Economic system

How to build a fair and green economic system after covid-19

Covid-19 has exposed huge weaknesses in our economic systems. new scientist asked six leading economists how to redesign it to reduce inequality and save the planet

Humans


October 28, 2020


Roberto Cigna

THE coronavirus has triggered an economic crisis of a kind never seen before. In just one month, from March to April, the unemployment rate in the United States tripled to almost 15%, and remains uncomfortably high. Elsewhere, only state intervention on a scale virtually unheard of outside of wartime has avoided the most disastrous consequences. In the UK, gross domestic product (GDP), a measure of economic activity, fell 20% in the three months to June. To find another fall of this order, you have to go back about 300 years.

The events of the past six months have boiled over arguments about the economy that have been simmering since at least the 2008-09 financial crisis. While the size of the global economy has quadrupled since 1970, improving the material well-being of billions of people, the past decade has seen many people’s incomes stagnate and inequality rise (see “A Failing System?”). During the covid-19 pandemic, it has become clear that some of the most crucial jobs are being held by some of the lowest paid – people who are also among the most likely to die from the virus.

Meanwhile, conventional economics’ emphasis on growth at all costs is being blamed for the ecosystem devastation that both made the pandemic more likely and worsened its impact. All of this raises two questions: are our economic systems fit for the post-covid-19 era, and, if not, how do they need to change? new scientist asked six leading economic thinkers how we got here and how we might choose to do things differently.

PROFILES

Diane Coyle East …