Patient Capital

There is something cultural about capital. Different cultures use different narratives when they commonly talk about capital. In Western capitalist societies it is common practice to cite “capital is a fugitive dear”, meaning that people who command sizeable amounts of capital tend to flee places once they become to agitated, especially by politicians. The Eastern narrative surrounding capital is more focused on “patient capital”. The newspaper “China Daily” has more than 6.000 entries referring to this term. On 2024-9-26 (p.9) the Japenese economist Kazuyuki Motohashi praised the Japanese economic system and its specific form of patient capitalism as based on” long-term, stable investment, which enables companies to achieve sustainable growth in the long run”. The Chinese economy suffers as Western capitalism from excessive focus on short-term profit seeking and this causes huge market flucturations shifting quickly from shortages to oversupply and back again. Short-term rent seeking is driving whole industries into fluctuations that are hard to attenuate through other economic (fiscal and monetary) as well as labour market policies (training, re-locations, internal migration).
It is interesting to witness that recently in Germany an example of a bank that had benefited from a patient capital approach of the German government for more than a decade (Commerzbank) is now prone to a bit of a hostile takeover from another bank probably more interested in the short-term rent-seeking. After all, banking and the varieties of capitalism approach highlight that at the very heart of economic rationale there remains a little bit of a cultural twist to understand what is happening in international economics and competition.(Image: Musée Rodin Paris 2024, Le Penseur”)