Humanization of the economy – an effective development path or a utopia?

Актуальные исследования • 2025. №40 (275) Экономика и управление| 57 ЭКОНОМИКА И УПРАВЛЕНИЕ 10.5281/zenodo.17332556 SIDENKO Maya Antonovna 11th-grade Student, ANO SOSH "Academic Gymnasium", Russia, Moscow Scientific Advisor – Deputy of the Council of Deputies of the Khoroshevo-Mnevniki Intracity Municipal Formation of the City of Moscow Shorina Tamara Borisovna HUMANIZATION OF THE ECONOMY – AN EFFECTIVE DEVELOPMENT PATH OR A UTOPIA? Abstract. In the context of global transformations and challenges of the 21st century related to climate change, social inequality, technological revolution, and changes in the structure of labor markets, rethinking the role of the economy in the life of society is of particular importance. Modern economic systems, focused primarily on GDP growth, profit maximization, and production efficiency, often ignore fundamental human values, such as well-being, social justice, sustainable development, and care for future generations. In this context, the humanization of the economy is one of the most relevant and controversial concepts. Humanization of the economy offers an alternative path, where the economy becomes a tool for achieving the goals of man and society, and not vice versa. It involves reorienting the economic system to the priorities of human development, well-being, and harmonious coexistence with the environment. The results of the analysis of a number of economic and social indicators of a sample of countries with different types of state and economic structures showed that the humanization of the economy, based on the priority of human capital, fair distribution of resources, sustainable development, and democratization of labor, can indeed become an effective development path for society. Examples of countries with high levels of investment in social and environmental technologies confirm that this approach improves the quality of life, stimulates innovation, and ensures long-term stability. However, the implementation of this concept requires overcoming many barriers and limitations, such as raw material dependence, corruption, bureaucracy, and insufficient public involvement. Keywords: humanization of the economy, fundamental human values, human development priorities, human capital, democratization of labor, environmental technologies, raw material dependence. 1. Introduction The purpose of this work is to study the concept of humanization of the economy in the context of its basic principles, to analyze the possibilities and barriers of humanization of the economy in the conditions of the modern world, and to find answers to the following practical questions: • Are there any examples in the world of countries with a humanized economy? • Is the humanization of the economy compatible with further effective growth of the country's economy, or is it a factor hindering economic development? • At what stage of a country's political and economic development does economic humanization become possible? The relevance of this study is determined by the need to find new approaches to solving global problems caused by the traditional model of economic growth, focused primarily on GDP growth, profit maximization, and production efficiency, which often leads to increased social polarization, environmental degradation, and loss of moral guidelines. The object of the study is the modern economic system as a set of institutions, mechanisms, and Актуальные исследования • 2025. №40 (275) Экономика и управление| 58 processes that form the basis of social development. The subject of the research is the processes of humanization of the economy, their impact on the functioning of economic systems, and the possibility of their implementation on a global scale. The study's hypothesis is as follows: economic humanization is a realistic and effective development path for various countries, contributing to improved quality of life and social justice. However, its implementation requires overcoming significant institutional and cultural barriers. At the same time, there is a risk that economic humanization is a utopian concept without realistic tools for implementation. In accordance with the set goal, the following tasks were solved: 1. Study of the concept of humanization of the economy in the modern world; 2. Analysis of the basic principles of humanization of the economy and their impact on sustainable development and social well-being of economies and societies; 3. Identification of limitations and barriers to the processes of humanization of the economy; 4. Formation of conclusions based on the conducted research. The research methods were: • Quantitative methods – collection and analysis of numerical data, statistical analysis, identification of patterns and trends; • Correlation analysis – the study of the relationship between variables; • Comparative analysis – a phenomenon, event, or object is compared with a similar one; • Systems analysis – the construction of a system with a certain interrelationship and hierarchy of elements, the definition of key functions, system-forming and system-destroying factors. To collect numerical and statistical data, a sample of 15 countries with different territorial, climatic, religious, economic, and other features, with different types of state and political systems was formed. Numerical data were collected for 2022 from reports, papers, and publications of international agencies, government bodies, and national reports of various departments (information sources are provided after each table). It should be noted that data may vary slightly between different sources. This study prioritizes the order of the numbers and the overall hierarchy of values, rather than specific numerical values. 2. The main part 2.1. The concept of humanization of the economy. Basic principles and barriers to implementation The humanization of the economy is a concept aimed at reorienting the economic system from a focus solely on material benefit to ensuring sustainable and equitable development focused on human capital, fundamental human values, wellbeing, and the comprehensive development of the individual. At the center of this concept is the individual, not capital or technology. The key idea is: the economy should serve the people, not the people serve the economy. At its core, the concept of humanization of the economy is a synthesis of ideas from economics, sociology, psychology, and philosophy. This concept has no single founder. It matured in the second half of the 20th century as a response to growing inequality, environmental problems, and the sense of futility of the consumption model. The following scientists and organizations made a significant contribution to the concept of humanization of the economy: • Gary Becker (1992 Nobel laureate in economics) formalized the concept of "human capital," insisting that investments in education, health, and knowledge increase productivity and human income and are a key factor in economic growth. • Amartya Sen (1998 Nobel laureate in economics) proposed the concept of "development is not the growth of wealth, but the expansion of freedom," which emphasizes the need to expand people's real freedoms and opportunities to lead the lives they value. His ideas formed the basis of the UN Development Programme's Human Development Index, which has become a practical indicator of humanization. • Richard Easterlin (economist, author of the famous 1974 article “Does Economic Growth Improve The Human Lot? Some Empirical Evidence") argued that economic growth beyond a certain point does not lead to an increase in the happiness of its citizens. His "Easterlin paradox" led to the emergence of "happiness economics" and such indicators as "gross national happiness" and the "better life index." • Karl Polanyi (economist, anthropologist), in his 1944 book “The Great Transformation: The Political and Economic Origins of Our Time”, insisted that the market, without state intervention, tends to subjugate people and nature, treating them as commodities, which destroys the very Актуальные исследования • 2025. №40 (275) Экономика и управление| 59 “fabric” of society. He argued that the economy should be integrated into social relations, vice versa. His ideas became the theoretical basis for social economics and cooperatives. • Muhammad Yunus (2006 Nobel Peace Prize laureate) coined the concept of microcredit and social business. He believed that business can and should solve social problems. Social business, where profits are reinvested in social goals rather than paid out to shareholders, is a practical tool for humanizing the economy at the micro level. • The works of Abraham Maslow (hierarchy of needs), Carl Rogers, and Erich Fromm shifted the focus to self-realization and full personal development. • The Brundtland Commission (UN World Commission on Environment and Development) examined the limits of economic growth in terms of environmental impacts, developed the concept of sustainable development and meeting the needs of the present without a threat to future generations. This concept has become an integral part of humanization, linking human well-being with the health of the planet. Thus, the basic consolidated principles of humanization of the economy were formed: 1. Man is the main value: • The economy must contribute to improving the quality of life, not just GDP growth; • Not only material goods are important, but also education, healthcare, culture, and ecology are important too; • Resources should be invested in the development of human capital: in education, science, creativity, and the creation of conditions for people’s self-realization. 2. Social justice: • Reducing inequality, fair distribution of income. • Availability of basic goods (housing, medicine, education) for all segments of society. 3. Caring for future generations as a guarantee of sustainable long-term development: • Balance between economic growth and ecology through the development of “green ecology” and the use of renewable energy sources. • Abandoning the mindless exploitation of resources in favor of long-term well-being. 4. Ethics in business and democratization: • Corporate social responsibility. • Refusal of labor exploitation in favor of decent working conditions. Despite the obvious benefits of humanization of the economy for society, E. V. Smirnova (Russian economist, specialist in regional economics and spatial development) rightly notes that “there are significant obstacles that limit its implementation in some regions” [1, p. 58-61]. According to various sources, the key barriers to the humanization of the economy are the following: • One of the main barriers is the economy's dependence on raw materials. N. I. Komkov, V. V. Sutyagin, and N. N. Volodina (Russian economists and analysts specializing in macroeconomics, industrial policy, technological development, and, in particular, the “resource curse”) note that "in countries with a high share of income from oil and gas exports, incentives for investment in human capital often remain weak" [2, p. 107-112]. • E. N. Kan, V. I. Trunin, and N. V. Sopina (Russian economic analysts specializing in macroeconomic policy, monetary regulation, and forecasting) note that “rigid bureaucracy is also a serious obstacle to the humanization of the economy. State control over many areas often limits civil initiatives from below” [3, p. 57-62]. Instead of supporting cooperatives or social entrepreneurship, bureaucratic structures often create additional barriers to their development. • Corruption and inequality undermine the effectiveness of social programs and hinder the fair distribution of resources. In conclusion of the general description of the concept under consideration, it should be noted that the question of the advisability of humanization of the economy gives rise to many discussions. Critics of the humanization of the economy (Milton Friedman, Arthur Laffer, Daron Acemoglu), who believe that humanization can reduce competitiveness and growth rates, usually argue their position by the fact that: • Social spending and taxes reduce investment; • Strict labor laws reduce market flexibility; • Business is losing its competitiveness on a global level. Advocates of humanization (for example, Joseph Stiglitz, Thomas Piketty) acknowledge these risks, but argue that they can be minimized through thoughtful reforms. 2.2. Formation of country sample for the study and of their basic characteristics list To conduct a comprehensive and objective study, a sample of 15 countries with different territorial, climatic, religious, economic, and other features, with different types of state and political systems was formed. Tables 1 and 2 were compiled Актуальные исследования • 2025. №40 (275) Экономика и управление| 60 for these countries, reflecting key country characteristics relevant to the main topic of this study: • The ability to invest in a country's human capital and ecology is linked, among other things, to the availability of such financial resources. As a key characteristic of the availability of this opportunity in a country, the level of GDP per capita at purchasing power parity was chosen, which in turn may depend on the period of time that has passed since the beginning of the industrialization of the country's economy (time resource), and the type of the country’s economy itself. • Social justice and democratization in business are usually characterized by the type of political system of the country and the period of existence of this type of political system - an indicator of the stability of the regime. • Barriers to the humanization of the economy stem from the same type of political structure of the country, the type of economy, and dependence on raw materials exports. The general data collected across countries will be referenced and selectively duplicated within the framework of the analysis of various principles of humanization of the economy and barriers to its development. Table 1 Type of political regime and duration of the current regime Country Type of political regime Duration of the current regime, years Sweden Developed stable democracy 100+ Norway Developed stable democracy 100+ Germany Developed stable democracy 75 France Developed stable democracy 65+ USA A developed stable democracy (with elements of oligarchy, fusion of business and government) 230 Russia Authoritarian regime (after a long totalitarian-authoritarian regime and a short period of fragile democracy) 20 Poland Stable democracy 35 Peru Fragile democracy (unstable) 20 Chile Stable democracy 35 Venezuela Authoritarian regime (with dictatorial features) 25 China Authoritarian regime 70+ Japan Developed stable democracy 75+ India Fragile democracy (with signs of authoritarianism) 75+ UAE Authoritarian regime (absolute monarchy) 50+ Saudi Arabia Authoritarian regime (absolute monarchy) 90+ Table 2 Year of industrialization (approximate), GDP per capita PPP, type of economy, and share of raw material exports in GDP for 2022 according to World Bank Group and Observatory of Economic Complexity Country Period since the beginning of industrialization, years (year of beginning) GDP per capita PPP, $ (2022) Type of economy Share of raw materials exports in GDP, % (2022) Sweden 132 (1890) 62,926 Diversified (highly diversified, high-tech, post-industrial) 5–7 Norway 117 (1905) 89,114 Diversified with the raw materials sector 15 Germany 151 (1871) 63,150 Diversified (highly diversified, industrial) 2-3 France 174 (1848) 55,493 Diversified (highly diversified, post-industrial) 1-2 Актуальные исследования • 2025. №40 (275) Экономика и управление| 61 Country Period since the beginning of industrialization, years (year of beginning) GDP per capita PPP, $ (2022) Type of economy Share of raw materials exports in GDP, % (2022) USA 157 (1865) 76,399 Diversified (highly diversified, post-industrial) 2-3 Russia 137 (1885) 35,865 Raw materials (oil and gas) 15–20 Poland 72 (1950) 45,343 Diversified (industrial) 5–7 Peru 72 (1950) 15,893 Raw materials 10 Chile 83 (1939) 28,526 Raw materials with elements of diversification 12–15 Venezuela 72 (1950) 15,893 Raw materials (oil, hyper-raw materials, crisis) 10–15 China 38 (1984) 23,309 Diversified (industrial) 2-3 Japan 142 (1880) 42,248 Diversified (highly diversified, post-industrial) 0.5-1 India 71 (1951) 8,379 Diversified developing 3-4 UAE 52 (1970) 55,368 Transition from raw materials to diversified 20–25 Saudi Arabia 49 (1973) 69,958 Raw materials (oil and gas) in the early diversification stage 25–30 Note to Table 2: A high share of raw material exports in GDP (above ~10%) almost always indicates a raw materials type of economy. GDP per capita PPP – gross domestic product per capita at purchasing power parity, a macroeconomic indicator reflecting the market value of all final goods and services produced over a specified period in all sectors of the economy on the territory of a particular state, regardless of the nationality of the factors of production used. 2.3. Analysis of the principle “man is the main value” The first and key principle of economic humanization is the recognition of human capital as the main resource of modern society. "Investments in education, healthcare, culture, and social protection contribute to improvement of the population's standard of living, stimulate innovation, and ensure long-term economic growth," A. E. Kisova (a Russian political scientist and economist specializing in regional development, spatial analysis, and public administration) states in her dissertation [4]. For a more detailed examination of the given principle, Table 3 was formed, where expenditures on education and healthcare as a percentage of GDP were compared with the Human Development Index (HDI) as a key indicator. Data on economy type and time period since the beginning of the industrialization were also entered into the table to identify possible relationships with GDP per capita and the HDI. Based on this table, the following conclusions can be drawn: 1. The most obvious and strong correlation can be traced between the level of investment in human capital (total expenditure on education and health care ), the value of the Human Development Index (HDI), and the value of GDP per capita: • Countries in the group with the highest HDI values > 0.90 (Sweden, Norway, Germany, France, the United States, and Japan) have high GDP per capita values > $42,000 and high social spending > 14.7% of GDP. These are mature, postindustrial, diversified economies where wealth is generated by intellect and innovation – the products of creativity in the broadest sense of the word. To unleash creative potential, people need certain conditions: education, freedom of thought, access to information, the opportunity to experiment and make mistakes, health, and psychological well-being. The humanization of the economy that invests in healthcare, education, and a balanced, fulfilling life with minimal stress clearly creates more fertile ground for innovation. • Countries in the group with average HDI values of 0.76–0.88 (Poland, Chile, Russia, and China) have average GDP per capita values and average social spending of approximately 10% of GDP. This group of countries is dominated by raw materials economies or developing diversified ones. Their investments in education and Актуальные исследования • 2025. №40 (275) Экономика и управление| 62 healthcare are a compromise between available revenues and spending priorities. • Countries in the group with the lowest HDI values < 0.76 (Venezuela, India, Peru) have the lowest GDP per capita values < $15,000 and social spending < 10% of GDP. This likely creates a "poverty trap." Without investing in people, sustainable economic growth is impossible. The economies of these countries are either raw materials without effective governance or agro-industrial. • Venezuela can be called an exception among the ranking's underperformers. Despite the lowest total public investment in education and healthcare (4.3%) among the entire sample, the HDI fails non-critically. This nonsense can be explained by the historical legacy of past investments (the economic boom following the discovery of large oil fields in the 1960s and the social programs supported by high oil revenues in the early 2000s), which is now rapidly eroding due to hyperinflation and the severe economic crisis that has developed since 2015. The HDI data presumably lags behind current reality and does not reflect the current collapse. 2. The influence of the duration of the period since the beginning of industrialization on the level of GDP per capita is traceable, but numerous exceptions have also been identified (see chart 1): Most countries that began industrialization 100+ years ago (Germany, the United States, Sweden, France) have high GDP per capita ($55,000– 76,000). These countries have consistently completed the entire transition from agrarian to industrial and post-industrial societies. This significant time resource allowed them to create developed infrastructures, production capacities, and a skilled workforce. This laid the foundation for the subsequent creation of deeply diversified and sustainable economies, independent of any single sector. Thus, a long period of industrialization allows for the creation of complex institutions and the accumulation of human capital, something that cannot be achieved in just a few decades. • Norway is an exception among the leaders in the ranking based on the share of raw materials exports. It is the only country with a high share of raw materials exports that is considered a diversified economy. The secret lies in the prudent management of resources through a sovereign wealth fund that invests oil revenues in foreign assets, turning the "resource curse" into a "resource blessing." This deliberate policy has made it possible to avoid the negative consequences of the "resource curse." • Russia (GDP approximately $35,000) is a clear example of a country with the "resource curse" in action among countries with "old" industrialization. Compared to Norway (GDP approximately $89,000), Russia has retained its dependence on raw materials and has a raw materials economy. • A bloc of countries that began industrialization significantly later, < 80 years ago (Peru – 72 years, Venezuela – 72 years, India – 71 years), exhibits extremely low GDP per capita ($8,000– $16,000). These countries' economies are either raw materials or are just developing on the path to diversification. • Nevertheless, a comparable group of countries whose industrialization began < 80 years ago (Poland – 72 years, China – 38 years, the UAE – 52 years, Saudi Arabia – 49 years) is demonstrating rapid, explosive growth, in some cases catching up with the GDP per capita of countries in the "old" industrialization group. This is a consequence of the "catch-up development" model. Poland, having carried out radical economic reforms, effectively took advantage of rapid integration into the European Union, a massive influx of foreign investment, and the experience of more developed economies. The UAE and Saudi Arabia effectively utilized modern oil and gas production technologies, bypassing the traditional stages of industrialization. China actively adopted the most modern technologies and a vast pool of cheap labor. The example of these countries suggests that effective governance and modern technologies can compensate for a short period of industrialization and significantly accelerate economic growth. Conclusions: 1. The presented data convincingly demonstrate that the level of economic development (GDP per capita), the type of economy (diversified vs. raw materials), and public policy priorities (education/healthcare expenditures) are determining factors for achieving a high HDI. The primary path to achieving a high HDI is high social spending based on high GDP per capita in the presence of a stable, post-industrial, diversified economy. 2. High GDP per capita is important, but not sufficient. The quality of economic growth, the diversification of the economy, and how income is distributed and invested in society are far more important for a nation's well-being than its absolute value. 3. Resource wealth can become a trap if strategic policies are not implemented to diversify the Актуальные исследования • 2025. №40 (275) Экономика и управление| 63 economy, invest in the future and in human capital. Thus, the analysis clearly demonstrates that the most successful countries are those that invest in their people and, on that basis, create complex, diversified economies and products. It's worth noting that micro-examples of this policy include Google, Apple, and Yandex, which have long understood this connection. Their philosophy of organizing a workspace with maximum freedom and opportunities for collaboration, flexible schedules, and corporate culture is aimed at attracting and developing creative employees who will create the next breakthrough product. The growth of their market capitalization is a direct consequence of this policy. Table 3 Total expenditure on education and health from GDP, Human Development Index (HDI) according to national statistical agencies, OECD, UNDP for 2022 Country Total expenditure on education and health care from GDP, % Human Development Index (HDI) GDP per capita $ (2022) Period since the beginning of industrialization, years Type of economy Sweden 17.7 0.947 62,926 132 Diversified Norway 17.0 0.966 89,114 117 Diversified with the raw materials sector Germany 17.3 0.951 63,150 151 Diversified France 17.7 0.910 55,493 174 Diversified USA 24.3 0.921 76,399 157 Diversified Russia 10.0 0.822 35,865 137 Raw materials Poland 11.5 0.881 45,343 72 Diversified Peru 9.4 0.762 15,893 72 Raw materials Chile 14.7 0.860 28,526 83 Raw materials with elements of diversification Venezuela 4.3 0.691 15,893 72 Raw materials China 10.0 0.788 23,309 38 Diversified Japan 14.8 0.936 42,248 142 Diversified India 6.7 0.644 8,379 71 Diversified developing UAE 8.8 0.937 55,368 52 Transition from raw materials to diversified Saudi Arabia 11.5 0.875 69,958 49 Raw materials in the early stage of diversification Note to Table 3: The Human Development Index (HDI) is a comprehensive indicator for assessing the quality of life in countries around the world. It reflects not only economic well-being (gross national income per capita) but also access to education, healthcare, and other basic opportunities for personal development (0.80-1.00 is very high, 0.7-0.799 is high, 0.550-0.699 is average, below 0.550 is low). Актуальные исследования • 2025. №40 (275) Экономика и управление| 64 Fig. Period since the beginning of industrialization (years) and Human Development Index (HDI) (points) for a sample of countries 2.4. Analysis of the principle of "Social Justice" Another important aspect of humanization of the economy is the fair distribution of wealth. This means reducing economic inequality through progressive taxation, establishing decent wages, and supporting vulnerable groups of the population. For example, A. E. Kisova and T. D. Romashchenko (Russian economists, authors of a number of articles and studies in labor economics and economic sociology) emphasize that "the Gini coefficient, which measures the level of income inequality, is significantly lower in countries with developed social policy (for example, in Norway) than in countries with a less equitable distribution of resources" [5, p. 110-115]. To substantiate the stated principle, Table 4 was formed, in which key indicators are examined in detail. In this case, the indicators were the poverty level and the social tension index. What connections can be traced here: 1. High income redistribution: European countries are democracies with diversified, developed economies. They exhibit low inequality, low poverty levels, and low or moderate social tension. 2. Moderate income redistribution: The United States and Japan are democracies with diversified, developed economies. They exhibit high inequality, moderate poverty levels (higher than in the first group), and moderate social tension. In these countries, tension is partially offset by the high absolute income of part of the population. 3. Low income redistribution: Russia, Chile, Peru, Venezuela are authoritarian regimes and democracies with raw materials economies. They demonstrate high inequality, high levels of poverty, and high social tension. There are 4 countries (UAE, Saudi Arabia, China, and India) that are exceptions to the general system: • The UAE and Saudi Arabia are countries with low tax redistribution but also extremely low poverty rates among their citizens. High resource revenues, through direct transfers and social benefits, help maintain low poverty. This ensures acceptable national stability. • India, with its high Gini coefficient and extremely high poverty level, also falls out of the general logic and avoids maximum social tension due to its historically established caste system, which reduces the protest potential, and religious norms – Hinduism and Buddhism preach the acceptance of suffering in the current life for the sake of future reincarnations. • In China, high inequality and poverty are partly offset by rapid welfare growth generally. Thus, the data convincingly demonstrate that an active and effective state role in income redistribution through a progressive tax system and social spending is critical to reducing inequality and poverty, ensuring social stability, and decreasing social tension. A market economy, especially in a context of raw materials dependence, leads to the concentration of wealth in the hands of elites and increased social tension. Актуальные исследования • 2025. №40 (275) Экономика и управление| 65 Table 4 Gini coefficient after taxes and minimum wage compared to the poverty level index at the international poverty line according to national statistical agencies (OECD Income Distribution Database, INSEE Fiscal Report, IRS Tax Statistics, INEI, and others), World Bank PovcalNet, Rosstat for 2022 Country Gini coefficient after taxes Redistribution index (RI), % Minimum wage or actual minimum, US dollars Poverty level according to the international poverty line ($3.65/day) Social Unrest Index (SUI) Sweden 0.27 42.5 1,800 0.1% 2.3 Norway 0.26 42.2 2,200 0.1% 1.8 Germany 0.29 42.0 1,985 0.4% 3.1 France 0.29 40.8 1,747 0.3% 4.5 USA 0.39 23.5 1,256 1.2% 5.2 Russia 0.41 10.9 242 2.7% 7.6 Poland 0.28 35.0 755 0.8% 4.2 Peru 0.44 15.4 282 8.5% 8.0 Chile 0.46 13.2 460 3.1% 6.4 Venezuela 0.50 5.0 20 more than 25% 9.2 China 0.42 12.5 290–410 4.8% 4.8 Japan 0.32 25.0 1,150 0.7% 2.5 India 0.45 10.0 50–120 18.7% 5.9 UAE n/a low n/a low 500–700 0.1% 2.0 Saudi Arabia 0.40 15.0 960 0.1% 4.5 Note to Table 4: Ginni coefficient (Ginni index) evaluates income inequality (0 – complete equality, 1 – maximum inequality). Redistribution Index (RI) reflects how effectively a country's tax system reduces income inequality between rich and poor citizens (a high index >30% means the tax system takes more from the rich and redistributes in favor of the poor; a low index <15% means a weak impact on inequality). The Social Unrest Index (SUI) measures the risk of mass protests, strikes, dissatisfaction with the government, and economic vulnerability on a scale of 0 to 10 (0-3.99 low risk, 4-6.99 moderate risk, 7-10 high risk). 2.5. Analysis of the principle of “Caring for future generations as a guarantee of sustainable long-term development” Caring for future generations is a necessary criterion for sustainable development and is another important principle of the humanization of the economy, which presupposes environmental responsibility through the introduction of “green” technologies and the transition to nuclear energy and, optimally, renewable energy sources, as causing less harm to the environment. To examine this principle, Tables 5, 6, and 7 were formed, which summarize a variety of indicators that impact environmental performance in one direction or another: carbon footprint indicators, the share of renewable energy, the share of nuclear energy, the share of fossil fuel energy, electricity production and consumption per capita, the presence of a mandatory carbon credit system and the year the system was introduced, and the share of ESG funds in the total investment fund market. All these indicators were compared with the Economic Complexity Index (ECI) and Environmental Performance Index (EPI) of countries, as well as poverty levels, which also provide significant insights. Analyzing the tables, the following key relationships can be identified: 1. Clear correlation between the Economic Complexity Index (ECI) and the Environmental Performance Index (EPI): • High ECI, high EPI. Almost all countries with high-tech, non-raw materials economies (European countries and Japan) demonstrate successful results in reducing their carbon footprint and are also developing carbon credit systems. These countries produce high-value-added goods rather than raw materials, which requires fewer resources and energy per unit of GDP. Given their developed environmental culture (no accumulated air, water, Актуальные исследования • 2025. №40 (275) Экономика и управление| 72 Below is a comparative analysis of these groups in the following context: Scandinavian countries (Sweden, Norway) versus the USA and Japan versus Germany. Group 1: Scandinavian countries (Sweden, Norway) vs. the USA. Key similarities: 1. All countries have diversified economies and very high levels of GDP per capita ($62,926 – $89,114). 2. High human development indices (>0.92) that indicate a high quality of life in general. 3. Long history of stable political structure and industrialization (>100 years). Key differences: 1. Redistribution of wealth and inequality: • Scandinavian countries exhibit exceptionally low Gini coefficients (0.26–0.27) and a nearzero poverty rate (0.10%). This is a direct consequence of humanization policies. A progressive tax system and high social spending effectively redistribute wealth. • Despite a comparably high GDP per capita in the group ($76,399), the United States has the highest Gini coefficient (0.39) in the group and a poverty rate (1.20%) that is 12 times higher than in Scandinavia. This confirms the thesis that the liberal model creates greater inequality, even with high overall prosperity. 2. The role of the state and social spending: • Paradoxically, the US spends a whopping 24.3% of GDP on education and healthcare (the highest figure among all countries in the sample), yet the results are clearly worse. This is explained by the fact that spending in the US is largely private (expensive health insurance, fee-based higher education). The system is inefficient in terms of "social impact per dollar." • Scandinavia spends less (17.0–17.7% of GDP), but the services are public and of high quality, ensuring universal access. This is a more effective model in terms of humanization. • Quality of society and environment: • Scandinavian countries lead in the Social Progress Index (90.3–90.4) and the Environmental Performance Index (72.7–77.7). This reflects a comprehensive approach to development, where economic growth is inseparable from social and environmental well-being. • The United States lags behind on these indicators (SPI=84.2, EPI=51.1), indicating that economic efficiency is prioritized over social and environmental components. 3. Corruption: • The more cohesive and equal societies of Scandinavia show the highest scores on the Corruption Perceptions Index (84–85 points). • The United States (69 points) shows the worst result in the group of developed democracies, which correlates with the characteristic of the type of political regime indicated in the table: “fusion of business and government” (lobbying). Conclusion for Group 1: The Scandinavian model of humanization of the economy has proven effective in creating a more equal, socially secure, and sustainable society with a high quality of life. The liberal US model generates comparable enormous economic wealth, but at the cost of significant inequality and lower social and environmental standards. Group 2: Germany vs. Japan (considering postwar recovery). This comparison is particularly revealing in the historical context, as both countries: • Were completely destroyed in 1945 after the end of World War II (both countries took a major part in the war and lost). • Have a comparable period since the beginning of industrialization (Germany – 151 years, Japan – 142 years). • They have equal length of existence of the current democratic regime (75 years). • They have highly diversified and complex economies (high ECI: 1.94 and 1.90). Key differences: 1. Selecting an economic model: • Germany consciously chose the path of a socially oriented market economy (a concept pioneered by Ludwig Erhard, the eminent economist and statesman, which became the foundation of Germany's post-war economic recovery). Erhard believed that economic freedom was a necessary condition for political freedom, and the state's social responsibility was a guarantee of societal stability. His approach can be characterized as a "third way" between wild capitalism and totalitarian socialism. It is a humanizing approach aimed at combining market competition with a strong social network. • Japan followed a path similar to the American one, with an emphasis on powerful corporations, lifetime employment, and a relatively weak state social security system compared to Europe. Social security was largely provided by companies and families. Актуальные исследования • 2025. №40 (275) Экономика и управление| 73 2. Results of model selection: • Inequality: Germany (Gini coefficient of 0.29) demonstrates a more equal income distribution than Japan (0.32). The poverty rate in Japan (0.70%) is almost twice as high as in Germany (0.40%). • Social spending: Germany spends 17.3% of GDP on social benefits (education and healthcare), close to the Scandinavian level. Japan spends significantly less (14.8%). This directly reflects the varying roles of the state in societal well-being. • Quality of life and society: Germany has a higher HDI (0.951 vs. 0.936) and SPI (88.8 vs. 87.9), indicating a higher overall quality of the social environment. • Economic impact: Despite all this, Germany's per capita GDP ($63,150) is significantly higher than Japan's ($42,248). This may indicate that the German model has proven not only more "humane" in the long term, but also more economically efficient in today's environment. Conclusion for Group 2: Both countries achieved an "economic miracle" after the end of World War II. However, Germany's choice of a humanizing path (social market economy) led to the creation of a society with less inequality, a stronger system of state social support, and, notably, a higher level of economic well-being per capita today. The Japanese model, closer to the American one, led to the formation of a society with greater social stratification. General conclusion: The analysis convincingly demonstrates that the humanization model of the economy (a socially oriented market economy) leads to the formation of more balanced, just, and socially sustainable societies without compromising economic competitiveness. Countries that have chosen this path (Scandinavian countries) lead in indicators of equality, social progress, and the fight against poverty and corruption. The liberal-individualist model (USA/Japan), although capable of generating high aggregate GDP, creates significant inequality and leaves issues of social security to the market or corporations, which ultimately results in lower comprehensive indices of the quality of society (SPI, HDI) and higher levels of poverty. The historical context of the post-war recovery of Germany and Japan makes their comparison a particularly pure experiment, which demonstrates the advantages of a socially oriented path even under conditions of identical starting opportunities. Thus, in answering the first two questions posed, "Are there any examples in the world of countries with a humanized economy?" and "Is the humanization of the economy compatible with the further effective growth of the country's economy?", a positive answer can be given, supported by the research conducted. Another conclusion that can be drawn from the study: humanization is a benefit that can only be afforded by countries with stable political regimes that have already resolved the basic problems of survival and economic growth. An analysis of all the research tables shows that such countries must meet the following thresholds in the designated categories: 1. High economic performance: • GDP per capita > $40,000. This is the level at which society as a whole overcomes poverty and a significant middle class is formed, willing to pay taxes in exchange for high-quality public goods. • A diversified, complex economy (high ECI > 1.0). A raw materials economy (Russia, Venezuela, Saudi Arabia) does not create a stable, broad tax base (revenues depend on resource prices) and often leads to the formation of authoritarian or oligarchic regimes, where there is no incentive to share wealth. A diversified, knowledgeand technology-based economy (characteristic of all countries with a humanized economy) requires a highly educated and healthy workforce, which creates a natural demand for investment in human capital. • Overcoming absolute poverty (<1%). While a significant portion of the population lives in poverty, state resources are directed toward targeted assistance rather than creating a universal system of high-quality services. 2. Stability and democracy of political institutions: • The key factor is the long-term stability of political institutions. Economic development alone is not enough. A political system capable of transforming economic success into sustainable social institutions is needed. • Countries with humanized economies (Sweden, Norway, Germany) have stable democratic regimes for over 65–75 years. It is not a coincidence. It is over a long period that a social agreement between citizens, businesses, and the state is formed. People trust the state because they believe their taxes won't be stolen but will be converted into high-quality public services. This trust is reflected in high Corruption Perceptions Indexes (CPI > 80). Актуальные исследования • 2025. №40 (275) Экономика и управление| 74 • Chile and Poland are examples of stable democracies (35 years) that have reached the GDP threshold and are already demonstrating significant social progress (SPI > 82–85) compared to their less stable neighbors (Peru, Venezuela). They may be in a transitional phase toward humanization of the economy. • Russia, China, and Venezuela demonstrate that even with significant economic indicators (Russia with $35,000 GDP per capita, China with rapid growth), authoritarian regimes do not choose the path of systemic humanization. Social spending in these countries is low (10% of GDP), and inequality is high. The state in such systems is not accountable to the population and has no incentive to ensure fair redistribution. General conclusion: The analysis shows that time for development is a resource, but not a guarantee of success. Humanization of the economy becomes possible not at a specific year of industrialization, but when two conditions are simultaneously met: 1. Economic condition: The country has achieved a high level of prosperity (GDP per capita > $40,000 – $50,000) based on a diversified, complex economy that creates a material basis for redistribution. 2. Political condition: the country has had stable, publicly accountable democratic institutions for a long time (as in the case of Poland, which may choose a socially oriented market economy model, for at least 35 years), which form public demand for justice and ensure the efficient and transparent use of resources for social purposes. Thus, in answer to the last question posed, "At what stage of the country's political and economic development does economic humanization become possible as a branch of further development?", it can be answered that economic humanization is a conscious, but not obligatory, political choice of a mature democratic society that has achieved a high level of economic development. 4. Conclusion The study analyzed the key principles of humanization of the economy (recognition of human capital as the main resource of modern society, social justice, concern for future generations through ecology, ethics in business and democratization of labor), identified the main barriers and obstacles to its implementation (raw materials dependence, corruption, bureaucracy), and found answers to the questions posed in the study: 1. Are there any examples in the world of countries with a humanized economy? 2. Is the humanization of the economy compatible with the further effective growth of the country's economy, or is it a factor hindering economic development? 3. At what stage of a country's political and economic development does economic humanization become possible? The study identified countries that have chosen the path of economic humanization, embodied in the construction of a socially oriented market economy. These countries include Sweden, Norway, and Germany. These countries lead in economic indicators (GDP per capita, Economic Complexity Index) as well as in equality, social progress, poverty and corruption reduction, and environmental efficiency. The analysis convincingly demonstrates that the humanization model of the economy leads to the formation of more balanced, just, and socially sustainable societies without compromising economic competitiveness. Therefore, humanization of the economy is not a utopian, unrealistic concept. However, as the study also confirmed, only countries with stable political regimes that have already resolved the basic problems of survival and economic growth can afford this development path. At the same time, the long period allocated for the development of the country's economic and political systems is a resource, but it is not a guarantee of success. Humanization of the economy becomes possible not at a specific year after the country's industrialization begins, but rather when two conditions are simultaneously met: the country achieves a high level of prosperity (GDP per capita > $40,000 - $50,000) based on a post-industrial, diversified, high-tech economy; and the existence of stable, publicly accountable democratic institutions over a long period (at least 35 years), which generate public demand for justice and ensure the effective and transparent use of resources for social purposes. Thus, the humanization of the economy is a conscious, but not obligatory, political choice of a mature democratic society that has achieved a high level of economic development. References 1. Smirnova E.V. Goals and factors of humanization of economic growth // Space of economy. 2018. No. 3-2. P. 58-61. https://cyberleninka.ru/article/n/tseli-i-faktory-gumanizatsiiekonomicheskogo-rosta/viewer. 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