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ASSOCIATION INTERNATIONALE DES ANCIENS DE L’OECE ET DE L’OCDE INTERNATIONAL ASSOCIATION OF FORMER OEEC AND OECD STAFF

2, RUE ANDRE-PASCAL, 75775 PARIS CEDEX 16 01 45 24 85 94 aia@oecd.org

CAPITALISM ON THE MOVE

Discussion Note by Ron Gass

I. INTRODUCTION – THE RECONCILIATION OF THE

ECONOMY, NATURE AND SOCIETY

II. THE STATE, THE MARKET AND "PEOPLE POWER"

III. THE EMPOWERING STATE IN A POLYCENTRIC WORLD

IV. THE SCRAPPING OF HUMAN CAPITAL

V. THE NEW PRODUCTION REVOLUTION TO THE RESCUE

VI. AN ECONOMY WITH A HUMAN FACE

VII. A NEW GLOBAL HUMANISM?

VIII. GLOBAL VALUES IN A DIVIDED BUT INTERCONNECTED

WORLD

IX. CONCLUSION

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I. INTRODUCTION - THE RECONCILIATION OF THE ECONOMY, NATURE

AND SOCIETY

1. The recent NAEC Seminar on "The Limits of the Market" (Paul De Grauwe and

Denis Snower) finished up on the note that the market-state nexus is in flux. In effect,

the fall of the Berlin Wall marked the failure Soviet style economic planning, but the

triumph of "laissez-faire" is now in question as a result of the 2008 crisis. In a nutshell,

cheap money, pragmatic Keynesian policies and structural reforms have lifted economic

growth (see OECD November 2017 Economic Outlook), but inequalities,

environmental threats and migration are getting worse and trust in government has

fallen in OECD countries ("How's life?" OECD 2017). Thus, the over-riding goal long-

term is how to reconcile the economy, nature and society, with economic growth as a

means and "better lives" as the goal. Can capitalism meet this challenge, and if so on

what basis?

II. THE STATE, THE MARKET AND "PEOPLE POWER"

2. The protagonists in this debate are no longer limited to the State and the Market,

as in the book "Où va le monde - le marché ou la force ?" (Pascal Lamy and Nicole

Gnesotto, Odile Jacob 2017). On the contrary, civic societies across the world are

experimenting with a variety of challenges to neo-liberalism, such as the Circular

Economy (The Club of Rome) and the Symbiotic Economy (Isabelle Delannoy,

"L'économie symbiotique - régénérer la planète, l'économie, la société", Actes Sud,

2017). Whilst this is less true in authoritarian states, even they are compelled in that

direction. Climatic warming is a striking example.

3. The underlying reality is that to tackle the transformative structural changes

embodied in the 2030 UN Policy Agenda, nation states need to go into partnership with

civic society institutions, the multinationals and diverse levels of government. Neither

the all-powerful State nor market fundamentalism can cope with glaring inequalities,

climatic disaster or massive migration.

III. THE EMPOWERING STATE IN A POLYCENTRIC WORLD

4. In such a polycentric world system, both the State and the Market are forced to

become more societal because faster and more profound structural changes tend to

"leave communities and individuals behind", and because the rising generation is

seeking new ways of working. As a result there is a growing "third sector" standing

between the Market and the State and propelled by a growing body of social

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entrepreneurs, many of whom are women. What is surprising is that this "third sector"

or "social economy" is growing in times of high unemployment because people are

forced to create their own jobs. This movement, in relation to which OECD (ILE now

LEED) has played a pioneering role, is estimated to account for about 10-12% of jobs

in OECD countries. Even the poor all over the world (100 million) are clients of micro-

finance institutions such as the Grameen Bank founded by Muhammad Yunus in

Bangladesh in 1970 (OECD/ENV/WPK/2010).

5. Is this movement a sort of "grass roots" capitalism or is it a retreat from

capitalism? It appears to be neither, because on the one hand it eschews profit, yet on

the other it embodies the idea that even the disadvantaged can become entrepreneurs. It

is neither market nor state. The "social enterprise concept does not seek to replace the

concepts of the non-profit sector or social economy. Rather, it is intended to bridge

these two concepts, by focussing on new entrepreneurial dynamics of civic initiatives

that pursue social aims ("The Social Enterprise Sector - A Conceptual Framework",

OECD/LEED, 2018). In other words, it is a manifestation of the partnership between

the Empowering State and the Civic Society.

6. The Paris One Planet Summit on the Climate is typical of this new alignment of

national states, business and people power. The notion of the Empowering State evolves

around the idea that national states, both individually and collectively, are required to

become strategic and implement strategy in partnership with business and civic society.

The 2030 UN Policy Agenda provides a sort of compass for the international

community; the G20 is working out the strategy but it will fail without massive business

investment (OECD Guidelines on Responsible Business Conduct) and action by the

population at large -- cities, regions, local communities and the citizenry.

7. Other transformative structural changes, such as inequalities and migration, are

pushing in the same direction.

IV. THE SCRAPPING OF HUMAN CAPITAL

8. The 2017 MCM put its finger on the central problem by recognizing that the

OECD strategy of inclusive growth for better lives calls for "strong government-

business-unions-civil society dialogue" (para 17 of the Ministerial Communiqué). In

other words, the essentially humanistic goal of "better lives" can only be realized if the

age-old problem of scrapping human capital (the slave trade, Dickensian London,

Germinal, etc) finds a contemporary solution.

9. Up to the oil shocks crisis at the end of the 1960's, collective bargaining between

business and trade unions, combined with public policies for social security, enabled

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market capitalism to achieve massive increases in human prosperity by renewing the

capital stock. Hence the fall of the Berlin Wall, and the implosion of the Soviet Empire.

10. Today, the problems of the "scrapping" of human capital are posed again because,

in democracies, the fact that whole communities are being "left behind" is politically

unacceptable -- and is leading not only to a rejection of globalization but also to public

debate on post-capitalist alternatives (see for example "L'Age de la Régression -

Pourquoi nous vivons un tournant historique", Premier Parallèle, 2017).

11. What seems to be happening is that the market fundamentalism adopted in the

Thatcher/Reagan era has led to a "touch-of-the-button" movement of financial capital;

whereas human capital cannot adapt or move that fast. The situation is further

complicated by the fact that the knowledge-based physical capital of the new production

revolution (see Richard Baldwin: "The Great Convergence and the New

Globalization") can more freely cross borders than in the past.

12. The result is that the traditional adjustment policies - active manpower and social

policies and trade adjustment policies -- need to be reinforced by place-based actions

(see 2017 OECD Ministerial Communiqué, para 15). Neil Martin spells this out in a

text produced for the AIA/NAEC seminar on Prospects for Global Governance: "The

case for Place-Based Policies and Multi-level Governance as a Response to the

Problems faced by 'Stranded Communities' ". Thus, the "Think Global, Act Local"

theme behind the creation of the OECD/ILE (now LEED Programme) in 1982 should

now become mainstream, because it is at the level of cities, regions and local

communities that the scrapping of human capital can be best combatted (see "Better Use

of Skills in the Workplace", OECD/LEED, 2017).

13. The NAEC Seminar on "The Useless Man" by Professor Pierre-Noël Giraud

(April 2016) goes further because capital, and the technologies it vehicles, can migrate

more freely than people, leading to an underlying imbalance in the neo-liberal system.

Nomadic jobs move to new locations with capital, whereas sedentary jobs are tied to the

"stranded communities". This leads to growing inequalities of income, and feeds a new

class struggle between the nomads and the sedentaries (see the debate between Giraud

and Harsault in Philosophie Magazine, May 2016). Metropolitan areas are most

affected because they need to recuperate nomadic jobs to restore the sedentary/nomadic

balance. He argues that there is no national solution because only multi-national

enterprises have the power to move nomadic jobs from one country to another. Hence,

the development strategies of large cities and metropolitan areas have to integrate

international trade negotiations, inter-city co-operation and local community-building:

giving new force to the "think global, act local" doctrine.

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14. For Giraud, the slide into "uselessness" is the more or less inevitable consequence

of long-term unemployment and precarious employment. It can only be combatted by

access to opportunities as well as income -- what he calls the "new mobility". Hence,

flexi-security and life-long learning opportunities, ie the renewal of human capital, are

the key to success. Neither are credible goals without the full participation of business

and the unions.

15. Today, with the advent of the new industrial revolution, people will have to renew

their skills. But the life-long learning of today profits the higher education elite and will

exacerbate inequalities. "If the 21st century economies are not to create a massive

underclass, policy-makers urgently need to work out how to help all their citizens learn

while they earn" (The Economist, "Lifelong Learning -- How to Survive in the Age of

Automation", January 2017).

V. THE NEW PRODUCTION REVOLUTION TO THE RESCUE?

16. Thus, will the latest manifestation of modern capitalism, the New Production

Revolution in the form of robots and artificial intelligence, scrap human capital or the

contrary? The jury is still out, but recent OECD reports tend to be cautiously optimistic

on both the question of level of employment and the nature of skills (see for example

"The Next Production Revolution -- Implications for Governments and Business",

OECD, 2017). The spectre of jobless growth is ruled out, and the level of employment

depends in any case on the success of macro-economic policies: the Schumpeterian

logic of "jobs destroyed and new jobs created" will no doubt prevail. This cautiously

optimistic OECD view is, however, challenged by the question of skills. Andreas

Schleicher has ventured the opinion, based on the results of PIAAC, that "For those with

the right knowledge, skill and character qualities, this can be liberating and exciting.

For those who are insufficiently prepared, it can mean the scourge of vulnerable and

insecure work, and life without prospects" (Foreword to "Computers and the Future of

Skill Demand", OECD, 2017). Another OECD Report ("Getting Skills Right - Good

Practice in Adapting to Changing Skill Needs", 2017) points in the same direction:

rising demand for high-level, creative skills and the opposite for low-level routine skills,

leading to labour market segregation and an even more divided society.

17. Roberto Unger (NAEC Seminar on Socially Inclusive Economic Growth and the

Future of the Knowledge Economy, 5th May 2017) has articulated a riposte to this

gloomy perspective. He argues that it is in the nature of the new technological

revolution that knowledge-based production will spread from "insular vanguards"

(Silicon Valley and like enterprises) to the "inclusive vanguards" (SME's, local

initiatives, social economy, etc), thereby reducing inequality and exclusion. The

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condition for success, he argues, is “the reinvention of industrial policy in decentralized,

pluralistic and experimental form".

18. Unger's stance is political in the highest sense, since it is founded on the humanist

notion that every man and woman has "the vocation of a larger life", and that societal

change is needed to go in that direction - hence his Movement for Social Innovation.

As Yuval Noah Harari concludes in his recent book "Homo Deus - A Brief History of

Tomorrow" (2016), technology does not determine the future, but it presents the

challenge of political strategy, i.e. where to go. Unger presents one credible response

to that historic challenge.

19. The OECD is faced with the same challenge. As part of its Inclusive Growth

Strategy, it has accepted that technico-economic progress is a means not an end, thereby

providing a response to the criticism of Matthias Schmelzer that OECD has become the

"temple of economic growth". He proposes an alternative strategy of "just de-growth"

to respond to the ecological challenge and the unequal distribution of the fruits of

progress (NAEC Seminar on The OECD and the Making of the Economic Growth

Paradigm, March 2016). The OECD goal of "better lives", and the UN SDG's that have

been endorsed by the G20, put an end to any hegemonic stance, be it economic,

technological or ecological. The overriding vision is now the Reconciliation of the

Economy, Nature and Society, with the aim of improving human well-being across the

world.

20. Will a new capitalism, based on purpose as well as profit, participate in that

humanistic effort? Can capitalism and humanism converge in the global society that is

becoming a reality as it becomes more and more inter-connected?

VI. AN ECONOMY WITH A HUMAN FACE

21. Karl Marx postulated that capitalism was alienating for the human being and thus

anti-humanist, and so did the anarcho-syndicalists. Economics has become known as

the "dismal science" because, for many, Adam Smith's notion of "Economic Man" does

not reflect the reality of what makes the human being tick. So it is necessary, as the

foundation stone of this discussion, to take a stand on the nature of fundamental human

needs. The evidence of OECD work on behavioural insights seems to suggest more

complex human strategies than the "economic man" would deploy. Dennis Snower,

based on evidence from the neurosciences, argues that empathy and caring for others

can be as important as the materialist seeking ego (NAEC Seminar on the Limits of the

Market). Roberto Unger sees every human being as aspirational, that is to say goal-

oriented, searching for a better life.

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22. Historically, capitalism has taken many forms and survived the communist

challenge of the planned economy. Even authoritarian states have accepted it as the

best way of organizing production and competing in the global market. But, following

the 2009 financial crisis, Eric Beinhocker and Nick Hanauer are arguing that capitalism

is facing another crisis, because runaway financial capitalism is threatening the

economic system. The genius of capitalism, they say, is "that it both creates incentives

for solving human problems and makes those solutions widely available. And it is

solutions to problems that define prosperity, not money" ("Redefining Capitalism",

McKinsey Quarterly, 2014). This resonates with the idea put forward by Romina

Boarini at the AIA/NAEC Seminar on "A World Fit for the Rising Generation":

namely, that in the new capitalism, frontier companies are competing via purpose as

well as profit, since it gives them a comparative advantage, with regard to long-term

success.

23. Does this mean that the new production revolution, hinged on digitalization is

giving birth to a new organisational paradigm based on human creativity and

entrepreneurship? (see the AIA/NAEC seminar on The Creative Society and the New

Technological Revolution). Tanmay Vora has articulated this as: "from profit to

purpose; from hierarchies to networks; from controlling to empowering; from planning

to experimentation; from privacy to transparency" (World Economic Forum, 2017).

This means that the complex organizations of the new era will be more human-centered

than in the past. OECD work on skills supports this position, as does the work on the

"competencies" that the educational systems needs to instill in the rising generation (see

"Global Competency for an Inclusive World", OECD, 2017).

24. This brings us to a key question. Is the "good life" for the rising generation to be

found in leisure while the robots do the work? In recent NAEC discussions, Edmund

S. Phelps and Roberto Unger have put their money on the idea that the new production

revolution will lead to new freedoms in the workplace, work satisfaction being the basis

of life satisfaction. This is fundamental because history has shown that alienation in

work can lead to social and political conflict -- even revolution! This is why it is

imperative to bring "people power", as well as nation states and the market, into the

political debate.

25. The reality is that the global system is already polycentric rather than multi-polar

because nation states cannot meet their goals without going into partnership with cities,

regional and local authorities, NGO's and multi-national enterprises. The world is

already studded with initiatives to rise to the challenge of unemployment, inequalities,

climate and migration (see "L'économie symbiotique", op. cit. for an analysis of the

wide array of alternatives to capitalism such as the collaborative economy, the circular

economy, etc.). Are these alternatives to state power and capitalist production? The

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answer is "no", because these complex structural challenges cannot be met without a

strategy formulated by nation states and by massive investments, including by the

private sector. Moreover, the conflict between economic and social goals, which has

founded the architecture of political parties since World War II, is giving way to a

complex interaction between the two, as reflected in the OECD Codes of Responsible

Business Conduct (RBC), enterprise Social Audits, the development of Social Business,

and the vigour of the Third Sector or Social Economy. In other words, we are already

engaged in what Roberto Unger has described as a process of "radical experimentation"

involving the whole of society. In this process, the role of the state shifts from power

to empowerment (see Gabriela Ramos, "Towards an Empowering State: Turning

Inclusive Growth into Global Reality", (OECD Insights, 20th February 2017).

26. The central feature of the empowering state is that it declares clear goals and

facilitates the action of all stakeholders to move towards them. This is essentially what

the UN 2030 Policy Agenda is all about, the purpose being "human development". The

OECD goal of "better lives" reflects the same humanistic intention. What is vital is that

what we could call the Brundtland Vision has gained the endorsement of UN Heads of

State and Government, the G20 and the OECD. It can be considered as the "new

idealism" that Eric Beinhocker has called for in NAEC discussions ("A new narrative

for a complex age", OECD Insights Blog, January 2017). But, can the new capitalism

play its role in this ambitious, universal, common project? According to the CEO of

Unilever at the World Economic Forum 2017, the SDG's are a "compass" for the

business community. So far so good, but you don't need to be a pilot to know that

without a map and a destination you will bet lost!

27. The OECD/AFD Conference on Policy Coherence, the SDG's and the UN 2030

Agenda (October 2017), goes a long way to providing the map (see in particular Annex

1 to the Report), re-designing the compass (Eloi Laurent: "If you don't know anything

about the current state of inequality and of the environment you are missing most of

what you should know"); and pointing to the need for political leadership if we are to

get to the declared destination of "better lives" (Colin Bradford: "the imperative to

generate politically sustainable outcomes has not been given priority by leaders from

global platforms nor been heard by national publics. This is a political failure").

28. What, no doubt, he is referring to is the reality that there is now a group of major

nation states which, seeking to recover their former greatness, are engaged in a sort of

geo-political poker game based on hard power. On the other hand, there are those

seeking to sustain, by soft power, the rules-based international order. What could hold

them together in the medium-term is economic interdependence, that is to say

capitalism, to which all adhere with the possible exception of North Korea. Not to

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mention the ballot-box and people power, including women power in the name of peace

and equality.

29. The truth is that progress and security are now inextricably inter-linked.

Terrorism may be contained by the military, but it will only be beaten by the battle of

ideology. Yuval Noah Harari states the problem clearly ("Homo Deus: A Brief History

of Tomorrow", Harvill Secker, 2016): revolutionary technological means are now

available, but we do not know where we want to go. The UN SDG's provide the map

and the compass, but the destination has not been stated sufficiently clearly to mobilise

public opinion.

30. The OECD 2017 MCM was important in this respect because it recognized that

growth should be "strong, sustainable, balanced and inclusive" (para 4). The innovation

lies in the notion of "balance" between the three goals declared at the 2013 MCM,

namely resilient economy, inclusive society, and sustainable environment. The message

is that the great task after the 2008 crisis is the Reconciliation of the Economy, Nature

and Society, which can only be undertaken by an Empowering State working with all

the stakeholders.

31. From a policy/analytical standpoint there now seems to be a consensus that a

systemic approach is needed, since the economic, societal and ecological systems have

different logics and are interacting in complex ways which call for new approaches.

The OECD, as a policy pathfinder and standard setter, has an important role to play

because its professional culture has been analysing these three systems for 50 years and

more (see Ron Gass, "50 years of Reconciling the Economy, Nature and Society",

OECD Yearbook 2011). The Secretary-General's decision to establish a Strategic

Partnership with IASA (the International Association of Systems Analysts) comes at the

right time.

VII. A NEW GLOBAL HUMANISM

32. This is not the first time that the economists and the natural scientists have crossed

swords in the OECD. The result was that, at the time of the oil-shocks crisis, the Club

of Rome was conceived in the OECD but born outside (see the McCracken Report,

"Towards Full Employment and Price Stability, OECD, 1997, Note on "The Club of

Rome", p. 287). Alex King, the protagonist of the natural scientists in this battle; later

published his views in The First Global Revolution (Simon and Schuster, 1991): "The

spiritual and ethical dimension is no longer an object of scorn or indifference, it is

perceived as a necessity that should lead to a new humanism" (p. 182). It is not without

relevance to the present geo-political drama that he quotes the Chinese philosopher Lao

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Tse: "Thus a good man is content with being resolved without resorting to force" (p.

180).

33. Thirty years later we are in a new global revolution in which "people power", in

a world of inter-connected populations via the Internet and social media, is becoming a

third force (cf the Weinstein affair). The result is that the dominant question for the

political leadership is "What sort of society do we want?" (see AIA/NAEC seminar on

A Society fit for the Rising Generation). The extreme neoliberal view as expressed by

Margaret Thatcher was that: "there is no such thing as Society". But she lost power to

David Cameron who declared the goal of the Big Society to engage other institutions

than the State in social protection. The Caring Society and the Entrepreneurial Society

have also been proclaimed by political leaders. Even Umberto Eco has entered the

debate with his book on The Liquid Society (Grasset, 2017) which castigates the

individualism and subjectivism of contemporary society, based on frenetic

consumerism and narcissism. The result, he says, is a loss of collective purpose and

common values now that nation states have lost power to supranational entities. In other

words, behind the 2008 crisis lies a deeper crisis: a loss of faith in the very idea of

Progress (Etienne Klein, "Sauvons le Progrès", L'Aube 2017).

34. So what is the policy response to this slide into something like nihilism and lack

of public confidence in a better future? Inclusive economic growth is the foundation

stone, but it does not deal adequately with the problem of the social exclusion of groups

outside the labour market (see AIA/NAEC Seminar on the Inclusive Society, February

2016). The goal of Inclusive Society, as adopted by the 2013 MCM, has the advantage

of making it clear that no one should be "left-behind"; including "stranded

communities". It also sharpens the teeth of the UN 2030 Policy Agenda and has the

moral backing of the Pope: "a just society, capable of memory, and refusing exclusion"

(Evangelii Gaudium, 239). This does not diminish the importance of economic growth,

but it makes it clear that it is a means to a higher purpose.

35. Even since its earliest days, capitalism has combined profit with purpose. The

merchants of Amsterdam financed Christopher Columbus for profit, but he had the

higher purpose of going westwards to discover the New World. Historically, capitalism

has taken many forms: from mercantilism, to colonialism, to mass-production

capitalism, and on to financial capitalism. Today, it is on the move again (see Sciences

Humaines, January 2018, "Dernières Nouvelles du Capitalism, p. 39). It is in part the

answer to the crisis of progress, and in part the cause. It has many faces.

36. First, it is clear that speculative financial capitalism can, in a global,

interconnected economy, put the whole system at risk, as in the 2008 crisis. When

money is devoted to making more money, a rentier class divorced from social purpose

can use tax evasion and tax havens to expand its wealth and pass it on to the next

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generation (Thomas Piketty, "Capital in the 21st Century"). The need for regulation in

order to avoid volatility of the financial system, thereby undermining the goals of

stability and resilience, has been spelt out by Adair Turner ("Between Debt and the

Devil -- Money, Credit and Fixing Global Finance", 2015).

37. On the other hand, what we might call entrepreneurial capitalism can often

reconcile profit and social purpose. The OECD Report on "The Sustainable

Development Goals as Business Opportunities" (2016) stands on that ground: "we look

at the opportunities the new Sustainable Development Goals offer for doing good

business, for profits, people and the planet. It offers guidelines and practical examples

of how all sectors of society can work together to deliver the 2030 Agenda". In the

same Report, George Soros adds an important rider: "But sustainable global progress

cannot be achieved through monetary means alone. It is vital that capacity is

strengthened in individuals and in the institutions of civil society to play a vigorous part

in carrying out such a transformation, including the thoughtful regulation of business

activity" (p. 3).

38. This brings us to the heart of the matter. "People Power" is already on the move:

the world is studded with "grass roots" initiatives which mobilize capital for social

purpose, not least to provide employment, but also to work for what is perceived to be

a higher purpose. These alternatives to capitalism are often in the market, but non-

profit. Typical cases are the producer's and consumer's co-operatives which resulted

from the trade union movement in the 19th century. Today, they extend to the micro-

finance movement for the poor and local initiatives to provide "green" energy in African

villages and elsewhere. The point is that we are already in a decentralized, plural

economy in which modern capitalism and alternatives to it will co-exist. The new

technologies will incite their interaction because the production of goods and services

can now escape from the "mass production" model; and the Internet will enable

information about these new possibilities to cross borders and reach cities, towns,

villages and the public at large.

39. In this global, polycentric world the relationship between the State, the Market

and People Power is changing. As far as the State is concerned, "laissez faire" and state

planning are giving way to an Empowering State which sets out strategic goals, fosters

dialogue between multiple stakeholders, and empowers them to act. Consumer habits

are shifting as the ecological realities take hold (the Circular Economy, the bio-

movement, etc). People power is taking on new forms via the social media, and on

occasions challenging parliamentary democracy.

40. Thus, the period ahead is one of political, economic and social experimentation.

It is not a question of whether capitalism will be dismantled, but what form it will take.

In his book on Mass Flourishing, Edmund S. Phelps argues that a good economy is one

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which offers the "good life": he castigates Stiglitz, Fitoussi and Kvint, and indeed the

Europeans, for providing this "quality of life" in the form of leisure and public services.

He even wants to go beyond Amartya Sen by arguing that, as Marx and the anarcho-

syndicalists did, the workplace should promote self-realisation: "people want to opt out

of work in which they have no autonomy". (see "A Good Economy for China", Project

Syndicate, June 17, 2016).

41. This may seem far-fetched, but putting it in OECD terms it raises the question

whether life-satisfaction is built on work-satisfaction (see OECD Your Better Life

Index): "working to live" rather than "living to work"? This is the fundamental question

raised by the New Production Revolution: will artificial intelligence and robotization

lead to alienation at work or to more creative and autonomous roles? OECD analysis

by DELSA, DSTI and EDU seems to point to the latter, but Roberto Unger's

forthcoming book goes further and paints a broader picture: a systemic shift towards

grass-roots vanguardism.

42. Historically, technological mutations have always led to new theories of

organisation and management. Complexity theory is based on more realistic

assumptions about the behaviour of economic agents than Adam Smith's "Economic

Man" (see NAEC Seminar on Insights into Complexity and Policy, September 2016).

Contemporary management theory, faced by the problems of stress and "burnout", is

moving towards the recognition of fundamental human needs, such as altruism and

autonomy (see Adam Grant, "Give and Take - Why Helping Others Drives our

Success"). To put it bluntly, the New Production Revolution is bringing out a vast

agenda for social dialogue and collective bargaining, which has started with the

"uberisation" of work, and will need to include the quality of jobs and the wage share

of income (see the OECD "Global Deal" Initiative),

43. At root, the fundamental question is whether capitalism is compatible with

humanism. Time will tell, but it is already clear that the three urgent challenges facing

the international community -- migration, inequalities, and climate -- cannot be met

successfully without the participation of the two sides of industry.

44. In the longer run, there is no escaping the need to re-invent the idea of Progress,

and that means a new humanism built on the goals of inclusive growth and inclusive

society.

45. Given the geo-political realities of the day, this might appear illusory, because

the world seems to be divided into two camps: cosmopolitan multilateralism and nation-

state protectionism. But it should not be forgotten that both Brexit and the advent of

President Trump were the result of a democratic vote. They are not alone in aspiring

"to be great again" by a return to the cultural values and power of the past. (eg Russia,

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India, China). And all have contributed to the emergence of the adventure of humanism,

even before the European Enlightenment. In the end, the power of a common humanity

will win the day, as expressed in the new book by Dag Herbjornsud, "Global

Knowledge: Renaissance for a New Enlightenment" (2016). He maintains that "The

highest ideals of Locke, Hume and Kant were first proposed a century earlier by an

Ethiopian in a cave"! (Aeon, December 2017). And Steven Pinker ("Enlightenment

Now: Manifesto for Science, Reason, Humanism and Progress", Allen Lane, 2017) has

in any case put the Enlightenment back on today's political agenda.

46. All this rings a bell with Eric Beinhocker's plea for a new idealism in NAEC

discussions, and Noam Chomsky's challenging question at the end of his book (Who

Rules the World?, Metropolitan Books, 2016): what principles and values rule the

world? (p. 258).

47. If the OECD is to play its role of policy pathfinder on the global scene, it cannot

avoid the challenge presented by Beinhocker and Chomsky. If the answer is to be found

in a new relationship between national states and the market, the signs are not good:

because of populist and authoritarian trends in nation states; and technological

hegemony in the market by the high-tech giants of capitalism. But if "people power" is

brought into the policy equation, the picture changes because both nation states and the

market have to respond to the reality that a world society is developing because of global

travel, communications and access to information via the Internet and Social Media. A

typical case is that, in the wake of the Weinstein affair, Prime Minister Trudeau intends

to place equality between women and men at the centre of the June 2018 G20 Summit.

This is a symbolic reflection of the fact that, now there is light at the end of the 2008

economic tunnel, the quality of growth is becoming centre-stage.

48. The OECD has taken two strategic steps in that direction. First, the Inclusive

Growth Initiative which has recognized that economic growth is a means not an end.

And second, the Better Lives Initiative which has placed human well-being at the centre

of the policy debate. It is in this sense that the quality of economic growth as well as

the level, as reflected in the UN 2030 SDG's, has invaded the global policy agenda:

leading to a much more complex debate about the balance between economic growth, a

sustainable environment and an inclusive society (the OECD Triangular policy

paradigm).

49. The recent (April 2018) NAEC Seminar on "Inclusive Vanguardism - the Future

of the Knowledge Economy" has amply confirmed that the New Production Revolution

calls for political and social innovations if technico-economic progress is to be

harnessed to human well-being. And the transformative, politico-humanistic model

presented by Roberto Unger makes it clear that profound institutional and legal changes

are needed to reap the benefits. The Nobel prizewinner Jean Tirole, in his book

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"Economie du Bien Commun" (PUF, 2016) spells out how the capitalist, market

economy can be reformed so that all the stakeholders contribute to the common good.

And the philosopher Isabelle Delannoy has demonstrated how "grass roots" initiatives

across the world are "regenerating the planet, the economy and society" as part of a

"symbiotic" economy (opus cited).

50. Such advances towards what Roberto Unger has called "shared progress" could,

however, be irrevocably blocked if geo-political rivalries lead to military action, even

war. What can be hoped for is that the threat of military action will be used as an

extension of diplomacy, as appears to be the case with the recent air-strikes in Syria and

the Korean conflict. Such use of limited military action in aid of diplomacy is well-

known historically, as in the case of the celebrated "Grand old Duke of York, who had

ten-thousand men; he marched them up to the top of the hill, and he marched them

down again."

51. The contemporary geo-political scene is indeed dominated by this struggle

between soft-power and hard-power (see the Next War, the Economist, 27/01 - 0/2

2018). It can only be resolved by shared values. As essentially a soft-power institution

based on economics, the OECD has a new geo-political role to play. For, after all, the

science of economics is a child of the Western Enlightenment and it is founded on

assumptions about human behaviour (the "economic man"!).

VIII. GLOBAL VALUES IN A DIVIDED BUT INTER-CONNECTED WORLD

52. A start has been made in this new adventure of Homo Sapiens, because the UN

2030 SDG's are nothing if they are not the foundation stone for a new global humanism.

Likewise, the OECD "Better Lives" Initiative is meaningless if it does not apply to all

humankind. But both need to be sharpened into a statement of "shared values" that

could bridge divides in the global system.

53. 1. A Common Humanity: The philosophical notion of universal human rights

is now underpinned by the recognition of universal human needs. For example, the

OECD Development Centre's report on "Measuring Well-Being and Progress in

Countries at Different Stages of Development" concludes that "the need for autonomy

and freedoms are profoundly related to the notion of capabilities that underpins the

OECD well-being framework" (p. 29). Furthermore, evidence from the neuro-sciences

suggests that human beings are by nature goal-oriented and aspirational -- driven by

self-realisation. This explains the growing role of people-power, and in particular of

woman-power today.

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54. Extending the notion of "capabilities" (Amartya Sen) to "competencies", a recent

OECD report on "Education 2030 - The World We Want" (2018) explores how initial

education and life-long learning can help the rising generations to acquire the

knowledge, skills and values to shape a global society faced with profound challenges.

For the identification of global values, the project has reviewed various global

instruments, including the UN, G7 and G20. Such an approach recognizes the value of

cultural diversity, but also the need for young people to overcome the danger that

diversity means conflict.

55. 2. Socio-Cultural Diversity: The danger ahead is that a mono-cultural global

society, moulded by the new technologies, will lose its power to innovate. History

shows that civilizations which integrate diverse cultural assets are more resilient

(Claude Lévi-Strauss, "Race et Histoire", 1987 [1952]). Indeed, many of the cultural

innovations embodied in the Western technico-economic revolution were assimilated

from the Chinese, Greek and Islamic civilizations. This is why respect for different

socio-cultural systems and philosophies is an essential pillar of the new humanism.

56. 3. Deconcentration of power: The technologically creative era proclaimed by

the G20 2016 consensus cannot be realized without political, economic and social

innovation. And the key to a heightened innovative capacity across society is the

deconcentration of power: "Leadership" more than executive authority: and grassroots

initiative more than ant-like conformity.

57. The relation of the individual to the State, the heart of democracy, is changing:

the ballot-box is complemented by more direct forms of political participation, leading

to the concept of "active citizenship". The NGOs, an expression of such active

citizenship, are part of the political scenery at all levels, from global to local. Cynthia

Fleury ("Les Irremplaçables", Gallimard, 2015) argues that far from undermining the

rule of law, individual autonomy and self-realisation ("individuation") are its very

foundation.

58. Public administration is also the scene of the deconcentration of power towards

cities, regions and local communities. Policy coherence and creativity get easier the

closer you get to the citizen, because participation is the ally of change. This might

explain why cities are taking the lead in response to the challenge of the climate.

59. 4. Equitable sharing of the Fruits of Progress: Glaring inequalities in wealth,

income and opportunity are the greatest threat to open and fair societies, and to the

sustainability of the global system. Both are linked.

`

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60. As to inequalities within nation-states, the latest OECD report on Inclusive

Growth sets out the issues squarely and fairly ("Bridging the Gap: Inclusive Growth

2017 Update Report"). The priority given to early childhood policies is well understood,

but the future is not 30 years ahead for the youth of today. That is why the highest

priority should be given to avoiding a "lost generation" through second-chance

education and training opportunities; to a minimum inheritance endowment on reaching

adulthood (Tony Atkinson), thus facilitating access to health, housing, training and self-

employment; and regulation so that industry enters the battle for equality of opportunity

for youth.

61. On the international scene, widening disparities obviously lead to growing

migratory pressures. Hence the proposal for a "Global Compact for Safe, Orderly and

Regular Migration" (see "International Migration in a Shifting World", OECD 2017).

The reality is that under the existing rules of the game, financial capital can move at the

touch of a button, whereas human capital is increasingly blocked at national frontiers.

The only possible answer lies in narrowing the gap between advanced and developing

countries in terms of income, wealth and quality of life. The best hope for this is in the

participation of the developing countries in the New Industrial Revolution rendered

possible by the ubiquity of the new technologies in terms of scale and place. Societal

changes in developing countries, with educated youth in urban locations, means that an

entrepreneurial youth culture is developing ("Unlocking the Potential of Youth

Entrepreneurship in Developing Countries - From Subsistence to Performance", OECD,

2017). Already a new generation of African, Asian and Latin American political,

economic and social innovators is appearing on the international scene, such as the

World Economic Forum and the OECD Forum.

62. This may appear as derisory compared with the "Big Bang" of high-tech but, as

the NAEC seminar by Carlos Moedas brought to light, the widespread grassroots

diffusion of innovation is the key to productivity growth. A typical case was the OEEC

European Productivity Movement after World War II to spread best practice in co-

operation with business and the trade unions. In any case, the process of catch-up and

leapfrog is now inherent in a globalized competitive economy. Witness the rise of Japan

in the 1960s, then the BRICS - when will Africa and Latin America follow? In other

words, the key to an equitable sharing of the fruits of progress lies in a new international

division of labour.

IX. CONCLUSION

63. The World is faced with a Toynbee-like challenge: innovate or decline! There

is no new ideology or political philosophy on the horizon, but all the main pillars of the

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existing global order are being challenged: political, social and economic

experimentation are the order of the day.

64. Capitalism is clearly "on the move". So-called entrepreneurial capitalism is

making long-term moves to "internalise" so-called social and ecological externalities,

which will probably require fundamental changes in corporate governance. On the other

hand, the power of finance in favour of short-term speculative profit could put the whole

system at risk, as in 2008.

65. These uncertainties are clearly exacerbating geopolitical rivalries, to the extent

that World War III is beginning to haunt the public debate. The saving grace could be

the phenomenon of "people power", which neither the State nor the market can afford

to ignore (e.g. the "velvet revolution" in Armenia!).

66. Many innovations are now emerging from the "grass roots" of civic society, and

indeed the economy is already diverse and pluralistic with a growing "social economy"

which stands between the State and the market. "Diverse yet like-minded", in the words

of the MIKTA partnership (Mexico, Indonesia, Korea, Turkey and Australia) which

argues for "creative multilateralism" (OECD Observer, March 2018).

67. What is missing is a shared vision of the political leadership. Could it be a New

Global Humanism which puts people at the centre of policies?