Enlightened Economics

Economics for an Enlightened Age

Posts Tagged ‘Economics’

• 2015 Sustainable Competitiveness Index

Posted by Ron Robins on December 10, 2015

“The Global Sustainable Competitiveness Ranking 2015 is topped by Iceland for a second year running, followed by the Scandinavian nations.

The Sustainable Competitiveness Index is based on a competitiveness model that tries to evaluate exactly this – the ability to sustain wealth creation by incorporating all relevant pillars of sustained growth and wealth creation: natural capital availability, resource efficiency, social cohesion, innovation and business capabilities, and government-led development direction. The Sustainable Competitiveness Index also integrates data trends over time to allow for a better expression of future development potential.

The results aim at serving as an alternative to the GDP, for academic, policy or investment decisions, based on current and future development prospects and risks of nations.”
Global Sustainable Competitiveness Index 2015  (PDF), November 2015, SOLABILITY, Switzerland.

Commentary: Ron Robins
This is a terrific index concept. It needs to get more exposure to encourage governments, corporations and others further engaged in the sustainable competitiveness of their economies.

It’s interesting that the U.S.A. and the U.K. rank 41st and 48th respectively on this index while the Scandinavian countries dominate the top spots. The Scandinavian countries lead most alternative GDP indices as they are not only exceedingly high-income countries — but are top-tier performers on most other component measures as well.

The unique contribution that this index makes is the combination and weighting of its various components in endeavoring to predict the future direction of countries with respect to their total sustainability. Many countries might perform well on income measures but the sustainability and potential growth of those incomes with respect to the depletion and replenishment of their natural resources, social cohesion, etc., is wanting.

Also, countries like the U.K. and U.S.A. do relatively badly on this index because there’s a belief by its designers that governments should lead in all areas related to sustainability. Something that is politically difficult and unacceptable to many in the U.K. and America. Hence, China and Japan lead on this measure. Even Russia is ahead of the U.S.A. and U.K. on this measure — which probably raises some questions.

Nonetheless, this index is a valuable addition to alternate GDP indices.

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Posted in Economic Measurement, Economics, Environment, GDP Alternatives, News, Commentary | Tagged: , , , , , , | Leave a Comment »

• International Monetary Fund Blasts ‘Trickle-Down’ Economics

Posted by Ron Robins on June 25, 2015

“A new report from the International Monetary Fund suggests that the widely popular ‘trickle-down’ economics just increases the gap of income inequality, creating injustices in almost every country. The study written by five IMF economists said that if governments want to increase growth, they should focus on helping the poorest 20 percent of citizens… The report analyzed 159 developed and developing economies from 1980 to 2012, searching to see how income is distributed differently in each system. It found that when the income share of the top 20 percent increased by 1 percent, economic growth slows down 0.08 percent in the following five years. Meanwhile, a 1 percent increase for the bottom 20 percent leads to a 0.38 percent increase in the country’s GDP in the following years.”
International Monetary Fund Blasts ‘Trickle-Down’ Economics, by Grant Whittington, June 23, 2015, TriplePundit, USA.

Commentary: Ron Robins
The clear implication from this report is mostly for income redistribution. However, as I’ve previously argued, I believe that though some form of income redistribution could be effected to help close the immediate income gap, but by far the better way — though longer to effect — is for the lower-income groups to benefit financially from corporate stock ownership.

How can this be done? Well, on February 25  I wrote that, “I believe an enlightened approach would be for the wealthy — and for corporations themselves — in each country to entrust a certain percentage of their profits in the form of company stock to a ‘sovereign wealth fund.’ Over time, some of the dividends and stock gains could be cashed and used to directly increase the incomes of the poor. Higher taxes for the rich (which is becoming popular)… could be introduced now but would probably have to be quite onerous to significantly improve the income of the poor.

Furthermore, as it’s proving in France which imposed very high taxes on high incomes, the wealthy become very adept in finding ways to avoid the higher taxes — and many even moving themselves to other jurisdictions!”

The IMF and others have demonstrated in various studies that societies with growing and grossly uneven income and wealth distributions tend to eventually financially self-destruct. However, before they self-destruct, there’s broad recognition of this possibility. Recognition of this offers everyone the chance to expand their awareness and consciousness to develop greater insights into the solutions. And this is what has to happen to all nations facing this issue.

What the wealthy must realize for their own self-preservation — and for even greater financial gain — is that they should take a proactive, optimal approach to solving the income and wealth distribution quagmire such as the solutions proposed here. These, though not new, are the best way forward to an enlightened, sustainable, and affluent future.

Posted in Consciousness/Psychology, Economics, Labour Issues, News, Commentary | Tagged: , , , , , , , , , , | 5 Comments »

• Weekend read: The trouble with growth

Posted by Ron Robins on April 12, 2015

“A theme of particular interest is understanding what might be possible in advanced economies in the absence of economic growth and reductions in throughput.

Would these economies collapse without growth? Would mass unemployment result? Could the existing institutions — in particular, financial institutions — survive without growth, and if not, what sort of changes might be required? What would be the implications for economic growth of strict limits on throughput?”
Weekend read: The trouble with growth, by Peter A. Victor and Tim Jackson, April 11, 2015, GreenBiz, U.S.A.

Commentary: Ron Robins
There’s no doubt — barring the economic extraction of resources from other heavenly bodies — that Earth’s resources are limited and that for economic growth to continue indefinitely is impossible unless Earth’s resources are used far more efficiently. If we’re to avoid wars and famines where countries and peoples plunder each others resources, there has to be a marked change in consumer behavior. How can this happen? Will scare stories and killer climate events cause the change in consciousness? Perhaps so, but a more humane way is best.

And the nature of that humane response is for governments, educational institutions, and companies encourage changes in individual and collective consciousness the like of which I’ve written about in many of my posts that include: The Missing Ingredient In Economics — Consciousness!Cultural Creatives to Dominate in the Age of Enlightened Economics; and ‘Voluntary Simplicity’ Brings Higher Consciousness into Economics.

Posted in Consciousness/Psychology, Economics, Environment, GDP Alternatives, News, Commentary, Spiritual | Tagged: , , , , , | 1 Comment »

 
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