New Birth for Social Democracy

Structural changes in the global economy are driving inequality. Technology has not only replaced many workers in manufacturing and services, but is also transforming the traditional business model. Decentralized organizations hire low paid, temporary workers instead of long-term employees. Uber, which has threatened traditional taxi services, is an example of a decentralized business model. This do-it-yourself style of decentralization also works against unionization and regulations traditionally used to protect low-income workers. Often, the decentralization trends support the wealthiest and most skilled workers. Most of the population is unprepared for these changes, and anxiety is fueling populism. Voters with lower incomes who might support center-left economic policies veer to the right on issues like immigration. Meanwhile, welfare programs are dismantled. Such policies can encourage conflict within a society, and Kemal Dervis concludes in this essay for the Brookings Institution: “Each citizen should feel empowered, not isolated and abandoned, in the face of globalization and technological transformation.” – YaleGlobal

New Birth for Social Democracy

The global economy is undergoing structural transformation, and social policies must prepare the poor while encouraging growth and minimizing inequality and conflict
Kemal Derviş
Friday, June 12, 2015

Kemal Derviş is vice president and director of Global Economy and Development. Formerly head of the United Nations Development Programme and Minister of Economic Affairs of Turkey, he focuses on global economics, emerging markets, European affairs, development and international institutions.

© 2015 The Brookings Institution

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