2020 Forecast – Economy – A One-Sided Economy vs. An Ecosystem Economy
The environment is ripe for a new economic model, one that aligns better with the promise of democracy. Perhaps it’s not socialism, such as Millennials seem to endorse. It’s development requires a new view.
This article from The New York Times sums up the concept of what we mean by “A One-Sided Economy vs. An Ecosystem Economy” through an interview with the now late former Federal Reserve chairman, Paul Volcker. In it Volcker talks about how the U.S. government is becoming a plutocracy and is serving only the wealthy. Rather than the economy working as an ecosystem that serves all and is more thoughtfully and rigorously managed.
He speaks to one of our long-held beliefs that too often policies are enacted that aren’t tested and not thought through. Take globalization. Countries have been trading with each other for millennia. It’s a good thing. Yet, there are implications, especially with manufacturing shifting to China, Mexico, and other low labor cost nations over the last several decades, that were addressed with hollow solutions that weren’t actively managed. The article reads:
He wondered how many lectures and presentations he had sat through with economists “telling us open markets are wonderful, everybody benefits from open markets.”
Eventually, Mr. Volcker said, someone in those lectures would always ask, “What about that poor manufacturer in my town?” But that concern was dismissed too easily, with talk of worker retraining or some other solution far easier said than done.
Systems thinking is often not applied when developing policies, and action is not taken to ensure transitions and new economic development are actually fostered and realized.
This article by Ruchir Sharma about Switzerland, now the second riches nation in the world, offers an example of an economy that could provide insights on how the U.S. could do better in creating an economy that serves all.
“[Switzerland] delivers welfare benefits as comprehensive as Scandinavia’s but with lighter taxes, smaller government, and a more open and stable economy….”
“The real lesson of Swiss success is that the stark choice offered by many politicians — between private enterprise and social welfare — is a false one. A pragmatic country can have a business-friendly environment alongside social equality, if it gets the balance right.”
The Economy Forecast:
Help us create a healthier economic system that takes a broader view and creates equal opportunity for all, generating an economy that is healthier and wealthier.
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