Dr. Joseph Stiglitz, the Nobel Prize-winning economist, has asserted that the dominant economic model of the latter 20th Century — supply side free market economics — is obsolete in today’s swiftly changing global environment. Trickle down has had its day.
The world today is transitioning away from fossil fuel capitalism towards an energy model that has been termed “beyond carbon.” The fossil economy is no longer sustainable. Climate change and the plastics epidemic are pointers to the colossal damage the carbon economy has wreaked.
The carbon economy is synonymous with the exploitative nature of modern capitalism. The carbon economy is no longer working, and is placing humanity in peril.
Consequently, a new capitalism demands a different route.
The supremacy of the market is no longer socially acceptable in a world where environmental costs of production are ignored. The old capitalism is destroying humanity.
Western voters and residents, especially in Europe, have recognised this threat. They are demanding a change in an economics that is no longer driving greater life quality.
Gross domestic product can no longer be the one measure of social prosperity. Non-market factors such as pristine geography, and air and freshwater quality, must be given economic value.
Then economists and social scientists demand an expansion of the state sector to provide universal basic services and a universal basic income.
Truly, democratic government is the only player that can ensure that resources that should be freely available to all are not capitalised on by private ownership and predatory activity.
Technological monopolies must be broken up to stop rent seeking, the unlimited capability of a handful of global corporations to drive political and economic power in their favour — or, better stated, in favour of the 0.001 percent who control the global economy.
A radical new way of thinking should link the monetary value of production with the labour used in production. The human labour component in production must become the key factor in assessing value.
Today, the preceding is totally reversed: Information technology is destroying jobs faster than they can be created. This simply drives greater wealth inequality as technology is utilised by corporate power to ensure dominance of production and consumption by the tiny minority at the top of the wealth pyramid.
The answer is government intervention. Governments cannot be controlled by big business. Governments must not hesitate at fighting against the predatory pricing of multinational corporations. Governments must also recognise that the consumer or citizen is the most important factor in economics.
Free public services, universal welfare, and wage bargaining actually drive greater equity and produce better economic outcomes, as seen in the Scandinavian model.
Progressive capitalism means a new era of non-market social and business models.
The non-market sector must become the dominant force in economics. Governments must drive a new revolution, creating more equitable economic institutions, better forms of property ownership, new sources of capital, and better regulation of producers and production.
The new measure of social and economic prosperity becomes falling hours worked with better pay; greater quality leisure time for employees; greater activity within non-market institutions; falling poverty rates; rising well-being; and more time by everyone to pursue their dreams away from the dictatorship of the multinational corporation and the 0.001 percent who own global wealth. Progressive capitalism is people-friendly capitalism.
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