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CAPITALISM ON THE MOVE

Discussion Note by Ron Gass

I. INTRODUCTION – THE RECONCILIATION OF THE ECONOMY, NATURE AND SOCIETY

II. THE STATE, THE MARKET AND "PEOPLE POWER"

III. THE EMPOWERING STATE IN A POLYCENTRIC WORLD

IV. THE SCRAPPING OF HUMAN

V. THE NEW PRODUCTION REVOLUTION TO THE RESCUE

VI. AN ECONOMY WITH A HUMAN FACE

VII. A NEW GLOBAL HUMANISM?

VIII. GLOBAL VALUES IN A DIVIDED BUT INTERCONNECTED WORLD

IX. CONCLUSION

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I. INTRODUCTION - THE RECONCILIATION OF THE ECONOMY, NATURE AND SOCIETY

1. The recent NAEC Seminar on "The Limits of the Market" (Paul De Grauwe and Denis Snower) finished up on the note that the market-state nexus is in flux. In effect, the fall of the Berlin Wall marked the failure Soviet style economic planning, but the triumph of "laissez-faire" is now in question as a result of the 2008 crisis. In a nutshell, cheap , pragmatic Keynesian and structural reforms have lifted (see OECD November 2017 Economic Outlook), but inequalities, environmental threats and migration are getting worse and trust in has fallen in OECD countries ("How's life?" OECD 2017). Thus, the over-riding goal long- term is how to reconcile the economy, nature and society, with economic growth as a means and "better lives" as the goal. Can meet this challenge, and if so on what basis?

II. THE STATE, THE MARKET AND "PEOPLE POWER"

2. The protagonists in this debate are no longer limited to the State and the Market, as in the book "Où va le monde - le marché ou la force ?" (Pascal Lamy and Nicole Gnesotto, Odile Jacob 2017). On the contrary, civic societies across the world are experimenting with a variety of challenges to neo-, such as the Circular Economy (The Club of ) and the Symbiotic Economy (Isabelle Delannoy, "L'économie symbiotique - régénérer la planète, l'économie, la société", Actes Sud, 2017). Whilst this is less true in authoritarian states, even they are compelled in that direction. Climatic warming is a striking example.

3. The underlying reality is that to tackle the transformative structural changes embodied in the 2030 UN Agenda, nation states need to go into partnership with civic society institutions, the multinationals and diverse levels of government. Neither the all-powerful State nor market can cope with glaring inequalities, climatic disaster or massive migration.

III. THE EMPOWERING STATE IN A POLYCENTRIC WORLD

4. In such a polycentric world system, both the State and the Market are forced to become more societal because faster and more profound structural changes tend to "leave communities and individuals behind", and because the rising generation is seeking new ways of working. As a result there is a growing "third sector" standing between the Market and the State and propelled by a growing body of social 2 entrepreneurs, many of whom are women. What is surprising is that this "third sector" or "social economy" is growing in times of high because people are forced to create their own jobs. This movement, in relation to which OECD (ILE now LEED) has played a pioneering role, is estimated to account for about 10-12% of jobs in OECD countries. Even the poor all over the world (100 million) are clients of micro- finance institutions such as the Grameen Bank founded by Muhammad Yunus in Bangladesh in 1970 (OECD/ENV/WPK/2010).

5. Is this movement a sort of "grass roots" capitalism or is it a retreat from capitalism? It appears to be neither, because on the one hand it eschews , yet on the other it embodies the idea that even the disadvantaged can become entrepreneurs. It is neither market nor state. The "social enterprise concept does not seek to replace the concepts of the non-profit sector or social economy. Rather, it is intended to bridge these two concepts, by focussing on new entrepreneurial dynamics of civic initiatives that pursue social aims ("The Social Enterprise Sector - A Conceptual Framework", OECD/LEED, 2018). In other words, it is a manifestation of the partnership between the Empowering State and the Civic Society.

6. The Paris One Planet Summit on the Climate is typical of this new alignment of national states, and people power. The notion of the Empowering State evolves around the idea that national states, both individually and collectively, are required to become strategic and implement in partnership with business and civic society. The 2030 UN Policy Agenda provides a sort of compass for the ; the is working out the strategy but it will fail without massive business investment (OECD Guidelines on Responsible Business Conduct) and action by the population at large -- cities, regions, local communities and the citizenry.

7. Other transformative structural changes, such as inequalities and migration, are pushing in the same direction.

IV. THE SCRAPPING OF HUMAN CAPITAL

8. The 2017 MCM put its finger on the central problem by recognizing that the OECD strategy of inclusive growth for better lives calls for "strong government- business-unions- dialogue" (para 17 of the Ministerial Communiqué). In other words, the essentially humanistic goal of "better lives" can only be realized if the age-old problem of scrapping human capital (the slave trade, Dickensian , Germinal, etc) finds a contemporary solution.

9. Up to the oil shocks crisis at the end of the 1960's, collective bargaining between business and trade unions, combined with public policies for social security, enabled

3 market capitalism to achieve massive increases in human prosperity by renewing the capital stock. Hence the fall of the Berlin Wall, and the implosion of the .

10. Today, the problems of the "scrapping" of human capital are posed again because, in , the fact that whole communities are being "left behind" is politically unacceptable -- and is leading not only to a rejection of but also to public debate on post-capitalist alternatives (see for example "L'Age de la Régression - Pourquoi nous vivons un tournant historique", Premier Parallèle, 2017).

11. What seems to be happening is that the market fundamentalism adopted in the Thatcher/Reagan era has led to a "touch-of-the-button" movement of financial capital; whereas human capital cannot adapt or move that fast. The situation is further complicated by the fact that the knowledge-based physical capital of the new production revolution (see Richard Baldwin: "The Great Convergence and the New Globalization") can more freely cross borders than in the past.

12. The result is that the traditional adjustment policies - active manpower and social policies and trade adjustment policies -- need to be reinforced by place-based actions (see 2017 OECD Ministerial Communiqué, para 15). Neil Martin spells this out in a text produced for the AIA/NAEC seminar on Prospects for Global : "The case for Place-Based Policies and Multi-level Governance as a Response to the Problems faced by 'Stranded Communities' ". Thus, the "Think Global, Act Local" theme behind the creation of the OECD/ILE (now LEED Programme) in 1982 should now become , because it is at the level of cities, regions and local communities that the scrapping of human capital can be best combatted (see "Better Use of Skills in the Workplace", OECD/LEED, 2017).

13. The NAEC Seminar on "The Useless Man" by Professor Pierre-Noël Giraud (April 2016) goes further because capital, and the it vehicles, can migrate more freely than people, leading to an underlying imbalance in the neo-liberal system. Nomadic jobs move to new locations with capital, whereas sedentary jobs are tied to the "stranded communities". This leads to growing inequalities of income, and feeds a new class struggle between the nomads and the sedentaries (see the debate between Giraud and Harsault in Philosophie Magazine, May 2016). Metropolitan areas are most affected because they need to recuperate nomadic jobs to restore the sedentary/nomadic balance. He argues that there is no national solution because only multi-national enterprises have the power to move nomadic jobs from one country to another. Hence, the development of large cities and metropolitan areas have to integrate negotiations, inter-city co-operation and local community-building: giving new force to the "think global, act local" doctrine.

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14. For Giraud, the slide into "uselessness" is the more or less inevitable consequence of long-term unemployment and precarious . It can only be combatted by access to opportunities as well as income -- what he calls the "new mobility". Hence, flexi-security and life-long learning opportunities, ie the renewal of human capital, are the key to success. Neither are credible goals without the full participation of business and the unions.

15. Today, with the advent of the new , people will have to renew their skills. But the life-long learning of today profits the higher education elite and will exacerbate inequalities. "If the 21st century economies are not to create a massive underclass, policy-makers urgently need to work out how to help all their citizens learn while they earn" (, "Lifelong Learning -- How to Survive in the Age of Automation", January 2017).

V. THE NEW PRODUCTION REVOLUTION TO THE RESCUE?

16. Thus, will the latest manifestation of modern capitalism, the New Production Revolution in the form of robots and artificial intelligence, scrap human capital or the contrary? The jury is still out, but recent OECD reports tend to be cautiously optimistic on both the question of level of employment and the nature of skills (see for example "The Next Production Revolution -- Implications for and Business", OECD, 2017). The spectre of jobless growth is ruled out, and the level of employment depends in any case on the success of macro-economic policies: the Schumpeterian logic of "jobs destroyed and new jobs created" will no doubt prevail. This cautiously optimistic OECD view is, however, challenged by the question of skills. Andreas Schleicher has ventured the opinion, based on the results of PIAAC, that "For those with the right knowledge, skill and character qualities, this can be liberating and exciting. For those who are insufficiently prepared, it can mean the scourge of vulnerable and insecure work, and life without prospects" (Foreword to "Computers and the of Skill Demand", OECD, 2017). Another OECD Report ("Getting Skills Right - Good Practice in Adapting to Changing Skill Needs", 2017) points in the same direction: rising demand for high-level, creative skills and the opposite for low-level routine skills, leading to labour market segregation and an even more divided society.

17. Roberto Unger (NAEC Seminar on Socially Inclusive Economic Growth and the Future of the Knowledge Economy, 5th May 2017) has articulated a riposte to this gloomy perspective. He argues that it is in the nature of the new technological revolution that knowledge-based production will spread from "insular vanguards" (Silicon Valley and like enterprises) to the "inclusive vanguards" (SME's, local initiatives, social economy, etc), thereby reducing inequality and exclusion. The

5 condition for success, he argues, is “the reinvention of industrial policy in decentralized, pluralistic and experimental form".

18. Unger's stance is political in the highest sense, since it is founded on the humanist notion that every man and woman has "the vocation of a larger life", and that societal change is needed to go in that direction - hence his Movement for Social Innovation. As Yuval Noah Harari concludes in his recent book "Homo Deus - A Brief of Tomorrow" (2016), does not determine the future, but it presents the challenge of political strategy, i.e. where to go. Unger presents one credible response to that historic challenge.

19. The OECD is faced with the same challenge. As part of its Inclusive Growth Strategy, it has accepted that technico-economic progress is a means not an end, thereby providing a response to the criticism of Matthias Schmelzer that OECD has become the "temple of economic growth". He proposes an alternative strategy of "just de-growth" to respond to the ecological challenge and the unequal distribution of the fruits of progress (NAEC Seminar on The OECD and the Making of the Economic Growth Paradigm, March 2016). The OECD goal of "better lives", and the UN SDG's that have been endorsed by the G20, put an end to any hegemonic stance, be it economic, technological or ecological. The overriding vision is now the Reconciliation of the Economy, Nature and Society, with the aim of improving human well-being across the world.

20. Will a new capitalism, based on purpose as well as profit, participate in that humanistic effort? Can capitalism and humanism converge in the global society that is becoming a reality as it becomes more and more inter-connected?

VI. AN ECONOMY WITH A HUMAN FACE

21. postulated that capitalism was alienating for the human being and thus anti-humanist, and so did the anarcho-syndicalists. Economics has become known as the "dismal " because, for many, 's notion of "Economic Man" does not reflect the reality of what makes the human being tick. So it is necessary, as the foundation stone of this discussion, to take a stand on the nature of fundamental human needs. The evidence of OECD work on behavioural insights seems to suggest more complex human strategies than the "economic man" would deploy. Dennis Snower, based on evidence from the neurosciences, argues that empathy and caring for others can be as important as the materialist seeking ego (NAEC Seminar on the Limits of the Market). Roberto Unger sees every human being as aspirational, that is to say goal- oriented, searching for a better life.

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22. Historically, capitalism has taken many forms and survived the communist challenge of the planned economy. Even authoritarian states have accepted it as the best way of organizing production and competing in the global market. But, following the 2009 financial crisis, Eric Beinhocker and Nick Hanauer are arguing that capitalism is facing another crisis, because runaway financial capitalism is threatening the economic system. The genius of capitalism, they say, is "that it both creates incentives for solving human problems and makes those solutions widely available. And it is solutions to problems that define prosperity, not money" ("Redefining Capitalism", McKinsey Quarterly, 2014). This resonates with the idea put forward by Romina Boarini at the AIA/NAEC Seminar on "A World Fit for the Rising Generation": namely, that in the new capitalism, frontier are competing via purpose as well as profit, since it gives them a , with regard to long-term success.

23. Does this mean that the new production revolution, hinged on digitalization is giving birth to a new organisational paradigm based on human creativity and ? (see the AIA/NAEC seminar on The Creative Society and the New Technological Revolution). Tanmay Vora has articulated this as: "from profit to purpose; from hierarchies to networks; from controlling to empowering; from planning to experimentation; from privacy to transparency" (, 2017). This means that the complex organizations of the new era will be more human-centered than in the past. OECD work on skills supports this , as does the work on the "competencies" that the educational systems needs to instill in the rising generation (see "Global Competency for an Inclusive World", OECD, 2017).

24. This brings us to a key question. Is the "good life" for the rising generation to be found in leisure while the robots do the work? In recent NAEC discussions, Edmund S. Phelps and Roberto Unger have put their money on the idea that the new production revolution will lead to new freedoms in the workplace, work satisfaction being the basis of life satisfaction. This is fundamental because history has shown that alienation in work can lead to social and political conflict -- even revolution! This is why it is imperative to bring "people power", as well as nation states and the market, into the political debate.

25. The reality is that the global system is already polycentric rather than multi-polar because nation states cannot meet their goals without going into partnership with cities, regional and local authorities, NGO's and multi-national enterprises. The world is already studded with initiatives to rise to the challenge of unemployment, inequalities, climate and migration (see "L'économie symbiotique", op. cit. for an analysis of the wide array of alternatives to capitalism such as the collaborative economy, the circular economy, etc.). Are these alternatives to state power and capitalist production? The

7 answer is "no", because these complex structural challenges cannot be met without a strategy formulated by nation states and by massive investments, including by the private sector. Moreover, the conflict between economic and social goals, which has founded the of political parties since World II, is giving way to a complex interaction between the two, as reflected in the OECD Codes of Responsible Business Conduct (RBC), enterprise Social Audits, the development of Social Business, and the vigour of the Third Sector or Social Economy. In other words, we are already engaged in what Roberto Unger has described as a process of "radical experimentation" involving the whole of society. In this process, the role of the state shifts from power to empowerment (see Gabriela Ramos, "Towards an Empowering State: Turning Inclusive Growth into Global Reality", (OECD Insights, 20th February 2017).

26. The central feature of the empowering state is that it declares clear goals and facilitates the action of all stakeholders to move towards them. This is essentially what the UN 2030 Policy Agenda is all about, the purpose being "human development". The OECD goal of "better lives" reflects the same humanistic intention. What is vital is that what we could call the Brundtland Vision has gained the endorsement of UN Heads of State and Government, the G20 and the OECD. It can be considered as the "new idealism" that Eric Beinhocker has called for in NAEC discussions ("A new narrative for a complex age", OECD Insights Blog, January 2017). But, can the new capitalism play its role in this ambitious, universal, common project? According to the CEO of Unilever at the World Economic Forum 2017, the SDG's are a "compass" for the business community. So far so good, but you don't need to be a pilot to know that without a map and a destination you will bet lost!

27. The OECD/AFD Conference on Policy Coherence, the SDG's and the UN 2030 Agenda (October 2017), goes a long way to providing the map (see in particular Annex 1 to the Report), re-designing the compass (Eloi Laurent: "If you don't know anything about the current state of inequality and of the environment you are missing most of what you should know"); and pointing to the need for political leadership if we are to get to the declared destination of "better lives" (Colin Bradford: "the imperative to generate politically sustainable outcomes has not been given priority by leaders from global platforms nor been heard by national publics. This is a political failure").

28. What, no doubt, he is referring to is the reality that there is now a group of major nation states which, seeking to recover their former greatness, are engaged in a sort of geo-political game based on . On the other hand, there are those seeking to sustain, by , the rules-based international order. What could hold them together in the medium-term is economic interdependence, that is to say capitalism, to which all adhere with the possible exception of North Korea. Not to

8 mention the ballot-box and people power, including women power in the name of peace and equality.

29. The truth is that progress and security are now inextricably inter-linked. Terrorism may be contained by the , but it will only be beaten by the battle of . Yuval Noah Harari states the problem clearly ("Homo Deus: A Brief History of Tomorrow", Harvill Secker, 2016): revolutionary technological means are now available, but we do not know where we want to go. The UN SDG's provide the map and the compass, but the destination has not been stated sufficiently clearly to mobilise public opinion.

30. The OECD 2017 MCM was important in this respect because it recognized that growth should be "strong, sustainable, balanced and inclusive" (para 4). The innovation lies in the notion of "balance" between the three goals declared at the 2013 MCM, namely resilient economy, inclusive society, and sustainable environment. The message is that the great task after the 2008 crisis is the Reconciliation of the Economy, Nature and Society, which can only be undertaken by an Empowering State working with all the stakeholders.

31. From a policy/analytical standpoint there now seems to be a consensus that a systemic approach is needed, since the economic, societal and ecological systems have different logics and are interacting in complex ways which call for new approaches. The OECD, as a policy pathfinder and standard setter, has an important role to play because its professional has been analysing these three systems for 50 years and more (see Ron Gass, "50 years of Reconciling the Economy, Nature and Society", OECD Yearbook 2011). The Secretary-General's decision to establish a Strategic Partnership with IASA (the International Association of Systems Analysts) comes at the right time.

VII. A NEW GLOBAL HUMANISM

32. This is not the first time that the economists and the natural scientists have crossed swords in the OECD. The result was that, at the time of the oil-shocks crisis, the Club of Rome was conceived in the OECD but born outside (see the McCracken Report, "Towards Full Employment and Price Stability, OECD, 1997, Note on "The Club of Rome", p. 287). Alex King, the protagonist of the natural scientists in this battle; later published his views in The First Global Revolution (Simon and Schuster, 1991): "The spiritual and ethical dimension is no longer an object of scorn or indifference, it is perceived as a necessity that should lead to a new humanism" (p. 182). It is not without relevance to the present geo-political drama that he quotes the Chinese philosopher Lao

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Tse: "Thus a good man is content with being resolved without resorting to force" (p. 180).

33. Thirty years later we are in a new global revolution in which "people power", in a world of inter-connected populations via the Internet and social media, is becoming a third force (cf the Weinstein affair). The result is that the dominant question for the political leadership is "What sort of society do we want?" (see AIA/NAEC seminar on A Society fit for the Rising Generation). The extreme neoliberal view as expressed by was that: "there is no such thing as Society". But she lost power to David Cameron who declared the goal of the Big Society to engage other institutions than the State in social . The Caring Society and the Entrepreneurial Society have also been proclaimed by political leaders. Even Umberto Eco has entered the debate with his book on The Liquid Society (Grasset, 2017) which castigates the and subjectivism of contemporary society, based on frenetic and narcissism. The result, he says, is a loss of collective purpose and common values now that nation states have lost power to supranational entities. In other words, behind the 2008 crisis lies a deeper crisis: a loss of faith in the very idea of Progress (Etienne Klein, "Sauvons le Progrès", L'Aube 2017).

34. So what is the policy response to this slide into something like nihilism and lack of public confidence in a better future? Inclusive economic growth is the foundation stone, but it does not deal adequately with the problem of the social exclusion of groups outside the labour market (see AIA/NAEC Seminar on the Inclusive Society, February 2016). The goal of Inclusive Society, as adopted by the 2013 MCM, has the advantage of making it clear that no one should be "left-behind"; including "stranded communities". It also sharpens the teeth of the UN 2030 Policy Agenda and has the moral backing of the : "a just society, capable of memory, and refusing exclusion" (Evangelii Gaudium, 239). This does not diminish the importance of economic growth, but it makes it clear that it is a means to a higher purpose.

35. Even since its earliest days, capitalism has combined profit with purpose. The merchants of Amsterdam financed Christopher Columbus for profit, but he had the higher purpose of going westwards to discover the New World. Historically, capitalism has taken many forms: from , to colonialism, to mass-production capitalism, and on to financial capitalism. Today, it is on the move again (see Humaines, January 2018, "Dernières Nouvelles du Capitalism, p. 39). It is in part the answer to the crisis of progress, and in part the cause. It has many faces.

36. First, it is clear that speculative financial capitalism can, in a global, interconnected economy, put the whole system at risk, as in the 2008 crisis. When money is devoted to making more money, a rentier class divorced from social purpose can use tax evasion and tax havens to expand its and pass it on to the next 10 generation (Thomas Piketty, "Capital in the 21st Century"). The need for in order to avoid volatility of the financial system, thereby undermining the goals of stability and resilience, has been spelt out by Adair Turner ("Between Debt and the Devil -- Money, Credit and Fixing Global Finance", 2015).

37. On the other hand, what we might call entrepreneurial capitalism can often reconcile profit and social purpose. The OECD Report on "The Sustainable Development Goals as Business Opportunities" (2016) stands on that ground: "we look at the opportunities the new Sustainable Development Goals offer for doing good business, for profits, people and the planet. It offers guidelines and practical examples of how all sectors of society can work together to deliver the 2030 Agenda". In the same Report, adds an important rider: "But sustainable global progress cannot be achieved through monetary means alone. It is vital that capacity is strengthened in individuals and in the institutions of civil society to play a vigorous part in carrying out such a transformation, including the thoughtful regulation of business activity" (p. 3).

38. This brings us to the heart of the matter. "People Power" is already on the move: the world is studded with "grass roots" initiatives which mobilize capital for social purpose, not least to provide employment, but also to work for what is perceived to be a higher purpose. These alternatives to capitalism are often in the market, but non- profit. Typical cases are the producer's and consumer's co-operatives which resulted from the trade union movement in the 19th century. Today, they extend to the micro- finance movement for the poor and local initiatives to provide "green" energy in African villages and elsewhere. The point is that we are already in a decentralized, plural economy in which modern capitalism and alternatives to it will co-exist. The new technologies will incite their interaction because the production of can now escape from the "mass production" model; and the Internet will enable information about these new possibilities to cross borders and reach cities, towns, villages and the public at large.

39. In this global, polycentric world the relationship between the State, the Market and People Power is changing. As far as the State is concerned, "laissez faire" and state planning are giving way to an Empowering State which sets out strategic goals, fosters dialogue between multiple stakeholders, and empowers them to act. Consumer habits are shifting as the ecological realities take hold (the Circular Economy, the bio- movement, etc). People power is taking on new forms via the social media, and on occasions challenging parliamentary .

40. Thus, the period ahead is one of political, economic and social experimentation. It is not a question of whether capitalism will be dismantled, but what form it will take. In his book on Mass Flourishing, Edmund S. Phelps argues that a good economy is one 11 which offers the "good life": he castigates Stiglitz, Fitoussi and Kvint, and indeed the Europeans, for providing this "quality of life" in the form of leisure and public services. He even wants to go beyond Amartya Sen by arguing that, as Marx and the anarcho- syndicalists did, the workplace should promote self-realisation: "people want to opt out of work in which they have no autonomy". (see "A Good Economy for ", Project Syndicate, June 17, 2016).

41. This may seem far-fetched, but putting it in OECD terms it raises the question whether life-satisfaction is built on work-satisfaction (see OECD Your Better Life Index): "working to live" rather than "living to work"? This is the fundamental question raised by the New Production Revolution: will artificial intelligence and robotization lead to alienation at work or to more creative and autonomous roles? OECD analysis by DELSA, DSTI and EDU seems to point to the latter, but Roberto Unger's forthcoming book goes further and paints a broader picture: a systemic shift towards grass-roots vanguardism.

42. Historically, technological mutations have always led to new theories of organisation and management. Complexity theory is based on more realistic assumptions about the behaviour of economic agents than Adam Smith's "Economic Man" (see NAEC Seminar on Insights into Complexity and Policy, September 2016). Contemporary management theory, faced by the problems of stress and "burnout", is moving towards the recognition of fundamental human needs, such as altruism and autonomy (see Adam Grant, "Give and Take - Why Helping Others Drives our Success"). To put it bluntly, the New Production Revolution is bringing out a vast agenda for social dialogue and collective bargaining, which has started with the "" of work, and will need to include the quality of jobs and the wage share of income (see the OECD "Global Deal" Initiative),

43. At root, the fundamental question is whether capitalism is compatible with humanism. Time will , but it is already clear that the three urgent challenges facing the international community -- migration, inequalities, and climate -- cannot be met successfully without the participation of the two sides of industry.

44. In the longer run, there is no escaping the need to re-invent the idea of Progress, and that means a new humanism built on the goals of inclusive growth and inclusive society.

45. Given the geo-political realities of the day, this might appear illusory, because the world seems to be divided into two camps: cosmopolitan multilateralism and nation- state . But it should not be forgotten that both Brexit and the advent of President Trump were the result of a democratic vote. They are not alone in aspiring "to be great again" by a return to the cultural values and power of the past. (eg ,

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India, China). And all have contributed to the emergence of the adventure of humanism, even before the European Enlightenment. In the end, the power of a common humanity will win the day, as expressed in the new book by Dag Herbjornsud, "Global Knowledge: for a New Enlightenment" (2016). He maintains that "The highest ideals of Locke, Hume and Kant were first proposed a century earlier by an Ethiopian in a cave"! (Aeon, December 2017). And Steven Pinker ("Enlightenment Now: Manifesto for Science, , Humanism and Progress", Allen Lane, 2017) has in any case put the Enlightenment back on today's political agenda.

46. All this rings a bell with Eric Beinhocker's plea for a new idealism in NAEC discussions, and Noam Chomsky's challenging question at the end of his book (Who Rules the World?, Metropolitan Books, 2016): what principles and values rule the world? (p. 258).

47. If the OECD is to play its role of policy pathfinder on the global scene, it cannot avoid the challenge presented by Beinhocker and Chomsky. If the answer is to be found in a new relationship between national states and the market, the signs are not good: because of populist and authoritarian trends in nation states; and technological in the market by the high-tech giants of capitalism. But if "people power" is brought into the policy equation, the picture changes because both nation states and the market have to respond to the reality that a world society is developing because of global travel, communications and access to information via the Internet and Social Media. A typical case is that, in the wake of the Weinstein affair, Prime Minister Trudeau intends to place equality between women and men at the centre of the June 2018 G20 Summit. This is a symbolic reflection of the fact that, now there is light at the end of the 2008 economic tunnel, the quality of growth is becoming centre-stage.

48. The OECD has taken two strategic steps in that direction. First, the Inclusive Growth Initiative which has recognized that economic growth is a means not an end. And second, the Better Lives Initiative which has placed human well-being at the centre of the policy debate. It is in this sense that the quality of economic growth as well as the level, as reflected in the UN 2030 SDG's, has invaded the global policy agenda: leading to a much more complex debate about the balance between economic growth, a sustainable environment and an inclusive society (the OECD Triangular policy paradigm).

49. The recent (April 2018) NAEC Seminar on "Inclusive Vanguardism - the Future of the Knowledge Economy" has amply confirmed that the New Production Revolution calls for political and social innovations if technico-economic progress is to be harnessed to human well-being. And the transformative, politico-humanistic model presented by Roberto Unger makes it clear that profound institutional and legal changes are needed to reap the benefits. The Nobel prizewinner Jean Tirole, in his book 13

"Economie du Bien Commun" (PUF, 2016) spells out how the capitalist, can be reformed so that all the stakeholders contribute to the common good. And the philosopher Isabelle Delannoy has demonstrated how "grass roots" initiatives across the world are "regenerating the planet, the economy and society" as part of a "symbiotic" economy (opus cited).

50. Such advances towards what Roberto Unger has called "shared progress" could, however, be irrevocably blocked if geo-political rivalries lead to military action, even war. What can be hoped for is that the threat of military action will be used as an extension of , as appears to be the case with the recent air-strikes in Syria and the Korean conflict. Such use of limited military action in aid of diplomacy is well- known historically, as in the case of the celebrated "Grand old Duke of York, who had ten-thousand men; he marched them up to the top of the hill, and he marched them down again."

51. The contemporary geo-political scene is indeed dominated by this struggle between soft-power and hard-power (see the Next War, the Economist, 27/01 - 0/2 2018). It can only be resolved by shared values. As essentially a soft-power institution based on economics, the OECD has a new geo-political role to play. For, after all, the science of economics is a child of the Western Enlightenment and it is founded on assumptions about human behaviour (the "economic man"!).

VIII. GLOBAL VALUES IN A DIVIDED BUT INTER-CONNECTED WORLD

52. A start has been made in this new adventure of Homo Sapiens, because the UN 2030 SDG's are nothing if they are not the foundation stone for a new global humanism. Likewise, the OECD "Better Lives" Initiative is meaningless if it does not apply to all humankind. But both need to be sharpened into a statement of "shared values" that could bridge divides in the global system.

53. 1. A Common Humanity: The philosophical notion of universal is now underpinned by the recognition of universal human needs. For example, the OECD Development Centre's report on "Measuring Well-Being and Progress in Countries at Different Stages of Development" concludes that "the need for autonomy and freedoms are profoundly related to the notion of capabilities that underpins the OECD well-being framework" (p. 29). Furthermore, evidence from the neuro-sciences suggests that human beings are by nature goal-oriented and aspirational -- driven by self-realisation. This explains the growing role of people-power, and in particular of woman-power today.

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54. Extending the notion of "capabilities" (Amartya Sen) to "competencies", a recent OECD report on "Education 2030 - The World We Want" (2018) explores how initial education and life-long learning can help the rising generations to acquire the knowledge, skills and values to shape a global society faced with profound challenges. For the identification of global values, the project has reviewed various global instruments, including the UN, G7 and G20. Such an approach recognizes the of cultural diversity, but also the need for young people to overcome the danger that diversity means conflict.

55. 2. Socio-Cultural Diversity: The danger ahead is that a mono-cultural global society, moulded by the new technologies, will lose its power to innovate. History shows that civilizations which integrate diverse cultural assets are more resilient (Claude Lévi-Strauss, "Race et Histoire", 1987 [1952]). Indeed, many of the cultural innovations embodied in the Western technico-economic revolution were assimilated from the Chinese, Greek and Islamic civilizations. This is why respect for different socio-cultural systems and philosophies is an essential pillar of the new humanism.

56. 3. Deconcentration of power: The technologically creative era proclaimed by the G20 2016 consensus cannot be realized without political, economic and social innovation. And the key to a heightened innovative capacity across society is the deconcentration of power: "Leadership" more than authority: and grassroots initiative more than ant-like conformity.

57. The relation of the individual to the State, the heart of democracy, is changing: the ballot-box is complemented by more direct forms of political participation, leading to the concept of "active citizenship". The NGOs, an expression of such active citizenship, are part of the political scenery at all levels, from global to local. Cynthia Fleury ("Les Irremplaçables", Gallimard, 2015) argues that far from undermining the rule of law, individual autonomy and self-realisation ("individuation") are its very foundation.

58. is also the scene of the deconcentration of power towards cities, regions and local communities. Policy coherence and creativity get easier the closer you get to the citizen, because participation is the ally of change. This might explain why cities are taking the lead in response to the challenge of the climate.

59. 4. Equitable sharing of the Fruits of Progress: Glaring inequalities in wealth, income and opportunity are the greatest threat to open and fair societies, and to the sustainability of the global system. Both are linked.

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60. As to inequalities within nation-states, the latest OECD report on Inclusive Growth sets out the issues squarely and fairly ("Bridging the Gap: Inclusive Growth 2017 Update Report"). The priority given to early childhood policies is well understood, but the future is not 30 years ahead for the youth of today. That is why the highest priority should be given to avoiding a "lost generation" through second-chance education and training opportunities; to a minimum inheritance endowment on reaching adulthood (Tony Atkinson), thus facilitating access to health, housing, training and self- employment; and regulation so that industry enters the battle for equality of opportunity for youth.

61. On the international scene, widening disparities obviously lead to growing migratory pressures. Hence the proposal for a "Global Compact for Safe, Orderly and Regular Migration" (see "International Migration in a Shifting World", OECD 2017). The reality is that under the existing rules of the game, financial capital can move at the touch of a button, whereas human capital is increasingly blocked at national frontiers. The only possible answer lies in narrowing the gap between advanced and developing countries in terms of income, wealth and quality of life. The best hope for this is in the participation of the developing countries in the New Industrial Revolution rendered possible by the ubiquity of the new technologies in terms of scale and place. Societal changes in developing countries, with educated youth in urban locations, means that an entrepreneurial youth culture is developing ("Unlocking the Potential of Youth Entrepreneurship in Developing Countries - From Subsistence to Performance", OECD, 2017). Already a new generation of African, Asian and Latin American political, economic and social innovators is appearing on the international scene, such as the World Economic Forum and the OECD Forum.

62. This may appear as derisory compared with the "Big Bang" of high-tech but, as the NAEC seminar by Carlos Moedas brought to light, the widespread grassroots diffusion of innovation is the key to productivity growth. A typical case was the OEEC European Productivity Movement after World War II to spread best practice in co- operation with business and the trade unions. In any case, the process of catch-up and leapfrog is now inherent in a globalized competitive economy. Witness the rise of in the 1960s, then the BRICS - when will Africa and follow? In other words, the key to an equitable sharing of the fruits of progress lies in a new international division of labour.

IX. CONCLUSION

63. The World is faced with a Toynbee-like challenge: innovate or decline! There is no new ideology or on the horizon, but all the main pillars of the

16 existing global order are being challenged: political, social and economic experimentation are the order of the day.

64. Capitalism is clearly "on the move". So-called entrepreneurial capitalism is making long-term moves to "internalise" so-called social and ecological , which will probably require fundamental changes in corporate governance. On the other hand, the power of finance in favour of short-term speculative profit could put the whole system at risk, as in 2008.

65. These uncertainties are clearly exacerbating geopolitical rivalries, to the extent that World War III is beginning to haunt the public debate. The saving grace could be the phenomenon of "people power", which neither the State nor the market can afford to ignore (e.g. the "velvet revolution" in Armenia!).

66. Many innovations are now emerging from the "grass roots" of civic society, and indeed the economy is already diverse and pluralistic with a growing "social economy" which stands between the State and the market. "Diverse yet like-minded", in the words of the MIKTA partnership (, , Korea, and ) which argues for "creative multilateralism" (OECD Observer, March 2018).

67. What is missing is a shared vision of the political leadership. Could it be a New Global Humanism which puts people at the centre of policies?

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