At its heart inclusive capitalism seems to be about relying on the morals of the rich to do something about inequality.
The onus seems to be on the banks and CEOs to change "mindsets" (see this article by Mark Boleat, chairman of the
The second frustrating thing about the recent series of articles on this topic is that they are long on describing the problem and almost silent on solutions. (See these articles by
It seems to me that the only way to generate inclusive capitalism is to change the rules of the capitalism game and to focus on reducing inequality via fiscal policy.
In March of this year the Bank of
Minouche, as she was known when the Permanent Secretary at DFID, will hopefully bring some lessons from international development to the
1. Treat financial sector wealth in the way one would treat other potential "resource curses". We know how to regulate oil and mineral wealth so that they generate inclusive growth rather than exclusive growth. Learn from these experiences.
2. Make everyone in the Bank of
3. Make fiscal analyses more equity sensitive. In development economics we worry a lot about the distributional aspects of who are taxes raised from and who are they spent on (Public Expenditure Reviews). This kind of analysis does not often puncture public consciousness in the rich countries.
4. Invest in education and health. Boring, I know, but yet another article (this time in Science) notes the net value of a higher degree in the
So the next time you hear someone going on about inclusive capitalism, ask them what they would do if they were in charge. If you work in international development, you might even have some new ideas and evidence to share.
Some unguarded reflections, thoughts, and ideas on international development from
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