Economic Governance for Inequality and the Private Sector
14 Economic Governance for Inequality and the Private Sector The outstanding faults of the economic society in which we live are its failure to provide for 1 full employment and its arbitrary and inequitable distribution of wealth and incomes. John Maynard Keynes Enabled by the technological revolution, the world economy has globalized. Yet despite an enormous increase in economic activity and world trade, and a significant reduction in poverty in some regions, inequality between and within countries has increased as economic returns go increasingly to capital rather than to labor, exacer- bating social tensions. Addressing this inequality has become a global priority and is the first economic governance challenge discussed in this chapter. We then review the need for international governance and regulation of the business sector in the common interest and raise some general issues about global governance of the economy. inequality One function of governance is to address issues of inequality, as extreme differences create tensions and destroy the social cohesion necessary for stability and security. Income gaps are widening in many countries, while aspirations are growing. Social inequalities lead to apathy, alienation, social unrest, violence and the erosion of trust 2 between individuals and the institutions of governance. Inequality can occur at multiple levels: between individuals, between communities or cultural groups, 1 This is the starting sentence in Keynes’s chapter 24 (“Concluding Notes on the Social Philosophy towards which the General Theory might Lead”), 1936, for the General Theory of Employment, Interest and Money. Basingstoke, Palgrave Macmillan. 2 Bahá’í International Community. 2012. Beyond Balancing the Scales: The Roots of Equity, Justice and Prosperity for All, Bahá’í International Community’s contribution to the UN Global Thematic Consultation on “Addressing Inequalities,” New York, October 12.
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