Is it possible for markets to serve the needs of the people as much as those of companies and shareholders?

This issue lies at the heart of a debate in Europe and elsewhere that questions the social value of a lightly regulated and taxed system and asks whether the economic model promoted by industrialised nations might in future be refocused to emphasise a social role for capitalism.

Although such thinking has its present origins in the banking crisis of 2008, it tries to address a far more fundamental question: how best to organise economic activity in societies that have recognised there are serious imperfections in capitalism, socialism and their modern derivations.

In Europe, the debate has been made accessible by figures like the chairman of Britain's Financial Services Authority, who bluntly suggested that many of the complex financial instruments that almost brought down the global banking system, represent "socially useless activity".

Economy of integrity

More recently, the deputy governor of the Bank of England told a City of London audience in St Paul's Cathedral: "We can't give meaning to our lives and have a financial system and economy of integrity, purely on the basis of self-satisfaction ... .We need to have a sense that what we are doing is socially acceptable."

President Sarkozy and the Archbishop of Canterbury have also weighed in, as have those whose economic-based arguments can best be described as coming from a 'greed is good for everyone' camp.

In many ways, the comments go to the heart of a problem every small state now faces: how do nations deliver social objectives with equitable and demonstrably national character-istics if the market and its mechanisms that they have embraced cannot deliver growth on a sustainable basis?

Or put more directly, if the effect of economic globalisation and the laws of the market drive down smaller economies to a point where popular expectations about health care, education, public-sector employment, pensions and infrastructure become undeliverable, are there viable alternatives?

These are difficult-to-answer questions in the Caribbean where economies are small, relatively open and success depends significantly on the vibrancy of the global economy to support industries such as tourism or to spur hoped-for-new growth in the non-tourism services sector.

Interestingly, a parallel debate has been taking place in Cuba.

Development model failing

Although its starting place is very different, its development model is also failing.

It too is looking closely at how it might build an alternative economic model which has as its objective sustaining a socially equitable society.

Read carefully the speeches and newspaper commentaries of the last few months and it becomes apparent that the type of monolithic socialist model that Cuba has built since the 1950s is gradually giving way to a new philosophy and organisational structure that aims to reorganise an outdated, inefficient and sometimes mismanaged, over-centralised socialist system.

Why this is happening now will no doubt be the subject of much speculation and many future studies, but it is becoming clear that Cuba's government is developing a more pragmatic economic model that can respond to the market and economic globalisation and deliver a more sustainable social and philosophical direction less bound by the past.

Previously, when change occurred in Cuba in response to a crisis, it has been temporary and aimed at restoring the status quo at a subsequent date.

However, what is now happening is something more fundamental. Although driven by Cuba's disastrous economic problems, it is clear that recent statements are the consequence of an internal debate that has been under way for some time and still has a way to run before being endorsed by a delayed Party Congress.

In these, President Castro has made clear that the process of change will involve the decentralisation of the state-dominated economy, new forms of property ownership, an end to all government gratuities and subsidies except in health care, education and social security, and the introduction of an adequate tax and contribution system so that all Cubans contribute to support services that are provided free of charge or at highly subsidised prices.

This approach will gradually extend to differentials in salaries.

Moral exhortation

While the outcome of the process of change is far from clear, certain or yet at hand, it seems the new social model will be shorn of ideological rhetoric, place less emphasis on moral exhortation for those other than the truly committed, and will recognise that for the many it is material improvement that will underwrite future commitment to a revitalised system.

That is to say, a system that once saw value in a centralised command economy providing benefits for all, irrespective of what they gave back to society, is drawing to a close.

This is, of course, not to argue that Cuba's social, economic or political model is appropriate for the rest of the region.

Rather, it is to note that its outdated economic system is also under review with questions being asked about how government might best use the market to provide social justice and an egalitarian society.

Significant doubts

That this coincides with significant doubts in the developed world about the social purpose of market economies suggests that both socialism and capitalism are in crisis.

In the Caribbean, in nations like Jamaica, politicians and academics are trying to address what social philosophy should guide future political thinking.

They have been looking at a wide range of relevant experiences in nations from Scandinavia to Brazil.

If the global economic crisis does nothing else, one must hope that it spurs new thinking that leads, in turn, to a new social and economic model able to sustain future Caribbean development.

David Jessop is director of the Caribbean Council. Email: david.jessop@caribbean-council.org.