Moving forward

«Start by doing what’s necessary; then do what’s possible; and suddenly you are doing the impossible»
Saint Francis of Assisi

The sweeping, sometimes lacerating changes of the last decade have strained geopolitical, social and economic equilibria, which were in some cases found wanting.

Indeed, the transition to new equilibria historically goes hand in hand with a paradigm shift forged by the many forces at work in social systems. The phenomenology of change seems to be governed by laws that anthropological science has traced to the physical and metaphysical concept of the absence of any opposing forces in nature1, where the universal principles of nature (…) essentially represent force.

The International Monetary Fund entitled its 2019 Annual Report2 “Our Connected World”, focusing heavily on the need for policies that not only adequately respond to the changes underway but which transcend borders and are global in reach.

The key message of the First Deputy Managing Director, David Lipton, is the need to confront common challenges, particularly those of climate and technological changes, with the ideally shared goal of creating conditions for people to succeed, reducing inequality by striking the right balance between growth, debt sustainability, and social protection.

It could be said that the sweeping, often overwhelming and strongly opposing changes currently underway chime with Kantian pragmatic ethics3, introduced into in economic theory as the conscience of Smith4 or Stuart Mill5.

Older and more recent change theories agree that the paradigm that turns chaos and complexity into a shift is underpinned by individual cognitive processes and collective mobilisation processes around key issues, be they the environment, inequality or technological change, and that lead to a shift in awareness.

A re-examination of events often results in a change to the scheme of being which had been until that time unimaginable6.

Uncertainty abounds in the current macroeconomic landscape and political tensions plague areas of the globe. While world trade has been an extraordinary driver of economic growth, it now faces new threats and disruptions as a result of the tariff war which has jeopardised the process of integration among markets.

Culturally, we are facing a breakdown in the system of international trade conceived after WW2 with the multilateral GATT7 treaty, which gave rise to the WTO8.

This process is consolidated and accompanied by the breakdown of liberal democracy and the liberal order conceived in Europe, with the European Union being a unique experiment for the creation of a “security” or “amalgamated community” as defined by Karl Deutsch9, where a form of common government coexists with the independence of its units.

A new system of equilibria and contrasts is taking shape in line with the global north/south divide devised by the far-sighted Willy Brandt10, in a proposition already defined as “post-western”11.

From a purely macroeconomic standpoint, there are mounting fears that the growth of recent years is softening, exacerbated by lower monetary stimuli, although crises or a return to the lack of transparency and illiquidity which triggered the short circuit ten years ago are not envisaged. The ratio of global debt (households, non-financial companies and public administrations) to GDP is nevertheless again on the rise, reflecting a persisting generalised financial fragility affecting social groups, businesses, banks and governments.

Indeed, one of the most heavily debated and controversial issues remains the approach of modern economic policies to an institution that has existed since ancient times in respect of both public and private debt. Babylonian emperors would occasionally declare a jubilee, a moral and religious event that may give rise to a debt cancellation when debts reached levels causing unsustainable social inequalities and tensions. Today, the issue of debt sustainability is approached from manifold viewpoints, including moral, using assumptions that are not always free of bias, and pseudo-scientific methods.

Nevertheless, the issue faced by the global economy seems not to be merely the slowdown in growth or an inversion of the hoped-for positive cycle, as the “structural fragility that has outlived the recovery from the great crisis”12.

Given the lack of generally-accepted solutions, greater global cooperation would improve the outlook and the European Union should seek to rediscover its original vocation as a major driver and laboratory for the reorganisation of global economic-political relations.

The fronts to work on in this reorganisation include a real reform of public and private finance so that the markets can reallocate resources to generate opportunities, and a “new welfare” to better address “the inefficiencies, dissatisfactions, inadequacies, economic and psychological failures, caused by the great changes of the recent decades”13.

What is at stake is the end of an economic world “full of opportunities that has, however, long walked recklessly”.

The Leaders’ Declaration of the tenth G20 summit, held in Buenos Aires in December 2018, was entitled “Building consensus for fair and sustainable development”. It addresses universal issues, focussing on the aim of building an inclusive, fair and sustainable work future, recognising the importance of social dialogue and where all governments are committed to promoting social protection systems and participation in response to the technological challenges and the needs of the person, particularly the most vulnerable14.

  1. Olinto Grandesso Silvestri, Antropologia Critica e Teorica delle Scienze Antropologiche, Tipografia Reale, Gir. Bursio, Vicenza, 1873. ↩

  2. IMF Annual Report 2019. ↩

  3. Immanuel Kant, Critique of Pure Reason, 1781. Ref. Abraham Edel “Anthropology and Ethics in Common Focus”, The Journal of the Royal Anthropological Institute of Great Britain and Ireland, Vol. 92, No.1 (Jan.-June. 1962), pp. 55-72. ↩

  4. Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, generally referred to by its shortened title The Wealth of Nations, 1776. “The Smithian conscience is perhaps the most attractive, for it consists, as his analysis of duty shows, of a pyramiding of spontaneous sympathetic reactions in a variety of relationships” A.Edel, op.cit, p. 64. ↩

  5. John Stuart Mill, On Liberty, London, John Parker and son, West strand, 1859, “The Millian conscience is a feeling of overweighing importance, where importance involves a sense of massive instrumentality for general welfare”. A. Edel, op.cit., p. 64. ↩

  6. H. G. Wells, “spread out and examine the pattern of events, and you will find yourself face to face with a scheme of being, hitherto unimaginable by the human mind”. In James N. Rosenau, Turbulence in World Politics. A Theory of Change and Continuity, Princeton University, NJ, 1990. ↩

  7. General Agreement on Tariffs and Trade, 1947. ↩

  8. World Trade Organization, 1995. ↩

  9. Karl W. Deutsch (et al.), Political Community and the North Atlantic Area, 1957. ↩

  10. Willy Brandt, Brandt Report, Independent Commission on International Development Issues (1980), later (2001) renamed the “Brandt Equation” by the Information Director for the Brandt Commission, James Quilligan. ↩

  11. Leopoldo Nuti, Full Professor of History of International Relations at the Department of Political Studies at Roma Tre University “Geopolitical Perspectives from a Post-Western World”, in ISPI Annual Report 2019: The End of a World. ↩

  12. Franco Bruni, “The End of an Economic World”, 2019 in ISPI Annual Report 2019, p. 127. ↩

  13. Franco Bruni, op.cit., p. 128. ↩

  14. G20 Leaders Declaration, Buenos Aires, December 2018. “We remain committed to building an inclusive, fair and sustainable Future of Work by promoting decent work, vocational training and skills development, including reskilling workers and improving labour conditions in all forms of employment, recognising the importance of social dialogue in this area, including work delivered through digital platforms, with a focus on promoting labour formalisation and making social protection systems strong and portable, subject to national law and circumstances. We will continue to foster cognitive, digital and entrepreneurship skills, and encourage the collection and exchange of good practices. We will promote increasing labour force participation of underrepresented as well as vulnerable groups, including persons with disabilities.

    We will implement policies to improve the employment situation of young people, consistent with the G20 Antalya Youth Goal. We will take actions to eradicate child labour, forced labour, human trafficking and modern slavery in the world of work, including through fostering sustainable supply chains. We will endeavour to further create enabling conditions for resource mobilisation from public, private and multilateral resources, including innovative financial mechanisms and partnerships, such as impact investment for inclusive and sustainable growth, in line with the G20 Call on Financing for Inclusive Business”. ↩