Message in a bottle

There is no scarcity of problems in this world. And when it comes to global economics, problems are, in fact, in abundant supply. But, what really are the biggest three economic problems faced by the world today?
The answer to that question isn't simply 2+2, but five leading worldly philosophers currently alive have pronounced their verdict: inequality and lack of inclusiveness; inadequate growth in world's advanced economies; and climate change.
Marking 50 years of Finance and Development, a quarterly magazine published by the IMF, the multilateral agency asked five Nobel Prize winners (for economics) to write about what they see as the biggest problem faced by global economy.
For Joseph Stiglitz and Micheal Spence--both of whom were awarded Nobel for their individual analyses of markets with asymmetric information--the biggest challenge is the rising inequality and lack of inclusiveness. For Robert Solow and Paul Krugman, the biggest problem is inadequate demand in advanced economies.
Robert Solow, who got his Nobel for contributions to the theory of long-term macroeconomic growth, says affluent economies are stuck in neutral, a state which is likely to be more than transitory. Solow fears that advanced economies are heading towards secular stagnation, which "refers to a persistent tendency for a national economy (or a group of them) not only to grow slowly but more particularly to find it difficult or impossible to use fully its productive potential".
While Solow only fears that rich economies are heading towards secular stagnation, Krugman, who won his Nobel for analysis of trade patterns and location of economic activity, appears to hold a more certain position. "Inadequate demand is still a very big problem, and looks likely to remain so for a long time to come," he wrote in the magazine.
Turning to the problem of climate change, George Akerlof--who shared his Nobel with Stiglitz and Spence for different work on the same subject of "markets with asymmetric information"--says the world faces two inconvenient truths. "The first is global warming itself. The second is that we aren't yet telling ourselves the stories that compel us to combat it."
Tie these challenges together and we have a recipe for disaster; a kind of an economic doomsday scenario. With sustainable development still an elusive pipedream, the convergence process, which is expected to triple the size of the global economy in the next 25 to 30 years, will lead us towards ecological time bomb.
Spence says "at present, there is no consensus about how to deal with the various forms of inequality that exist." Capitalising on this lack of consensus, the markets and market-men are having a ball, and, therefore, taxing the ecological system even more.
Stiglitz chimes in by noting that the major challenge facing the global economy in coming decades is more than just taming the excesses of the market economy; it "entails ensuring that the economy is the servant of society, not the other way around".
And given the power of money in politics, inequality within and between countries will continue to stoke fire. Those closely watching regional and global developments would agree that the fire is back, as protests, riots, coups and geopolitics have begun to make headlines once again all across the world.
With the West in economic stagnation, a power vacuum or a leadership gap has begun to emerge. The BRICS and other emerging economies aren't willing to fill the leadership void, as together they are busy bringing billions on the development curve--a move that risks bringing the earth to an ecological tipping point.
And with global governance superstructures "at best a work in progress", it seems there is no silver lining on the sky. For those on this ship called earth, here is the message in a bottle: we better start believing in ghost stories, we are in one.