Social contributor – Dickson Igwe
Free market, supply side – trickle down- economic thinking is facing it’s Waterloo moment
After the era of economic stimulus ended in the early 1970s- the belief the consumer is king and that deficits driven by public spending generate the best type of economic growth- free market thinking became the dominant force in western economics.
The new Supply Side Economy lowered taxes on the rich, deregulated labor and production, and placed Jack the Investment banker and Tom the Billionaire at the core of the global economy.
However this mid 2019 – 40 years later- a number of the world’s most respected economists have decided that Free Market Economics has failed, spectacularly.
Today economic growth is lower than in the Post War Stimulus era. Global wealth is controlled by .001% of the world population. The middle and working classes have seen their incomes stagnate and even decline.
Another result of the vast inequality that the Supply Side Economy generated has been the rise of public anger. A new western nationalism has disowned globalism and blames migrants and foreigners for all of today’s problems.
Photo courtesy http://www.economicnoise.com/
Joseph Stiglitz is a Nobel Laureate in Economics, Professor of Economics at Columbia University and the Chief Economist at the Roosevelt Institute. Stiglitz has proposed a New Way.
Progressive Capitalism is a new thinking based on four priorities: The first is to restore the balance between markets, the state, and civil society.
Stiglitz asserts that slow economic growth, rising inequality, environmental degradation, and financial instability are all problems born of free markets.
As a consequence these problems cannot be solved by free market thinking.
Governments have a duty to intervene in the economy.
Governments have a duty to limit and shape markets through regulation and do the work markets have failed to do such as research and development; and investing in technology, education, and healthcare that lift up the working and middle classes.
To be continued
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Dickson Igwe is an education official in the Virgin Islands. He is also a national sea safety instructor. He writes a national column across media and has authored a story book on the Caribbean: 'The Adventures of a West Indian Villager'. Dickson is focused on economics articles, and he believes economics holds the answer to the full economic and social development of the Caribbean. He is of both West African and Caribbean heritage. Dickson is married with one son.
