The future of our world, part 1: economies and institutions
The SARS-Cov-2 virus brought our civilisation to its knees. But our downfall started long before this pandemic, and its effects will be felt in all walks of life for quite some time after.
The COVID-19 pandemic the world is currently suffering through is not our first tryst with the threat of mass extinction and will not be our last. But some key players have entered the game now that never played it before, and these have forced us to reframe our thinking of how life will be lived in the future.
The economy is one of them. Flawed, skewed and delicate, our economies are an inexact science that always fascinates the physicist in me who is used to a great deal of precision and predictability. The newest generations are feeling the pinch of falling economies more profoundly than they ever have before. The jokes have stepped out of memes and into reality.
Technology is the other. From doctors to teachers to bankers to practically everyone else, all of us are embracing technology as a real tool at last. It has graduated from a luxury and a distraction to an indispensable tool that can both help prevent the spread of SARS-Cov-2 and help us survive our quarantine by feeding our most raw human desire to socialise.
The third is the environment. From dolphins returning to Venice to the skies clearing above our own homes, humanity taking a break has shown us how safe the environment is without us. While the pigeons may be puzzled and the elephants may be making their way closer to urbanity than ever before, we cannot help but stop and reconsider our future actions now that there is no doubt left that we have long been the cause of environmental ruin.
People are also realising the importance of the institutions they never cared two hoots about earlier: banks, grocery stores, delivery services, toilet paper and a bunch of other supply chains we took for granted. Every generation is reminded of the frailty of humankind and if the last two wars were the reminders for our older generations, we ought to consider ourselves spared.
Since the late Middle Ages our civilisation has been divided into three realms or ‘estates’. The first estate were the religious orders, the second estate were the nobility and parliamentarians, and the third estate were the commoners. Today, we seem to have five: the religious orders, the politicians, the commoners, the media and independent activists. Whatever the model one would subscribe to, two things have remained unchanged: the first two estates have greedily held onto to power and the right to take large-scale decisions, and the third have always been the ones who bear the brunt at every stage.
Over time this led to a monopoly where greed, conflicted interests and personal profits soared to the top of everyone’s priorities while the people who actually drove the economic machines were relegated to mere cogs. The greed of those at the top knew no end, and their control over the fourth estate went from suggestive influences to precise ownership. In the end, the supreme were beyond reach and the commoners remained unheard. Civilisation as we knew it grew a rift down the middle as the top few went on like they needed nobody and nothing and the bottom majority went on without the light of hope.
The metric that most succinctly captures this rift is a measure of wealth. Since the Second World War the wealth gap has constantly increased. Moreover, the wealth gap has increased faster when the economy was growing more slowly. This counterintuitive idea quite simply suggests that there is a priority built into the system by design where the rich get their share regardless of economic growth and the sluggishness of growth is only ever felt among the commoners—the majority. While any system that benefits the minority at the cost of pushing down the majority is itself questionable, the world simply went on with this idea because it seemed to work and we were far too risk-averse to try anything else.
The way this idea was reconciled with another popular idea of that time, equality, was through the theory of trickle-down economics. If the rich were allowed to grow their wealth, it reasoned, they would invest it back into the economic system thereby benefitting society at large. More precisely, if businesses and rich folks were taxed less they would have more to spend, and such money would make its way to everybody else. Of course what happened was more straightforward, and probably surprised nobody. Per Occam’s razor: the richer the rich people got the more they hoarded and multiplied their wealth; not only did nothing substantial trickle down, money left the majority and made its way to the wealthy. Either these people were often among the first two estates or this flawed system was worsened and made the status quo by these two estates—it was for the simple reason that the status quo benefitted them.
The numbers spoke of the rift quite loudly: as of 2016 the poorest 90% of the people in society owned 23% of all the wealth in the world; the richest 10% owned the remaining 77% of the wealth. Of that 77%, the richest 1% in the world owned half. These numbers had been growing since the 1970s.
The novel coronavirus that ravaged parts of China in late-2019 and is spreading through the rest of the world now, over the first quarter of 2020, simply widened this rift. Economies are turning out to be the biggest sufferers now. But cruelly enough, it is still the commoners who are bearing the brunt.
COVID-19 is a rich man’s disease. Its virus transmitted to humans because the rich people in China wanted to eat pangolins (and had shortly got a previous ban on selling wild animal meat lifted for this sake). Thereafter, people who could afford air travel flew across the globe, carrying the disease out with them and introduced it to populations the world over. They were offered cover by the most powerful authorities in China—even as the likes of Taiwan cried foul—who hushed up the affair long enough for it to become a pandemic.
But why did China do it? Simply because the people taking these decisions could afford to take such decisions. They literally could afford to sit at home, give up their jobs for a while, continue to draw huge incomes, and socially distance themselves with little to no worry. The people who were worst hit were the poorer ones; they needed their jobs, their student loans were weighing them down, they had families they would feed month-to-month, their arms stretched thrice could reach both ends of their homes—if they were lucky enough to have homes.
The International Food Policy Research Institute estimates that COVID-19 could increase the number of people living in extreme poverty by 6.5%, of which 5.6% would come from rural populations. Worse still is that Africa, which is so far the least affected by the virus, will see the worst effects of the pandemic thanks to trade shocks.
The long-term economic effects will be particularly visible in the job market. Full-time jobs are expected to reduce while part-time and contractual hiring will see a jump. In some ways this gig economy—which was hit hardest by COVID-19—will also reap the greatest benefits of this pandemic. Further, this crisis has shown us just how many jobs can be done from home. As a combination of increasing technology and reducing physical presence, people who can work from home will likely be asked to do so. This will save companies infrastructure costs and will give its employees a better work–life balance.
There will arise a general trend towards power shifting to the hands of employees rather than businesses now that it has been made amply clear how many businesses can crumble if its customers and employees step back, even if the entire board surges ahead.
Soon, besides some of our stablest institutions—such as responsible banks which can embrace new technologies like blockchain—businesses in general may start approaching freelancers to get things done in order to save money in the long run. Freelancers and other gig economy workers may then find the ball in their court and may finally inhale the sweet smell of ink as they dictate their own terms to their clients.
Similar benefits may extend to society at large. The greatest realisation so far has been that our healthcare system is unprepared for a pandemic. An epidemic can be handled when countries share resources, but a pandemic allows for no such generosity. It is to each their own, and on our own we are unprepared.
An important development that can potentially secure humanity’s future from most things but itself is universal healthcare. A guarantee of healthcare for every single person, taxation that incentivises production of medicines and medical equipment, laws that nip pharmaceutical price wars in the bud, and widespread presence of hospitals and doctors must become the norm if we have learnt anything from this pandemic. How such things will be funded is simple: tax the rich more heavily. Give honest new businesses a tax break but tax the obviously wealthy people with guaranteed streams of income—think Jeff Bezos—much more heavily.
To some, all this may seem a bit too optimistic to be real. Indeed I was quite pessimistic about it myself until, in a particularly enriching conversation, Ishtaarth Dalmia (@ishtaarth) pointed out to me that the failure of our institutions is due to ‘individual efforts to effect change’. This was a refreshing outlook for me that said there is hope yet.
Our ‘estates’ have failed us repeatedly, yet they seem to rebuild themselves. Our society has been crumbling for some time, yet the status quo seems to never want to change. Why would this time be any different? Will we not all just rush out of our homes forever forgetting how we felt when it first dawned on us that the virus was effectively shutting countries down? The answer lies in the fact that unlike previous instances (during the wars for example) the crumbling of our institutions this time is not a distant sociopolitical occurrence. This time it is personal. This time we are watching with our own eyes as our society falls precisely because individuals are absent, our institutions are falling because individuals are not around to drive them, the war—whether it is an inconvenience or outright suffering—is being fought not on a large-scale sociopolitical landscape but on an individual level, at home.
All this means there is hope that the individuals who failed to effect change will simply be replaced by individuals who understand the need to effect change and will do so. And this time round individuals will keep watch, institutions will be accountable to individuals and not first and second estate overlords.
Humans as a species have not demonstrated the ability to learn. But select individuals have. And with the weight of most of us behind them, change can be brought. It would be in the best interests of everyone—including the behemoths. Everything was set up this way with good intentions and we can reinforce those intentions and translate them into actions now. The current pandemic is a global wake-up call. All will be well if we are not overwhelmed by the freedom we gain when our quarantines are lifted and if our current predicaments fade into distant memories that seem almost fictitious. But there is hope yet: although individuals may forget, society may still remember and empower us all and remind us all—over and over again. And this time round, more than ever before, individuals collectively want to make a difference and believe they can.