Millennium
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Capitalism in Youth
The twentieth century was marked by three great disasters – the two wars and the Great Depression. Speaking in the most general terms, the major lesson to be drawn from the past hundred years is of the things to be avoided. Most people, at least in the more developed world, suffered more from death and hunger in the wars than from the depression. In a world equipped with atomic weapons, war is what we must, above all, seek to avoid. This is especially a lesson for the United States, because we are particularly vulnerable to any use of atomic weapons. (One bomb in downtown New York, I note, would rob a very large number of people of their possessions and any record of what they own.) So the two greatest needs we have now are peace and the avoidance of another world depression. Globalization: Benefits and Costs: Globalization is a very ugly term! I strongly hope that we will have closer international relationships in such areas as economics, culture, the arts, travel, and communications. One of the sources of disaster in the century just past was uncontrolled nationalism. Trade, along with cultural exchange and travel, lessens that risk. If you are an international corporation doing business in various countries, you are not inclined to stir up trouble between governments, as has been the case in the past. The loss of jobs by industrial countries to the developing world is inevitable in greater integration of countries into the world economy. It is something we must live with. We should bear in mind that this loss of jobs is to people who are also very much in need of work and for whom employment is an escape from severe poverty. There are things we can do internationally to support wage standards. Speaking of vulnerability of developing countries to external shocks, we should take for granted that there will be economic crises, and especially in the young countries. History offers many examples of financial insanity in newly industrializing countries. Future crises are likely. There are some things we can do – that the IMF can do – to alleviate the damage, but two points must be made: capitalism is inherently unstable, and it is especially unstable in early youth. This is inescapable. The IMF, the World Bank: Those years that brought the IMF and the World Bank into existence were ones of great innovation. One wants to see continued development, for example, of the World Trade Organization, laying down the common rules on international trade. We also want to see more international coordination on science and on economic policy guidance. International action through conferences and through institutions such as the IMF, the World Bank, and the WTO is an essential part of the internationalism. When we have a crisis, there needs to be an infusion of capital and there needs to be guidance on the matter of recovery, both of which are essential functions of the IMF. We want to see the World Bank continue to support capital flows to the poor countries – a most important function. The international financial markets do not sufficiently help the poorest countries, and that is where the World Bank is needed. One of the great achievements of the last century was the end of colonialism. But the end of colonialism did not bring the end of poverty, nor did it ensure in all cases an adequate government. Democracy, Development and Economic Growth: While supporting democratic government, we must be aware that democratic government can be a guise for poor government or non-government. We have to look beyond democracy and ask also for competence. Looking around the world today, one sees that good, honest government is the greatest requirement for economic development. One of the greatest barriers to economic development is the government that does not serve its people and is protected by a commitment to sovereignty. We need to recognize – through the United Nations, not through individual countries – that there are times when sovereignty protects grave suffering. The Economic and Monetary Union (EMU) is a step in the right direction. It is more wonderful in conversation than in reality, and people would like to see the reality increase beyond the common currency. Economic and monetary union is one of the important developments of our time. Income Inequality, Urban Poverty: Inequality and urban poverty are indeed the two great problems of the developed countries. Let us always have in mind that nothing, absolutely nothing, so denies the liberty of the individual as an absence of money. There will always be tax evasion. But we do make escape from the income tax system to the tax havens a matter for criticism and contempt, and let us continue doing that. We need even more to examine how the money that goes to the tax havens was, in fact, made. People who make money honestly generally pay taxes and this must be legally assured. The pursuit of income is not damaged by the fact that some of it goes to taxes; it may be enhanced. The contrary view is advanced by those who don’t want to pay taxes. We must recognize that some of our most ingenious and committed literature is on the dangers of taxing the affluent. In that connection, we must have an increasing recognition of the relationship of income to corporate structure. Very large incomes are established by the top corporate executives who are in the wonderful position of appointing the board of directors that set their income. We should hardly be surprised if that income is very generous. In a peasant economy or a simple farming economy, as we’ve had in the past, there was a greater equality, often a greater equality in poverty, than there was as development increased and an increasing number of people escaped the poverty. But when people left the farm and went into business or the professions or other endeavors, income inequality increased – the result of expanded opportunity. GNP & GDP, State Role: Florence in its great days was a town with a very low gross domestic product. Shakespeare came from a country with a very low GDP. And Darwin, who did more to change our thinking about human existence and prospects than anyone else, was also from a much poorer country. Many of the great achievements of humankind have had very little to do with income. This is something we should always have in mind as we contemplate our educational system. Work is very good if you are poor, but if you are rich, leisure becomes important. The more you enjoy your employment, the more pay you get. People want to have a share in their government, want freedom of expression and the other liberties associated with well being. There are some things – education, health care, minimum income, social security – where government is absolutely essential. There are other matters where the government rightly surrenders the production of goods and services to private enterprise. As to the future, let us hope to see improvement in the poorest countries and reasonable stability in the fortunate countries, and closer international association. |
