Lagarde cautioned against people becoming too complacent about the pick-up in global growth reported by the IMF at the start of the WEF’s annual meeting. The IMF raised its forecasts for global expansion to 3.9% this year and in 2019, reporting that all major economies – the US, the eurozone and Japan – are doing better.
“I don’t think that we’ve completed the job,” said Lagarde, who fears that the growing economic inequality in many countries is creating “fractures”.
“Having growth is good, improving productive is good, but [policymakers should] make sure that the results of that growth are properly allocated,” said the IMF chief, adding that inequality is growing in many advanced economies, and very high in emerging markets.
Still thinking, or perhaps newly thinking, that there is some lever to be pulled to “allocate” growth.
It’s as much of a delusion as thinking that there’s some lever to pull to create growth. That’s one we’ve tested to destruction and shown to be untrue. But then those whose job is to mull over how to run the world economy aren’t going to be happy with the likely correct answer. We can’t. Growth is emergent from economic freedom, just as the allocation of that growth is.
Sure, we can vary the tax system a bit, fiddle with benefits, but that’s about it. We’ve no lever long enough, nor a fulcrum for it, to be able to create nor allocate the growth itself. Something as chaotic as an economy isn’t malleable enough to be managed. We’ve irrefutable proof that an economy can be mismanaged, there’re enough examples of fuck ups for that, but management to good ends appears to mean doing only what must be done (that peace, easy taxes and tolerable justice) and then leaving the fuck alone.
But then if you were an international bureaucrat tasked with economic management you wouldn’t like that answer, would you?