Wanted: A new economic model that works for all.

Digitalisation has created extended global supply chains, linking together the fates of millions of businesses. The 2020s will be the decade when the idea that economic problems can be "left to the market" to solve is finally put to rest - after some 40 years during which that belief has caused untold damage to society and the environment. We can foretell this with such confidence because of the nature of the digital economy. The long-standing economic theory, according to which firms or people deliver the best outcomes for society by acting individually to maximize profits or "utility," has never been valid. If it were, businesses would see no advantage in becoming much larger, and advertisers would never use social pressure to manipulate consumers. But in the digital world, it is simply impossible to ignore our interdependence. Consider today's pervasive digital platforms. One reason why there are just a few globally dominant players is the existence of network effects: whether a platform matches diners with restaurants or enables users to connect with each other, the more users it has, the better it is for all users.

As a platform becomes larger, the benefits for everyone increase, often at an accelerating pace. Or consider the evident importance of data, the rapidly increasing volume of which is fueling artificial intelligence and other innovative services (as well as, less positively, the digital advertising market). Data have the technical economic characteristics of a classic public good (like air) in the sense that they are "non-rival" - more than one person can use data at the same time without depleting the overall stock. And basic economics shows that markets cannot be expected to generate and allocate such goods efficiently. Moreover, raw data are processed into knowledge containing valuable information, which, even when provided by an individual, generally relates to other people or other data. In other words, the value of data-driven knowledge comes from its social context. Digitalization has created extended global supply chains, linking together the fates of millions of businesses. Social media are making societal influences on consumer demand more important than ever. And economic progress is more than ever driven by ideas, which come attached to people and multiply with exchange. The observation of fundamental flaws with the methodological individualism that underpins conventional economic prescriptions is far...

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