Is The World Economy Broken?
By Jairaj Singh, Associate Partner, Lighthouse International
With the recent publication of the leaked 'Paradise Papers' shedding further light on how wealth is being hidden offshore to avoid tax, the spotlight is once again well and truly on how money is distributed across the globe.
This week, Ed Conway, Sky News economics editor wrote a powerful piece on why the world economy is well and truly broken. He broke down the history of our economic journey since World War I and World War II, charting the downfall of moral values and the increase of greed and profit at all costs:
"The economy is broken. Well and truly broken.
You can see the hallmarks everywhere. Rising inequality, flatlining real wages, the weakest productivity growth for more than a century. The rift between haves and have-nots has been widening for decades. Money has flowed out of our economies and into company coffers and into tax havens.
Is it any surprise what has transpired? Trust in the establishment has collapsed. Electorates around the world are punishing their politicians at every vote.
Everyone is angry. And you know what? They're right to be angry. Because the unwritten contract between citizens, business and government has broken down
The system we built to manage the global economy has broken. It is kaput. It is an anti-system. And this anti-system is at the heart of the discontent. This doesn't answer every complaint in 21st century politics/economics. But it does at least get us some of the way."
Fundamentally why is this happening? You don't need to be an economic genius to know that our current system is unsustainable. What happens when you continually try to reap crop from a harvest year after year without planting enough new crop? The farm will eventually die.
The reality is that there are fundamental laws and principles of life and one of them is that you must reap only what you sow. For too long now our sophisticated economic system has created more and more debt and urged consumers to buy more and more stuff and this just cannot carry on.
Lord Mervyn King, former Governor of the Bank of England said in 2016 that:
“Only a fundamental rethink of how we...organise our system of money and banking will prevent a repetition of the crisis. Without reform of the financial system, another crisis is certain, and the failure…to tackle the disequilibrium in the world economy makes it likely that it will come sooner rather than later."
What is needed is a fundamental change and a new way of doing business which is more in line with the basic laws and principles of life. A system where business can make a profit while ensuring wealth is distributed to areas where it's most needed. A new type of social enterprise is emerging through the internet-age and it will be those businesses which align themselves with these principles that will thrive whenever the next crash hits. Because one thing is for certain, it will come and individually and collectively we need to be as prepared as we can be.
To talk to one of our experienced life and business mentorship coaches about how you can do this, just click the live chat below...
Wait! There's More...
Get More Inspiration As a Member of The Legends Report