7 February 2023

The Economy Post-COVID: New Directions for the Federal Government

It is not enough to win a war. You must also win the peace that comes after. For Canada it will be, post COVID 19, winning the hearts and minds of a traumatized population that never wants so many of its populace to bear such costs nor feel so vulnerable again. We have been here before. Following the Second World War a devastated Europe found new life and energy through the building of a new social contract and the implementation of a plan for reconstruction – the Marshall Plan.

The Marshall Plan was a large-scale economic rescue program. It addressed weaknesses in the economy and in combination with welfare measures resulted in the economic revival of Europe. It is the sort of thing that is needed now.

What would such a rescue plan look like Post-COVID? The weaknesses and vulnerabilities that emerged from the society wide lockdown are suggestive of the focus and kinds of measures needed. These weaknesses were most manifest in seniors care, underpaid and precarious work forces, the thin margins of economic sustainability for millions and the vulnerability to key supplies like medical equipment and some food sources, and all of this within a backdrop of climate change and a shattered global economy of massively high unemployment.

What does all this indicate or suggest by way of a road map as we try to move forward. At an aggregate level it signals a rebalancing of the public and private spheres. This will need to occur on the basis of principles and initiatives that will need to address the most pressing issues that have emerged.

Among the principles would be:

  • An Economy of Fair Prices and not Cheapest Price: The global search for the cheapest price and production costs has led to a race to the bottom and is the single biggest source of the hollowing out of the middle class in the developed world. A fair price on the other hand would recognize labour an environmental standard as a component of the price regime. Long been advocated for, it would address simultaneously climate change and poverty and precarious work issues.
  • The Market is not always the Answer: The era of ‘let the market decide’ is over. Public policy needs to be broadened and strengthened with a focus on building resiliency and redundancy (not enabled by least cost approaches to system building). Privatization needs to be rolled back and the role of non-profit and public goods strengthened and restored on a fair price basis.
  • The Welfare/opportunity System must be Strengthened: Well being, access to education and information, should not be determined by private wealth. As jobs become ‘project/piece work based’ universal social safety nets are more and not less important. Guaranteed annual income? Certainly, with other measures, is a consideration.
  • Taxation is not a dirty word: Overhaul of the tax system is necessary addressing matters of leakage and unfairness but also recognizing that state revenues are inadequate. Social policy through tax exemptions have long fallen short of meeting the needs of the marginalized and vulnerable as a start. If nothing else, the epidemic has restored the indispensable role of the state. It is the job of the King after all (the state) to keep the granaries full. But it needs to be properly financed and not continuously handcuffed. These principles can become the philosophical and ethical anchor to specific policy initiatives that would entrench not only this ethic, but provide widespread and energizing benefits to the economy of the future.
  • A Revised Globalism: Many challenges remain global in nature, but the globalization based on market efficiencies is not up the job of what is needed. It cannot deal with pandemics. It is not dealing with climate change. It is not dealing with displaced populations. It is all about trade and that has to stop or at least given a more reasonable place in our priorities.
  • The Internet as Public Utility: The lock down resulting form the epidemic has adrenalized the on-line world and has shown its importance to the functioning of any future economy and society. Differential access entrenches inequality and is not acceptable. It is one of the public policy challenges of the time and needs to be in the public domain
  • A National Disability Insurance Program: Persons with disabilities have always been treated differently. Seen as welfare cases they were never part of the Medicare system committed to getting people ‘back on their feet’ as best it could. This needs to change. One pioneering program in Australia, the National Disability Insurance Scheme provided not only an anti-poverty stimulus, and needed social and other supports but upon its roll out provided more new net jobs than any other sector in Australia in 2018 2109.

The COVID -19 epidemic has revealed the fragility of our economies and societies. The entire system is
working on tight margins in the name of efficiency. Glittering communications technology enabled us to
communicate despite lockdown while our food supplies crumbled. Workers who had been mistreated,
exploited and taken for granted now became indispensable. We had lost sight of what mattered.
Much thought will need to go into rebuilding the post-COVID world. If nothing else is clear we cannot afford to go back. But we have been here before and with very creative and progressive results. It is time to do it again.

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