I would say: X this out right now. On towards an X-shaped transition. Don’t keep trying to plug all the holes but make real choices!
A great deal of money for a very small group of people
One of the latest themes in the financial world is that of the K-shaped recovery: while financial assets, especially shares in tech companies, have risen to record levels, the real economy - yours and mine - is becoming weaker and weaker.
Let's please call this what it is: a recovery that 'Knackers' our economy (with a capital K). This type of recovery implies that the ‘haves’ have only gained more and that the money invested by governments - our tax money - remains within the financial system. And this contributes to preserving the status quo: a system that even more and more conservative, free-market parties around the world acknowledge does not work for most people.
This type of ‘recovery’ has a logical end. At some point people see and experience that it does not work for them. This starts with no wage rises for nurses. And it ends with retrenchments and people realizing that they do suffer the pain but do not experience any of the pleasure. Because all the pleasure has already been enjoyed by the world’s richest 1%.
So what should we do?
The recovery from the corona crisis is a matter of transition. And, fortunately, we in the Netherlands have thought and written a great deal about transitions. A group of researchers in Rotterdam, for instance, has come up with the idea of the X-curve, or the transition curve. Put very simply: during a transition, opportunities should be provided for developing new, good initiatives, promising ideas should be developed and anything that does not stand a chance should be scrapped.
Transitions are long-term processes. And often it is far from clear exactly where you will end up. However, the overarching goal - in this case a society that will also be pleasant to live in for future generations - is actually very clear.
But - and that is the big difference with the policy that is currently being pursued - it is definitely not about hanging onto everything we have now. What could such a transition policy look like during and after the corona crisis? Let's take a look at the various levels:
- New initiatives: I can see plenty of those. Every day. People who are implementing different types of organisations to make the world a little bit better. Sometimes subsidies can help. Sometimes it is enough to enable people to do something whilst retaining their welfare payments. Sometimes it is enough to have a network that enables people to support each other. But what has become clear under the current conditions is that new grassroots initiatives have never been as cheap or important as they are now. Cheap because many people feel a great urge to do ‘something’ to open up prospects. Important because especially now, now that the cultural sector is going through a very tough period and events are being cancelled, much of what makes our lives fun and valuable needs to be reinvented. By creative and motivated people.
- Transformation: Transformation is about issues such as arriving at a society that is really geared to handling work differently. That means working from home in comfort when that is desirable and going to the office whenever necessary, retaining the benefits of the lockdowns, such as reduced rush-hour traffic and better options for balancing work and private life.This also means that sectors that are struggling and that receive government support should be restructured in order to make them future proof. This applies to national railway companies just as much as to the retail sector.
- Elimination: This message is always tricky to get across but is nevertheless very clear. Companies that do not have a future and that are now running into trouble at an accelerated rate – many airlines, for instance - should not necessarily be kept afloat. The people that will consequently lose their jobs must of course get help in finding other work. Holding back this process will in the long term inevitably lead to reduced economic dynamics and less wealth.
All three X-aspects that I have mentioned are lacking completely in the current support packages and do not get a mention during the relevant discussions. And that is why, as I said earlier, I believe these should be X-ed out. Policies to help us through the crisis can only be successful if they are based on the guts to change. Because interpreting a return to the past as progress represents a very restricted perspective.
Read Hans' previous column: A step towards green integration of the European debt union.