Going off the Rails

The capitalist model was developed in the 19th century and recent events have shown the difficulties of adapting this to the demands of the 21st century, in which human and social capital are of far greater importance than physical capital. In Going off the Rails, John Plender shows how corporate scandals, inflated boardroom pay, corporate governance disciplines and outmoded accountancy conventions have stretched the Anglo-American model to its limit and what the effects of this might be on globalisation and the capital markets.

About the author vii

Preface ix

Part 1 IMPATIENT CAPITAL 1

1 The turn of the global tide 3

2 The Third World ghetto 25

3 Dr Pangloss comes to Wall Street 53

4 Europe pulls up a drawbridge 81

Part 2 DOUBLE STANDARDS 107

5 Uncreative destruction 109

6 The just-in-time CEO 137

7 Enron, alas 161

Part 3 THE LIMITS OF CONVERGENCE 183

8 Apocalypse later 185

9 The semi-detached samurai 201

Part 4 BEYOND SHAREHOLDER VALUE 217

10 The legitimacy crisis 219

11 Putting the world to rights 243

Index 275

"... cleverly links globalisation and Anglo-American capitalism... if you want to understand what business is going through, it is an excellent place to start." (Management Today, March 2003)

'Plender, a respected Financial Times columnist and former chaiman of the corporate governance consultancy PIRC, analyses the crisis cogently both on macro and micro levels' (Director, April 2003)

"…His insightful and wide-ranging book is a must for anyone who wants to understand how global finance shapes the world…" (New Statesman, 21 April 2003)

"…Going off the Rails looks at the myriad ways in which those trusted to look after shareholders’ money have let them down…" (Financial Times, 5 May 2003)

“…An intelligent book…”(En, May/June 2003)

John Plender is a senior editorial writer and columnist at the Financial Times and a regular current affairs broadcaster for the BBC and Channel Four. John has served on the UK government's Company Law Review steering group, and consults on corporate governance for the International Finance Corporation, the private sector lending and investing arm of the World Bank. In 1994 John Plender received the Wincott Award, Britain's premier prize for financial journalism. In this thought-provoking work, writer and journalist John Plender explores the model of capitalism advocated by English-speaking countries and asks the following pertinent questions:
* Why are developing countries financing the world's richest economy, instead of the other way round?

* How have the markets come to appear so unstable?

* What is causing the erosion of the wealth creation process? and

* Is the conventional view of this model actually correct?
The capitalist model was developed in the 19th century and recent events have shown the difficulties of adapting this to the demands of the 21st century, in which human and social capital are of far greater importance than physical capital. In Going off the Rails, John Plender shows how corporate scandals, inflated boardroom pay, corporate governance disciplines and outmoded accountancy conventions have stretched the Anglo-American model to its limit and what the effects of this might be on globalisation and the capital markets.