The Organization for Economic Cooperation and Development -- a pro-establishment, rock-ribbed bastion of pro-market thinking -- has released a report predicting a collapse in global economic growth rates, a rise in feudal wealth disparity, collapsing tax revenue and huge, migrating bands of migrant laborers roaming from country to country, seeking crumbs of work. They prescribe "flexible" workforces, austerity, and mass privatization.
The report, Policy Challenges for the Next 50 Years , makes a number of assumptions about the impact of automation on skilled jobs in the workforce, the end the recent growth in the developing world (especially the BRIC nations), and a series of worsening environmental catastrophes.
As Paul Mason points out in The Guardian, the OECD does not countenance the possibility of rupture -- states opting out of market capitalism, say, or non-state actors refusing to accept claims on property. It seems unlikely that the changes the OECD envisions will not be attended by more changes in the way people think about the legitimacy of the economic and political system that produced them.
The OECD has a clear messagefor the world: for the rich countries, the best of capitalism is over. For the poor ones – now experiencing the glitter and haze of industrialisation – it will be over by 2060. If you want higher growth, says the OECD, you must accept higher inequality. And vice versa. Even to achieve a meagre average global growth rate of 3% we have to make labour "more flexible", the economy more globalised. Those migrants scrambling over the fences at the Spanish city of Melilla, next to Morocco, we have to welcome, en masse, to the tune of maybe two or three million a year into the developed world, for the next 50 years. And we have to achieve this without the global order fragmenting.
Oh and there's the tax problem. The report points out that, with the polarisation between high and low incomes, we will have to move – as Thomas Piketty suggests – to taxes on wealth. The problem here, the OECD points out, is that assets – whether they be a star racehorse, a secret bank account or the copyright on a brand's logo – tend to be intangible and therefore held in jurisdictions dedicated to avoiding wealth taxes.
The OECD's prescription – more globalisation, more privatisation, more austerity, more migration and a wealth tax if you can pull it off – will carry weight. But not with everybody. The ultimate lesson from the report is that, sooner or later, an alternative programme to "more of the same" will emerge. Because populations armed with smartphones, and an increased sense of their human rights, will not accept a future of high inequality and low growth.
The best of capitalism is over for rich countries – and for the poor ones it will be over by 2060 [Paul Mason/The Guardian]