Klaus Schwab, the executive chairman of the World Economic Forum, writes that Capitalism needs a Grand Reset. The coronavirus has made the need for such a reset painfully obvious:
There are many reasons to pursue a Great Reset, but the most urgent is COVID-19. Having already led to hundreds of thousands of deaths, the pandemic represents one of the worst public-health crises in recent history. And with casualties still mounting in many parts of the world, it is far from over.
There are at least three big tasks that much be accomplished:
The first would steer the market toward fairer outcomes. To this end, governments should improve co-ordination (for example, in tax, regulatory and fiscal policy), upgrade trade arrangements and create the conditions for a “stakeholder economy.” At a time of diminishing tax bases and soaring public debt, governments have a powerful incentive to pursue such action.
Moreover, governments should implement long-overdue reforms that promote more equitable outcomes. Depending on the country, these may include changes to wealth taxes, the withdrawal of fossil-fuel subsidies and new rules governing intellectual property, trade and competition.
The second component of a Great Reset agenda would ensure that investments advance shared goals, such as equality and sustainability. Here, the large-scale spending programs that many governments are implementing represent a major opportunity for progress. The European Commission, for one, has unveiled plans for a €750-billion (C$1.14-trillion) recovery fund. The U.S., China and Japan also have ambitious economic-stimulus plans.
Rather than using these funds, as well as investments from private entities and pension funds, to fill cracks in the old system, we should use them to create a new one that is more resilient, equitable and sustainable in the long run. This means, for example, building “green” urban infrastructure and creating incentives for industries to improve their track record on environmental, social and governance (ESG) metrics.
The third and final priority of a Great Reset agenda is to harness the innovations of the Fourth Industrial Revolution to support the public good, especially by addressing health and social challenges. During the COVID-19 crisis, companies, universities and others have joined forces to develop diagnostics, therapeutics and possible vaccines; establish testing centres; create mechanisms for tracing infections; and deliver telemedicine. Imagine what could be possible if similar concerted efforts were made in every sector.
We don't lack for solutions. What we lack is political will.
Image: twitter
