The proliferation of short-termism

Contemporary OECD economies are characterised by three forms of short-termism: The short-termism of capitalists, given their very high return on equity requirement s ; The short- termism of consumers, given their desire for high consumption and rapid replacement of the goods they own; The short-termism of politicians, given electoral constraints. These three forms of short-termism are self-sustaining: the short-termism of consumers leads to that of politicians ; that of politicians enables that of capitalists. Today, however, there is a need to: Make huge public and private investments with long horizons; Reduce consumption to free up room for investment in GDP and to reduce commodity consumption and CO 2 emissions; Ensure debt sustainability to avoid financial crises in the future. But all this will be possible only if these three forms of short-termism disappear.