I am no economist but you don’t have to be to realize that long before the Covid-19 Pandemic, the state of the global economy was already in disarray, now with viruses the economic problems to come are in general as serious as they have ever been.
To deal with the accumulated liabilities history suggests some radical alternatives, including a burst of inflation or an organized public default, one way or the other the economic fallout defies calculation.
It makes sense with everything happening at once to take a hard look at the coming economic depression. (which is going to be deep and long)
It will require not just governments to be more visionary to lead the way out of the crisis but new economic thinking to rethink the whole Globalisation of economies before they disappear into the world of digital data and become difficult to measure, or tax.
The question, of course, is what form that will take and which political forces will control it.
We all know that economic relationships are complicated and changeable. The influence of anyone variable in an economy is not easy to isolate even with the use of sophisticated data. This is why economists are unable to agree on any course of action when it comes to deciding how the economy actually works and how it ought to work.
Even if they could agree countries have different moral and political judgments.
What I see is that we entering an era of doing it yourself economics, based on people’s intuitions,but unfortunately macroeconomic is choosing between inflation or unemployment.
With countries trying to reopen their economies and given that economists can not agree or have sufficient knowledge to predict any direction one could be forgivin to ask are they performing a useful purpose in the first place.
The coming economic depression can only be diluted by the creation of a new interrelationship with the resources of the earth, their use against their value to the ecosystems as a whole not the continuation of profit for profit sake.
We must recognize that the civilizations of the world are entwined in a global economic system that is incapable of functioning for the common good of humanity, other species, and this planet, which is our home.
It is clear that serious reflection is in order.
Simply to stand back and question what has happened and why would be to compound failure with failure: failure of vision and failure of responsibility.
A sustainable and prosperous global economy needs to be grounded in the common good of all living species, not profit.
The failure of markets, institutions, and morality during the current coronavirus crisis has shown that the emergence of global capitalism brings with it a new set of risks that call for an ethical, moral change.
Leaders are now gambling with public health, safety, and the future of younger generations. They unapologetically prioritize serving themselves over the people they were elected to serve. We have to make them raise their game.
A new approach to economics is required that puts values, compassion, generosity, kindness, people, planet, and the common good at the heart of our economic system.
Now is the Time for a Revolution in Economic thinking.
A new definition of the “Bottom Line.”
Given today’s global challenges, such as climate change, financial crises, oil depletion, renewable energy, inequality, and poverty, what kind of new economic theory is called for?
Therefore this post is an appeal to economists, academic colleagues in business, finance, management, political economy, philosophy, theology, ethics, environmental studies, sociology, anthropology, and others to come together, so that, all of us, collectively, can prescribe a working solution to our commonly shared challenges.
As we transition from a service-based economy to a knowledge-based economy, human capital will not be enough, the next generation will see large tax increases in order to pay off the national debts.
The work, of which we are a part, which is so needed, has barely begun.
The pandemic will continue to change the economic and financial order
It will lead to permanent shifts in political and economic power in
ways that will become apparent only later.
However, the coronavirus crisis has been a powerful reminder that the basic political and economic unit is still the nation-state. Countries will have to strive for a better balance between taking advantage of globalization and a necessary degree of self-reliance.
The COVID-19 pandemic has created a wartime atmosphere in which such changes suddenly seem possible.
Perhaps the emergency payments to individuals that many governments have made are a path to a universal basic income and universal health insurance.
The pandemic has laid bare the vulnerabilities of open borders.
Firms that are part of global supply chains have witnessed first-hand the risks inherent in their interdependencies and the large losses caused by disruption.
Supply chains will have to become more local and robust—but less global.
The real risk, however, is that this organic and self-interested shift away from globalization by people and firms will be compounded by some policymakers who exploit fears over open borders. They could impose protectionist restrictions on trade under the guise of self-sufficiency and restrict the movement of people under the pretext of public health.
It is now in the hands of global leaders to avert this outcome and to retain the spirit of international unity that has collectively sustained us for more than 50 years.
The rise of populism in many countries further tilts the balance toward home bias.
Even after the pandemic is brought under control (which may itself prove a lengthy process). The post-coronavirus financial architecture may not take us all the way back to the pre globalization era, and the damage to international trade and finance is likely to be extensive and lasting.
The gap between rich countries (along with a few emerging markets) and the rest of the world in their resilience to crises will widen further. Economic nationalism will increasingly lead governments to shut off their own economies from the rest of the world.
Now and for a long time to come, central banks will become entrenched as the first and main line of defense against economic and financial crises. They may come to rue this immense new role and the unrealistic burdens and expectations it will impose on them.
We urgently need more and deeper conversations, dialogue, and engagement at all levels and from a variety of perspectives to bring the different cultures, civilizations, and viewpoints together, in order to find common ground and agreement on joint action.
The pandemic and subsequent recovery will accelerate the ongoing digitalization and automation of work changing the future composition of GDP.
The share of services in the economy will continue to rise. But the share of in-person services will decline in retail, hospitality, travel, education, health care, and government as digitalization drives changes in the way these services are organized and delivered.
The downturn will accelerate the growth of nonstandard, precarious employment—part-time workers, gig workers, and workers with multiple employers—leading to new portable benefits systems that move with workers and broaden the definition of employer. New low-cost training programs, digitally delivered, will be required to provide the skills required in new jobs.
The sudden dependence of so many on the ability to work remotely reminds us that a significant and inclusive expansion of Wi-Fi, broadband, and other infrastructure will be necessary to enable the accelerating digitalization of economic activity.
We cannot achieve our hopes and dreams without such conversations and dialogue. Only then can we hope for the understanding between civilizations, peoples, and points of view necessary to construct an economy that truly works for the common good.
No country or economic activity is going to be impervious to the drastic impacts of climate change.
It is cuckoo land to think that we can continue to ignore the pending disasters, compounded by the social problems, highlighted by the epidemic that has brought all manner of issues to the surface. From the coronavirus pandemic and police brutality to the marginalization of minority communities around the world, leadership is broken.
For years we have listened to their rhetoric without action that has given full rein to self-harming market forces.
The Normal Economy is Never Coming Back.
This much is certain:
Just as this disease has shattered lives, disrupted markets and exposed the competence (or lack thereof) of governments, it will lead to permanent shifts in political and economic power in ways that will become apparent only later.
It would be fair to say that if we are to move to Green sustainable economies the first thing that is needs is green energy that is free of costs to the user.
The whole concept of economies becoming attached to the fundamental values required to protect and revitalize the fundamental resources of the earth that provide us all with life is idealistic and will remain so as no one wants to foot the bill to make it happen.
However, for the first time in human history, before profit disappears into the cloud we have the technology to apply a World Aid commission of 0.005% on all activities that are in existence for profit sake only.
One of humanity’s greatest weaknesses is greed.
One can see this throughout history, with the present-day examples personified by Wall Street and other world stock exchanges now run by high-frequency trading algorithms.
Such a commission would create a perpetual fund of billions almost invisibly to the markets. It would spread the cost of changing world economies fairly to achieve the desired outcome both the earth’s needs and our needs.
It would turn a begging United nation into a giving United nation.
No one country wants to foot the cost of change and it cannot be achieved if visible to Wall Street
Micro and Macro Economics are neither different subjects, nor they are contradictory, rather, they are complementary. The only important point which makes them different is the area of application.
A fund like this could give grants, not loans. It could buy the sunshine and turn it into energy, buy the protection of forests, freshwater, fresh air, remove the need for mass farming, reduce inequality, afford education, change our lives for the better.
All human comments appreciated. All like clicks and abuse chucked in the bin.