Dave Deruytter has some positive economics news for us in a volatile world.
It is time to look beyond the current lingering international issues such as Brexit or the world trade war. Of course, the trade war and Brexit need a good and future-proof solution, still there is more to life and business than those two problems. Technological but also social innovation is looming around the corner to change parts of our way of working and our way of relating to, or socializing with, one another.
Technological advances are well covered in the press. Medical breakthroughs, digital advancement, social media, virtual reality, service robots, self-driving cars, IOT… all led by advances in Big Data and Artificial Intelligence. We are only at the start of this industrial or service revolution. There is much more to come and many observers expect the pace of innovation and change to accelerate even more.
On the social side, we see developing countries getting richer and their populations too. That is a good evolution. Still, quite a few of those countries have to watch out for the already large and increasing divide between the haves and ‘the haves-not. The ‘Gini’ coefficient of these countries is not good and worsening. That may become dangerous for social stability. Strangely the same seems to be happening in the West, with lower pay for large numbers of the young generation, leading to unrest like the ‘Yellow jersey’ movement in parts of continental Europe.
We will have to revisit the relation between what people do and what they are paid for it. Should the CEO really earn 100 times more than his lowest ranking employee? Should a top sports player earn more in a week than most people in a year? Is it normal that the 26 richest people in the world own as much as the 50% poorest (according to Oxfam)? Thus 26 people own as much as the 3.8 billion poorest people on earth. All in favour?
I know there is no law against greed and there probably should not be one. Still, maybe we should consider greed to be a legal drug and tax it. You cannot spend more than you can eat, drink, wear, live in, fly with, play with… can you? But money is power for the people who have it, or at least it increases their status. Maybe we should consider power and status as legal drugs too and tax them.
Agreed, taxation alone, will not get us where we need to be.
I do not think that wages today are as closely related to the added value, the risk or effort a person puts into his or her job, as they should be. As far as financial income is concerned, capital gains in particular, it is an overrated income from a human or social point of view. Shareholders are of course important stakeholders in companies, but they seem to be able to punch well above their weight, almost unchecked. The employees, clients, plus society as a whole, are not always served as well as they should be by companies, particularly large companies and especially those active in the new economy. Change is needed there.
Luckily, there are other real green shoots popping up too.