COVID-19 lockdowns may be gradually easing, but anxiety about the world’s social and economic prospects is only intensifying. There is good reason to worry: a sharp economic downturn has already begun, and we could be facing the worst depression since the 1930s. But, while this outcome is likely, it is not unavoidable.
To achieve a better outcome, the world must act jointly and swiftly to revamp all aspects of our societies and economies, from education to social contracts and working conditions. Every country, from the United States to China, must participate, and every industry, from oil and gas to tech, must be transformed. In short, we need a “Great Reset” of capitalism.
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.
This will have serious long-term consequences for economic growth, public debt, employment, and human wellbeing. According to the Financial Times, global government debt has already reached its highest level in peacetime. Moreover, unemployment is skyrocketing in many countries: in the US, for example, one in four workers have filed for unemployment since mid-March, with new weekly claims far above historic highs. The International Monetary Fund expects the world economy to shrink by 3% this year – a downgrade of 6.3 percentage points in just four months.
All of this will exacerbate the climate and social crises that were already underway. Some countries have already used the COVID-19 crisis as an excuse to weaken environmental protections and enforcement. And frustrations over social ills like rising inequality – US billionaires’ combined wealth has increased during the crisis – are intensifying.
Left unaddressed, these crises, together with COVID-19, will deepen and leave the world even less sustainable, less equal, and more fragile. Incremental measures and ad hoc fixes will not suffice to prevent this scenario. We must build entirely new foundations for our economic and social systems.
The level of cooperation and ambition this implies is unprecedented. But it is not some impossible dream. In fact, one silver lining of the pandemic is that it has shown how quickly we can make radical changes to our lifestyles. Almost instantly, the crisis forced businesses and individuals to abandon practices long claimed to be essential, from frequent air travel to working in an office.
Likewise, populations have overwhelmingly shown a willingness to make sacrifices for the sake of health-care and other essential workers and vulnerable populations, such as the elderly. And many companies have stepped up to support their workers, customers, and local communities, in a shift toward the kind of stakeholder capitalism to which they had previously paid lip service.
Clearly, the will to build a better society does exist. We must use it to secure the Great Reset that we so badly need. That will require stronger and more effective governments, though this does not imply an ideological push for bigger ones. And it will demand private-sector engagement every step of the way.
The Great Reset agenda would have three main components. The first would steer the market toward fairer outcomes. To this end, governments should improve coordination (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 ($838 billion) recovery fund. The US, 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 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 centers; create mechanisms for tracing infections; and deliver telemedicine. Imagine what could be possible if similar concerted efforts were made in every sector.
The COVID-19 crisis is affecting every facet of people’s lives in every corner of the world. But tragedy need not be its only legacy. On the contrary, the pandemic represents a rare but narrow window of opportunity to reflect, reimagine, and reset our world to create a healthier, more equitable, and more prosperous future.
*Klaus Schwab is Founder and Executive Chairman of the World Economic Forum. Copyright: Project Syndicate, 2020, and published here with permission.
35 Comments
Klaus Schwab views the COVID-19 crisis as an opportunity to build healthier, more equitable, and more sustainable systems
Klaus Schwab is Founder and Executive Chairman of the World Economic Forum.
Is he qualified to undertake the task outlined in the title? Any reference to this group of self serving globalist, oligarchs practically disqualifies him from any sensible discussion about equitable outcomes.
The foundation is funded by its 1,000 member companies, typically global enterprises with more than five billion dollars in turnover (varying by industry and region). These enterprises rank among the top companies within their industry and/or country and play a leading role in shaping the future of their industry and/or region. Membership is stratified by the level of engagement with forum activities, with the level of membership fees increasing as participation in meetings, projects, and initiatives rises.[20] In 2011 an annual membership cost $52,000 for an individual member, $263,000 for "Industry Partner" and $527,000 for "Strategic Partner". An admission fee cost $19,000 per person.[21] In 2014, WEF raised annual fees by 20 percent, bringing the cost for "Strategic Partner" from CHF 500,000 ($523,000) to CHF 600,000 ($628,000).[22] Link
Don't knock the message because of the messenger. We have epithany examples in NZ, and anyone with half a brain knows were were in trouble globally, BEFORE this.
Yes, he's part of the Elite. Yes, their influence has lead to the disparity of access to energy/resources (sometimes called wealth).
But yes we need a re-set; the only alternative is collapse followed by low-tech localism (which I regard as the mostlikely scenario). And who cares who is pointing this out? Bring it on, I say. Well said, that man.
He and his kind promoted the virtues of "Free Trade", in reality it was anything but free. NZ ended up swapping jobs for debt - China got the jobs, NZ got the debt and virtually no tax receipts from those global corporations operating in our territory.
I don't expect anything less nefarious from this debate emanating from him and his organisation.
We don't have free trade agreements. They are preferential trade agreements. A true free trade agreement would be the removal of all tariffs and non-tariff barriers, the only thing left being rules of origin chapters and new tariff agreements to compensate the signatories for subsidies so everyone has a level playing field. I don't believe that will ever happen.
Maybe he sees the pitch forks coming, and wants to avoid being a target.
He's nothing more than a plant, not dissimilar to the function Ghislaine Maxwell served for Jeffrey Epstein.
Well the money is no good to Epstein how, though one can deduce most of that was gained through lies, deceit and blackmail going to the highest level. Far from honorable Clinton was in the thick of this, and who will forget "I did not have sexual relations with that woman."
With covid 19, this above the law brigade are finding out they have no where to run or hide. Rumour has it, Jonkey is relocating to Great Barrier Island to join Michael Fay, to share trade secrets and their spoils. First installment with be how to exploit the state at the highest level.
Great Mercury Island off the Coromandel coast;
Just follow what trump was already doing as a reset way before Covid. Drastically lowered corporate taxes to put the country in unsustainable debt. Putting a coal lobbyist in charge of the EPA so now the clean water act is non existent and allows chemical plant waste to directly discharge into streams and rivers. Abolishment of the clean air act so businesses can make more money, defund the CDC and WHO so more people can die thru pandemics alongside industrial pollution deaths Blah, blah, blah. And now he will be making the country way worse off in the next few months under the guise of getting the economy moving before he gets voted out in a vain attempt to get reelected so his corporate buddies can get more filthy rich. Is this the reset we are talking about?
Oh wait..you meant reset in the other direction?..sorry, I dont have any information on that side of things....
Time for Great Reset but is this printing of money and artificially inflating assets be it stock or house helping in this Great Reset.
'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.'
No government is bold as are aware trying to change status quo will not give them vote..best example Capital Gain Tax in NZ.
It’s the “rent seeking” we need to eliminate not the wealth........
https://www.google.co.nz/amp/s/www.marketwatch.com/amp/story/guid/3BB98…
Even with a quarter of the world population we'd still be running into major environmental problems if everyone was living like an American. Conversely, the world could support a few billion more ppl with lower consumption patterns. Some kind of balance of both would be great.
Too many people is part of it, but problem with focusing on overpopulation is it shifts the blame to the developing world, when really we in the OECD cause more than our fair share of the ills.
First sentence yes. Second sentence no; even the Third-World is trashing it's soils, forests, aquifers, fisheries and biodiversity-counts. For themselves, not for First-world extraction (although of course that is a major factor in Third-World resource depletion. So the third sentence has to be wrong; there's nothing to balance, they're both on the same end of the see-saw.
Last sentence correct. :) But avoiding population in the discussion is flawed; it's one side of the penny, the other being consumption. Long-term, 1-2 billion, depending on consumption-rate, and I've seen claims much less than that.
Thanks for replies. I wasn't very clear: the balance I advocate is lower population + lower consumption.
I do think we could sustain higher population, but it would involve drastic lifestyle changes (soylent green anyone?) - far more than necessary with degrowth. So I agree - no one wants that.
A challenge with lowering population is that lower fertility rates are easiest achieved with ^ female education, which has historically been at least partly tied to economic growth. I think that a lot of the billionaires, economists and globalists represented in this article had their hearts in the right place in promoting growth to eliminate poverty and stop the population explosion (and yes, many just wanted window dressing to justify a cynical consolidation of power). The mistake was the ridiculous assumption that the pie could keep growing forever (or even for a while).
That not being the case, some solutions for the population problem that come to my mind are:
- Reducing population without reducing the fertility rate (eg like Ghengis Khan or the plague did, not very nice or just)
- Decoupling education from growth (eg charity/ngos rather than development - this relies on a rich West)
- Decoupling growth from "illith" (ie sustainable development, something we haven't managed thus far, except for illusory gains which really just export problems to the 3rd world. The 3rd world obviously can't do that, tho for eg China & India could start exploiting Africa)
- Limited targeted growth to bring the third world to a level of wellbeing in which fertility drops, with concurrent degrowth in the west (ie a redistribution of the pie)
So I guess I'm advocating for the possibility of the latter: degrowth and depopulation are important, but it's NET degrowth that matters, and some local growth may be necessary to achieve depopulation. But I'm no expert and would love other views.
The planet doesn't care, the biosphere doesn't care. You are in fact only talking about the preferences of a small proportion of the human population, with most espousing such beliefs want others to carry the cost for their desire.
We are in a period of incredibly rapid tech advancement, with energy food and luxuries rapidly getting cheaper, and soon enabling much cheaper provision of necessities of technological living. Tech fixes scarcity concerns. Humans have nothing significant to worry about except coming of superintelligent AI in a few decades.
Bit of a pipe dream, given the way in which tech has addressed scarcity vs. over-consumption over the last decades. And absolutely, completely wrong on the biosphere, given the Holocene Extinction underway. It requires willful blindness to ignore the effects of humans on the biosphere.
the reset certainly wont come from these self serving billionaires -- who all want to become known as great philanthropists - but only after they have screwed the masses for about 10 billion each !
This was and maybe still is the opportunity - but the window is rapidly disappearing - as this and other governments try to rush back to BAU - all without any vision for the future. The amount of money being printed/borrowed - is surely enough to make some fundamental changes - startign with the Tax system.
We spend a fortune administering a tax system for families/singles earning under 120K per annum - taxing them on every dollar and then giving them "benefits" like WTF / Acc supp /TAS - all the time making them feel dependent on the state and unable to support themselves - hell we even tax benefits!
Given that the majority of people are net takers not contributors under our current system -- why not simply alllow hard working people to keep all their cash up to say 80K for a single and 120K for a family unit - and then have a higher more progressive tax rate for earnings over that amount --
Yes some wealthy people would get that tax break too -- but if they were paying say 35% over those amounts and 40% over 150K -- it would even itself out -and yes at say 200K those people would be paying more net tax - but hey ask 99% of the population if they would like to earn 200K and pay more tax - and they would jump at the chance
A huge chunk of NZ's would feel much better, not needing a handout , most would be not only better off - but could see value in earning more - gets rid of the poverty trap and of course is much cheaper and easier to administer -
its only one part - but it is a fundamental and radical change that would support a reset -
Next would be GST - but again - more targeted away form basic essentials of life and onto consumerism - - lets not tax childrens clothes/ medical and healthcare products -- but put significant increases on luxury items like jet skies -- could again be cost neutral - but benefits the poorest most - and of course has an environmental or sustainable component
PS - What happened to the 180 WORKING GROUPS - surely some of these came up with ideas for a more equal fairer society - ?
Its never going to happen. For a great reset you would need to halve the worlds population. All of the worlds problems are simply because there are now to many people on the planet and nobody is even willing to talk about it, let alone present a solution. The solution is to now slow the birth rate significantly, if we don't do it manually, the easy way then nature will do it for us which will be the hard way.
The author of this is dreaming ! But we need dreamers , even if they appear out of touch with reality .
If anything the wealth gap has already widened since the covid -19 epidemic started in January 2020 ..........all while these starry - eyed liberal lefties are musing about a new society where everyone has meals of caviar , washed down with Moet en Chandon , a Rolls Royce with a driver and a mansion in Remuera .
Instead we see hungry people queuing for food hampers in the US , food riots in South America , looting of food stores in South Africa , poor hungry Indians walking thousands of miles home ..........signs of desperation .
And while these food issues are ongoing , the stock-markets in the US, Brazil and South Africa are going UP!!!!
We know there is acute unemployment everywhere and I would imagine nothing is more impoverishing than losing your job and having no work to go back to , and little prospect of finding work .
And since when are there fossil -fuel subsidies which the author refers to ?
Much of the fuel consumed by the West is taxed to high-heaven , thus making the cost of getting to and from work a problem for many .
Its all very well to suggest a 'reset" of the world to be more equitable, however , the devil is in the detail and the mechanics of how to achieve this .
Even countries , such as China , have resorted to opportunism since the virus started
I will be prepared to wager that in this dog-eat dog , every man for himself world little will change.
Re fossil fuel subsidies, they do exist, a lot of developing countries subsidize pump prices with the goal of providing energy security to the poor, and developed economies subsidize producers:
https://www.theatlantic.com/technology/archive/2013/11/the-fossil-fuel-…
More controversially, if you take a wider view of the concept/definition of a subsidy, then taxpayers HUGELY subsidize fossil fuels by paying for their externalities. An IMF report put this at over 5 trillion:
https://www.vox.com/platform/amp/2019/5/17/18624740/fossil-fuel-subsidi…
It's a figure based on a controversial definition, but starts to make sense when you choose to look at the environment and climate as part of our collective wealth/capital/services.
Another alternative example might be in public infrastructure and planning. Eg roading and the expansion of suburbia are hugely beneficial to the fossil fuel and automotive industries.
How would this look in NZ? Where to start?
Let's give companies a tax break to set up in the regions away from the major centres. This at least would give AK a solution to most of its problems. and most large cities end up in a trap in that they must continue to grow.
Secondly undo the employment law changes of the last 30 or so years. Go back to the 40 hour week, set a decent minimum wage, pay overtime rates. And work towards resilience - rebuild our manufacturing industries, and support buying NZ made. Oh and industries selling in NZ should sell at a actual cost of manufacture and transport, not some BS 'international price'.
Inequity starts with a lack of opportunity for the lowest in the socio-economic spectrum. Create real opportunity and you create a change in equity opportunities.
Given that many countries currently offer fossil-fuel subsidies, which is the stupidest thing ever, this article is either satire, or the man is merely deluded into thinking that the whole world is suddenly going to start singing Kumbaya and act jointly to fix all the world's problems. Even 33% BS New Zealand subsidises fossil fuel consumption, how do you think those buses that use fossil fuels (ugh- especially empty ones) are funded, local government subsidy.
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.