While open markets, capitalism have raised standards of living around the globe, globalization combined with rapid progress and technology has also weakened the position of workers and their ability to secure a decent wage. In advanced economies like my own, unions have been undermined, and many manufacturing jobs have disappeared. Often, those who benefit most from globalization have used their political power to further undermine the position of workers.
In developing countries, labor organizations have often been suppressed, and the growth of the middle class has been held back by corruption and underinvestment. Mercantilist policies pursued by governments with export-driven models threaten to undermine the consensus that underpins global trade. And meanwhile, global capital is too often unaccountable -- nearly $8 trillion stashed away in tax havens, a shadow banking system that grows beyond the reach of effective oversight.
A world in which one percent of humanity controls as much wealth as the other 99 percent will never be stable. I understand that the gaps between rich and poor are not new, but just as the child in a slum today can see the skyscraper nearby, technology now allows any person with a smartphone to see how the most privileged among us live and the contrast between their own lives and others. Expectations rise, then, faster than governments can deliver, and a pervasive sense of injustice undermine people’s faith in the system.
So how do we fix this imbalance? We cannot unwind integration any more than we can stuff technology back into a box. Nor can we look to failed models of the past. If we start resorting to trade wars, market distorting subsidies, beggar thy neighbor policies, an overreliance on natural resources instead of innovation -- these approaches will make us poorer, collectively, and they are more like to lead to conflict. And the stark contrast between, say, the success of the Republic of Korea and the wasteland of North Korea shows that central, planned control of the economy is a dead end.
But I do believe there’s another path -- one that fuels growth and innovation, and offers the clearest route to individual opportunity and national success. It does not require succumbing to a soulless capitalism that benefits only the few, but rather recognizes that economies are more successful when we close the gap between rich and poor, and growth is broadly based. And that means respecting the rights of workers so they can organize into independent unions and earn a living wage. It means investing in our people -- their skills, their education, their capacity to take an idea and turn it into a business. It means strengthening the safety net that protects our people from hardship and allows them to take more risks -- to look for a new job, or start a new venture....
So just as I’ve pursued these measures here at home, so has the United States worked with many nations to curb the excesses of capitalism -- not to punish wealth, but to prevent repeated crises that can destroy it.... And just as we benefit by combatting inequality within our countries, I believe advanced economies still need to do more to close the gap between rich and poor nations around the globe. This is difficult politically. It's difficult to spend on foreign assistance. But I do not believe this is charity. For the small fraction of what we spent at war in Iraq we could support institutions so that fragile states don’t collapse in the first place, and invest in emerging economies that become markets for our goods. It's not just the right thing to do, it's the smart thing to do.
And that’s why we need to follow through on our efforts to combat climate change. If we don't act boldly, the bill that could come due will be mass migrations, and cities submerged and nations displaced, and food supplies decimated, and conflicts born of despair. The Paris Agreement gives us a framework to act, but only if we scale up our ambition. And there must be a sense of urgency about bringing the agreement into force, and helping poorer countries leapfrog destructive forms of energy.
So, for the wealthiest countries, a Green Climate Fund should only be the beginning. We need to invest in research and provide market incentives to develop new technologies, and then make these technologies accessible and affordable for poorer countries. And only then can we continue lifting all people up from poverty without condemning our children to a planet beyond their capacity to repair.
So we need new models for the global marketplace, models that are inclusive and sustainable....