There is an awful lot going on in the world right now. It’s hard to find any one thing that is worth writing about, given all of the news. So let’s run down everything all at once.
The time was a year before the Euro launched, the place was the tiny town of Burghausen, Germany. Busloads of people from their sister city in France were welcomed with fluttering tricolors silently proclaiming liberty, equality, and brotherhood. It was declared “French Week” through the town as menus in German gave way to French and the whole town celebrated unity.
I asked Herr Mitterer, the owner of the Hotel Post, if this grand “Eurozone” idea was going to work. “It has to,” he replied, “We’ve seen the alternative.”
Underneath the giddy celebrations at the end of a long period of expansion, the Euro was launched in 1999. It was always a forced marriage, a necessity blessed like any marriage with talk of happiness and great times ahead. But at the first sign of trouble the cracks are showing. Fourteen years on it is at a turning point – move closer or forget the whole thing?
Income inequality is one of the biggest barriers to sustained growth today. You can’t have a consumer economy without income reasonably well distributed, and such an economy is going to have more sustained, reliable growth. But as we’ve shown before, income inequality has grown since 1968, threatening long term growth.
Here is another way to look at that rising inequality as part of a long-term trend that defined 1968-2000 – the expansion of the workforce and subsequent collapse of that expansion that will solidify when the Baby Boom hits retirement. Economic changes are often demographic at heart, and we are due for some major upheaval that we need to be ready for.
There’s no doubt that how the world comes together is changing. So much of it is beautiful and joyful as we discover new cultures, some is hateful and drenched in fear. But what we do know is that economies, how we all make our living and get the scratch we need to live, love, and be happy is changing faster than most of us can possibly keep up with. How can we build an economy on purpose?
You can read that last sentence several ways, and they are all important.
This is what the Social Enterprise Alliance (SEA) 2013 Summit in Minneapolis, starting 19 May, is about. Social Enterprises exist to use the power of free markets to promote social good – businesses that are self-sufficient, stable institutions out to not make a profit but to improve the world in some way. The techniques and lessons of making that happen are not always obvious, and these annual summits are a key tool for advancing the cause and making sure that the change we are all buffeted by eventually works for all of us – on purpose.
How is that economic recovery going? It may not feel like much, given that it’s progressing far more slowly and cautiously than after any other postwar recession. One of the themes we’ve been discussing for over four years is that given that the downturn was of a different kind, the upswing will be different as well. The term offered was “restructuring”, meaning that the economy we’re evolving towards is going to be very different from the one that spent the 2000s sputtering and failing. That takes time and effort.
The term is starting to catch on outside of Barataria as investors find opportunity in the new industries that are going to grow and prosper in this new world. That’s great progress. But as we’ve noted many times, the real restructuring takes a broader social, political, and legal reformation and agreement that has been woefully slow to develop. Enter Niall Ferguson, a Harvard History Prof and conservative bad boy to offer some new ways of looking at the growing malaise in the developed world in his forthcoming book, “The Great Degeneration: How Institutions Decay and Economies Die.” His points are worth discussing, especially on the left, because they offer some new perspective and potentially more fruitful debates than we’ve been having so far.