Introduction

Abstract

The subprime crisis that erupted at the very heart of global capitalism showed the destructive power of an economic system that has no moral compass. Over US$10 trillion in assets might be destroyed; millions of poor families have been evicted from their homes while millions have also lost their jobs in the shrinking economy. Worst yet, the malaise has spread around the world — although it has had less impact in Asia (partly because governments have learnt their lesson from the East Asian financial crisis of 1997). The crisis has its roots in the wrong assumptions about human nature that underpin our current paradigm of capitalism and its dominance in the globalization process. Milton Friedman’s model, Adam Smith’s “invisible hand” — assuming that when an individual pursues his own interest (“rational” decision makers) he is contributing to the greater good of all — do not seem to produce the Common Good.