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We Need to Redefine the Global Economic System

COVID-19 has exposed the fragility of nation states and the weaknesses of existing organizational structures.  It has paralyzed the global governance system, and shone a light on weaknesses in the social fabric of our free society, and indeed poses a threat to our existing world order. It has exposed global supply chains, with the relative scarcity of Personal Protective Equipment (PPE) and Intensive Care Unit (ICU) beds and respirators, along with national relief distribution and logistics systems, all ill-equipped for a global health crisis of this magnitude. 

We are fighting this 21st Century pandemic with lockdowns, handwashing, and masks, something more akin to centuries past and not befitting the modern technological world that now dominates our lives.  

Return to Isolationism

The US appears to be abrogating its leadership role in global governance and organizations it helped to establish in the 20th century to help stabilize a volatile and precarious world order following the second world war: The United Nations (UN), North Atlantic Treaty Organization (NATO), and The World Health Organization (WHO) to name a few. The US appears to be turning its back on its historic allies and suffering its own existential crisis with a populist inward looking administration.   

World leaders will not attend the UN General Assembly for the first time in 75 years. The UN has been fairly silent, and the WHO is under attack from the US. The IMF is lending emergency funding to some small emerging market countries, we haven’t really seen much from the World Bank, the OECD is starting to offer guidance on the crisis, and the World Economic Forum seems more focused on how to ensure Davos is running in January 2021, because that’s where it makes its money.

Global coordination and cooperation are not top of mind for many political leaders. This is witnessed recently by Angela Merkel declining the G7 meeting – the G20 has not united to demonstrate global leadership and is struggling for relevance.  Policymakers are under pressure from their constituents. They have diverted resources away from other countries, banned the export of food and drugs and hoarded essential supplies. Each of these measures, popular as they may be to the national public, impose a cost on other countries and in the final analysis, the lack of cooperation makes everyone worse off. Political leaders are most concerned about their own backyard. Countries are moving to isolationism, protecting their borders, their citizens, and their livelihoods. Many countries have dropped any traditional coordination or cooperation. 

Many of the institutions and international systems in place, appear to be rapidly becoming no longer fit for purpose. We are facing a fundamental shift to a new world economic disorder. If everybody is going isolationist, then who is going to lead and with which institutions and what kind of governance models? 

The now commonplace US China divide  uncomfortably exposes  trade disputes in what is emerging as a titanic struggle to dominate the global economy, exacerbated by the outbreak of COVID-19 and its origins. China’s new security in Hong Kong appears to remove the remaining vestiges of (western) democracy and freedom of speech from Hong Kong citizens via a change to the legal system and sends a chilling signal to the free world that China  has no tolerance for domestic criticism, and little patience for foreign criticism.

Pervasive inequalities, loss of trust in due process and governance, the growth and acceptance of surveillance capitalism, and a global economic system that principally rewards growth and not humanity and conservation, along with the socially destructive dominance of “platform economies” have all been amplified in the first few months of the pandemic.

The past decade has  seen   the growth of surveillance capitalism: big businesses have been watching you, clocking you, measuring your digital footprint, understanding how you behave, and making money from it, and governments have moved into this space now with citizen surveillance. COVID-19 has also opened the pathway for governments to operate at unprecedented levels infringing privacy, with their use of technology, facial recognition, cameras, scanning and tracking technology. Perhaps this is even the tail end of a phase where a democratic capitalism has become self-serving for a smaller number of people. We will need a wholesale review of these checks and balances, as once given up, privacy will be hard to reinstate.

The Top 10 companies in the world have a greater market capitalization than the GDP of most countries in the world, bar the G20. There are over 100 global companies that generate more than 40 percent of their income from foreign sources, who’s products contribute to the lion’s share of “western consumption”. The size and scale of these companies now means that governments are listening more closely to big business than they ever have, bidding for employment for citizens and tax revenue. Many of these companies are listening to investors and citizens more than they ever have – especially when it comes to Environment, Social and Governance (ESG) investing, and achieving the UN Sustainable Development Goals.

The diversity of experiences citizens have had during this crisis mirrors the diversity of experiences that they have in non-COVID-19 times. The explosion of civil unrest related to black lives matter represents a simmering foment that existed well before the pandemic. The economic system has allowed the super-rich to accumulate wealth at a greater rate than the rest of society who are not big asset holders, and struggle to accumulate wealth in a system with little wage inflation.

At the same time, the push for innovation to try and address the pandemic is quite stunning. It has absolutely caused us to rethink globalization, to rethink what we value, and to rethink how we live. 

Potential not inevitability 

There is a tremendous opportunity upon us and it is all about potential and not inevitability. We have the potential to really drive a citizen-led transformational change of the global economic system. Many of the key measures we need to do this are in place, we just don’t have access to this data. 

As citizens, we are the ultimate stakeholders in society, and must demand that government and business are open about their performance in delivering their commitments not just to their immediate customers, staff and shareholders, but for the benefit of all stakeholders in society, including citizens and the environment. Making policy and profit to the harm or detriment of society and the environment will no longer be tolerated.

This is the time for technology to shine even brighter than it has. Now is the time for human centered technology so that we can monitor government and business for the benefit of all of humanity and the environment, rather than for the benefit of narrow self-serving constituencies. 

Technology enables the citizen to look at a smart social contract and to reawaken democracy which can only work when it has the backing of its citizens.  We need to enable that state to be that distributed force for the good, driven through that smart social contract and enabled empowered citizens. We can use technology to make governance within government better and more transparent for us, the end beneficiaries of democracy.

Those governments that focus more on open governance will allow us the stakeholders of democracy to measure the effectiveness of how governance in the public and private sector is working to our benefits. It is when we have that shift of power, rather than government business  monitoring us, that we will get a better degree of alignment in the global economic system. It is everyone’s responsibility. 

We need social innovation enabled by technology. We call for more transparency and participatory processes so that we can use this combination of access to data in as near real time for everybody. This is really what democracy and the free world should look like in 2020. 

What is important today is  better empowering people in their lives. Give them tools and intelligence to live a better life. It’s not about cheaper things and more efficiency. It is about fairness, benevolence, transparency and an inclusive participatory process. This is how we will use technology, the great 21st century application of technology – citizen enabled technology to surveil global governance.  Ultimately, the delivery of this “governance monitoring data” to citizens will allow us to better direct our consumption spending, our investments, our contribution to community and charity, and our votes. 

No crisis should ever go to waste. We owe it to all those people adversely affected by this crisis to do everything to make a success of what comes the other side. It’ll come down to the human values that have always been true in human society – but the potential is absolutely in our hands at the moment. 

FINTECH.TV ACTIONABLE INSIGHTS FROM GLOBAL TECHNOLOGY THOUGHT LEADERS

Contributors: Dr. Jane Thomason Fintech.TV; Emily Landis-Walker Senior financial services executive; Dr. Efi Pylarinou: independent Fintech & Blockchain business advisor & influencer; Chris Holmes House of Lords; Lawrence Wintermeyer: GDF; Loretta Joseph: Public Policy influencer 

The views, thoughts, and opinions expressed in the text belong solely to the author or contributors, and not necessarily to the author’s employer, organization, committee or FINTECH.TV

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