the new economy: human capitalism? klas eklund iucisd, istanbul june 22, 2001
TRANSCRIPT
THE NEW ECONOMY:THE NEW ECONOMY:Human Capitalism?Human Capitalism?
Klas Eklund IUCISD, Istanbul
June 22, 2001
WHAT IS THE WHAT IS THE NEW ECONOMY?NEW ECONOMY?
• New technology and globalisation• Sounder macro policies• Economies work better, old relations are
stretched -• but “old” theories can still be used• The new economy is not only IT, certainly
not dot.coms• Even though stock market bubble burst
the underlying changes remain
IT - AN INDUSTRIAL IT - AN INDUSTRIAL REVOLUTIONREVOLUTION
• The third, after steam and electrical/ internal combustion engines
• Great effects when the new technology conquers more sectors. Decades before fully ripened
• No idea of future effects or where they will come
• The IT sector in a narrow sense is not very important
GLOBALISATIONGLOBALISATION
• Trade expansion, tariff reduction, direct investments
• Free capital flows, international capital market
• New technology changes trade-off between quality and quantity
Result: Stiffer competition, faster productivity growth, larger markets,
higher speed, cultural integration - and less room for national economic policy
““THE GOLDEN THE GOLDEN STRAITJACKET”STRAITJACKET”
• Low inflation policy, more independent central banks
• Stricter fiscal policies: Rules and targets
• Deregulation• International co-operation and rules• Straighten up and join the club - or
pay a price to stay outside!
STRUCTURES CONVERGESTRUCTURES CONVERGE
• Collapse of the planned economies• Problems of the “Scandinavian model”• Problems of the “Asian model”• Successes of the “Anglo-Saxon model” • Mobile tax bases imply pressure of
convergence of taxes - capital, labour, consumption
• One major currency in Europe. Long-term trend toward fewer currencies?
MACRO EFFECTSMACRO EFFECTS
• Higher growth... – New technique, developmental blocks, clusters
of innovations– Investment and capital rationalisation– Higher productivity - at last
• …without high inflation– Transparency & stiffer competition– Empowered consumers– Lower transaction & distribution costs
• Difficult question: What is permanent and what is transitory?
THERE WILL BE PAINTHERE WILL BE PAIN
• Gains: Productivity, growth, benefits to consumers
• But: Old structures threatened– Creative destruction– Regional, sector-wise and individual effects– New gulfs and inequalities - which old-fashioned
redistribution policies cannot handle
• Unemployment effects depend on flexibility of labour market
• Bubbles and crashes will follow• Risk of political backlash?
UNDEMOCRATIC?UNDEMOCRATIC?• Globalisation opens closed societies, unseats
dictators! • Helps women’s liberation• More narrow room for stabilisation policy
– Restrictions are not new– But they work faster now
• Globalisation does not prohibit national politicians from making decisions – but costs become more visible – the political tool-box becomes less efficient
• The alternative? That politicians have the right/power to set all prices and rates?
• What is the market: An external force - or all of us?
““HUMAN CAPITALISM”?HUMAN CAPITALISM”?
• New economy threatens old structures• Human capital rules
– The new economy is meritocratic– Anti-racist, anti-clerical, anti-chauvinist!– Human capital rules first through competence– then through ownership
• Old class structures and gulfs change character– Traditional labour/capital division still exists
and spreads to new countries– but becomes less important in the ”core”
countries and in leading industries
NEW POLITICSNEW POLITICS
• Communication is swifter– Easier to find each other– Lower costs
• Politics changes shape– Flatter organisations also in politics?– Speed!– Virtual and global debates– Electronic polling - and voting?– Traditional media loses some power
• Public sector efficiency enhanced– Better information– Lower costs
PROBLEMSPROBLEMS
• The digital divide– But must new media be available to all
before anybody is allowed to use them?– Don’t let the god become enemy of the best
• A new class society? “Netocracy”?• Subgroups instead of open discussion?• Too rapid communication - no room for
thought? – A high frequency reality cannot only have a
low frequency political system
CHALLENGESCHALLENGES
• Old parties, structures and activities are threatened– they must renew policies and methods
• But this is not a threat to democracy - rather a chance to develop democracy!
• The real problems– Medialisation– Stale parties and meetings– Unattractive to young people
can partly be addressed by IT