Friday, March 13, 2009

A New World Order

Much water has flown below the proverbial river since I last penned my thoughts. the world as we knew then ( yes it does seem a different era does it not?) no longer looks the same, several unshakable enterprises and our presumed unshakable assumptions about markets and economies cease to exist. It would be fair to say that very few things would now surprise us they would have prior to the big fall of the developed economies in the last six months.

McKinsey’s worldwide managing director, Ian Davis recently wrote on the topic he called "The new normal". Read it at the following link

The article prompted me to pen the following thoughts.

A “new world order” is a term now increasingly heard both from economic and national leaders. What could this new world order look like? The answer lies not just in economics or financial systems or in balance of trade constructs.

The answer is more fundamental, the very basis of society, nations, in fact the very existence of mankind. It would not be wrong to say that Nations and their associated Economic & Financial systems exist for the purpose of good of all mankind. The common goal, of government, of society and all associated interconnected institutions comprising these, is to ensure their subjects live comfortably, that there is somewhat uniform distribution of benefits, that they are happy and contented, can realize the best of their potential. Of course, there are higher, overarching objectives beyond material comforts, i.e the more spiritual constructs, but we will restrict our discussion to the more mundane issues of material existence.

What we have discovered, albeit a bit painfully, that no single nation or society or economic construct is guaranteed to achieve the goals set above. Both capitalism and communism in their various formats and mix have not been successful in helping human beings achieve a uniform standard of existence, let alone being able to enable achieve their potential. It could be right to surmise, that on this metric, these have failed. So too has socialism failed in its most forms to date. Socialism probably has been the most difficult to define, let alone implement. The other two formats mentioned above, at least are clear on their stance.

And, a non-uniform distribution of benefits is not the prerogative of the underdeveloped third world countries, this is too apparent in the most leading of economies of the developed world. So what could the new world order look like, will the “new normal” be a movement towards this world order? Will the new normal include governments that are more concerned about their subjects long term financial and economical health, and therefore more involved? Will the new normal mean enterprise forced towards a higher sense of ethics and selflessness, with higher accountability to their stakeholders, which includes not just direct shareholders but the society at large. Will the new normal mean individuals with a higher sense of personal economy, self-control, and probably increased sensitivity to their individual responsibility towards society?

Whatever the new normal will be, one can see, and fervently hope, that it will spur us to question the purpose of nations, society, government, of very existence. And then move to that newer, higher normal.

It might help for us to revisit Plato's 'Republic' vs. studying Keynes' 'The General Theory of Employment, Interest, and Money'!

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