None of the old "isms" fits the economic situation of the world today. Certainly it is not socialism, nor could it be described as unfettered capitalism. After all, governments everywhere have a role in steering the boat, if not rowing it. Is it a market economy? Yes, if markets work competitively. But what if there are missing or incomplete markets?
The new "order" presents a great many challenges, though the continued fascination with percentage growth rates is hardly a healthy sign. Wherever one happens to be on the globe, far more pertinent questions needs to be asked. How will regional groupings function in the context of alleged multilateralism? What are the links between the "real" aspects of the economy and the "monetary" ones? What is the burden of the public debt?
Let us not fool ourselves any more with post World War II methods of national income accounting. All over the world, if automobile and highway accidents are high, national income rises because you add up hospital bills, car repairs, and insurance bills!
I suggest for a moment we forget the magical charm of the year 2000 and think of 2002, which will mark the 10th anniversary of the Rio Earth Summit of 1992. What capital stock and what Earth are we leaving for our progeny? Remember the old African proverb: "We did not inherit the earth from our ancestors. We borrowed it from our descendants."
*This week's Soapbox speaker is professor of economics at the American University in Cairo and a member of the Shura Council.
None of the old "isms" fits the economic situation of the world today. Certainly it is not socialism, nor could it be described as unfettered capitalism. After all, governments everywhere have a role in steering the boat, if not rowing it. Is it a market economy? Yes, if markets work competitively. But what if there are missing or incomplete markets?