On the other hand, every textbook on neo-classical economics teaches that individuals pursuing their own private interests in a free-functioning market gives us the best possible allocation of resources and is a driving force for efficiency, implying that the pursuit of private gain will result in social good… This essay examines whether ‘self’ interest is an over-simplistic foundation for economic theory, and why paying more attention to the ‘other-centred’ interests that individuals might have is helpful. It suggests that relational drivers have a significant additional impact on human behaviour. Consideration for others as well as oneself also represents a more desirable basis than individualistic self-interest on which to found the development of society.”

The full version of Lorna Zischka’s paper can be found here: