The World Economic Forum is calling for a “great reset” of capitalism following the coronavirus crisis.
The NGO warned that the economic fallout of the Covid-19 downturn will exacerbate the climate and social crises that were already underway, leaving the world “even less sustainable, less equal, and more fragile”.
It said with enough government support and private sector engagement we can ensure that tragedy is not “the only legacy” of the crisis.
But to achieve this we must take the following steps:
- Governments must steer the market toward fairer outcomes by improving coordination (for example, in tax, regulatory, and fiscal policy), upgrading trade arrangements, and creating the conditions for a “stakeholder economy.”
- Ensure that investments advance shared goals, such as equality and sustainability.
- Harness the innovations of the Fourth Industrial Revolution to support the public good, especially by addressing health and social challenges.
The calls come as the notion of a post-growth economy gains traction across the world.
In Amsterdam, where the city’s economy has been ravished by global travel restrictions, leaders are putting together an unorthodox post-pandemic recovery plan where its main goals aren’t about growing the economy or increasing GDP but about making the city better for people and the planet.
Milan has already moved to introduce one of Europe’s most ambitious schemes reallocating street space from cars to cycling and walking in response to the crisis and in France a citizen’s assembly has called for a different social and economic model that is more human and more resilient in the face of future downturns.
Winds of change
In the UK, too, winds of change seem to have been exacerbated by the pandemic.
A report commissioned by The Treasury recently concluded that we need to recognise new measures of success that go beyond GDP. The Dasgupta Review noted that the “human economy is embedded within, rather than external to nature”, and that a limited paradigm that prizes economic growth at any cost could lead to future crises.
A recent poll of 2,000 Brits found eight out of 10 people would prefer the government to prioritise health and wellbeing over economic growth during the coronavirus crisis, and six in 10 would still want the government to pursue health and wellbeing ahead of growth after the pandemic has subsided.
The findings show that “growth at all costs” is not something that people will support any longer, with a clear appetite to move away from GDP as the only indicator.