Improving the world for everyone

SELF-APPOINTED leaders have assembled at Davos, Switzerland, over the decades to promote boundary-less globalisation of finance and trade. “Davos is where billionaires tell millionaires what the middle class feels,” according to Jamie Dimon, CEO of JPMorgan Chase, the world’s largest bank in terms of market capitalisation.

These leaders were like fireflies: small and local. They had an inner light driving them to change the world around them for improving the lives of families and communities.

In the Davos model of the global economy, the accumulation of wealth by billionaires is expected to increase the wealth of the poorest classes also. It has not turned out that way. On the contrary, with cumulative causation, whereby those who already have wealth can exploit expanding opportunities to make more wealth, the gap between those on top of the pyramid and the masses below (including the middle classes) have widened. Poor migrants are arriving at the borders of America and European nations, desperate for opportunities to safely live and earn a living. Anti-immigrant populism is shaking up governments in the West. Migrants are being forced back, with the rich pulling up drawbridges to save themselves, ending the short history of boundary-less globalisation.

“We need to overcome what one would label the ‘Davos arrogance’. People gather here, including representatives of the liberal elites primarily from Europe and the United States, and say that we are the ones who know how to solve all the problems of the world,” Kyriakos Mitsotakis, Prime Minister of Greece, said at the World Economic Forum (WEF) summit in Davos last week. He stated that the international arrangements and institutions after World War II, which concentrated power within the G7 (and primarily the US), did not reflect the reality of today’s world, and this was upsetting countries in the Global South that were emerging as global powers.

Populism in the rich West is rising from the political right; in the poorer Global South, it is generally coming from the Left. “One needs to be very careful in this environment where everyone is pointing a finger at populists, because some of their grievances are actually very real,” Mitsotakis explains. “People feel they are being left behind by globalisation. The wages have not really increased. Inflation is really hitting lower-income households,” he adds.

In 2001, Goldman Sachs’ economist Jim O’Neill forecast that the economies of the BRICS countries, outside the G7, would be the engines of global growth in the 21st century. Western capitalists and MNCs were attracted by these potential opportunities for profits.

However, some are not convinced by economists’ predictions, stating that their mathematical models are incomplete. They do not include social and political forces, which are hard to quantify, and therefore their predictions of growth are often wrong.

Nate Silver points out in The Signal and the Noise that forecasts of GDP growth by the Survey of Professional Forecasters have been right only 50 per cent of the time — no better than tossing a coin. Therefore, the WEF commissioned some scenarists to use “systems-based scenario forecasting”, which considers all forces that shape the future of countries, to forecast what lay ahead for the BRICS countries. This method of ‘whole systems thinking’ anticipates future risks and suggests changes in policies to navigate through them.

The scenarios for India were presented at Davos in 2005. They revealed three plausible futures for the country by 2025. The first scenario was an analysis of the trajectory India was on at that time: wealth was admired and it had become an aspiration for India’s youth. The scenarists described this scenario as ‘BollyWorld’, with its celebration of glamour. But social tensions were also building up. A Bollywood movie is entertaining, but it eventually ends and we cannot escape reality.

The second scenario emerges from the first when the social tensions in it are not resolved. The youth are unable to satisfy their aspirations. The government must make ease of living easier for the masses, and not just ease of making profits for business. It strains to make growth more inclusive. The scenarists called this scenario, with its internal tensions, ‘Atakta Bharat’. Is this today’s India?

A third scenario emerged from the systems analysis. The WEF scenarists called it ‘Pehle India’, in which India would emerge as a global leader of a new model of growth from the bottom. In this scenario, leaders of change were within the system, at the bottom and in the middle, not perched like glamorous peacocks on top. These leaders were like fireflies: small and local. They had an inner light driving them to change the world around them for improving the lives of families and communities.

The scenarists found that there were millions of such fireflies making a change in India. Fireflies are not counted among the ‘unicorns’, who are the models of entrepreneurial success that is taught in management schools. They are not admired because, in the capitalist world of wealth, success is measured by the stock market, not by the wellbeing of the poor. Fireflies provide models of inclusive, rather than extractive, entrepreneurship. Their strength lies in their human values, not in the financial valuations of their enterprises.

Paradigms are hard to change. The beneficiaries of an established paradigm always resist change. They want to remain on their pedestals, to continue their gains from the upward rush of admiration and wealth towards them in the prevalent paradigm. They use their power to stop those who threaten it. They prevent others from accessing resources and silence their voices. Therefore, the powerless are compelled to resort to other means to remind the powerful that they, too, deserve respect and must be listened to.

Prevalent theories of economics and institutions of global governance have failed to make the world safer or growth more inclusive and sustainable. The world desperately needs ideas from outside the intellectual and official establishment. Powerful peacocks on their pedestals must deign to come down to earth and listen to the masses. That is where fireflies, who are genuine social entrepreneurs, are changing the world to make it better for everyone.