NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Friday, June 7, 2013

(June 6, 2013: Redwood City, CA) — Winston Churchill said it best when he concluded, “democracy is the worst form of government ….except all those other forms that have been tried from time to time.”

The same can also be said about capitalism. In the past several decades, international markets have pulled millions out of poverty, unlocked life-changing technological and scientific innovation, and raised our global standard of living to unprecedented levels. But, distressingly, far too many people are being left out. This is true everywhere, including in the United States, where the wealthiest one percent now own 43 percent of the country’s wealth compared to just 25 percent in 1950. Globally, the numbers are equally concerning since the 1.2 billion poorest people account for only one percent of world consumption, while the billion richest consume 72 percent. Clearly, this disproportion warrants urgent attention.

In 10 days, the G8 will gather in Enniskillen, Ireland to consider, among many other things, how our international economic system can address this inequity, recognizing its enormous human cost and the threat it poses to global stability. Daunting though that is, we are far from discouraged. In fact, we know firsthand that market-based solutions can be a powerful way to create jobs and deliver services to those who need them – at the scale required in a world of seven billion people. And we are especially heartened to see a new movement afoot called “social” impact investing, which explicitly seeks to apply the power of the market to help solve stubborn economic and social challenges.