How can we build a better Economy?
by Linus Ziltener
Introduction
We are living in a very dynamic economic situation. Change is everywhere and not reversible. The recent developments are a consequence of a decrease of national powers and constantly growing global interconnections which led us to an extended free trade, liberalisation of the financial markets, more competition on commodity markets, introduction of new technologies. Because of all this the way we live and work has alterated a lot, at least for people living in western countries for whom I like to speak. On the one hand we are living in a much exciting and challenging world of globalisation, on the other hand we are endangered by numerous risks which frighten people and are about to destabilise our societies. Already today a lot of problems are perceptible and should alert us.
Problems
A lot of people were excited about the upcoming globalisation because they thought this development could be beneficial for every one. But now there are winners and losers. Our economic system has switched more than ever to a survival-of-the-fittest capitalism, governed by the ideas of big company boards. On the one hand there are huge globally orientated companies having unbelievable profits, on the other hand there is a large workforce which has been deprived to own a stake in all this. The managers of those multinationals blame this situation on emphasising too much on the so called shareholder value, but in fact there is a big lack of common sense and social responsibility in numerous executive boards. If the only goal is considered to be cutting down expenditures to achieve profit maximisation it is obvious that some other aspects which are related to the function of a company within a society are neglected. Companies are embedded in the society and are badly advised if they reduce their care to the shareholders only. Having the aim to downsize, they easily lay-off people and delegate the costs for them to the governments. In addition, they pay taxes in the country where it is the cheapest what puts the governments under pressure because of lacking tax revenues. Thus, we are in the middle of a vicious circle. It seems to me that we are living in a very decadent society who has forgotten where our welfare is coming from. In the Eighties and at the beginning of the Nineties governments in the western world increased expenditures excessively and spent more money than they earned by taxes. The budget deficits rose and rose. Nobody cared about this dangerous development because everybody believed the economic boom would further go on and refinance the debts. Now, at the end of the Nineties, we are still about to solve the sins of the Eighties. E.g. by cutting down the budget turn-over. Governments who are forced to do so don‘t put the right emphasis in cutting expenditures. Having those high social security cost because of unemployment, more ill or handicapped people and above all retired people, they forget to think about investing in education, health care of young people and infrastructure. Most people including the governmental technocrats forget that these are the basic needs of society and economy . The current youth- disadvantaging attitude is a consequence of the fact that elderly voters are (or soon will be) in majority for the first time in history of humanity. They are unwilling to improve a system which is beneficial for themselves.
Consequences
For those reasons, the interest of the youth in politics is very weak. They are very conscious that after all their politic activity can not lead to any change. They are outnumbered by the older generations voters. This short-sighted attitude will lead us to lose our competitive advantages in business areas which are crucial for the growth of our economies. The result is a stagnant economy and a hard struggle to catch up again with countries who better dealt with those problems or actually don‘t have them because of another demographic background. In some countries this downturn which will hit poorer people very hard, will initiate major upheavals which will cause a climate of political instability. This won‘t become crucial tomorrow, but some when in the next 50 years.
Conclusions/Solutions
Frequently asked questions
What are the main problems discussed in "How can we build a better Economy?" by Linus Ziltener?
The text identifies several problems, including a shift towards a "survival-of-the-fittest" capitalism where large multinational companies prioritize shareholder value over social responsibility, leading to a lack of common sense and social responsibility in executive boards. This results in companies downsizing, laying off workers, and minimizing taxes, creating a vicious cycle. Furthermore, the author criticizes excessive governmental spending in the past, leading to budget deficits and a subsequent focus on cutting expenditures without prioritizing essential investments like education, healthcare for young people, and infrastructure. The text also points to a youth-disadvantaging attitude in politics due to the growing number of elderly voters.
What are the consequences of these problems according to the text?
The author argues that these issues lead to a weak interest in politics among the youth, as they feel their voices are outnumbered. This short-sightedness can result in a loss of competitive advantages in crucial business areas, leading to a stagnant economy. The text also suggests the potential for major upheavals and political instability in the future, particularly affecting poorer populations.
What solutions does Linus Ziltener propose to address these economic challenges?
The text suggests that governments need to harmonize and improve tax legislation, controlling and monitoring to better estimate tax revenues. The author also advocates for a shift away from subsidies towards long-term investment programs in areas where private financing is insufficient, such as supporting entrepreneurs in developing future technologies. The author also suggests governments should support sunrise-industries and let die more quickly old-fashioned sunset-industries. The text also emphasizes the need for a commitment to foster new visions and goals for society. The text advocates for governmental leadership that sets the pace and gives direction to the society among other players in a non- dominant way.
What is the author's overall assessment of the current economic situation?
Linus Ziltener paints a somewhat pessimistic picture of the current economic situation, characterized by a decadent society that has forgotten the sources of its welfare. The author believes a new orientation of governmental policies is urgently needed to address the complex challenges facing western economies.
- Arbeit zitieren
- Linus Ziltener (Autor:in), 1998, How Can We Build a Better Economy?, München, GRIN Verlag, https://www.grin.com/document/95278
