The Great Depression of 1929 was a milestone that led to the questioning of the "liberal" understanding, which was the only dominant view in the economic literature until that time, and confirmed that it was inevitable for the state to undertake important regulatory, supervisory, and guiding roles in economic life. Therefore, the "physiocratic" and "neoclassical" understandings that dominated the 180 years after the 1750 Industrial Revolution, after 1929, left their place to the Keynesian understanding, which advocated the indispensable role of the state in the economy. Although the 1960s and 70s witnessed the re-evolution of the "neoliberal" understanding, and the 1980s and 90s witnessed the resurgence of the "neoliberal" understanding, the Latin American Crisis, the Asian Crisis and the 2008 global financial crisis have each time put the results before us that confirmed the merit of the Keynesian understanding.

Need for change

One of the strongest followers of the global financial system, Agustin Carstens, president of the Bank for International Settlement (BIS), who is followed with great interest by all the stakeholders of the international financial system due to the data he produces and the reports he shares, also reminded that the global economic system is on the verge of a historical change. Because all the data on the international finance and economic system, especially the global debt data announced by the BIS on a regular basis, show that the system will be completely blocked and become inoperable unless fundamental changes are made in the general philosophy and operating mechanism of the system.

Economic recession

The "neoliberals," who have adopted the "extremely tightened monetary policy" path as the only solution in the fight against inflation and trying to impose this on the world, have sadly, and strangely very easily, embraced undergoing the heavy recession on a global scale, stagflation in developed economies, impoverishment, and the burden of global debt. However, the same names also advocate for "green transformation," "energy transformation," and "green development" for the world economy. How can green development investments, infrastructure and superstructure investments that will ensure the sustainability of the global supply and logistics system continue in the short, medium and long-term with the extremely high investment costs due to the high-interest rates of central banks? There is no doubt that they are not even trying to find an answer to this question.

Historical change

It is strange to think that the global inflation spiral will be resolved by a monetary policy tightening action based solely on high-interest rates without an improvement in the processes in the global supply and logistics system, normalization in global demand, and the end of the global "hoarding" or stockpiling tendencies. However, the global economic system needs a "people-oriented" change based on the understanding of "conscious capitalism," which prioritizes people, the environment, the climate and the Earth's future. The global pandemic, the Russia-Ukraine War and the aftershocks caused by the two black swans have brought to the table the inevitability of a historical change in the global economy. Is it possible to tame inflation on a global scale with extremely harsh monetary policy measures or with conscious capitalism that would lead to more savings, efficient use of resources, and a people-oriented understanding far from "energy and food nationalism" selfishness? We will witness a challenging war between different economic schools.