: The Pandemic Laid Bare the World’s Inequities. A Top Economist on Why We Need a New Social Contract #WorldNEWS Minouche Shafik has spent a career straddling the worlds of government, central banking

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The Pandemic Laid Bare the World’s Inequities. A Top Economist on Why We Need a New Social Contract #WorldNEWS
Minouche Shafik has spent a career straddling the worlds of government, central banking and academia. She has held senior positions in the World Bank, the U. K. government, and the International Monetary Fund, and is now director of the London School of Economics.
Having spent a lifetime studying what makes economies and societies tick, Shafik decided to put her ideas down on paper in her book What We Owe Each Other: A New Social Contract. The objective, she told TIME in an interview in July, was to imagine the kinds of policy prescriptions needed to keep a fragile world from pulling itself apart. “We need to think about what we owe each other at all levels of society, from how we divide up housework in the home to how we share the burden of addressing the climate crisis,” she said. “The responsibility is on us as individuals, as citizens, and on who we elect. ”
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The following interview has been edited for length and clarity.
TIME: Your book calls for a new social contract between individuals, families, businesses and the state. What inspired you to write it now?
Shafik: I started thinking about these issues in 2016, when we saw this wave of populism across the Western world and I was sort of baffled by it. I worked in international development for 25 years, and Ive seen the progress that weve made in terms of health, education, life expectancy. I asked myself why are people so angry? Why are we so divided? Then the pandemic came, and heightened all these problems. People are worried about inequality, and theyre insecure and worried their children wont be as well off as they are. The populists diagnosis is right but their answers are wrong. I kept thinking Ive got to come up with an agenda that will actually solve those real concerns.
Your book aims to solve that with a range of policy prescriptions, from investing in lifelong education to expanding the workforce to reforming tax and regulation. You make clear its not a blueprint or a fixed menu, so what is it?
If you needed a strapline, I think its moving away from a world of trickle-down economics to one where we water all the seeds. The old model was, lets let the economy grow as much as possible and if it accumulates at the top thats O. K. , because eventually itll trickle down, and if it doesnt trickle down well compensate the losers. And of course what weve learned is, it doesnt trickle down, theres no compensation, and who wants to be a loser anyway? The social contract Im talking about is about predistribution—investing early in everyone, especially those who are poor and deprived, and then using that to grow a more productive economy.

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