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Wednesday, June 16, 2010

"It is Time for Asia to Rewrite the Rules of Capitalism"

This argues that the "western economic model, which defines success as consumption-driven growth, must be challenged," and Asian countries are in the best position to lead the way:

It is time for Asia to rewrite the rules of capitalism, by Chandran Nair, Commentary, Financial Times: The 20th century’s triumph of consumption-based capitalism has created the crisis of the 21st century: looming catastrophic climate change, massive environmental damage and significant depletion of natural resources. ... The western economic model, which defines success as consumption-driven growth, must be challenged. Asia, while apparently promising most for this model’s continuation because of its large population, is paradoxically the region best placed to do this.
Advocates of the western model tend to play down its dramatic effects on natural resources and the environment. ... Instead, they argue that human ingenuity aided by innovations in the markets will find solutions. This is rooted in an irrational belief that we can have everything: ever-growing material wealth and a healthy natural environment. ...
Imagine a world in which, by 2050, four to five billion Asians are consuming like Americans. The result would be catastrophic, yet this is what Asians are being told to aspire to. ... Asian political leaders must demonstrate leadership. The western emphasis on markets, technology and finance cannot deliver..., politicians must recognize that technology cannot provide all the answers. Blue fin tuna, if fished to extinction, cannot be recreated in a petri dish. Nor can business be expected to lead the way in this area. The new rules needed to change the way people consume may spell the end for some companies, and they will fight to prevent change.
This is why Asian governments must intervene. Limits must be placed on various forms of consumption... This starts with access to resources and the rights to various forms of consumption. Their core task is to rewrite the rules of capitalism – by putting resource constraints at the centre of policymaking.
Governments have two key mechanisms at their disposal. First, negative environmental externalities ... must be priced in through ... taxes and fees... Second, caps must be put on the use of resources that are being overexploited, including, where appropriate, outright bans on use. ...
Policymakers need to challenge the vested interests arguing that consumption-driven capitalism is the only course and that any alternative will lead to poverty and unemployment. ... Asian governments must take responsibility for current and future generations. ... Suggesting a future in which economic policy is framed around limits, restraint and restrictions is to invite controversy, but Asian governments ... have no choice. ...

How do non-authoritarian governments impose highly unpopular, restrictive policies and survive in the long-run?

    Posted by on Wednesday, June 16, 2010 at 12:34 AM in Economics, Environment, Politics, Regulation | Permalink  Comments (40)


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