The Schumpeter columnist of the Economist recalls the eponymous thinker’s bleak view of the future of capitalism. His many worries are magnified today: economic incentives favour stasis, because many big firms thrive on government regulation and companies are owned by shareholders who employ professional managers seeking safe returns instead of risky opportunities. Democracy is also growing more dysfunctional, with citizens prioritizing short-term goals over long term investments, and lobbyists seeking private benefits gaming the system. The worrying conclusion is that as economic stagnation breeds populism, so excessive regard for the popular will reinforces stagnation.
Barry Eichengreen reflects on Galbraith’s The Age of Uncertainty, which was about the abrupt end of the golden age of stability that characterized the third quarter of the twentieth century. From the perspective of 2017, however, the uncertainty of 1977 seems almost enviable. Although Jimmy Carter was certainly not the best president, he he did not threaten actions that placed the entire global system at risk like Trump is doing. In 1977, moreover, the prospects for European integration were rosy as the EU was expanding, while today the Union is losing members. Europe’s house remains half built. The Eurozone is neither appealing enough to attract additional members nor flexible enough to grant troubled incumbents a temporary break, in the manner of the currency snake. Finally in 1977 developing countries were too small to drag down the global economy, while today what happens in China, Brazil and Turkey have important implications for the global economy.
Hope for the Future
For Zoe Williams there is yet hope for the future, as solutions that tackle multiple crises at once are starting to emerge. The crisis of democracy needs to be addressed before any of the other problems can be solved. According to the the World Economic Forum, people who believe that it is “essential” to live in a democratic system plunged from 70% of those born in the 30s to 25% of those born in the 80s. Beside amnesia of the horrors of undemocratic regimes, the problem is that politics is seen as a career for insiders who have a vested interested in preserving the status quo and are, as such, disconnected from ordinary people. In order to fix this, we must realize that voting is only the endpoint of deliberation. The latter acquires meaning on the basis of its prior elements, which need to be improved. Giorgio Clarotti pinpoints one clear opportunity for reforming European democracy in the aftermath of Brexit. Britain’s 73 seats in the European Parliament could be reallocated to create the first genuinely European group of MEPs, voted in office by all European citizens from a single electoral list. This would be easily done by allowing each European voter to cast two votes: one for her national representative and one for the “federal” candidate. This would imply transnational campaigns and, possibly, the eventual transformation of European parties into proper political structures.
Liberalism and its alternative
Graeme Archer thinks that despite the preaching of liberals, a majority of the population is prioritizing local communitarian values over global liberal ones. The key idea here is that the people among whom we live have a higher claim on our attention than those living elsewhere. For Archer, this fact surprises liberal, whose cultural dominance led them to believe that most people accept their worldview. Jonathan Freedland opposes this view and claims that the opposition between the elite and the little people is a false one, given that 48% of British voters supported the Remain side, and in the US Clinton actually obtained more votes than Trump. Liberal, he concludes, is a word that should be worn with pride, holding true to the value of enlightenment, democracy and human values.
Photo Credits CC Christian Görmer
Also published on Medium.
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