For years the neoliberal economic principles based on Milton Friedmann’s work and the Chicago school tradition have emphasized that the results of Adam Smith’s theory of the invisible hand maximize the aggregate welfare of society based on an individual’s pursuit of happiness. This approach reinforces the greed and the unsustainable quest for economic profit that do not respect the human being or the environment. This greed is behind the 2007-2008 financial crisis of Wall Street bankers. Regulation is only a first response to a deeper problem underlying in the very roots of capitalism.
Robert Bates, a Professor of Government at Harvard University, emphasizes that economic reform is strongly attached to democratic reform, inferring that the former is only possible if the latter occurs (Bates, 2004).
In their book For the Common Good, H.E. Daly and J.B. Cobb (1989) point out that “the axiom of greed must be rejected because real people, unlike Homo Economicus, are not insatiable”. They add that “the view of Homo Economicus derived from anthropology and still underlying the existing discipline is radically individualistic”, concluding that “society as a whole is viewed as an aggregate of such individuals” (Daly et al, 1989).
Economic growth has been emphasized by the political, economic and corporate elites. This economic growth failed to incorporate the sustainability clause. Natural resources are finite. The depletion of natural resources harms the environment and the viability of capitalism on the long-run. Sustainability comes into play in a new economic paradigm. Marcel Jeucken (2004) describes sustainable development as a triple bottom line that includes the three Ps: people, profit and planet.
Once upon a time in 1944 in a small town in New Hampshire, called Bretton Woods, the economic elite of 44 nations met to determine the skeleton of the subsequent economic and financial architecture. Such economic architecture would aim at avoiding the pitfalls of the interwar period that led to the emergence of Nazi Germany and the eruption of World War II. Those times are no longer representative of today’s time. Today’s challenges are of a different nature. Extreme poverty, inequality, widespread disease, conflicts that are exacerbated by the availability of weaponry, corruption, money laundering and tax evasion, all of which contribute to the persistence of unethic behavior in today’s capitalistic economies.
It is time to look beyond the present tense to imagine the kind of world we intend to devise for 2050. The Bretton Woods Elites represent an older generation of retiring baby boomers that proved ineffective when dealing with the problems of our time: extreme poverty, environmental sustainability, human dignity and climate change.
It is time to transition from the old paradigms and consensuses to new approaches. The transition has to make sure the whole of society and its operating mechanism turn sustainable, respecting the human being and the environment, proposing international standards that are fulfilled by nation-states, designing new institutions with the ability to provide Global Public Goods that work based on the principle of Global Redistribution.
We lived a fairy tale that is over. We were part of a Western society that slept a beautiful dream. I decided to wake up to the reality of an unequal world and realized our current economic institutions are ineffective. The European Union as Sleeping Beauty must wake up and assume a historic responsibility that it owes to the African continent and the United States and lead the path towards a New Paradigm, financing the change, proposing and executing reform.
On the quest to find the Expert Dreamers of today that will help build a new capitalism I interacted with thousands of individuals throughout Europe, the United States and the developing world.
I met Rodrigo de Rato Figaredo in June 2008 in Madrid. In March 2006, I had sent Rodrigo a letter with some of my thoughts for a redefined capitalism. Rodrigo was Spain’s Finance Minister from 1996 to 2004 and Managing Director of the International Monetary Fund from 2004 to 2007. The letter was part of a group of ten letters that I sent to the following individuals besides Rodrigo: Joaquín Almunia, Raymond Baker, Josep Borrell, Jimmy Carter, Bill Clinton, Hernando de Soto, Susan George, William Greider, and Jeffrey Sachs.
At the end of our meeting I gave Rodrigo a paper I had finished a few days before in the class The European Union and the Challenges of the Twenty-first Century that I took at Columbia University in 2008. I finished the paper in May 2008. Subsequently I mailed a copy of the paper and a letter to the European Union’s 27 Commissioners and to President José Manuel Durão Barroso in an attempt to tell these important leaders that it is time. It is time to move ahead. It is time to never give up and fight the great evils of our time. It is time to start materializing utopia, to start dreaming of the History of Tomorrow.
Jaime Pozuelo-Monfort, Aspiring Candidate to Chief Dreamer
