MMS - Mumbai Multimedia Studio - reflects the picture of pre and post pandemic crisis and world political aspects that affect the economies of certain nation like anything which takes time to heal the losses incurred !
Our Country Indian economy has been facing a major economic crisis and the situation has become quite serious after August 1992. The main elements of India’s economic crisis are deepening foreign exchange crisis, growing fiscal imbalances, increasing rate of inflation, slackening of overall economic growth and deceleration in industrial growth. An attempt has been made in this regards to examine the elements and also analyse India’s macroeconomic strengths and weaknesses. Multimedia Studio also examines critical policy prescriptions and remedies recommended by the group of experts economists to deal with the present economic crisis. The author’s views on the main ingredients of macroeconomic strategy to deal with the short term as well as long term aspects of present economic crisis.
There’s a simple fact about this century’s economics everyone should know. Or, if you like, what it will take to really exit these strange and troubled times we live in. Most sensible people these days would agree that this century presents us with a new set of epic challenges, existential threats. I call them the Big Five. Climate change, mass extinction, inequality, stagnation, extremism. What do all these problems have in common? They can only — only — be solved with higher levels of investment. Nothing else — nothing — from consumption in shinier toys to higher level of trade to more treaties to kinder corporations and so on can solve them.
Take climate change as an example. Treaties to limit emissions are nice. So are corporations who suddenly see the light. But without investment in, for example, green construction, energy, transport, and so on — all those are doomed to fail, as they currently are. The world’s emissions are still rising to their highest levels ever, precisely because there isn’t enough actual, hard, real investment in preventing or stopping them. There aren’t enough Green New Deals, for example, across rich countries, let alone poor ones. Here’s the lesson.
Or take the example of pandemics. The 20% of the world that is rich exploits and underpays the 80% of the world that is poor, leaving the poor to encroach on wildlife out of desperation — think of the loggers chopping down the Amazon just to make a living, or a person in Wuhan eating a bat. But this is the result of underinvestment. The less we invest, the more we encroach, the higher the zoonotic flow, the greater risk we’re at for pandemics.
The Big Five — the great existential threats we face as a world and as societies — can only be solved with a permanently higher level of investment. The keywords are: only and permanently. We can’t consume our way out of this mess. We can’t import or export or trade deal or corporate vision statement our way out this mess. There is only one way out of this abyss, and that is higher levels of investment. Permanently — as in, for the foreseeable future of humankind and our societies. We are at the cusp of a sea change in how civilization must organize itself, in other words. Just as the Romans learned to build aqueducts, and raised social investment from zero to a small amount, so we too must raise it again transformationally now.
That means something like a generation — maybe three to five decades — of Marshall Plans, New Deals, and New Agendas — for everything that’s broken, from the planet to people on it to life across it to democracy within it. For countries, individually, and for the world, collectively. That is how we raise investment levels…again…permanently. Yes, really.
Let me explain. I want to do so carefully and deliberately so you really understand all the above — you can be the judge of whether or not I succeed. The world’s current level of investment is about 25% of its income. And it’s clear to see that isn’t enough. For what? To keep the projects called prosperity and civilization and progress alive. Think of progress as a house. We aren’t investing enough for the house not to fall apart. Hence, it is. If you invested just 25% of your earnings, over your lifetime, you probably wouldn’t go anywhere, either. That might sound remote — so let me bring it home.
American Economics:
Who decided that the world’s level of investment would be 25% of income? Guess who else’s level of investment is almost exactly 25% of its income? America’s is. And American capitalism is effectively the system that runs the global economy, from trade deals to how GDP is measured and how currencies are managed and so forth. It’s not a coincidence that the whole world’s level of investment exactly mirrors America’s, at just 25% — it’s a relationship. Because American capitalism is the “system of the world”
America also teaches us, in hard terms, what kind of society we can have with just 25% of income invested. The answer is: a failing one. 25% of income isn’t enough to fund, for example, functioning healthcare, education, retirement, safety nets, high-speed rail, good food, drinkable water, and so on. Hence, more and more, Americans simply go without these things. They don’t seem to understand the fundamental point enough: their social level of investment is too low to provide them a good life in modern terms.
If the world goes on investing just 25% of its income, it ends up like America. It fails to develop functioning social systems and public goods. The planet simply burns up. Life on it begins to die out. Progress, civilization, and democracy come to a halt. Let me tie up those threads. The great problems of the 21st century are the existential threats of climate change, mass extinction, inequality, stagnation, and social breakdown. America’s the bellwether example of all of them overwhelming a society. It teaches us that investing just 25% of our income isn’t enough to build the systems we need to solve them. That’s true at a social level — America — and it’s true at a planetary one, too.
So how much do we need to invest? The answer is given to us by Europe. Europeans — Western ones, not those in post-Soviet satellite states — live history’s richest, healthiest, sanest, happiest lives…not by a little way, but by a huge distance now. Their life expectancy is 5 years higher than Americans, and rising fast. That is because they invest around half their income. That is enough to fund expansive generous social contracts, which provide healthcare, education, retirement, transport, and so on. It’s also enough to develop green societies — Europe is the only part of the world that’s managed to actually cut emissions. The only one.
Europeans are lucky — and perhaps they’ve forgotten just how lucky they are. After the war, they stumbled on history’s secret for human prosperity: reinvest upwards of half your income. Hence, in just one human lifetime, Europeans — from the ashes of destruction — now enjoy the highest standards of living in human history, ever, period, full stop. While American and British ones are declining. And yet even in Europe, rates of investment are falling — because perhaps Europeans, or their leaders, at any rate, think resting on their laurels is perfectly fine. It’s not. The faster those rates of investment fall, the harder and swifter Europe is hit by all the threats above. You can see that in the last few years alone. It’s not a coincidence the hard right has risen at the precise moment investment rates fall — it’s a relationship.
There’s a simpler way to say all that. We need three to five decades — a generation — of New Deals, Marshall Plans, and New Societies. Of transformational investment…that becomes a permanently higher level, forever. In what?
Let’s go back to the Big Five, the existential threats. Some of the investments we need to make will be Green New Deals — so the planet doesn’t burn. Some of them will have to be New Deals for Life — so we don’t go on causing mass extinctions, which threaten our own ecosystems. Some of them will have to be Marshall Plans — rapid, sustained investment in social systems like healthcare and education — so that people have opportunities again, and they don’t succumb to authoritarianism and fascism in their resentment and fury. And some of them will have to be New Societies — that’s a reference to the way that Europeans made things like healthcare and retirement basic constitutional human rights after the war. We’ll have to go further, and give reefs, rivers, fish, trees, and animals the inalienable right to exist, too.
And all that, in turn, means an entirely new institutional infrastructure for the world. Who’s going to coordinate all those New Deals and Plans and Agendas? We’re going to need things like a New World Bank. Like an International Monetary Fund for Life. Like a Global Green New Deal Alliance. Like a World Investment Fund. And many, many more. Those, in turn, are going to create whole new jobs, roles, titles. Clean energy accountant. Green investment manager. Extinction prevention team. And so on. In that way, we begin to resolve our economic malaise, too. The feeling people have that there aren’t enough good jobs, that the dream has died, that all that is on offer is a life of frustration, new poverty, degradation, and despair.So. The one simple fact every single person on this planet should know about 21st-century economics. Here it is.
We need to double our rates of investment. As societies, As a world. if we want the projects of progress, civilization, and democracy to continue. We need to double them, and we need to double them right here, right now. This is an emergency. This is not a drill. If we don’t double our rates of investment in the next ten to twenty years, all our great existential threats get locked in and hit irreversible tipping points. Climate change goes catastrophic. Mass extinction hits the point of no return. Inequality surges extremists to power. Societies break down into competing fascism and authoritarianism. The world becomes a set of mini-Americas, failed states vying desperately for the last few morsels of resources left on a withered world.
That statistic isn’t some dry abstraction. It means a generation — thirty years or more — of New Deals and Marshall Plans and New Societies, which raise investment levels permanently to a much higher plateau. That means whole new institutions and organizations to coordinate and manage and administer them. For every country on earth. For the globe as a whole. For each one of the Big Five problems we face. How many Deals, Plans, and Agendas is that? How many do we have now? Somewhere between none and the fingers you have on one hand. Do you see how big the gap is? All that means whole new ways of life and commerce, whole new ways tasks of work and labor, whole new enterprises, whole new big, brave, bold, beautiful dreams. And that feels right to me — as maybe it does to you. The old dreams are dead. The new ones haven’t taken their place yet. Isn’t it about time they did?
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