It is now more than 6 months since we've met Covid-19. Not a pleasant acquaintance and I wish we had never met it. But we did. The world is now much different than what it was half-a-year ago and it is still changing. Where is this "path of change" leading us?
According to WHO's covid-19 situation report #132 (WHO, 2020a), we presently have 5,934 936 people globally infected (i.e. more than half the population of my home country - Portugal) with a toll of 367,166 dead (i.e. over 120 times the number of casualties from the September 11th attacks). Sadly, these numbers will only increase. Such a grim scenario must be fought with action, encouragement, and perspectives of hope on what comes next. This is the first in a series of three brief opinion articles to help in the fight, highlighting hopes and wishes for the future that can also provide some ointment for the present.
#1 - Human Capitalism:
The current economic system that we call "capitalism" has asserted itself well and has brought us impressive years of development with data suggesting a global decrease of poverty, increase in education, and expansion of life-expectancy (World Bank, 2015, 2018a, 2018c, 2018b). But capitalism has its discontents, with complaints often referring to the increasing inequality and tragedy of our most important "common": the environment and earth. Further, the economy does not seem to be working that well, with alarming negative interest rates - an absurd that has made its way into the new normal - and an expansive monetary policy that fails to translate into inflation. Ideologies apart, such fragilities and negative impacts of our current framework of economic organisation stress that “Economics”, as a social science, is still very far from perfection.
Not surprisingly, there have been calls for “rethinking capitalism”, whilst economic thinking has been evolving towards cherishing unorthodox views (Jacobs & Mazzucato, 2016). By stressing the need for public financial intervention and leadership in times of crisis, the covid-19 pandemic has unfettered the action of the state in the economy, bending rules of fiscal discipline towards the provision of a social and life-saving support. The return of the state is also the return of public policy and public influence, that can lead economic agents' action towards a more evolved economic system, focused on the sustainable realisation of the human being.
This is my first hope for the post-pandemic: the rebalancing of capitalism towards human realisation within the boundaries of sustainability.
The concept of value is fundamental to economics and the pandemic has altered value conceptions. Indeed, often neglected goods such as supporting networks (family, friends, neighbours, and community) and access to natural healthy environments have seen their value perceptions soar, with the acknowledgement of their centrality for human well-being. Recent proposals for more holistic economic development pathways, aligned to the UN's sustainable development goals, can capitalise on these new perceptions of value whilst finding enhanced adherence in the post-pandemic period. One of such proposals is Kate Raworth's concept of “doughnut economics” (Raworth, 2017), with the city of Amsterdam recently employing it in preparation of the city's development plan (Daniel Boffey, 2020; World Economic Forum, 2020). The European Commission has also adopted this concept by using it in its forward-looking report: “Science, Research and Innovation performance of the EU, 2020” (European Union, 2020).
“Build back better” is definitely one of the slogans arising from the pandemic, with governments being urged to create “more sustainable, resilient and inclusive societies” (United Nations, 2020a, 2020b). From the UN ecosystem, it is worth highlighting the recent statement by Dr Hans Henri P. Kluge (WHO, 2020b), WHO Regional Director for Europe, with a clear call urging for a different economy: a human centric economy.
Has the current pandemic the strength to persistently alter valuations and propel firm's and individual's behavioural change in adherence to such holistic and human centric approaches? Collective memory tends to fade away fast (Gustafsson, 2020; The Economist, 2019). Hopefully, this time it will induce persistence change in economic perceptions, expectations and incentives, which in turn will change our current economic system and our evolving concept of capitalism.
