"Today's turbulent world calls for prosperity that can withstand shocks"


Lhen the world changes, political paradigms also change, or at least they should. Harvard economist Dani Rodrik recently argued that instead of globalization, financialization and consumption – the tenets of the neoliberal paradigm that has dominated global economic policies for the past four decades – we need a framework that emphasizes production , jobs and localism. Mr. Rodrik calls this emerging paradigm the "productivism".

At a time of growing political polarization across the developed world, this productivist paradigm has found support on both right and left. But productivism is only part of a broader and deeper transition: the neoliberal concern for efficiency gives way to another priority, the systemic resilience.

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Neoliberalism's assumptions about the ability of individuals and communities to adapt to economic shocks have proven to be utterly unrealistic. Trade liberalization has been a blessing for GDP, but most of the gains in developed countries have gone to the wealthy, while the losses have been borne disproportionately by already vulnerable groups. Economic globalization has reduced inequalities between the developed and developing worlds, but it has also increased geostrategic competition, especially between China and the United States. Interdependence is being used as a weapon, and the neoliberal paradigm provides little guidance on how to respond to security issues such as economic coercion and fragile supply chains. The neoliberal paradigm may have increased wealth, but it has also increased carbon emissions, contributing to the current climate crisis. Its followers have not understood that efficiency is only desirable up to a certain point.

Inclusive growth

The world has become riskier and more uncertain, in part because of neoliberal policies that have exacerbated social, political, economic, and environmental vulnerabilities, and are proving ill-equipped to respond to the crises they helped cause. Any new paradigm must enable policy makers to address internal political and wealth distribution conflicts as well as long-lasting global instability and uncertainty.

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Resilience is defined as the ability to absorb shocks and adapt to continue functioning. But it is also a system concept. It shifts the analysis from decisions taken individually to their long-term effects on the system as a whole. It discourages excessive focus on a single measure, such as GDP, or short-term returns. It encourages the balance between diversification and concentration, between independence and interdependence.

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