A situation analysis of the current economic panorama with special focus on context and problems, in a search for new development models to cope with the world crisis and build new positive scenarios.
Growth, Development, Human Capital
Conventionally, the term economic growth is the increase in the amount of goods and services produced by an economy over time, measured as the percent rate of increase in GDP on an annualized basis net of inflation. The use of per capita GDP as the main indicator of the level of growth of a country, together with monetary variables such as consumption and income as measures of wealth, has created a situation where the theory of growth has been reduced to a unilateral analysis of factors, to the detriment of historical, ethical and human considerations. Yet the relationship between the most commonly used growth indicators and wealth is much more controversial. As is the relationship between economic growth and economic development.
A broader and more articulated concept than growth, indubitably economic development includes action to improve the well-being of a community calculated in terms of life expectancy, literacy levels and schooling, the poverty threshold, as well as, equally important, a holistic vision of progress as quality of the environment, leisure time, culture, safety, social equity. Here, growth is one of the means and not the ultimate aim of development, and people are not instruments to increase income and wealth, but the makers of their own welfare.
The financial and economic crisis of the last few years has highlighted clearly the limits of growth theory; whilst digressions and extremist views that criminalize it are to be avoided, we have to set our development model on a new basis inspired by the principles of social equity, eco-sustainability and durability. The need for such a review is urgent, dictated by a situation that is deteriorating and will not be resolved in the immediate term. “We’ve gone from a financial crisis to an economic crisis and in the coming months it’s going to be an employment crisis. In some countries, these events could next become a social and human crisis.” This was the former president of the World Bank, Robert B. Zoellick, speaking at the beginning of 2009.
A few months ago, shortly before the end of his five-year term of office, warning the G20 about the risk of a European “Lehman moment”, Zoellick added that it would be better if the euro zone countries could “avoid piling up debt … and look to the fundamentals of future growth— infrastructure and human capital.”
Whatever the underlying causes of the crisis—the growing distance between the real economy and finance, or the superiority of finance over production, or the lack of confidence in government leadership—today there is fierce debate over the remedies, where no formula seems to provide the answer, monetarist or neo-Keynesian, public spending or austerity, state intervention or the free market.
So the question is, what growth? What development? And if there were no economic recovery, and we found ourselves facing a real, serious recession, if we were forced to review our lifestyle models and limit our field of action, can we say with certainty that this degrowth would not itself become an opportunity for moral growth and human development?
While the assumption remains that economic growth is and continues to be a primary goal of states and of society, today there is a pressing need to learn to recognize its intrinsic and physiological defects and to see it as an important aspect of human activity, not as its main distinguishing feature.