If we want to have a global interconnected society that can survive shocks like pandemics, we are learning that all people everywhere need basic access to nourishment, healthcare, and communications. Without it, every institution, from schools to businesses to entire economies, grinds to a halt.
Even if profit is the bottom line for someone, it still makes more sense for them to help fund robust social, educational, nutritional, and healthcare programs for all people. Because a society without these basic standards is fragile, non-resilient, and will wipe out everyone's profits when there is a major shock to the system. And a society of healthy people, with access to communications and online resources, will generate more economic activity, both in consumption and production. In the past we recognized things like roads and water as public utilities, not merely private commodities. Time to do the same for healthcare and internet access.
Or to put it in another metaphor: A race car can only go fast if it races on a well maintained track. A potholed track will destroy any race car. So, even though the only thing the race teams ultimately care about is winning and going as fast as possible, it is in their best interest to join together and pay for a well maintained, high quality racetrack. In this metaphor, the race teams are economic leaders. The track, including vendors and fans, the roadway and the bathrooms, is the rest of society.
Prior to the pandemic, I was already a big critic of how privatization and Neo-Liberalism created a race to the bottom for both the quality of products produced by free market systems, and also ever-shrinking wages for laborers. The two easiest ways to make products more profitable is to skimp on quality and pay labor less to produce it.
Everything is sacrificed for the bottom line of profit over all else. And much of this profit ultimately gets siphoned up to those who are already swimming in wealth, while the bottom half of people are one missed paycheck away from homelessness. Having all of the resources pooled among a very small group of people is the very definition of inefficiency and ineffectiveness, since an efficient and effective system would maximize wellbeing for the most people, not the fewest. On this metric our economic system is one of the most spectacularly ineffective economic systems in history.
Prior to the pandemic, I was also a big critic of how all of this contributes to ecological collapse, as the cost for pollution and climate change is “externalized” to society at large, so the super-wealthy don’t have to pay for the messes they produce. This is because a further strategy to make profits is to make someone else pay for the true costs of your production. When this gets combined with our economic system's preference for short term profits in the next quarter or the next year, it is literally toxic. Because there is no incentive to think about the larger ecological and social impacts of economic activity in ten years or fifty years or two centuries.
BUT what I did not realize until the pandemic happened was how the razor-thin profit margins, the just-on-time delivery pipeline, and the lack of redundancy, are incredibly dangerous for society as a whole when any degree of variability or difficulty is placed on the overall system. We have designed an incredibly fragile and brittle economic infrastructure that can not tolerate bumps and shocks. It’s very much like we are trying to drive a high performance race car down city streets with potholes and water puddles. Race cars are great as long as everything is smooth, flat, and dry. But if you use one to take your kids to school, it will break down every day.
We have designed a high performance race car of an economic system that creates absurdly fast profits for the very few people that drive the car. But for the rest of us it is a death trap waiting to crash and burn. Hopefully one of the long term effects of this pandemic is that it will bring into our economic system a commitment to the common good, and a long term mindset that focuses not just on profitability, but on sustainability and resilience. We need to make sure we have robust public utilities, including healthcare and nutrition and communications. But we also need to make sure there are redundancies, safeguards, and protections for laborers, consumers, and environment built in to the system. It is only through systemic changes like this that we will create an economic system that doesn't crash and burn (within a few weeks!) every time we have a moderately bad pandemic sweep the globe.
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