Today’s world is a world of increasing inequality, poverty and despair, a world in which the current players are incapable of coping with a reality that is too rough to admit, too uncomfortable to deal with, and too disproportionately harsh to face. Thirty plus years of development aid have proven ineffective. The major international players in the financial arena are incapable of providing solutions. The Bretton Woods era is gone, the so-called Washington Consensus is a mere reflection of what it once was, in a new world, a new reality where the Cold War and Reagonomics no longer exist, where globalization and unilateralism have gained relevance as drivers of the first years in the twenty-first century.
The private equity shops and hedge funds of the world acquire major relevance in a financial landscape that is more and more sophisticated and hard to understand and to cope with for a majority of individuals in the first and developing worlds who no longer control their financial stability, subject to international traders, hedgers, brokers and speculators. Microfinance is claimed to be the most important tool devised to fight against poverty in the last thirty years, but only reaches a fraction of the extreme poor. New financial services for the poor do not arise because the poor have no collateral, because the poor lack the ability to earn, save and repay. Western financial institutions are timidly entering emerging markets to offer financial services, and more often invest and deinvest to speculate on the short-term and earn positive returns above the benchmark that beat the market. In the meantime the price of basic food skyrockets because of the turmoil in the oil markets, because the West needs to satisfy its hunger for energy with alterative energy sources that have discovered the wonder of biofuel.
A world based on the maximization of economic profit in an extreme derive of capitalism led by the wealthiest is leaving equity and global justice behind, is not incorporating redistribution to the global agenda, forsaking the poor, leaving those with no safety nets to the mercy of the charity of the better off and the corporations, that with their philanthropic activity claim to have become corporate sustainable and responsible, reaching a point of equilibrium where they shall stand for the years to come.
It is however time to turn the course of this journey and admit capitalism is not heading off the right direction. We need more regulation. We need Institutions to be above Markets, we need to protect the more vulnerable with Global Redistribution schemes and welfare systems that enable the incorporation of the poor to the benefits of the lifestyle enjoyed in the West. We need to provide the basic infrastructure to those who lack it, so that the poor get on the ladder of development once and for all and become economically self-reliant. Investors have to start looking at the social return of their investments. Investors have to start computing the collateral damage of some of their investment decisions, that are sound economically speaking on the short run, but bring about calamity and turmoil on the long run. Consumers have to start discriminating among products, and penalize those manufacturers that are not ethical and sustainable, rewarding as a result those that strictly comply with a set of internationally established standards, that must define an ambitious agenda to make sure the environment and the human being are respected.
There is a trend that needs to be accelerated. Muhammad Yunus won the Nobel Peace Prize in 2006 for his contributions to fighting poverty through microfinance. Albert Gore won the Nobel Peace Prize in 2007 for his activism against Global Warming. Society acknowledges the efforts of key individuals that have decided to fight the world’s most serious threats. But the trend has to be accelerated. We need our politicians, corporate leaders and investors to become aware of the challenges of an unequal world. We need our politicians, corporate leaders and investors to turn sustainable.
Jaime Pozuelo-Monfort, Aspiring Candidate to Chief Dreamer
