There is a Window of Opportunity that is opening up and will not last long. The Social Business paradigm proposed by Nobel Peace Prize winner Muhammad Yunus should dominate the profit-maximizing model so long as the poor remain poor. It is time to align the incentives of corporations, their shareholders and corporate managers, with those of the poor. Corporations should be required to embrace a modus operandi that fulfills the Social Business paradigm in the Yunus sense. Corporations would only transition to a Profit-Maximizing modus operandi when two triggers are hit: (i) a minimum per capita income of $5,000 in purchasing power parity; and (ii) a maximum Gini coefficient of 0.45 as explained in Chapter 5.
We cannot continue to operate under the previous economic paradigm, a unidimensional capitalism that prioritized the interest of shareholders and emphasized the shorter horizon over the longer horizon. We need ways to discriminate between short-term and long-term investors. We need to be aware of the cons and pros of globalization. Better times lie ahead of us if we put the global priorities on the agenda of Europe and North America. If we do not dare, we risk losing a unique opportunity. History will judge the ability of our men and women of political stature to defeat the great evils of our time.
John F. Kennedy screamed twice in 1963 “Ich bin ein Berliner”. It is time for President Barack Obama and his counterparties in Europe to scream the urgency of our time, to fight the Pirates of Heartless Capitalism that wish to perpetuate an economic model that prioritizes the interest of a few. The global agency problem stems from the fact that the political and economic elites on both sides of the Atlantic do not propose reform in the direction that benefits both Hemispheres. The United States emphasizes the war on terror and continues to maintain a foreign policy too focused on Israel and the Middle East. The European Union is a monster with 27 heads unable to become a credible superpower. Europeans continue to hide behind the American friend, who rescues and bails out according to its user’s manual that is not representative of the interest of the globe.
The opportunity cost of not undertaking reform during this Window of Opportunity could be huge. We cannot afford spoiling this opportunity. The elites, lobbies, think tanks and orthodox academia are what Cominform was during the late 1940s, an instrument of propaganda of the Pirates of Heartless Capitalism that seeks to perpetuate an evil economic system that has created wealth in the North in expense of those in the South, and has allocated the wealth with tremendous unequal patterns. The American middle class is not richer today in purchasing power parity than it was thirty years ago. We need more middle class, more sustainable and better allocated economic growth, and less inequality.
Where are thou men and women of political stature? Let’s displace the elites that are not ready to undertake reform. It is time to move one step forward, acknowledge the blame and dare.
Jaime Pozuelo-Monfort, Aspiring Candidate to Chief Dreamer
