The Commission on Global Economic Transformation: Rethinking Economic Paradigms for a Challenging Future

This podcast announces the formation of the Commission on Global Economic Transformation (CGET), a joint initiative by INET and CIGI, co-chaired by Nobel laureates Michael Spence and Joseph Stiglitz, and Adair Turner. The commission aims to address critical global problems that current economic models and governance structures are failing to resolve, leading to significant human and political consequences. Key issues include the failure of the standard market economy for most citizens, the shortcomings of the neoliberal globalization model, the inadequacy of protectionist responses, and the urgent need to integrate climate policy with economic policy. The speakers emphasize that the 2008 financial crisis exposed the instability of financially-led growth models, and highlight the alarming rise of inequality, the decline in labor's share of income, and the increasing dominance of monopoly rents over traditional capital and labor returns.

The discussion delves into the profound impact of technology and automation, predicting that job losses from AI and smart machines could dwarf those from globalization, posing immense challenges for both advanced and developing economies. The traditional manufacturing-led export model, successful in East Asia, is deemed unsuitable for Africa, where most future population and labor force growth will occur, necessitating new development strategies to avert escalating migration crises. The speakers also underscore the need to rethink public finance, public policy, and innovation systems, particularly concerning data ownership and intellectual property rights, which are increasingly driving economic rents.

Practical insights include the necessity of a "third way" beyond the failed neoliberal consensus and counterproductive nativist protectionism. The commission will explore how to rethink the role of the state versus the market and civil society, drawing on alternative economic models developed over the past 10-15 years. The importance of intellectual honesty, diverse perspectives (geographic, gender, ethnic/racial), and a nuanced understanding of economic theory is stressed to improve public debate and inform policy responses. The speakers acknowledge the slow pace at which political elites recognize systemic failures, citing the 2016 US election as a wake-up call regarding globalization's downsides.

Broader implications suggest that without fundamental rethinking and proactive policy interventions, the future of market economies and democratic governance is at risk. The current economic dysfunction is seen as fueling social despair, potentially leading to a "raging mob" rather than informed democratic action, and threatening social integration and non-economic freedoms. The commission's ambitious intellectual project aims to provide sensible solutions and a coherent narrative to guide national and global public policy, ensuring that technological progress and private sector innovation serve as part of a sufficient solution, rather than exacerbating existing challenges like inequality and climate change.

"the standard market economy as we know it in the United States and Europe has not been working well for most citizens or for at least a very significant fraction."

"the way globalization was managed in the past sometimes called the neoliberal model or whatever did not work for large fractions of the citizens but the Trump protectionist and protectionist of nativist policies are going to be equally bad for the same groups of people so there needs to be a third way."

"the loss of jobs that's been associated with globalization may be small compared to with the loss of jobs that maybe was a result of realisation in AI."

"the manufacturing led export-led model is not going to be working for Africa and that's where the one place in the world that remain most people in poverty and most of the population growth over the next 50 years will be in Africa."

"the 2008 crisis showed that financially led economic model which was sort of the the model that predominated before 2008 didn't work very well doesn't produce high growth and didn't produce stable growth."

"the striking thing is the share capital is also down what does it mean the share capital the share of labor is down well sheriff ranks monopoly rank Salman all other sources of ranks are up that's a very different model of the economy than has been taught in basic economics for a very long time."

"if you have two thirds of humanity not able to grow its incomes through roots that we know what exactly will they do this is the kind of tricky question where we can't go back to something that no longer exists."

"I personally believe and I'll be talking that further this evening about this that we are facing extraordinary technological capabilities the ability to automate more and more functions the ability to innovate new products but I think in many ways these may makes the challenges for some developed countries and some developing countries more challenging than they are at the moment."

"I think we live in a world in which it's highly likely that in 2050 all the manufactured goods that the world need will be produced by maybe 5% of the global workforce."

"the biggest danger right now is whether this dysfunctional economics produces not the wisdom of crowds in a democratic governments but puts create something that looks more like a raging mob and deforms the way we live."

"the evidence from the US that there are areas of the US which were particularly exposed to Chinese or Mexican competition and that those where the real wages have fallen most dramatically and those where the opioid abuse problem is greatest and those which are voted for Donald Trump in a large amount this is a very very compelling evidence."

"if you address gender inequality particularly because of the ramifications it has for children it has almost more to do with alleviating poverty than any of the other or many of the other Development Goals put together."