When we get back to normal: Time for a new economic paradigm?

Eventually we will poke or noses out of our hutches. The virus storm will have passed.

And we will return to our normal.

“When we get back to normal” – how many times do we hear that at the moment? Hundreds of times a day.

There seems to be a presumption that once the Covid-19 virus has passed, everything will return to the way it was. Politicians across the world are saying the same thing. I can understand why. They need to keep the morale of the population up during a hugely difficult time where the virus is causing illness and death and people are being told to stay indoors.

If I was a political leader, I would be saying the same thing. People need to be able to fix onto something in the future – some form of certainty and that fix point is a return to the way we were before the virus struck and disrupted our lives. When the virus goes, we will return to the way things were, they are saying. The message is: when we return to normal, everything will be ok.

But will it?

To protect the population and preserve the economy, the UK government has made a massive intervention, potentially the biggest ever seen. In order to protect our health, people have had to stay off the streets and consequently the economy has come to a grinding halt. The capitalist market system has no mechanism to preserve itself and under market rules it has become basically bust within two weeks. The government has had no alternative but to shore up the system to stop millions becoming unemployed and worse, going hungry.

When we are finally allowed to venture out of our homes, the world will be a different place. Who knows what it will look like – but will it be different?

Take the airline industry, for example. The sector has been grounded with many airlines technically bust and crying out for government bailouts. The question is: will the government allow that? It currently not only runs against its own rules on private sector competition but runs completely against its own economic philosophy whereby governments do not intervene into the business sector.

The travel and tourism sector is huge. Surely, the government has to move to protect and help the sector recover. We can’t have a country with all its airlines grounded, can we? Those who believe rigidly in the market will argue that a sector can rebuild even if all airlines are closed down. Some demand for airline travel, they will argue, will still be there and as a result a market will begin to emerge, grow and become established. But that might take decades. On the other hand, government may put its market philosophy to one side and refinance an industry sector which it believes is vital, so that it can motor onwards. The government did this with the banking sector during the financial crash, but the airline industry is a different kettle of fish.

The government will say that shareholders have a key role to play: they cannot take huge dividends in the good times and expect taxpayers to bail them out in the bad times. But these are exceptionally bad times for business. Will the government allow whole industry sectors go to the wall or will we see the reemergence of nationalised industries?

The airline industry and what happens to it is only one example of many. We can be sure that there will be major realignments of different parts of the economy once the virus passes through. Things will not return to normal – they will not return to the way they were before.

And actually, that might be a good thing. Perhaps this is a wake-up call for us all. The way we are living isn’t sustainable. Maybe, actually, we need to stop getting on airplanes so much. There is clear evidence that emissions from airlines are damaging the planet. Perhaps we need to understand that those holidays in the sun and business travel aren’t actually necessary, and there are other ways we can live our lives. The lesson we are currently being taught is that we have to change the way we live our lives, or we will suffer more like this in the future.

I am sure some people will rush out and say that this is the end of capitalism and it is the public sector which must develop economies, rather than a market driven economy which is based on a service sector which services itself.

The issue isn’t about the end of capitalism or the role of government in our lives, it is about the economic system. We are living in a modern inter-connected world built on an economic system which is way out of date. What we need is a new economic system based on a completely new set of values and a new paradigm. It’s a system which we haven’t even thought of yet but it is one which preserves the planet and protects our health.

That’s why there is an imperative to hear the voices of people who are trying to create a new world based on new values. We haven’t got there yet but at The New Ism we are creating a serious debate about practical ways forward. One day, the new system will be clear to us all.

We aren’t going back to normal. We need to create a new normal and head there.

Header image: Jeremy Bishop on Unsplash

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