Destiny, Michael Jackson and the Rivalry between the Muslim and Western Worlds

As we are increasingly concerned about the state of individual companies and the extent that it is difficult to understand their strategy and now the numbers they present, I thought that it would be interesting to look outside our industry for thoughts that might be useful to apply to what is going on.

I recently read two books that I thought had bearing on the current situation, Bernard Lewis' "What Went Wrong?" and Joseph Ellis' "Founding Brothers."

For those who haven't read them, Lewis' book looks at how the current situation of antagonism developed between the Muslim world and the West. The Founding Brothers looks at the people and events involved in the early years of the United States.

So what does all this have to do with finance? Well there are two issues; one that there is an increasing culture of "who did this to me?" as opposed to "what did we do wrong". The other is there is no guarantee that things will end up a certain way.

From reading Founding Brothers, it becomes increasingly clear that the US surviving as a country was a lot more touch and go that I originally had thought. There are certain turning points, often ones that aren't realized at the time, that the right or wrong decision can make a huge difference to the fate of a venture. In the case of the first years of the United States there were a number of points where a different choice or a lack of courage could have meant that the prospect of the country surviving to become that world's pre-eminent nation would have been very doubtful. The United States was lucky to have a number of men of towering intellect and moral courage to help the correct choices to be made.

Lewis takes a panoramic view of the last thousand years and examines how the Muslim world went from being the pre-eminent military, cultural and scientific global powerhouse in the Middle Ages to being overtaken by the West. He has a number of conclusions and I hesitate to paraphrase such an eminent scholar, but one of his main ones is that the Muslim world has been too quick in blaming the West for its troubles without spending enough time looking at the failings of its own systems.

So where does Michael Jackson come into this? Well, I don't want to take sides in his spat with Sony but, could it be possible that Invincible isn't a very good record and people are not buying it for that reason. As someone who buys a lot of CD's and has bought a number of Michael Jackson CD's in my time, the tracks I heard from Invincible didn't impress me. No amount of advertising promotion would have changed my view. David Gray's album White Ladder became one of the world's biggest last year because it is a great album and despite receiving no promotion for the first year of release.

It isn't always someone else's fault. It could be that people have to take responsibility for their own destiny and whether what they do succeeds or fails. I look at the situation in today's markets and wonder whether people are spending too much time blaming others rather than looking at the mistakes they themselves made. Undoubtedly, we are only just beginning to find out about certain criminal accounting practices and the massaging of profits. There has certainly been a number of individuals and companies that have acted in less than good faith.

However, the response of class action suits and other forms of retaliation against the wrong-doers might be somewhat hasty. How much have those who operate the system been responsible for helping create the current environment? I don't think you have to be an anti-capitalist anarchist to believe that the way that people viewed the markets in the nineties was a contributing factor. Greed and a desire for ongoing increasing profits helped create an environment where companies felt it necessary to inflate their numbers.

As my colleague, Susan Lakatos, recently asked, is it a surprise that risky investments are risky? People lost track that there is no such thing as an absolute certainty. If people got the results they wanted I have a feeling that they didn't check that all the relevant questions had been asked.

I think that we are at a point where companies and individuals have to take a look at the current situation and say that looking for blame is not enough. Punishing the criminals is an absolute must, but we need to look forward and decide what kind of system do we want in the future? Once that is decided a lot of other decisions will come naturally. It is up to financial and political leaders to show proper leadership and lay out a vision of what they believe a system should be like. That has to be defined in the positive not just in the negative. It is not just about passing a whole raft of laws outlawing this and that practice because laws can always be got around. It is about setting forward a vision of what capitalism should look like in the coming years.

Two hundred years ago a group of people set forth ideas, debated them and made crucial decisions. They weren't clear cut and the debate was often acrimonious however, the results have stood the test of time. It is about time that our generation looks to do the same. I am not encouraged so far that we will not just sit back and ask, "Who did this to us?"