Global finance in the 21st Century
Speculation, Debt, Rentiers and Issues for Development Policy
Paradox of globalisation
- Globalisation is associated with flexibility, efficiency and competitiveness but everywhere advanced countries have become increasingly brittle, sluggish and fractured
- Developed countries are increasingly connected – but this allows for the net negative resource transfers to the rest of the world
- We have allowed those who were the architects of GFC back into the driving seat, comforted by the word that the world is simpler, safer, fairer.
- Global debt is higher now than ever before.
- We have bought into the notion that public capacity is inefficient and power has been taken by those with the money …rule by law…not rule of law…
- Rise of the Rentiers (super elites – top 1% of earners) in finance and elsewhere that have benefitted
The return of rentier capitalism
- If those living on incomes derived from ownership and institutional and political control of physical and financial assets gain the upper hand over innovative and risk taking investment – the outcome is distortionary
- Tobin – High private rewards disproportionate to their social productivity
- Stiglitz – rent-seeking – not for creating wealth but grabbing a larger share of it
Penelope Hawkins,Senior Economic Affairs Officer Debt and Financial Analysis branch Division on Globalisation and Development Strategies penelope.hawkins@un.org
