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Peacocks display the weaknesses of capitalism.

Peacocks display the weaknesses of capitalism

Have you heard the peacock's tail theory of capitalism?

According to Christopher Meyer and Julia Kirby (A19, HBR) the peacock's tail grew ever larger and more flamboyant across the years in response to the fact that peahens preferred mates with a large tail. But after many generations the huge tail created a problem for the peacock. It was so heavy that it slowed the bird, making it easier prey and eventually causing the peacock population to decline.

The authors draw a parallel with the development of capitalism. While they acknowledge that capitalism remains the most powerful, flexible and robust system for driving broad-based prosperity and enhancing the quality of life, they argue that keeping capitalism on track will depend on being able to rethink the priorities that guide everyone in the system - from entrepreneurs to regulators to investors.

Most importantly, say the authors, there is a need to slow the headlong pursuit of competition and return on equity; a process that begins with recognizing them as out of control. Reshaping capitalism in the aftermath of the crisis may offer the chance to deliver greater human happiness. Necati Aydin (Humanomics, Vol. 28 No. 1, 2012) criticises unreformed capitalism for bolstering the animal spirit in human beings, rather than serving their wider range of needs and desires. According to the author, capitalism should be reformed to fulfil people's needs and desires in a more balanced way.

Shawn Acor (A20, HBR) reveals how this might happen. Based on his studies at KPMG and Pfizer, carried out in conjunction with Yale University, he shows that rather than success leading to happiness, happiness precedes success. Happy employees are more productive, more creative and better at problem-solving than their unhappy colleagues.

Shawn Acor sets out three ways in which employees can improve their mental well-being at work: develop new habits; help colleagues; and think more positively about stress.

Gretchen Spreitzer and Christine Porath (A20, HBR) expand on these ideas. According to the authors, employees thrive when their work makes them feel alive and excited, and when they feel they are gaining new knowledge and skills. This sense of vitality and of learning new things is best satisfied when employees have the power to take their own decisions, share information about the organization and its strategy, and offer and receive feedback on performance.

The quest for happiness seems so deeply ingrained that it is tempting to believe it has always existed. In fact, according to Peter N. Stearns (A20, HBR), the culture of happiness in the Western world dates only from the eighteenth-century Enlightenment, which ushered in the notion that happiness was the attainment of a worthy life.

Since then, of course, the pursuit of happiness has spread to almost every aspect of human behaviour, from religion and politics to parenting and work. Some 15% of the population of most developed countries suffers severe depression, a condition that results in more absenteeism than almost any other physical disorder and costs US employers more than $51 billion a year.

Paradoxically, argues Peter N. Stearns, the quest for happiness can create pressures that themselves make people miserable. Many of us would benefit from leading a gentler, simpler life. And for that to happen, the new capitalism needs to be scaled back and made simpler, too - just like the peacock's tail, when you come to think of it.