Warren Buffett’s famous bit of investing advice: “be greedy only when others are fearful.”
So, if technology has virtually revolutionized every industry in the current global economy, why are economists still question whether technology is visible in traditional economic metrics such as GDP, productivity, and corporate profit?
Because to date, it’s not but it has and will continue to profoundly alter our modes of life and the function of the state.
The field of state activity has been widened by the Covid pandemic while profit is disappearing into the cloud.
Profit-seeking algorithms are advancing without regulation presenting many significant opportunities but also posing major challenges.
Today, innovations in information technology are having wide-ranging effects across numerous domains of society, and policymakers are acting on issues involving economic productivity, intellectual property rights, privacy protection, and affordability of and access to information – paying little or no attention to who benefits from this exploration of data and the profits being made.
Modern technology has made the states perform such functions as -the protection of the aged, the weaker section, and the minorities making provision for education, health care, etc. Choices made now will have long-lasting consequences, and attention must be paid to their social and economic impacts.
It has brought about remarkable changes in the whole system of social relationships and installed new ideologies in the place of traditional ones.
The industry is being taken away from the household and new types of economic organizations have been set up online such as factories, stores, banks, corporations, etc.
These covid inventions are leading to a shift of functions from local government to the central government of the whole state but the most striking change is the change in economic organization.
COVID-19 has not been nor will it be an equal opportunity virus so what will be the aggregate consequences of COVID-19?
Around the world, there are marked differences in how the pandemic has been managed, both in terms of how successful countries have been in maintaining the health of their citizens and the economy and in the magnitude of the inequalities on display.
It is not only exposing and exacerbating inequalities between countries but within countries. This pandemic will end up exerting a significant adverse impact on inequality and we will need a comprehensive rewriting of the rules of the economy.
One that is greener and more knowledge-based, with even greater equality, trust, and solidarity.
To date, it is presenting a silver lining to firms that have now crossed the psychological threshold of large-scale remote work.
Robots do get viruses. They are more easily managed. So it is likely that robots will, where possible, at least at the margin, replace humans.
For example “Zooming” will, at least at the margin, replace airline travel.
The year 2020 will go in history books as one when the world economy was ravaged by the Covid-19 pandemic.
The year 2021 is set to go into the history books for Profit above the planet’s needs and the humanity that live on it.
Our capitalist economic system needs to first recognize that the competitive equilibrium model (whereby producers maximize profit, consumers maximize utility, and prices are determined in competitive markets which equate demand and supply that has dominated economists’ thinking for more than a century) does not provide a good picture of the plant or the economies of today.
We now have the beginnings of an economy rife with market power and exploitation which is weakening the constraints on corporate power to generate profit with profit-seeking algorithms.
While the pandemic is reminding us that our lives are in the hands of so many people who work in underpaid jobs it has stripped many of the effective rewards away from work placing them in the hands of a few online monopolies like Amazon, eBay, Facebook, Twitter, Netflix, PayPal, Alibaba, JD.Com, Etoro, Plus500, Avatrade, Libertex, Alphabet. to name just a few.
The rules governing globalization must do more than just serve corporate interests; the environment has to be protected.
Clearly, there will be an even faster acceleration of digitalization and automation across the board.
From virtual work from home to telehealth, distance learning, online shopping, entertainment, journalism, online delivery, the true economic realities are hitting home.
In the meantime, there will be collateral damage, with countless businesses shutting down, millions of people losing their jobs and many will have to struggle with their mental health from the isolation of lockdown not to mention the digital market.
Since the pandemic started in March of 2020, more than 110 million people have become infected with COVID-19 globally – 84 million of those people have recovered but over 2.4 million people have died.
We might now be reaching a point where we are in control of the virus rather than it controlling us.
This pandemic has indeed been the great accelerator of many technologies and innovations, and it made decades happen in few weeks but most viruses are experts at changing genomes to adapt to their environment.
It is switching us from our high-touch, highly analog daily interactions to the exact opposite all in a span of a year.
As we convert our lives online the evidence that SARS-CoV-2 is a wily, capable and ruthless, and adaptable adversary is piling up steadily. There are two major technology trends that will accelerate in the post-Covid-19 world:
Touchless technologies and highly automated robots augment human tasks.
To estimate the distributional impact of this pandemic event we are going to need to recognize the disproportionate burden of the pandemic on low-skilled workers.
Before Covid-19, the global market for all vaccines was about $24 billion a year.
Apart from the obvious pharmaceutical companies are filling a desperate public need, they are also corporations with shareholders expecting a return.
At the moment drugmakers are not asking for as much as they could for their vaccines, especially considering the enormous economic value attached to the end of the pandemic, because that prestige can be lost very easily if the vaccine is too expensive for people or governments to buy.
Now, these companies want to avoid the risk of investing in a capacity that eventually proves worthless. Firms invest in large-scale capacity only after the vaccine has proved effective and it will paradoxically be easier for pharmaceutical companies to negotiate higher prices for their vaccines when they aren’t as essential for the functioning of the world.
Taking a more general look at who is going to profit, life after the pandemic “is going to be, in many aspects, a sped-up version of the world we knew.”
And this is also applicable to technology and its role at the onset of the pandemic.
The pandemic is likely to bring about a rash of debt crises so there will be a debt restructuring.
Without a debt moratorium, it will leave long-lasting scars.
That’s why it’s a matter of self-interest—as well as a humanitarian concern—for the developed economies to provide the assistance the developing economies and emerging markets need. Without it, the global pandemic will persist longer than it otherwise would, global inequalities will grow, and there will be global divergence.
It is not sufficient for economies is open for business. The economy depends upon imports, exports, travel, and tourism. The longer-term rebuild of the post-pandemic economy requires rethinking our policy approaches and targets defining success.
So we are at a historic crossroads for shaping the recovery and have a window of opportunity to reset economies on a new trajectory of more inclusive and sustainable growth.
Because of online profiteering and automation, this can only be achieved by the removal of the social welfare net and replacing it with unconditional no-strings-attached Universal Living Wage that will redistribute wealth, release creativity ensuring that nobody lives in poverty.
The hiatus imposed by the pandemic provides a unique moment to introduce a far-reaching systemic change that will stop inequality from spiraling further out of control and focus on measures that will enhance social mobility.
The only question is whether it can be introduced orderly or disorderly.
GDP itself will also need to be updated to reflect value creation in the digital economy, the value created through unpaid care work as well as value destroyed through certain types of economic activity.
Companies have long been profiting from our feelings – The facebook-like button is possibly the best example. Click by Click producing data that was once undervalued now worth billions.
You name it profit is moving to profit-seeking algorithms that monitor/analyze our emotions one of the most important sources of profit in the contemporary economy.
If you don’t believe this look at the profits of Pay Pal, Netflix, Libertex, Plus 500, Etoro, Avatrade, Libertex, Alibaba, J D.Com, Alphabet, E Bay, Google, Amazon, to mention Apple, are just a handful of companies that are replacing large industrial super companies.
All of these will not, in the short run at least, create the equality and solidarity that we need. Markets on their own pay no attention to the broader impacts that arise from decentralized decisions leading to excessive borrowing in foreign-denominated currencies or excessive inequality.
With significant economic contractions, low-income people have a limited ability to work from home than those with higher income.
Various historical epochs – hunter-gatherers, agrarian society, and industrialist society are distinguished from each other in terms of technological advancement.
The evolution of mankind can be seen in terms of technological evolution as well.
Technology changes society by changing our environments to which we in turn adapt.
This change is usually in the material environment and the adjustment that we make with these changes often modifies customs and social institutions.
Scientific and technological inventions have modernized societies in various countries.
However, the problem of unemployment is a concomitant feature of rapid technological advancement. Machines not only provide employment opportunities but also take away jobs through labor-saving devices.
This results in technological unemployment.
Within this new context, and given the fast-paced emergence of disruptive products and business models, as well as the transformative power of digital technologies on business and society it is now of paramount importance that we are capable of detecting the economic impact of such fast technological changes and respond with similar speed and foresight.
The pandemic won’t be controlled until it is controlled everywhere, and the economic downturn won’t be tamed until there is a robust global recovery.
Manufacturing coronavirus vaccines is a potentially lucrative business, but how much will these companies earn?
If we leave it entirely to the market, we will get too little vaccine too late.
We don’t want to find ourselves with a working vaccine but too little manufacturing capacity.
Son an advanced market commitment to support vaccine development is a critical component of a timely plan to defeat the virus, reopen the economy and return to normal life stronger and more resilient.
What will the market for Covid-19 vaccines look like in the long term?
Pfizer and Moderna are likely to make money from the vaccine—and it isn’t the vaccine itself.
It’s the patents on how they were made.
The fact that mRNA technology could be capable of changing medicine and the pharmaceutical industry as we know it. But Moderna and Pfizer’s vaccines have an element that is far more important than the elements that make it effective specifically against Covid-19: The use of RNA messengers to trigger the immune response.
These are patents cover everything from the formula, to the method of administration, to the manufacturing process. But often, when a new vaccine comes to the market, there is little in it that hasn’t been patented already in the past.
With any transformation, projects get mired in the fear of the unknown, risk aversion, and a misunderstanding of what digital offers.
It won’t be long before we see the sale of a digital token for smartphones that can verify that you are Virus-free – “Vaccine nationalism.”
Many choices being made now will be costly or difficult to modify in the future.
It took two world wars to win the freedoms we have, but it will take a pandemic for humans to be barcode-like products.
It will take years of legal case to win them back.
All human comments appreciated. All like clicks and abuse chucked in the bin.