Why Democracy is Failing to Deliver Economic Growth – and How to Fix It
Economics is a rich and complex field of study. But when you read or see a news report about how a particular company or country is doing, it all gets boiled down to a few bare figures. And most of the time, what’s being talked about is growth. We’re obsessed with it and we expect it: if a country’s economic growth is stagnating, then you can be sure that some politician is going to come in for criticism.
But let’s backtrack a bit. Just why is growth so desirable?
Simply put, growth brings economic opportunity, upward mobility and increased living standards.
China is the example par excellence here. Its growth over the last 40 years has been stupendous and it now stands as the world’s second-largest economy. By 2014, China’s purchasing power parity – how much a country's money can buy in other countries – was $17.6 trillion, surpassing the United States’ $17.4 trillion.
China's economic growth also brought economic opportunity. Its economy created new jobs, especially for the rural poor; in just one generation, over 300 million Chinese were lifted out of poverty.
In 2013, the Chinese State Council’s income distribution plan made clear how the economy would be directed. China would work toward minimizing income inequality by raising low wages, increasing education spending and providing more affordable housing.
This begs the question: what factors result in a country failing to grow? As we know from Argentina, when economic growth fails to materialize, it’s often down to political instability and short-term thinking.
Back in 1913, Argentina was, per capita, the world’s tenth-richest country. But between 1930 and the mid-1970s, the country experienced six military coups. Alongside this political instability, three separate bouts of hyperinflation exceeded 500 percent per year, while economic “growth” rates sank below zero for several years.
Furthermore, Argentine governments weren’t exactly thinking long-term about what could be done to benefit the country. They failed to invest in education and instead preferred to build up a cheap, poorly educated agricultural labor force – hardly a strategy for economic success. In fact, during the 1940s, Argentina had the lowest rate of secondary-school attendance in the world, and the result of poor education was ultimately a lack of innovation and a competitiveness shortfall.
The full effects were felt in Argentina’s 1998-2002 economic and political crisis. Unemployment peaked at 25 percent, the currency lost 75 percent of its value and poverty went from 35 percent in 2001 to 54.3 percent in 2002.
Getting the economy right is tricky, but one thing is clear: growth matters.
Edge of Chaos (2018) examines the key challenges that liberal democracies around the world are facing today. Aging populations, limited resources and increasing debt are all threats to these countries’ economic well-being – but so too are the “remedies” of short-term policies and protectionism. Author Dambisa Moyo examines that misguided agenda and presents a radical blueprint for economic growth in the twenty-first century.
For the first time in Americas history, its next generation of workers will be less educated than its last.
Ich bin begeistert. Ich liebe Bücher aber durch zwei kleine Kinder komme ich einfach nicht zum Lesen. Und ja, viele Bücher haben viel bla bla und die Quintessenz ist eigentlich ein Bruchteil.
Genau dafür ist Blinkist total genial! Es wird auf das Wesentliche reduziert, die Blinks sind gut verständlich, gut zusammengefasst und auch hörbar! Das ist super. 80 Euro für ein ganzes Jahr klingt viel, aber dafür unbegrenzt Zugriff auf 3000 Bücher. Und dieses Wissen und die Zeitersparnis ist unbezahlbar.
Extrem empfehlenswert. Statt sinnlos im Facebook zu scrollen höre ich jetzt täglich zwischen 3-4 "Bücher". Bei manchen wird schnelle klar, dass der Kauf unnötig ist, da schon das wichtigste zusammen gefasst wurde..bei anderen macht es Lust doch das Buch selbständig zu lesen. Wirklich toll
Einer der besten, bequemsten und sinnvollsten Apps die auf ein Handy gehören. Jeden morgen 15-20 Minuten für die eigene Weiterbildung/Entwicklung oder Wissen.
Viele tolle Bücher, auf deren Kernaussagen reduziert- präzise und ansprechend zusammengefasst. Endlich habe ich das Gefühl, Zeit für Bücher zu finden, für die ich sonst keine Zeit habe.
Hol dir mit Blinkist die besten Erkenntnisse aus mehr als 7.000 Sachbüchern und Podcasts. In 15 Minuten lesen oder anhören!
Jetzt kostenlos testen
Blink 3 von 12 - Eine kurze Geschichte der Menschheit
von Yuval Noah Harari
