This was the topic under discussion for the third edition of the "Global social transformations and the limits of growth in the 21st century" international forum, organized online by the World Academy of Art and Science in collaboration with UNESCO, the Lomonosov State University in Moscow and the Club of Rome on the 15th of June 2021. The event was organized in two parts.
The first part was dedicated to interventions from invited speakers who aimed to highlight a series of important issues such as post-pandemic economic growth, the intervention of global financial institutions in this regard and the role of international actors in regulating economic growth, particularly in developing states hit hardest by the pandemic. This section saw interventions from Ilya Iliyn, the Dean of the Faculty of Global Processes at the Lomonosov State University in Moscow; Tatiana Vaslovaya, General Director of the UN Office in Geneva; Federico Mayor, President of the Alliance of Civilization; Luiz Oosterbeek, university professor at the Polytechnic Institute in Tomar, Portugal, and Emil Constantinescu, the President of the Scientific Council of the Institute for Advanced Studies in Levant Culture and Civilization.
In their interventions, the speakers stressed the fact that mankind is confronted with irreversible global threats, which can only be efficiently managed if the global society makes a concerted effort to increase its resiliency. Moreover, multilateralism represents one solution for tackling the problems facing mankind: famine, poverty, disease and environmental threats. Just like in any other crisis, the pandemic has also disproportionately affected the most vulnerbale communities. For this reason, reconstruction will likewise be unequal; and, given these circumstances, we must not only redefine the social contract that ties our societies together, but must also act on the economy at a global level in order to have it operate as a bridge between the needs of the individual and the state which attempts to meet these needs. In order for society to operate at maximum capacity, it must prove both sustainable and durable, with the caveat that the two are not mutually interchangeable but, rather, mutually complementary.
The second part of the event was dedicated to the discussing avenues for the implementation of these ideas during a lengthy question and answer debate, moderated by John Crowley – the Director of the UNESCO Department for Research, Policy and Predictions, and by Carlos Alvarez Pereira, of the Club of Rome.
Emil Constantinescu: The end goal is to have society run by people and not by the market
The most striking conclusion of the economic events of the pandemic, bearing social implications, was the discrepancy between the impoverishment of the population at the same time as the increase in wealth of the world’s billionaires. The List compiled by Forbes Magazine on April 7th, 2021, comprises 2.755 billionaires, with 493 new billionaires this year only – one every 17 hours on average. According to the Oxfam report – “The Inequality of theVirus”, of January 25th, 2021, the combined wealth of the ten richest people in the world, increased during the pandemic by 540 billion dollars. It only took nine months for the wealth of the first 1.000 billionaires to come back to their maximum from before the pandemic, while for the poorest part of the world, the recovery might take longer than a decade.
I would also like to mention the recent reaction of the leaders of the main seven economic powers of the world, who, upon their meeting at the Cornwall Summit of June 11th-13th, decided to support the proposal made by President Joe Biden on an agreement on the establishment of a global tax of at least 15% for multinational corporations, to counter their resort to fiscal paradises with extremely low taxation levels or exemptions from taxation.
Almost a decade ago, I received from Graeme Maxton the book titled „The End of Progress: How modern economics has failed us”. The question that Graeme Maxton attempts to answer is “How can we offer compassion, kindness, equal access to opportunities to a large number of people, at the same time as protecting the world for the future generations?”. The question that Maxton raises as a representative of the Western world holds a special moral significance to me. In the first decades after the fall of the communist dictatorships of Eastern Europe which were fundamented on a state managed economy, I fought for 6 years as a civic leader and for 4 years as a head of state for a radical change to a democratic state, the rule of law and a free market economy. Today, after 30 years, I am profoundly disappointed.
As I discussed with Francis Fukuyama in 1998, in Harvard and in 2014 in Gdansk, the last decade of the past century was not the end of history. And the first decades of the 21st century are disappointing not just for me, but I think that they would have also been disappointing for the first Democrat presidents of the Eastern and Central European countries, should they have been among us.
Modern economy deformed the ideas of classical economists, who had in mind a moral fundament for a healthy economic development, that would lead to the creation of a robust middle class, able to support a stable democratic society.
If one cannot expect of today’s billionaires to fight for changing the very system that created their wealth – often based on financial speculations, governments need to revise their duties. This means that ideas of governance and democracy must be reconsidered.
We need a global leadership that can stand up to the exaggerated influence of global companies. The market economy needs to become accountable to the society it serves. This translates in the form of laws and regulations, that can govern the market and provide free access to its resources from the society at large, refraining from restrictive practices, which would have a negative impact as far as producers are concerned. We must preserve equity to preserve economy and the economic environment per se.
In the end, it all comes down to examining the essence and the role of life, which should not be focused entirely on consumerism, money, and growth. There are other social, cultural, intellectual and spiritual preoccupations that can satisfy our interest, without drying the planet’s resources.
The economic model of the future must not be a prisoner of consumerism and economic growth for the sake of growth. Economy must not be entirely abandoned to the free market, but rather steered to satisfy the needs of the society in its entirety. Such a perspective – moving from the needs of the individual towards the greater good of the society, will help ensure sustainability, equality, justice, and correctness. The end goal is to have society run by people and not by the market.