A Global Third Way Social Justice and the World Economy
Author(s)
Kapstein, Ethan B.
Abstract
For over a generation, this postwar machine, this model of social capitalism, carried the industrial world to a bountiful era characterized by unprecedented levels of economic growth and rising per capita incomes. Even some developing countries managed to hitch their wagons to it for part of the ride, enjoying a generation of exported growth. By the early 1990s, with the collapse of the Soviet Union, economists and policymakers were crowing that the West’s wartime vision had become a global reality, with countries everywhere seeking to liberalize and privatize their economies. But today we look back at our arrogance with shame. As the world economy suffers from an endless series of fiscal, monetary, and currency crises, the old design’s internal flaws are becoming evident. Fundamentally, we see that the bond between globalization and the welfare state is breaking down, as mobile capital flees social expenditure and the taxation that must come with it. Everywhere, states are failing to meet their obligations to those who are most vulnerable.
