Economic growth has stalled. Let's fix it
-
0:01 - 0:06Our ability to create
and sustain economic growth -
0:06 - 0:09is the defining challenge of our time.
-
0:09 - 0:12Of course there are other challenges --
-
0:12 - 0:15health care, disease burdens
and pandemics, -
0:15 - 0:17environmental challenges
-
0:17 - 0:20and, of course, radicalized terrorism.
-
0:21 - 0:22However,
-
0:22 - 0:27to the extent that we can actually
solve the economic growth challenge, -
0:27 - 0:28it will take us a long way
-
0:28 - 0:31to solving the challenges
that I've just elucidated. -
0:31 - 0:33More importantly,
-
0:33 - 0:38unless and until we solve economic growth
-
0:38 - 0:42and create sustainable,
long-term economic growth, -
0:42 - 0:44we'll be unable to address
-
0:44 - 0:49the seemingly intractable challenges
that continue to pervade the globe today, -
0:49 - 0:54whether it's health care,
education or economic development. -
0:55 - 0:57The fundamental question is this:
-
0:58 - 1:00How are we going to create economic growth
-
1:00 - 1:05in advanced and developed economies
like the United States and across Europe -
1:05 - 1:07at a time when they continue to struggle
-
1:07 - 1:10to create economic growth
after the financial crisis? -
1:10 - 1:13They continue to underperform
-
1:13 - 1:17and to see an erosion in the three
key drivers of economic growth: -
1:18 - 1:21capital, labor and productivity.
-
1:22 - 1:24In particular,
-
1:24 - 1:29these developed economies
continue to see debts and deficits, -
1:29 - 1:33the decline and erosion
of both the quality and quantity of labor -
1:33 - 1:36and they also see productivity stalling.
-
1:37 - 1:38In a similar vein,
-
1:38 - 1:42how are we going to create
economic growth in the emerging markets, -
1:42 - 1:45where 90 percent
of the world's population lives -
1:45 - 1:47and where, on average,
-
1:47 - 1:5070 percent of the population
is under the age of 25? -
1:51 - 1:52In these countries,
-
1:52 - 1:56it is essential that they grow
at a minimum of seven percent a year -
1:56 - 1:58in order to put a dent in poverty
-
1:58 - 2:02and to double per capita incomes
in one generation. -
2:03 - 2:05And yet today,
-
2:05 - 2:07the largest emerging economies --
-
2:07 - 2:09countries with at least
50 million people -- -
2:09 - 2:13continue to struggle to reach
that seven percent magic mark. -
2:14 - 2:15Worse than that,
-
2:15 - 2:20countries like India, Russia,
South Africa, Brazil and even China -
2:20 - 2:22are falling below
that seven percent number -
2:22 - 2:25and, in many cases, actually regressing.
-
2:26 - 2:28Economic growth matters.
-
2:28 - 2:30With economic growth,
-
2:30 - 2:34countries and societies
enter into a virtuous cycle -
2:34 - 2:39of upward mobility, opportunity
and improved living standards. -
2:39 - 2:43Without growth,
countries contract and atrophy, -
2:43 - 2:46not just in the annals
of economic statistics -
2:46 - 2:50but also in the meaning of life
and how lives are lived. -
2:51 - 2:54Economic growth matters
powerfully for the individual. -
2:55 - 2:57If growth wanes,
-
2:57 - 2:59the risk to human progress
-
2:59 - 3:03and the risk of political
and social instability rises, -
3:03 - 3:08and societies become dimmer,
coarser and smaller. -
3:09 - 3:10The context matters.
-
3:10 - 3:12And countries in emerging markets
-
3:12 - 3:16do not need to grow at the same
rates as developed countries. -
3:17 - 3:22Now, I know some of you in this room
find this to be a risky proposition. -
3:23 - 3:25There are some people here
-
3:25 - 3:27who will turn around
and be quite disillusioned -
3:27 - 3:29by what's happened around the world
-
3:29 - 3:32and basically ascribe that
to economic growth. -
3:32 - 3:36You worry about the
overpopulation of the planet. -
3:36 - 3:39And looking at the UN's
recent statistics and projections -
3:39 - 3:41that the world will have
11 billion people on the planet -
3:41 - 3:44before it plateaus in 2100,
-
3:44 - 3:48you're concerned about what that does
to natural resources -- -
3:48 - 3:52arable land, potable water,
energy and minerals. -
3:53 - 3:56You are also concerned about
the degradation of the environment. -
3:57 - 4:00And you worry about how man,
-
4:00 - 4:03embodied in the corporate globalist,
-
4:03 - 4:06has become greedy and corrupt.
-
4:07 - 4:10But I'm here to tell you today
that economic growth -
4:10 - 4:13has been the backbone
of changes in living standards -
4:13 - 4:15of millions of people around the world.
-
4:16 - 4:18And more importantly,
-
4:18 - 4:22it's not just economic growth
that has been driven by capitalism. -
4:24 - 4:28The definition of capitalism,
very simply put, -
4:28 - 4:30is that the factors of production,
-
4:30 - 4:33such as trade and industry,
capital and labor, -
4:33 - 4:37are left in the hands
of the private sector and not the state. -
4:38 - 4:40It's really essential here
that we understand -
4:40 - 4:45that fundamentally the critique
is not for economic growth per se -
4:45 - 4:48but what has happened to capitalism.
-
4:48 - 4:52And to the extent that we need to create
economic growth over the long term, -
4:52 - 4:56we're going to have to pursue it
with a better form of economic stance. -
4:57 - 5:00Economic growth needs capitalism,
-
5:00 - 5:02but it needs it to work properly.
-
5:03 - 5:05And as I mentioned a moment ago,
-
5:05 - 5:11the core of the capitalist system
has been defined by private actors. -
5:12 - 5:16And even this, however,
is a very simplistic dichotomy. -
5:16 - 5:19Capitalism: good; non-capitalism: bad.
-
5:19 - 5:22When in practical experience,
-
5:22 - 5:24capitalism is much more of a spectrum.
-
5:24 - 5:27And we have countries such as China,
-
5:27 - 5:29which have practiced
more state capitalism, -
5:29 - 5:31and we have countries
like the Unites States -
5:31 - 5:33which are more market capitalist.
-
5:33 - 5:36Our efforts to critique
the capitalist system, however, -
5:36 - 5:40have tended to focus
on countries like China -
5:40 - 5:43that are in fact
not blatantly market capitalism. -
5:44 - 5:47However, there is
a real reason and real concern -
5:47 - 5:52for us to now focus our attentions
on purer forms of capitalism, -
5:52 - 5:55particularly those embodied
by the United States. -
5:55 - 5:57This is really important
-
5:57 - 6:00because this type of capitalism
-
6:00 - 6:03has increasingly
been afforded the critique -
6:03 - 6:05that it is now fostering corruption
-
6:05 - 6:07and, worse still,
-
6:07 - 6:09it's increasing income inequality --
-
6:10 - 6:15the idea that the few are benefiting
at the expense of the many. -
6:17 - 6:20The two really critical questions
that we need to address -
6:20 - 6:23is how can we fix capitalism
-
6:23 - 6:25so that it can help create economic growth
-
6:26 - 6:29but at the same time
can help to address social ills. -
6:30 - 6:33In order to think about that framing,
we have to ask ourselves, -
6:33 - 6:35how does capitalism work today?
-
6:36 - 6:37Very simplistically,
-
6:38 - 6:44capitalism is set on the basis
of an individual utility maximizer -- -
6:44 - 6:48a selfish individual
who goes after what he or she wants. -
6:48 - 6:51And only after they've
maximized their utility -
6:51 - 6:54do they then decide it's important
-
6:54 - 6:57to provide support
to other social contracts. -
6:57 - 7:01Of course, in this system
governments do tax, -
7:01 - 7:05and they use part of their revenues
to fund social programs, -
7:05 - 7:07recognizing that government's role
is not just regulation -
7:07 - 7:11but also to be arbiter of social goods.
-
7:11 - 7:13But nevertheless,
-
7:13 - 7:14this framework --
-
7:14 - 7:16this two-stage framework --
-
7:16 - 7:18is the basis from which we must now start
-
7:18 - 7:21to think about how we can
improve the capitalist model. -
7:22 - 7:25I would argue that there are
two sides to this challenge. -
7:26 - 7:27First of all,
-
7:27 - 7:30we can draw on the right-wing policies
-
7:30 - 7:32to see what could be beneficial for us
-
7:32 - 7:34to think about how
we can improve capitalism. -
7:34 - 7:36In particular,
-
7:36 - 7:37right-leaning policies
-
7:37 - 7:41have tended to focus on things
like conditional transfers, -
7:41 - 7:44where we pay and reward people
for doing the things -
7:44 - 7:47that we actually think
can help enhance economic growth. -
7:47 - 7:49For example,
-
7:49 - 7:50sending children to school,
-
7:50 - 7:53parents could earn money for that,
-
7:53 - 7:56or getting their children
inoculated or immunized, -
7:56 - 7:58parents could get paid for doing that.
-
7:58 - 8:00Now, quite apart from the debate
-
8:00 - 8:03on whether or not
we should be paying people -
8:03 - 8:05to do what we think they should do anyway,
-
8:06 - 8:09the fact of the matter
is that pay for performance -
8:09 - 8:11has actually yielded some positive results
-
8:11 - 8:13in places like Mexico,
-
8:13 - 8:14in Brazil
-
8:14 - 8:17and also in pilot programs in New York.
-
8:18 - 8:19But there are also benefits
-
8:19 - 8:23and significant changes underway
on left-leaning policies. -
8:24 - 8:28Arguments that government should
expand its role and responsibility -
8:28 - 8:30so that it's not so narrowly defined
-
8:30 - 8:33and that government should be
much more of an arbiter -
8:33 - 8:34of the factors of production
-
8:34 - 8:37have become commonplace
with the success of China. -
8:37 - 8:40But also we've started to have debates
-
8:40 - 8:42about how the role of the private sector
-
8:42 - 8:45should move away
from just being a profit motive -
8:45 - 8:48and really be more engaged
in the delivery of social programs. -
8:48 - 8:51Things like the corporate
social responsibility programs, -
8:51 - 8:53albeit small in scale,
-
8:53 - 8:55are moving in that right direction.
-
8:56 - 9:01Of course, left-leaning policies
have also tended to blur the lines -
9:01 - 9:04between government,
NGOs and private sector. -
9:05 - 9:09Two very good examples of this
are the 19th-century United States, -
9:09 - 9:10when the infrastructure rollout
-
9:10 - 9:14was really about
public-private partnerships. -
9:14 - 9:15More recently, of course,
-
9:15 - 9:19the advent of the Internet
has also proven to the world -
9:19 - 9:22that public and private can work together
for the betterment of society. -
9:24 - 9:27My fundamental message to you is this:
-
9:27 - 9:33We cannot continue to try and solve
the world economic growth challenges -
9:33 - 9:37by being dogmatic
and being unnecessarily ideological. -
9:38 - 9:42In order to create sustainable,
long-term economic growth -
9:42 - 9:46and solve the challenges and social ills
that continue to plague the world today, -
9:46 - 9:48we're going to have to be
more broad-minded -
9:48 - 9:50about what might work.
-
9:50 - 9:52Ultimately,
-
9:52 - 9:56we have to recognize
that ideology is the enemy of growth. -
9:56 - 9:57Thank you.
-
9:57 - 10:00(Applause)
-
10:03 - 10:06Bruno Giussani: I want to ask
a couple of questions, Dambisa, -
10:06 - 10:08because one could react
to your last sentence -
10:08 - 10:10by saying growth is also an ideology,
-
10:10 - 10:12it's possibly the dominant
ideology of our times. -
10:12 - 10:15What do you say
to those who react that way? -
10:15 - 10:17DM: Well, I think that that's
completely legitimate, -
10:17 - 10:20and I think that we're already
having that discussion. -
10:20 - 10:22There's a lot of work
going on around happiness -
10:22 - 10:25and other metrics being used
for measuring people's success -
10:25 - 10:27and improvements in living standards.
-
10:27 - 10:29And so I think that we should be open
-
10:29 - 10:32to what could deliver improvements
in people's living standards -
10:32 - 10:35and continue to reduce
poverty around the world. -
10:35 - 10:37BG: So you're basically pleading
for rehabilitating growth, -
10:37 - 10:39but the only way for that happen
-
10:39 - 10:41without compromising
the capacity of the earth, -
10:41 - 10:43to take us on a long journey,
-
10:43 - 10:45is for economic growth
-
10:45 - 10:47somehow to decouple
from the underlying use of resources. -
10:47 - 10:49Do you see that happening?
-
10:49 - 10:53DM: Well, I think that I'm more optimistic
about human ability and ingenuity. -
10:53 - 10:55I think if we start to constrain ourselves
-
10:55 - 10:58using the finite, scarce
and depleting resources -
10:59 - 11:00that we know today,
-
11:00 - 11:01we could get quite negative
-
11:01 - 11:03and quite concerned
about the way the world is. -
11:03 - 11:06However, we've seen the Club of Rome,
-
11:06 - 11:08we've seen previous claims
-
11:08 - 11:10that the world would be
running out of resources, -
11:11 - 11:13and it's not to argue
that those things are not valid. -
11:13 - 11:16But I think, with ingenuity
we could see desalination, -
11:16 - 11:18I think we could reinvest in energy,
-
11:18 - 11:20so that we can actually
get better outcomes. -
11:20 - 11:21And so in that sense,
-
11:21 - 11:24I'm much more optimistic
about what humans can do. -
11:24 - 11:25BG: The thing that strikes me
-
11:25 - 11:28about your proposals
for rehabilitating growth -
11:28 - 11:30and taking a different direction
-
11:30 - 11:35is that you're kind of suggesting
to fix capitalism with more capitalism -- -
11:35 - 11:39with putting a price tag
on good behavior as incentive -
11:39 - 11:43or developing a bigger role
for business in social issues. -
11:43 - 11:44Is that what you're suggesting?
-
11:44 - 11:47DM: I'm suggesting
we have to be open-minded. -
11:47 - 11:49I think it is absolutely the case
-
11:49 - 11:51that traditional models of economic growth
-
11:51 - 11:54are not working the way
we would like them to. -
11:54 - 11:56And I think it's no accident
-
11:56 - 11:59that today the largest
economy in the world, the United States, -
11:59 - 12:00has democracy,
-
12:00 - 12:03liberal democracy,
as it's core political stance -
12:03 - 12:06and it has free market capitalism --
-
12:06 - 12:07to the extent that it is free --
-
12:07 - 12:09free market capitalism
as its economic stance. -
12:09 - 12:12The second largest economy is China.
-
12:12 - 12:14It has deprioritized democracy
-
12:14 - 12:17and it has state capitalism,
which is a completely different model. -
12:17 - 12:20These two countries,
completely different political models -
12:20 - 12:22and completely different economic models,
-
12:22 - 12:24and yet they have the same
income inequality number -
12:24 - 12:26measured as a Gini coefficient.
-
12:26 - 12:28I think those are the debates
we should have, -
12:28 - 12:30because it's not clear at all
-
12:30 - 12:32what model we should be adopting,
-
12:32 - 12:34and I think there needs to be
much more discourse -
12:34 - 12:38and much more humility
about what we know and what we don't know. -
12:38 - 12:41BG: One last question.
The COP21 is going on in Paris. -
12:41 - 12:43If you could send a tweet
-
12:43 - 12:46to all the heads of state
and heads of delegations there, -
12:46 - 12:47what would you say?
-
12:47 - 12:50DM: Again, I would be very much
about being open-minded. -
12:50 - 12:51As you're aware,
-
12:51 - 12:53the issues around
the environmental concerns -
12:53 - 12:55have been on the agenda many times now --
-
12:55 - 12:58in Copenhagen,
'72 in Stockholm -- -
12:58 - 13:00and we keep revisiting these issues
-
13:00 - 13:04partly because there is not
a fundamental agreement, -
13:04 - 13:05in fact there's a schism
-
13:05 - 13:08between what the developed
countries believe and want -
13:08 - 13:10and what emerging market countries want.
-
13:10 - 13:13Emerging market countries need
to continue to create economic growth -
13:13 - 13:17so that we don't have political
uncertainty in the those countries. -
13:17 - 13:19Developed countries recognize
-
13:19 - 13:21that they have a real,
important responsibility -
13:21 - 13:24not only just to manage
their CO2 emissions -
13:24 - 13:27and some of the degradation
that they're contributing to the world, -
13:27 - 13:29but also as trendsetters in R&D.
-
13:29 - 13:31And so they have to come
to the table as well. -
13:31 - 13:34But in essence, it cannot be a situation
-
13:34 - 13:38where we start ascribing policies
to the emerging markets -
13:38 - 13:40without developed countries themselves
-
13:40 - 13:42also taking quite a swipe
at what they're doing -
13:42 - 13:45both in demand and supply
in developed markets. -
13:45 - 13:48BG: Dambisa, thank you for coming to TED.
DM: Thank you very much. -
13:48 - 13:51(Applause)
- Title:
- Economic growth has stalled. Let's fix it
- Speaker:
- Dambisa Moyo
- Description:
-
Economic growth is the defining challenge of our time; without it, political and social instability rises, human progress stagnates and societies grow dimmer. But, says economist Dambisa Moyo, capitalism alone isn't going to create the growth we need. As she shows, in both state-sponsored and market-driven models, capitalism is failing to solve social ills, fostering corruption and creating income inequality. Moyo surveys the current economic landscape and suggests that we have to start thinking about capitalism as a spectrum so we can blend the best of different models together to foster growth.
- Video Language:
- English
- Team:
- closed TED
- Project:
- TEDTalks
- Duration:
- 14:04
Brian Greene edited English subtitles for Economic growth has stalled. Let's fix it | ||
Brian Greene edited English subtitles for Economic growth has stalled. Let's fix it | ||
Brian Greene edited English subtitles for Economic growth has stalled. Let's fix it | ||
Brian Greene edited English subtitles for Economic growth has stalled. Let's fix it | ||
Brian Greene edited English subtitles for Economic growth has stalled. Let's fix it | ||
Brian Greene approved English subtitles for Economic growth has stalled. Let's fix it | ||
Brian Greene edited English subtitles for Economic growth has stalled. Let's fix it | ||
Brian Greene edited English subtitles for Economic growth has stalled. Let's fix it |