Zoi Capital Managing Director’s latest article in Fast Company discusses the threats to the world order established in 1944 at the Bretton Woods conference. Under that system, we have seen tremendous economic growth and rise in prosperity. The recent developments with the rise in tariffs, the devaluation of the dollar, and making US less hospitable to the best and brightest minds around the world, can upend this order. Dr. Razmi explores the roots of the discontent that led to the rise of populism in advanced nations and how historic sociodemographic changes and poor policy resulted in discontent among a large swaths of the population of these nations. He discusses the best potential actions that business leaders can take to protect their businesses but also prevent the downfall of this world order.
From the article:
“One other key culprit for lower public sector investments is tax revenues that have not kept up with this increased spending. Starting in the 1950s, corporate income tax revenues as a share of GDP have declined due to a combination of lower rates and increased loopholes. The resulting budget deficits from this disparity of growth between spending and revenues has led to lower public sector investment rates.”