Our economy is unsustainable in a world where pandemics are common place and business disruption is business as usual. Our workforce culture is so highly financially leveraged, most families have no choice but to work five days a week and squeeze life into the free moments. This population control is managed by two debt levers, property and tax. The masses cannot sustain surplus saving and investing. Ultimately, they cannot afford time off.
Businesses are not much better off. Many are so highly leveraged, it doesn’t take much of a disruption to bring the whole thing crashing down. This high risk, growth at all cost strategy, neglects sound financial management needed for disruption ready sustainability.
Our new economy needs greater flexibility. It needs to be able to turn itself off and hybernate if needed. Like a polar beer weathering the storm, our businesses and our people need to maintain the surplus needed to ride out complete economic disruption.
Our new resilient economy needs a pause button. Our economy in a pandemic creates winners and losers. Some people have income and others do not. Transactions become difficult when one party maintains an income and the other does not. What if the pause button paused everything. All transactions where paused, all liability and all costs. This equates to a “safe mode” on a computer. Life continues but nothing is at risk. The pause button sounds like a good idea but doesn’t work. We still need to eat and free food doesnt come cheap. Even if the government pays, it’s still funded from tax or debt. It doesn’t work because we still believe in a world of scarcity. We still believe in exchange and capatilism and the power of the market to solve problems and innovate. Every aspect of the system is measured and needs to strive for profit. In this world every transaction is an exchange.
The inequalities that exist within this tension system, hold the key levers of labour and capital in balance. This tension exists to ensure the system is generally productive and any surpluses go where the surpluses are supposed to go. The problem is not enough slack in the system for the majority of end users to hold power of accountability and to build surpluses. We assume the surpluses go to actors in the system who will put those surpluses to best use. However, we now need those who have the power to decide to dedicate surpluses to disruption sustainability.
What we need is a market driven by capitalism but with a new universal income foundation. This foundation provides for the essentialls of life such as food, shelter, electricity etc and is unrelated to output. Everyone can be assured that their essential needs will be catered for when the market can no longer function.
Disruption relief is the realm of the insurance industry. New innovative insurance solutions should be developed to provide landlords pandemic income cover and/or renters expenses support for example.
Ultimately, our markets need to find innovative ways to continue to operate in a world that faces viruses as a legitimate disruption. If the market can naturally adjust and innovate to adapt to new conditions, these solutions will be more resilient, effiecient and less expensive than ongoing bailout mechanisms provided by regulators. Overuse of bailouts and funding injections could have the undesired effect of stunting the evolution of our markets.
