Challenges of changing today’s economic practices and responsibilities

Inclusive Economy07 Sep 2011Evert-jan Quak

Probably you already have noticed that The Broker started a project called the “Bellagio Initiative: living well in the 21st century”. This is mainly an online debate on a series of questions related to the promotion of human wellbeing in general, and the transformation towards a global sustainable and inclusive economy in particular.

As Steffie Verstappen, coordinator of the online debate, mentioned in her opening statement the real challenge of our time is achieving human wellbeing for all and living well together in a world system in which we experience scarcity, complex risks and great inequalities.

In that context we need to focus the discussion on the question how to change economic thinking towards an inclusive and sustainable economics. Steffie writes rightly: “Economics traditionally focuses on the pursuit of growth, efficiency and profit maximization and tends to assume that human wellbeing will naturally follow. This perspective overlooks the fact that our wellbeing is, apart from strictly economic factors, largely based on social and political circumstances.”

A paradigm shift – what would a new development model based on human wellbeing look like? And, how could economists, policy-makers and other professionals be encouraged to let go of orthodox development models and embrace the human wellbeing model instead?

I would add to this discussion one point: how can you ensure sustainable and fair international investments? The dogma still is that investments are good, the more you can attract the better for your economy. But some investments will be better than the others and some can even be disastrous for the (long term) development of a country. Spill-over effects aren’t guaranteed, social and environmental damage can be done, and tax incomes mostly are not secure. So, how countries can attract only the best investments that fit in their development model, or even better how can these investments do good for the wellbeing of citizens?

As long as investors’ main focus is on profits – the faster they can earn back their investment the better – human wellbeing will be one of the last issues they will be worried about. And they are covered by a world economic system including world policies that pushes for a free international investment regime where investors haven’t duties only rights.

This is just one example on investments, but it shows how important it is to discuss human wellbeing in the context of an inclusive economy. I hope the Bellagio Initiative will be a huge success and will not only focus on how to measure economic growth. I would encourage to discuss and highlight also how we can change today’s practices in international economics and related responsibilities by governments, the private sector, development agencies, philanthropic foundations etc., to ensure a (future) development model based on human wellbeing.

For that reason I want to invite everyone to read one of the first blog posts for the Bellagio Initiative. According to Dean Baker, co-director of the Center for Economic and Policy Research, the fundamental problem of economists is a lack of accountability to the public as a whole, not the fact that they are using the wrong measure. A good economist must do more than measure GDP and profit maximisation.

“As a practical matter, no serious economist would argue that economic growth is a comprehensive measure of wellbeing. It is a useful measure in the same way that weight is a useful measure in determining whether someone is healthy. (…) A physician assessing the health of her patient would want to know her weight; however, no physician in their right mind would end the examination there. In the same way, any reasonable economist would go beyond a measure of GDP or per capita GDP to look at distribution, the state of the environment, the quality of health care and education and other measures of wellbeing to assess an economy’s health.”

I would warmly welcome you to participate in this online debate by commenting on articles and blog posts, or by contributing your own blog entry. For more information, or to submit your blog entry, please email our editor at