From 600+ conversations with the world’s leading thinkers.
It's not that capitalism is failing, but rather that the organisation of capitalism is succumbing to wealth and power. People with extraordinary power and wealth will organise and enforce markets in such a way that it benefits their wealth and adds to their power- it becomes a self-fulfilling prophecy- a vicious cycle of more wealth and power.
One thing that really helped us was NOT following the IMF prescription, and hence I think the fact that we insisted on having growth (alongside stability) was something that made for a big change in Brazil.
The evidence suggests, unfortunately, that once you roughly earn a lower middle-class standard of living, additional money you earn beyond that has almost no effect on your quality of life.
You must tell yourself the truth about money if you're going to give it away well. If you can't live well with $999 million, there's something clearly wrong with you. Money gets inside us; it creates our perceptions and changes the way we operate. It changes the people among whom we are, and who we are. When we're not in touch with that reality, it can change us in heinous ways.
People are now talking of a new 'Cold War' with China. This is a very misleading use of history. If you look at the relationship between China and the US today, there is half a trillion dollars of trade, and some 350,000 Chinese students and 3 million Chinese tourists are in the US. It's more complex than the type of relationship we had during the Cold War.
Our system has never defined what it means to be 'good' – what is the ideal human being in capitalism? Is it Jeff Bezos? Is it Steve Jobs? They thrived, they profited, are they 'moral'? The ideal human profile of capitalism does not fit with our basic human dignity.
Basel III effectively means putting thicker gloves on this boxer, without fixing the fundamental problem (they cannot cope with unexpected punches, from a highly developed adversary- the economy).
When you look at the numbers, over half the sub-Saharan African population is under 18 years old, versus Latin America, where over half the population is under 25 years old and Asia, where it is under 35 years old. In short, these EM populations are young, expansive and dynamic, not like the stable, more risk-averse populations of the world's developed economies.
By far the most common is underestimating expenses. When industries do barely double-digits if their lucky, business plans ought not to be showing EBIT or EBITDA of 50-70% – that doesn't mean people are smart, it means they haven't understood the industry.
The only serious mechanisms which have made progress in this sense are growth, microfinance and democracy. Economic growth will naturally have some spill-over to the poor, democracy helps transparency together with political consciousness and microfinance helps the very poor to develop their own business and allows them to control their own lives without expecting the help of anyone.
The actual actions of the people in the market are the things that determine what happens next within the market.
Transport, natural disasters, the distribution of resources, globalisation – engineers and inventors have the traits and skillset to solve the problems the world faces today. And therefore have the potential to impact the world and economy.