No event since World War II’s end has had as profound a global impact as COVID-19. The pandemic has triggered a public health and economic crisis on a scale unseen in generations, and exacerbated systemic problems such as inequality and great-power posturing.
The only acceptable response to such a crisis is to pursue a “Great Reset” of our economies, politics and societies. This is the time to re-evaluate the sacred cows of the pre-pandemic system, but also to defend certain long-held values. The task that we face is to preserve the accomplishments of the past 75 years in a more sustainable form.
In the decades after World War II, the world made unprecedented strides toward eradicating poverty, reducing childhood mortality, increasing life expectancy and expanding literacy. Today, international cooperation and trade, which drove the post-war improvement in these and many other measures of human progress, must be maintained and defended against renewed skepticism of their merits.
At the same time, the world must remain focused on the defining issue of the pre-pandemic era: the Fourth Industrial Revolution and the digitization of countless economic activities.
Technological advances have given us the tools that we need to confront the current crisis — including through the rapid development of vaccines, new treatments and personal protective equipment. We need to continue to invest in research and development, education and innovation, while at the same time building protections against those who would misuse technology.
However, other shibboleths of our global economic system need to be re-evaluated with an open mind. Chief among these is the ideology of neoliberalism.
Free-market fundamentalism has eroded worker rights and economic security, triggered a deregulatory race and ruinous tax competition, and enabled the emergence of massive new global monopolies.
Trade, taxation and competition rules that reflect decades of neoliberal influence must be revised. Otherwise, the ideological pendulum — which is in motion — could swing back toward full-scale protectionism and other economic strategies that are “lose-lose.”
Specifically, we need to reconsider our collective commitment to “capitalism” as we have known it. Obviously, we should not do away with the basic engines of growth. We owe most of the social progress of the past to entrepreneurship, and to the capacity to create wealth by taking risks and pursuing innovative new business models.
We need markets to efficiently allocate resources and the production of goods and services, particularly when it comes to confronting problems like climate change.
However, we must rethink what we mean by “capital” in its many iterations — whether financial, environmental, social or human. Consumers do not want more and better goods and services for a reasonable price, but rather they increasingly expect companies to contribute to social welfare and the common good. There is both a fundamental need and an increasingly widespread demand for a new kind of “capitalism.”
To reconsider capitalism, we must reconsider the role of corporations. An early exponent of neoliberalism, the Nobel laureate economist Milton Friedman believed (quoting former US president Calvin Coolidge) that “the business of business is business,” but when Friedman pioneered the doctrine of shareholder primacy, he did not consider that a publicly traded company might not only be a commercial entity, but also a social organism.
The COVID-19 crisis has demonstrated that companies that invested in strengthening their long-term vitality have been better equipped to weather the storm. The pandemic has hastened the shift toward a stakeholder model of corporate capitalism, following the US Business Roundtable’s embrace of the concept last year.
However, for more socially and environmentally conscious business practices to stick, companies need clearer guidelines. To meet that need, the World Economic Forum’s International Business Council has developed a set of “stakeholder capitalism metrics” so that businesses can get on the same page when it comes to assessing value and risks.
If the COVID-19 crisis has shown us anything, it is that governments, businesses or civil-society groups acting alone cannot meet systemic global challenges.
We need to break down the siloes that keep these domains separate and build institutional platforms for public-private cooperation. Equally important, younger generations must be involved in this process, because it is inherently about long-term progress.
We must also expand our effort to recognize the diversity of backgrounds, opinions and values among citizens at all levels. We each have our individual identities, but we all belong to local, professional, national and even global communities with shared interests and intertwined destinies.
The Great Reset should seek to lend a voice to those who have been left behind so that everyone who is willing to “coshape” the future can do so. The reset that we need is not a revolution or a shift to some new ideology. Rather, it should be seen as a pragmatic step toward a more resilient, cohesive and sustainable world.
Some of the pillars of the global system need to be replaced, and others repaired or strengthened. To achieve shared progress, prosperity and health requires nothing more — or less.
Klaus Schwab is founder and executive chairman of the World Economic Forum.
Copyright: Project Syndicate
In a Facebook post on Wednesday last week, Chinese Nationalist Party (KMT) Taipei City Councilor Hsu Chiao-hsin (徐巧芯) wrote: “The KMT must fall for Taiwan to improve.’ Allow me to ask the question again: Is this really true?” It matters not how many times Hsu asks the question, my answer will always be the same: “Yes, the KMT must be toppled for Taiwan to improve.” In the lengthy Facebook post, titled “What were those born in the 1980s guilty of?” Hsu harked back to the idealistic aspirations of the 2014 Sunflower movement before heaping opprobrium on the Democratic Progressive Party’s (DPP)
Some people are saying the weather has been wonderful this year. That depends on how one defines wonderful weather. The Ministry of Economic Affairs last week announced that the alert level for Taoyuan, Hsinchu, Miaoli and Taichung areas are to be raised from green to yellow, and that water pressure is to be reduced at night. Few households with water tower storage facilities would have noticed any restrictions on their supply, but people concerned with the water situation have been aware for some time that the lack of typhoons this year, coupled with low rainfall, has meant that in the
Although China’s “reform and opening up” has become an empty slogan, Chinese President Xi Jinping (習近平) still put on a show by touring southern China to mark the 40th anniversary of the Shenzhen Special Economic Zone’s establishment. His motive was not to regain the international community’s trust, but to shore up his power in China. Externally, it was a response to diplomatic setbacks, and it even revealed his adventurist attitude of not being afraid to go to war. When former Chinese leader Deng Xiaoping (鄧小平) in 1992 conducted similar inspections, it was to suppress the “leftist wind” that was interfering with his
An increasing number of cafes and other businesses in Taiwan are keeping animals, which draw in people who are seeking the next perfect shot for their Instagram accounts. In the past these were mostly standard house pets, such as cats and dogs, which are accustomed to living indoors and being around people. However, raccoons have become popular, as well as alpacas and other “unusual” animals that require specialty care and specific environments to thrive. In late June, a customer recorded a video of the owner of a coffee shop in Taipei apparently unleashing a border collie on a raccoon, who was the star