Economics

Le chemin inclusif vers la croissance

Sep 7, 2015 Klaus Schwab and Richard Samans

GENÈVE – Il n'y a pas de plus grand défi politique qui préoccupe les dirigeants du monde entier que celui de répondre à la nécessité d'élargir la participation aux bénéfices de la croissance économique et de la mondialisation. En effet, un consensus géographiquement et idéologiquement diversifié a émergé pour dire qu'un modèle de développement économique nouveau – ou du moins largement amélioré – sera nécessaire si une plus grande inclusion est véritablement recherchée.

Malheureusement, ce consensus politique est resté jusqu'ici au stade de l’ambition, plutôt que de prescription. Les décideurs politiques doivent encore élaborer un cadre politique internationalement reconnu – accompagné d’un ensemble d'indicateurs et de jalons mesurables – pour guider les pays recherchant l'amélioration généralisée des conditions de vie, au lieu de simplement continuer à utiliser la croissance du PIB comme mesure ultime de la performance de l'économie nationale.

La mesure dans laquelle la croissance crée des opportunités et améliore le niveau de vie dépend d'un ensemble de politiques économiques structurelles et institutionnelles, dont beaucoup n’ont pas trait à l'éducation ou la redistribution (qui sont les champs les plus fréquemment présentés dans les discussions sur l'inégalité). Il y a une reconnaissance croissante de l'importance des institutions – notamment les cadres juridiques et les organismes publics qui gèrent les règles et les incitations – dans le processus de développement. Mais cette reconnaissance n'a pas encore influencé véritablement la façon dont la plupart des économistes et des décideurs pensent la croissance économique.

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Klaus Schwab

Writing for PS since 2013
25 Commentaries

Klaus Schwab, Founder and Executive Chairman of the World Economic Forum, is co-author of The Great Narrative: For a Better Future (Forum Publishing, 2022).

Richard Samans

Writing for PS since 2015
4 Commentaries

Richard Samans is a managing director of the World Economic Forum and Chairman of the Climate Disclosure Standards Board.

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Bassel Nadim Sep 10, 2015

Creating a parallel economic system to provoke inclusive growth may not suffice. The entire economy may suffer from double transactions charges hence will erode the created “inclusive” value. A research for Tanmia Capital suggests changing the classic fundamentals of growth such as “maximization of shareholder value” as a starting point
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M A J Jeyaseelan Sep 9, 2015

If we want the world to be a better place (which it can be), then there are real hard choices to be made between 'more' and 'better' and between 'greed' and 'happiness'.

While there is so much emphasis on the quality of goods and services, there is very little focus on the quality of life, which these goods and services are supposed to create and support.

What is not often realised is that we are being made to pay a far heavier price for a very poor quality of life, which the current socio-economic and political system is able to provide to people and that too very condescendingly. Growing inequalities is part of this paltry package.

WEF wants us to be to be 'pro-equality and pro-growth, to advocate strengthening social inclusion while promoting the efficiency of markets', while the very same markets are responsible for the continuous widening of inequalities. While WEF asserts that it can be achieved, it hardly adds anything about the 'how' of it. We need more substantive thinking on such critical issues than mere pontifications.

The real root causes of the growth challenges are indeed beyond the grasp of markets. It is time that we accepted the serious limitations of markets and stopped treating these as omnipotent and omniscient. At the bottom of all the major economic challenges, is highly wasteful utilisation of our resource endowments abetted by the market mechanism and autocratic governance frameworks.

My off the cuff estimate is that we currently waste or make wasteful use of at least about 60% of our resources including human ingenuity. We can certainly have a better quality of life for all without indulging in any of these wasteful activities. Examples of such wastages are in every sphere. More than half of what is being peddled as social sciences is irrelevant. The size of Internet can be shrunk to a fifth of its current size, if we are able to filter out redundancy and separate out valid information from gossip. The world can cut down the advertisement expenses almost to nothing. Military spendings can be 10% of what it is currently. Governments can be equally small too.

It is well-nigh impossible to take care of every person equally with so much of the world's resources remaining locked up in unproductive assets or being expended so wastefully. In short, goods and services that are relevant for the quality of life people constitute only a third of the National Incomes. It will not be possible to reduce inequalities just by changing the investment/consumption patterns in these areas. If we really want viable long term solutions, we must focus on diverting vast amounts resources that are currently being wasted in to activities that have a direct bearing on the quality and equality of life .
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Garrett Connelly Sep 8, 2015

There is no bigger policy challenge than figuring out that it is impossible to grow to infinity on a finite planet.

Every new corporation founded is designed to grow to infinity and devour Earth as a financial resource foe its growth.

The ultimate riddle is how to live in prosperity with a gently declining population that uses less resources per capita.

(Humanity has known for over a century that full commitment to education leads to a gently declining population).
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M A J Jeyaseelan Sep 8, 2015

Inclusive growth is certainly not a new agenda for the governments of the developing world. Inclusive growth is still a key political platform in these countries for winning elections.

It was these very same institutions like the world bank and WEF, which called upon these governments to eschew socialism and embrace capitalism. What has made them to change their heart?

It is the recurrent failures of the free market economies and the realisation that the growing inequalities are at the bottom of these failures, which has forced these bodies to rewrite their slogans.

What these organisations had not understood so far and perhaps will refuse to understand in future as well is the fact that growing inequality is not an aberration but, the inevitable end result of the free market mechanism.

Free market economic systems and the science of applied economics built upon it have it in them to create economic inequalities and more importantly accentuate the disparities over time. https://www.linkedin.com/pulse/root-causes-inequality-jeyaseelan-m-a-j

The world will never be able to solve the inequality puzzle within the framework of the existing domain knowledge in economics. Economics as it is being taught and practised is full of fault lines that will inevitably cause quakes and tremors. If economies are failing, economics cannot claim immunity. There is no way to solve the current economic problems without rewriting the fundamentals of the economic science. https://www.linkedin.com/pulse/20140622113422-17589031-is-it-time-for-rewriting-economics

One of the biggest tragedies of modern day economics is that it not only skirts around all issues and concerns of right and wrong but also has no wherewithal to distinguish healthy growth from unhealthy or cancerous growth. It is wrong to treat every increase in GDP as good and vice versa. There are bottoming out processes, which might actually pave the way for qualitatively better growth. https://www.linkedin.com/pulse/20140718210034-17589031-healthy-vs-unhealthy-economic-growth

In a nutshell, the extant domain knowledge in economics is woefully inappropriate and inadequate for resolving the monumental challenges, which the world economy faces. It will be in the realm of wishful thinking to believe that we would be able to overcome the problem of economic inequalities without rewriting the fundamentals of the economic science and restructuring the economic systems and frameworks.
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Jose araujo Sep 8, 2015

I ear a lot the term structural reforms, ans 99% of the time what it means is flexibilization of labor markets, the pressurization(sp.) of work, and lower wages. That makes little sense since a big part of this countries work is extremely flexible and wages are already low.

I also ear a lot about the structural reforms that mean the end of social security, health benefits, free education, etc..

Now, I still don't know how the hell those measures qualify has structural since most of them are aimed at destroying the structure of the economy, but go figure.

Wars were raged to impose this believes of structural reforms (free trade), opium wars and others. Revolutions started because of this beliefs, the American revolution for example, because truth be told, most of this structural reforms have nothing structural, they are just aimed at supporting an imperial policy where countries impose free trade and free markets to others just to dump manufacturing surplus and to access to cheap resources.
- Jose araujo Sep 8, 2015
  
  Ps. Where it reads pressurization its should be precarization (sp).
  
  By the way its also laughable when corruption is referred to a main obstacle of growth while at the same time this same people support dictators by giving them money and access to loundromats....
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Robbie Jena Sep 8, 2015

"The Inclusive Road to Growth" still is not in Practice.

Sounds like:
"Civilization begins with order, grows with liberty and dies with CHAOS.” – Will Durant.....
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Michael Public Sep 7, 2015

This sounds like a good way to start measuring it. Start publicly publishing these measures each month. Nothing drives behavior of governments better than proof they are doing the wrong thing.
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Paul Friesen Sep 7, 2015

I think we have failed to understand the fundamental reason that so many countries remain so poor. To me, it can be understood almost entirely as the result of economic clustering. Activities like manufacturing create environments in which more activities can thrive, for all sorts of reasons. Countries with lots of activities attract more. Countries that got left out when the clusters initially formed repel activities. The demand for labour in the former creates high wages. Lack of demand for labour in the latter makes wages low.

You will not get "development" in poor countries unless you can get more economic activities into them. The most likely way to do that in most cases is to focus on industrialization. Things like education might help industrialization, but if the industrialization does not occur all you get is lots of underemployed educated people. Improving the rule of law and stamping out corruption might help industrialization, but, again, they will do little unless the industrialization takes place.
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stephan Edwards Sep 7, 2015

Inclusiveness is deader then the Dodo. Policymakers are wholly and blatantly in the pockets of those the current situation benefits. By policymakers I mean not just the politicians who will never have to live as long as they can give 20 minute speeches at 50, 000 a pop, But the unelected who carry out policy for a few years and then go back to work for Goldman-Sachs or Lockheed. They have broken the back of labor who cannot compete with someone in 3rd world hole making 2 dollars a day. Bluntly the current situation benefits the ruling and while they may talk alot about changing the substance will be zero.
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Le chemin inclusif vers la croissance

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