Resuscitate, adjust or replace the economic system?

In which we desperately try to resuscitate the old economy, even though we have an opportunity to create a new one

At the beginning of the pandemic I thought it was going to mark a massive reset. Our economy would be so disrupted that it we would have to start again almost from scratch. I thought that this would be welcomed as a wonderful opportunity to establish a cleaner, kinder, more sustainable economic system to replace the existing system of “Get as much money as possible! Use it to buy stuff or to get more money!”.

Instead the focus seems to be on getting back to “normal” as quickly as possible. 

This may be because we are so used to the existing system that it doesn’t even occur to most of us that workable alternatives might exist. Of course the economy is based on chasing more money and more stuff! What other kind of economy could there possibly be?! The obvious solution – the only solution, in our minds, perhaps – is to fix the broken thing; it doesn’t even cross our minds that it might be possible to replace it instead. (Which is ironic, given that getting a new thing rather than fixing the old one is one of the driving forces of our current system.)  

Or perhaps it’s because our old economic model hasn’t been crushed quite thoroughly enough to make it worth writing off. A lot of people have a lot invested in the capitalist economy, and they are desperate not to see it evaporate and be replaced with something – heaven forfend – compassionate. Obviously this applies to the billionaires and the big, grey corporations that have shaped this powerful system in which money floods towards them as they laugh hollow laughs and eat the souls of those who toil in their warehouses and office cubicles. But even regular people like you and me, much as we might rhapsodise about a less grabby, impulsive world, also have an incentive to desperately try and shove the pieces back together again, because we are still at the mercy of the existing system, maimed and limping though it may be. We can’t just declare “I don’t do capitalism anymore! I’m not going to earn money or pay rent or buy food anymore!” 

And so although you see the odd article commenting “Isn’t it great that air pollution has fallen during lockdown? Let’s try and keep it that way!” or “Now we know how valuable healthcare workers and cleaners are, perhaps we should pay them properly!” the general focus is still on getting the old system back to running at full capacity as quickly as possible.  

The problem is that we can’t get it back up to full capacity, at least not for the foreseeable future and certainly not until a vaccine for the coronavirus has been developed and widely distributed. The Economist says that the most we can shoot for at the moment is “the 90% economy”. That may sound pretty good, but look at how the article was illustrated:


“Almost normal” is not a comfortable substitute for “normal”.

George Monbiot, who spends a lot of time shouting sense out into the void, believes that there is a genuine opportunity for a reset, provided that governments take the reins. The problem, he says, is that they are swayed more by the billionaires and corporations that fund and lobby them than by the people who elect them. A case in point, he says, is that after the 2008 economic crisis, governments “spectacularly squandered” the opportunity to reboot the system, choosing to resuscitate the “filthy old economy” and keep wealth concentrated in the hands of said corporations and billionaires, rather than investing in a green recovery, even though a green recovery was what the majority of the population – the very people who elected these governments – actually favoured. He implores governments not to repeat the mistake. “Bail out the people, not the corporations,” he says.

He emphasises the crucial role of governments in driving a green recovery:
“The vast changes we have made in our lives are likely to cut global carbon dioxide emissions by only about 5.5% this year. A UN report shows that to stand a reasonable chance of avoiding 1.5° or more of global heating, we need to cut emissions by 7.6% per year for the next decade. In other words, the lockdown exposes the limits of individual action. Travelling less helps, but not enough. To make the necessary cuts, we need structural change. This means an entirely new industrial policy, created and guided by government.”

His concrete suggestions include investing in making places more walkable, more cycleable and better served by public transport; stopping airport expansion; reducing landing slots; and designing neighbourhoods around people, not cars.

One silver lining is Amsterdam’s announcement that it plans to base its post-pandemic economic recovery on economist Kate Raworth’s “doughnut” model. Where traditional models look at economics purely in terms of flows of money, the doughnut model places the economy in the context of the planet and society. The outer ring shows the limits of what the earth can sustainably support (freshwater withdrawals, biodiversity loss, etc.). The inner ring shows the basic needs of society (food, education, income, etc.). Ideally, we don’t want to exceed the first or fall below the second; we want to stay between the two rings, in the “dough” of the doughnut.

Source: Finally, a breakthrough alternative to growth economics – the doughnut (George Monbiot)

If Amsterdam can do it, maybe other cities or countries will follow suit. If so, though, they will have to act soon. Yuval Noah Harari points out in this thought-provoking interview that whatever measures are put in place in the coming weeks will shape the world for many years to come: “Now they are handing out trillions of dollars, changing the job market, the educational system.” And it will be very hard to reverse whatever decisions are made during this time: “Whoever comes afterwards, it’s like coming to a party after the party is over and the only thing left to do is to wash the dishes.”

And on the subject of washing dishes, here’s an excellent TED talk: The unpaid work that GDP ignores – and why it really counts.

2 thoughts on “Resuscitate, adjust or replace the economic system?

  1. So true! It’s a great opportunity to start anew, and now populations have seen how changes can have a significant effect – why not capitalise? I see Mexico City and Copenhagen, and Oakland in California, are looking to ‘build back better’ and make the economy and cities more ‘green’.


  2. That’s so interesting Lara. Great post! I think a lot of people agree with you, but many aren’t necessarily ready for the big structural change yet, for some reason. It seems like we should open our eyes a bit more to how the world can now be made better: but, like you said, everyone seems more interested in just finding a way back to that “normal” that they find comforting. But I don’t see that normal as really being relevant anymore.


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