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Capitalism works

America's shareholder-driven business model has curbed its excesses and remains the most effective system of wealth creation.

By Geoffrey Owen   December 2003

The American version of capitalism has been knocked off its pedestal in the last three years. After the stock market crash and the corporate scandals which followed, the triumphalism inspired by the productivity surge in the second half of the 1990s has been silenced. What John Kay has called the American business model (Prospect, May 2003) is now widely condemned as both immoral and inefficient.

What happened at Enron, WorldCom et al was indeed a shaming episode in the history of US capitalism. Yet the conclusion which some critics have drawn – that the shareholder-based model of corporate governance is…

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