This blog first appeared on the Bradford University School of Management blog.

Is the economic turmoil going on around us the death of capitalism as we know it, or simply time for everyone to become accountable?

Some commentators have already expressed the first option. I think this is more in hope than reality – the last time I heard it was from Fidel Castro, commenting on the failed launch of new Coke!  But today there are mutterings – are things simply getting out of hand? Trade Unions see an opportunity to flex their muscles. Social commentators ask whether we really need our pressurised lifestyle.  But has any other system ever really been seen to work effectively?  Not really.  Wherever we look in the world the command economy has invariably resulted in wastage, lack of choice, lack of quality and quality and wealth in the hands of the few.  No, we won’t be saying goodbye to capitalism just yet. But that doesn’t mean its perfect and shouldn’t change.

In my view it all starts with accountability of producers, consumers, government, even business schools!

Let’s start with producers.  The credit crunch has been largely caused by the pursuit of short term profits, in rapidly growing markets with a relaxed focus on risk.  Construction and financial services have led the way with, for example, aggressive apartment building and self certificated mortgage applications. Properties have been bought off-plan, in many cases as investments rather than dwellings, whilst in the US, everyone was seen as a potential property owner. Yet, well over a year ago, you only needed to take an evening stroll around the new apartments of central Leeds to see the reality – far more lights out than on – empty flats bought as investments at a time when there was a dearth of family accommodation.  This apartment bubble was going to burst. But was accountability all about the next profits report rather than medium term sustainability? The constant push for great results in good times has a habit of ending in tears.

Its easy to put all the blame on the producers – but what about the customers? For every seller there is a buyer. In the US, property ownership with “guaranteed” returns suddenly became a reality for the sub prime market. I recently read an article about someone who was about to have her house repossessed. The house had a value at mortgage time of £300,000 and yet this individual had only ever done menial work, if any work at all. The capitalism doom mongers tell us that these people were poorly educated “victims” of smooth talking mortgage salesmen.  I just don’t buy this.  We’ve all got a level of common sense and “buying” a house when long term unemployed or in poorly paid employment showed greed as well as naivety.  Consumers need to take some responsibility as well.

What about we business academics?   I am a passionate believer that good management education can help managers see the route ahead, to spot the threats as well as the opportunities, to manage for a sustainable future.  Many managers remain sceptical, perhaps nervous about academic interventions and there has been a history of rather introverted academic management research.  We academics also need to be accountable, to the management community. At Bradford this is happening and we are seeing real differences being made. With today’s turmoil, we need to help managers take the objective view, challenge their strategies and see the sustainable medium as well as the shareholder driven short term.

Its not time to re-engineer society as we know it. But I do think that it is time for us to become more realistic, more pragmatic and more supportive of each other.  Government needs to take the lead. Firstly, we can’t allow unrealistic sales of major assets. Secondly, we must educate the more vulnerable, or even the more greedy, consumer of the perils of chasing unrealistic wealth.

If anything good comes out of the current turmoil, it will surely be that we won’t rush headlong into another crisis. Unless we lose our memory, chase the next short term boom and forget about accountability!