EDITOR, The Tribune
As the world is gripped by by Covid-19 pandemic, I find myself pensive about the global political, economic and social order. As of March 25, 2020 there were 460,065 confirmed cases with 20,829 deaths worldwide. This is a 4.5 % mortality rate; bearing in mind not all cases are detected. Only 17 fatalities were under 50 and 99% had other health complications. Whether you agree with martial law-like methods of fighting the pandemics everyone will agree that life globally and locally has changed. For me after this, everything is on the table for change and this proves the present global and economic system is ineffective.
The United States, the most powerful country in the world has a shortage of medical equipment and some staple groceries. My sister in Los Angeles was terrified when she could not get water, hand sanitizers, canned food and toilet paper. Mike Pence, Vice president of the United States, said they did not have enough testing kits for Covid-19. If the so-called leader of the free world has the 3rd most confirmed cases after China and Italy speaks volume of systematic incompetence.
We live in a time when nationalism and populism are prominent in virtually every country. This has translated to hoarding of resources for national use. Bloomberg reports many countries cutting export of rice, wheat and other food and medical equipment in case it is needed nationally. We see in the Bahamas people stocking up on groceries.
Every country on the planet has a Covid-19 stimulus package. All the packages are business centric and miss the point if you do not deal with the disease the economic shock will persist. After this crisis is over, everything is on the table, including self reliance and creating a better economic system.
The populism and nationalism is mainly caused by the negative perception of globalization, but the main cause of loss of jobs globally is automation. Technology is deflationary. Many economists say that technological revolutions are deflationary. They provide supply side shock. Technology allow more intensive use of resources and increases productivity. With more goods being produced, prices decrease. We are in the fourth industrial revolution. For example cellphones have gotten cheaper with more capacity. In about 20 years artificial general intelligence will be functional. This is the first time in history entities will exist that are smarter than humans. This will eliminate many jobs. Solar and alternative source of energy will eliminate millions of job. Thinking that enough new jobs will be created that will replace technological disruption is delusionary.
The current economic systems (communism, capitalism and socialism) are based on scarcity and suited for the 20th century not 21st century. 25 % of groceries are throwaway globally. Air is precious because you die in a few minutes, if you don’t have it. Air is free unless air pollution or other similar phenomenon occurs. A global debt of US$ 257 trillion produces US$ 85 trillion GDP: a 302% debt to GDP ratio. This is inflationary, inefficient and unsustainable.
The new economic system will be based on functionalism, adaptability, harmony and self-interest.
BRIAN ELLIS PLUMMER
March 30, 2020