“Existing economic theories are incapable of meeting the needs of the future, and we need an economic transition, away from neoclassical economics and market capitalism,” said the latest Sustainable Development report. In other words, capitalism and free markets are not good enough to guarantee prosperity for the people of the world. According to the UN.
This position is bound to stir up heated debate from all quarters. No one can argue with the fact that democratic market economies and global trade have contributed greatly to increased living standards in recent decades, but it seems that the United Nations is having an attack of affluenza.
Only the relatively well-off can afford to build alternative models, make allowances for externalities, and seek to introduce central planning to ‘improve sustainability’. For the many millions, or billions, who have escaped poverty, those are lofty ideals that take second place to consolidating a position in the middle class.
Democracy doesn’t always do what we hope or expect it to do, like reinforce markets. Sometimes democracy leads to the emergence of manipulative politicians and demagogues who are more interested in votes than economic freedom. Spending other people’s money is a great way for socialists to get re-elected; until you run out of other people’s money!
“Granted there are flaws in unbridled capitalism and excessive greed; but expecting bureaucrats to be more efficient with the allocation of resources to the greater good than the market mechanism is misplaced idealism!” huffed one libertarian. Remember the Soviet experiment?
But the UN’s position is clear: We need a transition away from the current model of zero-sum competition, to save the planet and its people. Remembering that UN debates are dominated by politicians, not business people, it’s likely to be a fierce and protracted fight.
Let’s hope some pragmatism emerges, or it might be a case of good intentions with disastrous consequences. Freedom is precious, and not easily surrendered!