Economic Reform Now: A Global Manifesto to Rescue Our Sinking Economies
Heiner Flassbeck, Paul Davidson, James K. Galbraith, Richard Koo, Jayati Ghosh, Palgrave Macmillan, 192 p., 2013
Five distinguished economists, professors at universities and international research institutions in the USA, India and Japan call for fundamental changes in economic policy for more common good and improved international cooperation. Because: 'Prosperity for all is not only possible, but necessary for a functioning economy'.
They ask fundamental questions about recurring crises in the global economy and the fact of hunger in a world of plenty. They contradict the theory of a free market that is as uninfluenced as possible and that already fixes everything. In the fifth year after the current financial crisis, the group of authors draws parallels to earlier crises and calls for active economic policies.
The authors criticize economic paradigms and individual misguided developments. The profiling of individual countries at the expense of others instead of a joint approach to global challenges is just as much a hurdle as thinking in terms of short-term benefits instead of understanding long-term consequences. Deregulation of the financial market is portrayed as a governmental mismanagement and is held responsible for the financial crisis. While the observations are mainly of an economic nature and reflect the regulatory possibilities of economic policy, e.g. in a balance sheet recession, the authors also address the behavior of the actors. Opaque financial packages were fraudulently decided by financial industry executives. Politicians, too, intent on their re-election, often tend to be obstacles to change and tend to present rather outdated economic thinking. In all examples, names and organizations are mentioned and are thus easy to follow.
Among the ideas proposed as solutions are: an international institutional framework for cooperation for the benefit of all; de-tabooing government debt, creating investment in infrastructure and profit opportunities for businesses; downsizing and regulating financial markets. At the individual level, taking responsibility versus short-term self-serving profit maximization and 'getting the heck out of dodge' when the game is over. Violations of the law must be brought to court. For the acting companies, as a priority, to restore trust.
Improved living conditions for all people and especially the handling of nature and energy are named as goals. Improved distribution competence leads to higher economic efficiency. Interesting that even just experienced economists among others come to the conclusion that for a more sustained development we need to 'relearn old lessons about fairness and participation'.
Tripl3Leader recommends the book especially for executives with stakeholder dialogues with policy makers. It highlights opportunities at the macroeconomic level and reflects on the role of financial institutions.