Designing a New Normal
The Great Disruption
We are living through the biggest economic disruption since the Great Depression. COVID-19 has caused pain and loss on an unimaginable scale and it has affected our psyche and how we relate with one another, through prolonged lockdowns and social isolation. It is strange to contemplate the thought that this will be the defining moment in our lives, akin to an industrial revolution or world war. However, if we pause and take a moment to consider this thought an obvious question emerges: how will this moment define us? How will future generations reflect on the importance of this moment? And what did those in positions of power do when a once-in-a-generation opportunity presented itself?
We consistently hear from politicians and business leaders that we should move as quickly as possible back to normal. However, despite the often-well-intentioned rhetoric, to put it simply, normal wasn’t working. Our economic system was already under severe strain well before COVID arrived. The last few decades have seen a dramatic rise in inequality, an increase in insecure working conditions, rampant over-consumption, the sustained prevalence of structural racism, deep concerns about privacy from the digital revolution, an underfunded care and education system, and of course the climate crisis. Though it may not always be obvious on the surface, these issues are all inter-related. We are in an economic system; a complex and interconnected web of status-quo power.
The virus has created a huge pause moment and in doing so has highlighted and amplified many of these pre-existing conditions in our economy. And once it has done so, once these issues have risen in our public consciousness, it is almost inconceivable that we would seek a return to this system.
Despite this reality, the arrival of a tipping point for our neoliberal economy is not inevitable. Moments of crisis can lead to a range of outcomes: a leap forward in progress (the rise of social welfare system after WW2), a reinforcement of the status quo (the post-GFC return to normal), or a descent into authoritarianism and tyranny (post WW1 Germany).
The question for all of us is how can we embrace this economic pause to consciously and imaginatively redesign our systems to better serve our communities and the environment?
Our Economy Was Already Sick
Despite the decades of GDP growth in Australia, the reality is that our economic system was already sick before COVID arrived. The virus has created an unimaginable pause moment for the economic machine we have been passengers in, and in doing so has highlighted and amplified the pre-existing illness in our economy.
In its current form, our economy destroys the environment. Think of climate change, species loss, ocean fishery collapse, chemical pollution of our air, land and water, natural resource depletion, habitat loss. Unbelievably, almost no single environmental indicator is better because of our economy. We have seen how damaging business as usual is to the environment by the counterpoint that lockdown has illuminated. Smog and pollution levels in cities around the world are hugely down (and must also be contributing to preventing large numbers of deaths and illness such as asthma). Cleaner waters, carbon emissions down, and the view of the Himalayas from cities in India that haven’t seen the mountains in decades.
In its current form, our economy is creating the largest concentration of wealth in history and exacerbating the wealth gap. The world’s richest 26 individuals own as much as the poorest 50% of the planet. In Australia, the richest 1% have more than double the wealth of 50% of our population, and the share of income going to the top 1% in Australia has been rising consistently since 1980. And during the pandemic, while the economic crisis smashed the livelihoods of millions around the world, the world’s billionaires increased their wealth by more than 25%. It is clear that our economic system, while creating economic growth over the last 40 years, has also dramatically accelerated inequality.
Our economy was built on theft and racism, and these legacies remain embedded in all our systems. Whether it is the wealth of Europe through colonisation, with the most obvious example for us being the land and wealth of Australia having been stolen from those that were here before (and multiple examples of this around the world), to the slave trade that still haunts societies around the world. From the structural to the psychological, racism permeates our economic systems, crippling our ability to advance towards equality for all.
Perhaps the ultimate example of the illness in our economic model is that it is so reliant on all of us spending like crazy to keep it alive. There is almost no in-built resilience in the model. A short period of lockdown of a few months causes a depression-like collapse and governments to step in with the largest stimulus packages in history. Our economy is built on an insatiable consumption model that will destroy us if we stop feeding it. The question is, are we serving the economy or is the economy serving us?
COVID-19 is not destroying our economy, it is exposing that our economy lacks the resilience it needs to be valuable to us in an era of increasing crisis. And with climate change and social unrest over inequality, this COVID-19 crisis will seem small compared to future ones. The solution is to reinvent our economy, not go back to business as usual. Our focus should be on transitioning to the next economy.
A New Normal
It is not enough to critique our current state without providing an alternative vision for the world we want to see. As Maria Popova notes, “critical thinking without hope is cynicism, but hope without critical thinking is naivety.” We must strive for a new normal that is driven by hope and built on a foundation of pragmatic systems thinking.
Here is one vision for our economy in 2050. A seemingly simple list of aspirations to guide out thinking and work as we emerge from lockdown.
The natural environment is now regenerating at pace. Much damage has been done and it will take generations to repair, but the arc has turned, and we no longer view the environment as a resource to plunder. We have deeply understood, in a painful way through increased fires, floods and droughts, that we are an interconnected part of our environment. Rewilding projects have flourished, and biodiversity is returning (on land and in the oceans). A regenerative food system and a zero-waste culture also contributes to the rehabilitation and protection of soil, animal and human health. We have also rediscovered nature’s potential to nourish and replenish us and to create balance and peace in our lives.
The second theme of our 2050 vision relates to deep time and long-term thinking (with a nod to Roman Krznaric’s work in this area). In 2050 we have come to understand our long-history and have begun to integrate the wisdom of our First Peoples into our national story and our vision for the future. We have also come to prioritise long-term thinking across our economy. We have a Commissioner of the Future who assesses all policy proposals from the perspective of future generations. We have long-term incentives in business and have reformed the stock-market to limit short-term trading.
Thirdly, we have remembered that the meaning of the word “economics” is actually the art of household management. This has dramatically widened the measures of success beyond profit for businesses and GDP for nations. Built on the leadership of Bhutan’s Gross National Happiness and Kate Raworth’s Doughnut Economics, our government’s primary responsibility is handing down an annual wellbeing budget, which comes ahead of the traditional budget each year.
The fourth theme is a revitalised and participatory democracy. We came through the turbulent decades at the start of the century with a newfound respect for the basics of our democracy. This evolution was in part driven by a new government program that funds a gap year for young school-leavers to volunteer in their local communities. Localism as a movement is now broadly accepted as a way of ensuring community resilience and this leads to a wave of local democratic engagement that precipitates countless reforms of our parties and our institutions.
As our privacy disappeared in the digital revolution, our society woke up to the severe threats, not of the technology itself but of the monopolies and the centralisation of power they had created. Our public policy response, to dramatically limit the business model built on surveillance capitalism and data exhaust, broke apart the monopolies and unleashed a wave of new innovation centred around digital dignity and the public good.
In 2050 new houses are energy and water independent by default and older housing has been retrofitted to these same standards. We have understood the benefits of universally accessible and free public transport which have removed most privately-owned vehicles from the road. Limitations on housing as an investment option stabilised prices long ago and, alongside unprecedented investment in social housing, has largely ended homelessness and the housing crisis.
Finally, the widespread and deep respect for our Indigenous history, alongside the renewed celebration of the cultures who have come here, has finally broken the back of racism and structural disadvantage. Our shared sense of belonging is underpinned by the elevation and reinvestment in the arts, which sits alongside sport as the glue that binds our nation together.
The old normal wasn’t working for our environment or the vast majority of human beings on this planet. The big question we should be asking is not how we return to normal, it is what is the vision for a new normal? We should be asking politicians and leaders across our economy, what is your vision and roadmap to an economy that supports human flourishing while living in harmony with the natural world?
An unlikely alliance of political thinkers, from Milton Friedman to Naomi Klein and Rebecca Solnit, have agreed about the power of crisis to produce real and lasting change. Friedman wrote that the basic function of change-agents is “to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes the politically inevitable.” It is at the point of crisis that the impossible can become inevitable. This is our work. It is time for an economics of wellbeing and a politics of belonging.
A version of this 2050 vision was previously published as part of the Future Now project.