Before the crisis most economists found common ground in the notion that fiscal stimulus was an obsolete relic. When crisis struck in 2008, however, that consensus evaporated. The frightening speed of the economic collapse spurred governments to action, in spite of economists’ doctrinal misgivings.
The growing rate of default on home mortgages in America precipitated the financial crisis. These delinquencies became impossible for some investment banks to bear. The contagion spread and nervous banks and other creditors stopped lending. Recessions and financial rescues led to a surge in government debt which raised fears about the solvency of various countries in the euro area. Debt was both a cause and a consequence of the crisis.
The collapse of Lehman Brothers, a sprawling global bank, in September 2008 almost brought down the world’s financial system. It took huge taxpayer-financed bail-outs to shore up the industry. Even so, the ensuing credit crunch turned what was already a nasty downturn into the worst recession in 80 years. Massive monetary and fiscal stimulus prevented a buddy-can-you-spare-a-dime depression, but the recovery remains feeble compared with previous post-war upturns.
Regulators, bankers, and ratings agencies bear much of the blame for the crisis. But the near-meltdown was not so much a failure of capitalism as it was a failure of contemporary economic models’ understanding of the role and functioning of financial markets – and, more broadly, instability – in capitalist economies.
As they go about their business of producing most of the world’s wealth, novelty and human interaction, cities also produce a vast amount of data. The people who run cities are ever more keen on putting those data to work. Hardly a week passes without a mayor somewhere in the world unveiling a “smart-city” project—often at one of the many conferences hailing the concept.
The gambler’s fallacy is a cognitive bias we show by taking a long-term average and assuming it applies to every observation. Averages are a blend of varying numbers and multiple factors that may or may not be relevant at a given time. However, despite knowing that the past is not prologue, we still expect averages to produce clockwork-like results that we can bet on with certainty.
While some are congratulating themselves on avoiding another depression, no one in Europe or the United States can claim that prosperity has returned. We have done some things to improve financial markets, but other problems have gone unaddressed and some have worsened. The financial system may be more stable than it was five years ago, but that is a low bar – back then, it was teetering on the edge of a precipice.
As bad as things in Washington are — the federal government shutdown since Tuesday, the slim but real potential for a debt default, a political system that seems increasingly ungovernable — they are going to get much worse, for the United States and other advanced economies, in the years ahead. We are reaching end times for Western affluence. The underlying reason for the stagnation is that a half-century of remarkable one-off developments in the industrialized world will not be repeated. Policy makers simply pray for a strong recovery. They opt for the illusion because the reality is too bleak to bear.
The 2013 Who Pays: A Distributional Analysis of the Tax Systems in All Fifty States assesses the fairness of state and local tax systems, measures the state and local taxes paid by different income groups as shares of income, discusses state tax policy features and includes detailed state-by-state profiles.
Increased regulation and low interest rates are driving lending from the regulated commercial banking system into the unregulated shadow banking system. The shadow banks, although free of government regulation, are propped up by a hidden government guarantee in the form of safe harbor status under the 2005 Bankruptcy Reform Act pushed through by Wall Street. The result is to create perverse incentives for the financial system to self-destruct.
Five years after the collapse of Lehman Brothers triggered the largest global financial crisis since the Great Depression, outsize banking sectors have left economies shattered. Worse, despite years of debate, no consensus about the nature of the financial system’s problems – much less how to fix them – has emerged. And that appears to reflect the banks’ political power.
It’s easy to be depressed about America these days. We’ve got messes aplenty abroad and the Republican-dominated House of Representatives is totally paralyzed. Fortunately, there is another, still “exceptional,” American reality out there. It’s best found at the research centers of any global American company.
The state has played a central role in producing game-changing breakthroughs, its contribution to the success of technology-based businesses should not be underestimated. There are many reasons why policymakers must modernise the state and bring entitlements under control. But one of the most important is that a well-run state is a vital part of a successful innovation system.
It was laughable when Coca-Cola launched a campaign to fight obesity. And even more laughable when the king of soda’s anti-obesity campaign shifted all the blame for those extra pounds to lack of exercise and chairs. But now, the company that donated $1.7 million to defeat last year’s GMO labeling initiative in California has gone from laughable to dangerous.
There is a never-ending supply of business gurus telling us how we can, and must, do more. Yet the biggest problem in the business world is not too little but altogether too much busy-ness. All this “leaning in” is producing an epidemic of overwork, and has been producing negative returns for some time now. It is time to try the far more radical strategy of leaning back.
There was no question that the nation’s troubled flood insurance program needed an overhaul when Congress passed legislation last year to eliminate many of the subsidies that had put the program about $25 billion into debt. But these reforms offered too much tough love and too little compassion for flood-prone homeowners.
Occasionally, the object of speculation has been one of those fundamental technological innovations that eventually transforms the economy. In these cases, the prospects of short-term financial gain from riding a bubble mobilizes far more investor capital than prudent professional investors would otherwise dole out.
A small but – anecdotally – growing group of Americans are leaving the structure and security of an office job for the gruelling, yet rewarding work of earning money from the land. Some want to be a part of improving the food supply for themselves and their community; others are excited by the prospect of becoming self-sufficient, or simply working outdoors like their ancestors did.
Researchers at the Swiss Federal Institute of Technology in Zurich have developed an ultra-efficient new engine that runs on a combination of natural gas and diesel. When combined with a battery and electric motor to make a hybrid vehicle, it could allow a car to get the equivalent of 80 miles per gallon, the researchers say.
A new research paper shows in detail how significant the surveillance effect on behavior can be. The researchers measured the impact of software that monitors employee-level theft and sales transactions, before and after the technology was installed, at 392 restaurants in 39 states. The research suggests that the surveillance effect on employee behavior is striking.
Insurers have long claimed to be the financial world’s shock absorbers, there to contain the carnage periodically unleashed by their banking brethren. Regulators have left them on the fringes of sweeping post-crisis reforms that have reshaped much of the financial sector. Until now.
Elon Musk proposes to revive an old science-fiction idea called the vac-train (short for “vacuum train”), albeit with a few important tweaks. The Hyperloop would carry passengers across California at more than 1,200kph—faster than a jet airliner—allowing them to zoom between San Francisco and Los Angeles in little over half an hour.
Detroit may be an extreme case of fiscal incontinence. But its bankruptcy highlights a long-term problem faced by many American cities and states; how to fund generous pension and health-care promises that are no longer affordable. Now Detroit, like other cities, faces a choice. It has made promises to creditors and retirees that it cannot meet in full. How should it share the pain?
What Bezos saw that others didn’t was that his business was about distribution, not inventory or product categories. With the right system in place, Amazon will be able to deliver anything to customers the same day it’s purchased online. It marks the beginning of the end of shopping as the whole world knows it.
Walmart has grown into the greatest force in retail the world has ever known. Walmart now employs more than 2 million people, by far the most of any company and behind only the U.S. Department of Defense, the Chinese Army, and China’s state owned railway system. Like every empire to come before it, Walmart is beginning to rot from the inside out.
Walmart is the thermometer of the American economy. Disregard the government data. Jobs and GDP and all the rest are at best inaccurate measures of the economy and at worst flat out corrupt. Walmart is capitalism writ large. When Walmart misses estimates, it can only mean one of two things: either Walmart or the American economy is weaker than anyone thought.
Lorenzo Fioramonti is a political scientist and specialist on governance issues who teaches at the University of Pretoria, where he directs the Centre for the Study of Governance Innovation. GDP was developed in the late 1930s in the US to help governments tackle the Great Depression, and afterwards it was used to plan America’s involvement in the Second World War. GDP is a measure of economic output. It is a market measure. What does not have a price tag is not included in GDP. This leads to the exclusion of important elements of economic performance. It neglects, for instance, the depletion of natural resources used for economic growth, as these are provided free of charge by nature. Nor does it consider the costs associated with economic growth, which include social risks, environmental degradation and the like. What matters is not statistical efficiency but social relevance. We should measure what we want rather than wanting what we measure.
Trillions of dollars in “green finance” are needed annually to prevent climate change and natural constraints from stalling the global economy and threatening the livelihoods of billions of people. Policymakers need to develop more effective ways to boost green investment. Limiting regulatory reform to preventing a repetition of past crises is an incomplete, potentially damaging approach. Today’s financial-market reform must also look ahead, in order to avoid the potential crises of tomorrow.
Mander draws attention to capitalism’s obsessive need to dominate and undermine democracy, as well as to diminish social and economic equity. Designed to operate free of morality, the system promotes permanent war as a key economic strategy. Worst of all, the problems of capitalism are intrinsic to the form.
One problem with the word bubble is that it creates a mental picture of an expanding soap bubble, which is destined to pop suddenly and irrevocably. But speculative bubbles may deflate somewhat, and then reflate. It would seem more accurate to refer to these episodes as speculative epidemics. A new speculative bubble can appear anywhere a new story about the economy appears with the narrative strength to spark a new contagion of investor thinking.
Jessica is a social entrepreneur focused on empowering others through entrepreneurship and access to capital. She currently serves as a Venture Partner with the Collaborative Fund, focused on investing in creative entrepreneurs who want to change the world through emerging technologies.
Nobel Peace Prize winner Muhammad Yunus’s vision is the total eradication of poverty from the world. This work is a fundamental rethink on the economic relationship between the rich and the poor, their rights and their obligations. Credit is the last hope left to those faced with absolute poverty. That is why Muhammad Yunus believes that the right to credit should be recognized as a fundamental human right.
Paul Collier is a Professor of Economics and Public Policy at the Blavatnik School of Government and Director of the Centre for the Study of African Economies. His research covers the causes and consequences of civil war; the effects of aid and the problems of democracy in low-income and natural-resources rich societies.
Rob Hopkins is an independent activist and writer on environmental issues, based in Totnes, England. He is best known as the founder and figurehead of the Transition Townsmovement. In 2007, he co-founded the Transition Network, a charity designed to support the many Transition initiatives emerging around the world.
Ian Andrew Goldin is Director of the Oxford Martin School at the University of Oxford – the leading global scholarly centre of deep research into a broad range of future challenges. The School research faculty is seeking to find solutions to questions of health and medicine, energy and the environment, technology and society and ethics and governance.
Central bankers have always carried a mystique far beyond justification. Even as their policies and procedures have become markedly more transparent, the air of secrecy and power about them persists. And the ongoing financial crisis has brought their activities to the center stage of both economic policymaking and political attention, even as the crisis has revealed many inherent limitations of monetary policy and economic forecasting more broadly.
I worry that because of the excess hype, 3D printing will soon suffer the same backlash as solar energy and electric cars. We are only in the early stages of 3D printing. The curve is flat for the foreseeable future. We are about to see a renaissance in design. So let’s be excited, but adjust our expectations – the large-scale manufacturing revolution will happen only after we become bitterly disappointed.
Capitalism rests on a foundation of myths. First, capitalism somehow “invented” entrepreneurship; second, capitalism provides the only “market” economy; third, only capitalism is compatible with “self-reliance” and individual responsibility; fourth, capitalism is the model of “efficiency,” when in truth it generates enormous waste of all kinds; finally, there Is No Alternative. All of this is nonsense. The economy of the Emilia Romagna region of Italy and its largest city, Bologna, is living proof.
From stadiums in Brazil to a bank headquarters in Britain, architects led by Norman Foster are integrating solar cells into the skin of buildings, helping the market for the technology triple within two years. Foster and his customers are seeking to produce eye-catching works while meeting a European Union directive that new buildings should produce next to zero emissions after 2020.
The less free-market thinkers are regulated, the less they seem to care about others. They ignore the fact that America’s most productive eras were driven by progressive taxes that funded entrepreneurship in the middle class. And they fail to see the deficiencies in a system that relies solely on profit-making to the exclusion of social responsibility.
If you’d like to know where American political debates are headed, the data suggest a simple answer. The next major struggle – in economic terms at least – will be over whether taxes on personal wealth should rise – and by how much. Wealth-to-income ratios in these nations climbed from a range of 200 to 300 percent in 1970 to a range of 400 to 600 percent in 2010.
How do aggregate wealth-to-income ratios evolve in the long run and why? We address this question using 1970-2010 national balance sheets recently compiled in the top eight developed economies. For the U.S., U.K., Germany, and France, we are able to extend our analysis as far back as 1700. We find in every country a gradual rise of wealth-income ratios in recent decades, from about 200-300% in 1970 to 400-600% in 2010. In effect, today’s ratios appear to be returning to the high values observed in Europe in the eighteenth and
nineteenth centuries (600-700%). This can be explained by a long run asset price recovery (itself driven by changes in capital policies since the world wars) and by the slowdown of productivity and population growth. Our results have important implications for capital taxation and regulation and shed new light on the changing nature of wealth, the shape of the production function, and the rise of capital shares.
Hundreds of millions of times a day, thirsty Americans open a can of soda, beer or juice. And every time they do it, they pay a fraction of a penny more because of a shrewd maneuver by Goldman Sachs and other financial players has cost American consumers more than $5 billion over the last three years. Similar practices are taking place in other areas of commodities trading as well.
Entrepreneurship is the modern-day philosopher’s stone: a mysterious something that supposedly holds the secret to boosting growth and creating jobs. But what exactly is entrepreneurship (apart from a longer way of saying “enterprise”)? And how should governments encourage it? The policymakers are as confused as the gurus.
The median compensation of chief executives at 200 of the nation’s biggest public companies came in at $15.1 million last year, a 16 percent jump from 2011. Is that excessive? One way to answer that question would be to look at the pay gap, the ratio of the pay of the chief executive to that of the company’s employees. But nobody really knows what the gaps are.
CEOs are legendary for defending their tax paying records, and eager to imply that government is responsible for any of their tax delinquencies. For example, just 32 companies avoided enough in 2012 taxes to pay the entire 2013 federal education budget. Changing the tax rules is a specialty of big business, but so is flouting the tax rules.
Few fiscal problems are as grave, or as little understood, as underfunded state and municipal pensions. The funding gap for all state schemes is estimated at $4 trillion—25% of GDP. States granted these benefits on the basis of recklessly optimistic assumptions, such as that pension fund assets would continue to generate the same returns as during the 1980s and 1990s.
Germany is now creating a record 23.4 gigawatts daily of solar power. This proves an industrialized nation can produce massive amounts of clean, non-petroleum based energy through strong government policies and incentives for stimulating the use of solar panels in private homes and businesses.
In the years leading up to the financial crisis, household debt soared in most rich countries. There were a couple of notable exceptions: Germany and Japan. The ratio of debt to disposable income rose by an average of 30 percentage points, to 130%, in OECD countries between pre-boom 2000 and pre-crisis 2007.
What, exactly, will bring us back to full employment? We certainly can’t count on fiscal policy, nor on the natural recuperative powers of the private sector, nor on the outrage of voters. Someday perhaps something will turn up that finally gets us back to full employment – but the last time we were in this kind of situation, the thing that turned up was World War II.
While Arctic warming is a fait accompli, it should not be taken as a license to recklessly plunder a sensitive environment. That’s why all the Arctic countries need to continue their cooperation and get to work establishing a shared vision of sustainable development, and why the United States needs to start treating the region as an economic and foreign policy priority, as China is.
Britain’s top dozen ‘payday’ lenders – some charging interest rates of more than 4,000% – made almost £1bn in the last 12 months. The figure is more than four times greater than the turnover of the entire industry assessed just three years ago. Half of the biggest high-risk loan companies in the Bureau’s research also posted profit margins of more than 30%.
Progressive Democrats in Congress are ramping up pressure on the Obama administration to release the text of Trans-Pacific Partnership, a secretive free trade agreement with 10 other nations, amid intensifying controversy over the administration’s transparency record and its treatment of classified information.
While the public and media are not allowed to see the text of the Trans-Pacific Partnership, and members of Congress only receive limited, heavily restricted access, 600 corporations, including some of America’s worst corporate citizens, have been advising the president and suggesting amendments with full access to the documents.
The idea of animating the inanimate, of compelling the physical world to do our bidding, has been a staple of science fiction for half a century or more. But someday soon we’ll have houses that can act with genuine intelligence that will enrich our lives far more than any missile launcher ever could.
Smart machines are evolving at breakneck speed and have reached a new social frontier. There are concerns that modern technologies will widen inequality, increase social exclusion and provoke a backlash. Policymakers need to think as hard about managing the current wave of disruptive innovation as technologists are thinking about turbocharging it.
The Sustainable Economies Law Center (SELC) charts the changing legal territory of the new economy, educating communities and individuals about the possibilities and limits of creative economic structures, and advocating for laws that clear the way for more sustainable economic development.
They assembled on the 40th floor of the tallest building in Seattle last week, the ex-Mexican president and the businessman who wants to be known as the Bill Gates of Bud. On the table: a pie bigger than the sky. It would involve drugs, suppliers and retailers, and laser-targeted marketing for buyers willing to pay a premium.
The combination of a strong, rising China and economic stagnation in Europe and America is making the West increasingly uncomfortable. By buying companies, exploiting natural resources, building infrastructure and giving loans all over the world, China is pursuing a soft but unstoppable form of economic domination.
A new survey of corporate officials and employees in 36 countries indicates that there is plenty of corruption that needs investigating. The survey revealed a “corruption perception gap” in many countries, where respondents said bribery and corrupt practices were far more common in other parts of their country than they were in their own industry.
The fact that the economy is “steadily healing” back to the old economy is the problem, not the solution. That economy featured growing inequality and a declining middle class. It was built on debt and speculative bubbles. Trade deficits hit new records as multinational companies shipped good jobs abroad.
B Lab is a nonprofit that serves a global movement of entrepreneurs using the power of business to solve social and environmental problems. B Corps are certified by the nonprofit B Lab to meet rigorous standards of social and environmental performance, accountability, and transparency. Certified B Corporations are leading a global movement to redefine success in business.
RSF Social Finance (RSF) is a pioneering non-profit financial services organization dedicated to transforming the way the world works with money. In partnership with a community of investors and donors, RSF provides capital to non-profit and for-profit social enterprises addressing key issues in the areas of Food & Agriculture, Education & the Arts, and Ecological Stewardship.
Investment bankers are a bright and resourceful lot. Some of the best minds of this generation are in search of the next big innovation in credit markets or risk management that will bring back the heady days before the financial crisis. But the industry’s voyage back to profitability will probably be slow, and not all banks will make it. Paradoxically, stricter regulation intended to tame banks that were thought too big to fail is leading to the creation of even bigger and more systemically important institutions.
Banking across the rich world expanded prodigiously between 1963 and the financial crisis in 2008. Since the crisis, returns have collapsed. This environment will create both winners and losers. The main beneficiaries are likely to be a handful of very big, global banks that, in the main, are able to reap the benefits of scale and combine investment banking and trading with corporate banking.
Income taken home by top earners in the United States has risen over the past few decades, along with popular concern about economic inequality. Outrage has centered on the compensation of the United States’ top corporate executives. The reality of executive compensation reveals a far different picture from this caricature of skyrocketing pay packages and crony capitalism.
The United States’ gross domestic product expanded at a 2.5 percent annual rate in the first quarter; but this figure masks disturbing signs: an economy whose recovery has failed to match the pace of past expansions may now be facing a deceleration in its own modest growth rate.
The Global Sustainable Investment Alliance’s mission is to deepen the impact and visibility of sustainable investment organizations at the global level. Its vision is a world where sustainable investment is integrated into financial systems and the investment chain and where all regions of the world have coverage through membership institutions that advance sustainable investing.
Cheap shale gas is translating into cheap electricity. Economists at Citigroup and UBS predict that the shale gale will lift America’s GDP growth by half a percentage point a year for the next few years. Indeed, cheap energy is cited as one factor by those who predict a manufacturing renaissance in America.
America puts more into R&D than any other country, yet as a share of GDP its expenditure now ranks only ninth in the world. America has dropped in the ranking because other countries are doing so much more. Government cash pays for over half of America’s basic research, and tends to produce patents of higher quality research undertaken by business.
The belief that America is losing its economic edge is pervasive. The misgivings are easy to understand, but despite glaring problems, the outlook is less bleak than the pessimists maintain. America’s competitive recovery is not as strong as it should be, but it is real, and pessimists should take a closer look.
Some carmakers try harder than others to be green. Besides making their models cleaner to run, many carmakers are also trying to reduce the environmental impact of manufacturing them. Having been depicted as environmental villains since the 1950s, cars and their makers may soon be able to move out of the spotlight.
It’s easy to understand why savers feel like collateral damage in the Fed’s fight against recession, but too much sympathy for their plight is dangerous. It may be hard for people to live off their savings these days, but the far more urgent problem is that it’s even harder for people who don’t have jobs, or whose wages are stagnant, to save anything at all.
Joseph Stiglitz is an American economist and a professor at Columbia University. He is a recipient of the Nobel Memorial Prize in Economic Sciences and the John Bates Clark Medal. In 2011 he was named by Time magazine as one of the 100 most influential people in the world.
Following the global financial crisis of 2008, China’s authorities took a number of steps to internationalize the use of the Chinese currency, the renminbi. This paper contends that the purposes of the renminbi internationalization program are mainly tied to domestic development objectives, namely the gradual opening of the capital account and liberalization of the domestic financial system.
Small businesses occupy an iconic place in American public policy debates. Numerous and diverse public policies subsidize small businesses, and political leaders of both parties routinely voice their support for the sector. At least part of this support is based on the notion that a healthy small business sector leads to innovation, jobs, and a healthy overall economy.
As politicians in Washington focus on reining in America’s worrisome deficit, they tend to have attitudes of doom and gloom. They convey fears of shortchanging future generations, overtaxing workers, depriving the needy, killing the fragile economic recovery and failing to make crucial investments.
There are serious proposals to force banks to fund themselves with considerably less debt and far more money from their shareholders. This would protect the rest of us, by leaving more of the risk with shareholders and reducing the potential need for taxpayer bailouts. However, there is a trade-off for the greater safety; loans would become more expensive and the economy would slow.
Silicon Valley is obsessed with serendipity. Armed with social network maps, managers can spot isolated teams and structural holes, tweaking the organizational structure in real time. Rather than wait for their employees to cross paths, they could simply make the necessary introductions.
On March 3rd, 68% of the Swiss electorate passed the “people’s initiative against fat-cat pay”, a measure that requires listed companies to offer shareholders a binding vote on senior managers’ pay and appointments at each annual general meeting. Criminal penalties apply in the event of non-compliance.
Shareholders used to mount activist campaigns only at firms that were performing horribly. Even then, shareholder activism was rare. But since the financial crisis of 2008, which revealed widespread flaws in corporate governance, shareholders have flexed their muscles more often.
Why pay through the nose for something when you can rent it more cheaply from a stranger online? That is the principle behind a range of online services that enable people to share cars, accommodation, bicycles, household appliances and other items, connecting owners of underused assets with others willing to pay to use them.
Although America has accounted for a sizable share of all technological innovations that have shaped our modern world, the wider historical evidence is disappointing for anyone who thinks political freedom is a fundamental precondition for innovation. Even the evidence of America’s own history undercuts the “all you need is freedom” story.
The Fed has resorted to a radical, uncharted spree of money printing. But the flood of liquidity has stayed trapped in the canyons of Wall Street, where it is inflating yet another unsustainable bubble. When it bursts America will descend into an era of zero-sum austerity and virulent political conflict, extinguishing even today’s feeble remnants of economic growth.
Sixteen years ago a book by Clayton Christensen changed business thinking forever. The Innovator’s Dilemma looked at industries and exposed a surprising phenomenon: When big companies fail, it’s often not because they do something wrong but because they do everything right.
Patagonia wants to be in business for a good long time, and a healthy planet is necessary for a healthy business. We want to leave behind not only a habitable planet, but an Earth whose beauty and biodiversity is protected for those who come after us. We think that business can inspire solutions to the environmental crisis.
Jeffrey D. Sachs is the Director of The Earth Institute, Quetelet Professor of Sustainable Development, and Professor of Health Policy and Management at Columbia University. He is Special Advisor to United Nations Secretary-General Ban Ki-moon on the Millennium Development Goals.
Of the many injustices that permeate America’s byzantine tax code, few are as outrageous as the tax rate on “carried interest” — the profits made by private equity and hedge fund managers, as well as venture capitalists and partners in real estate investment trusts. This huge tax benefit enriches an already privileged sliver of financiers and violates basic standards of fairness and common sense.
The IISS Geo-economics and Strategy Programme is designed to analyse global economic trends, their impact on the global governance agenda and their meaning for the global distribution of power. Its broad and global scope will allow for a comprehensive examination of the structural economic changes that are shaping today’s international strategic relationships.
All kinds of renewables will be used in the DESERTEC Concept, in centralized and decentralized solutions alike, but the sun-rich deserts of the world play a central role: within six hours deserts receive more energy from the sun than humankind consumes within a year. 90 percent of the world’s population lives within 3,000 km of deserts.
FLOW refers to an optimal state of human experience in which individuals are fully engaged in creative endeavors, experiencing fulfillment, happiness, and well-being; and the means by which increases in the free global flow of goods, services, capital, people, and information will accelerate human progress and well-being.
For all the focus on outsourcing, economic forces are actually pushing corporate giants to grow larger. We’ve been told that our unbounded connectivity will favor the rise of small, nimble organizations. But the rise of technology has conferred immense advantages on the Goliaths of American industry.
The consequences of our current patent crisis reverberate far beyond Silicon Valley. What can’t be measured are the products that are never built—taking on even bogus patents is too much of a hurdle for some innovators. Patents were meant to encourage innovation, but lately they are being used as a weapon to stop it.
What would help solve our fiscal problem: Give up your home mortgage deduction and wait two more years for Social Security and Medicare, or pay a little extra for gasoline and electricity? These will be our choices. The carbon tax would clean up the air for our kids, drive innovation and make us less dependent on the most unstable region in the world: the Middle East.
Industrial ecology (IE) is the study of material and energy flows through industrial systems. It is concerned with the shifting of industrial process from linear (open loop) systems, in which resource and capital investments move through the system to become waste, to a closed loop system where wastes can become inputs for new processes.
Thomas Picketty, Professor of Economics, specializes in economic inequality with his works covering both theoretical and normative issues. His scholarship includes work on long-term economic inequality, the evolution of inequalities in France, and comparative studies of different developed systems.
Emmanuel Saez is the Director of the Center for Equitable Growth at the University of California at Berkeley. His main areas of research are centered around taxation, redistribution, and inequality, both from a theoretical and empirical perspective. He recommends much higher taxes on the rich.
The massive global movements of capital, products, and talent in the modern economy have fundamentally changed the nature of business in the 21st century. The Chicago Booth Initiative on Global Markets supports original research on international business, financial markets and public policies.