Economics That Looks At The Lower Half Of The Pyramid
Context:
A new economic paradigm was the focus of the Global Solutions Summit, which took place in Berlin on May 15 and 16 of this year.
Global Solutions Summit
- Purpose: The Global Solutions Summit’s goal is to bring together various stakeholders to address urgent global concerns by providing a venue for international cooperation and problem-solving.
- Participants: Think tanks, research institutions, policymakers, business executives, representatives of civil society organisations, and academic institutions all send representatives to the summit. It aims to promote communication and collaboration between various industries and areas.
- Topics Discussed: The summit will cover a wide range of subjects, such as social inclusion, climate change, sustainable development, economic growth, and technology breakthroughs. These concerns are urgent and call for creative solutions, as shown by these topics.
- Knowledge exchange: A new economic paradigm was the focus of the Global Solutions Summit, which took place in Berlin on May 15 and 16 of this year. Through presentations, panel discussions, workshops, and research presentations, the summit promotes knowledge exchange. Participants’ thoughts, research discoveries, and best practises are shared, fostering a deeper comprehension of the world’s problems and potential solutions.
Points to Ponder:
- Economic Divide: The passage emphasises the widening gap between the world’s “haves” and “have-nots” in terms of economic status. It implies that this gap is subtly reshaping the Indian electorate and having an impact on politics around the world.
- New economic paradigm: The passage makes the case that a new economic paradigm is felt to be necessary, both in India and internationally. It implies that the majority of people are not benefited by the current economic model, which puts the interests of financial investors first.
- From Socialism to Free Market Capitalism: The text describes the evolution of economic ideologies throughout history. It describes how economies were changed in the 20th century to move towards socialism in order to rebalance incomes and wealth. The rise of free-market capitalism, which was influenced by leaders like Margaret Thatcher and Ronald Reagan, however, changed the tide in the 1980s.
- Impact of Globalisation: The chapter highlights how, since the 1980s, financial capitalization has grown around the world due to globalisation, with money moving freely across national boundaries. Due to this, a global elite class and multinational firms that frequently avoid taxes and put shareholder profits before social welfare have emerged.
- Political Forces and Economic differences: The text makes clear that, with the extremes of the left and right gaining power, economic differences are upending politics around the world. It implies that middle-class economic liberals are unsure, worried about the consolidation of political power while tolerating the concentration of money.
- Critique of Current Economic Reforms: The text takes issue with the current economic reform movement, which prioritises the private sector while cutting back on public spending. It claims that these reforms have not effectively addressed social inequities and have actually worsened economic precarity, especially in wealthy nations.
- GDP as a Measure of Progress: The paragraph questions the use of GDP as the only indicator of development, claiming that it ignores social equity, environmental sustainability, and human aspirations. It implies that human rights and ambitions are not compatible with the current economic model’s emphasis on equilibrium and pricing determined by an invisible hand.
Call for Economic Reform: The chapter ends by urging swift economic changes that put the welfare of regular people first. It advises Indian political parties to focus on the economy and Indian economists to reconsider the current economic paradigm while putting the demands of the lower socio-economic strata first.
