Prosperity Instead of Growth: A Musical Vision for a Post Corona Economy

Music in the making
Photo by Clem Onojeghuo on Unsplash

The COVID-19 has disrupted individual lives, entire societies and the global economy. As things are up in the air’ and we are struggling to find foothold, there is a unique opportunity to land in a different and better place. There is also the risk that we make the wrong choices and land in a worse place. The perhaps biggest problem, the problem behind all our other problems is our addiction to economic growth. The market needs growth to pay back loans and investments and to pay them back with interest, but states are not markets, they ought to be more than markets and they ought to strive for sustainable economic balance and general prosperity. Maybe there is a relatively easy fix — or at least a first step towards a fix: measure something other than growth and reward the investments that follow. Suggesting an alternative to GDP growth as the societal measuring stick, the following presents a new and more musical place for us to land in the post-COVID-19 world.

The societies that attract people from around the globe are the capitalist industrialized modern democratic nation states with some redistribution of wealth via taxes — for historical reasons, this happens to be for the most part Western nations. For this societal model to function, we have created, in the West, legislation, institutions and economic models. Among all known alternatives, this “Old Western Model” is a model worth keeping and protecting, but it also has flaws that need to be addressed.

The Old Western Model (OWM) has several implications that we rarely “see;” they are like water to the fish: that in which we swim and which we perceive as The Reality. We can take these implications apart, though, make them visible, ask ourselves if we still want them and if not, we can create something different.

The OWM distributes freedom and responsibility across society; citizens are expected to figure out for themselves how to live their life while considering the wellbeing of others and society as a whole. Capitalism rewards those who are willing to risk their money now for an increased amount of money later. This solves one set of problems: how to increase production and productivity without the government having to design it; people figure it out for themselves. Industrialization happened, because capital-intensive factories could deliver goods cheaper, faster and with higher stability and security than artisanship; capitalist industrialization eradicated hunger. Modernity insists that everybody can participate in this development on equal terms (i.e. both men, women and minorities), that science explains nature and helps design new products (incl. modern medicine), and that religion stays out of politics; instead of basing political power on revelation, we negotiate among ourselves based on scientific knowledge and reason. Democracy means that when we disagree, we use words in the fight, not weapons, poison or destruction of property, we organize together with others who share our viewpoints (i.e. political parties), and no matter who we are, each individual can cast one vote in elections and referendums. The reason it works is that we have created legislation and institutions that make it work: parliaments, courts, schools, universities, libraries etc. These are the good things about the OWM.

The flaws of capitalism

What does not work in the old western model is the growth paradigm and the way capitalism becomes counterproductive when it has solved the problem of feeding and clothing everybody. Capitalism needs constant economic grow to pay back investments and interest on the investments.

As if, the state were one part of the market and not that, which defines the rules of the market. Rather than being above the market or the foundation for the market carrying the market as the legislator, the states themselves have become obsessed with growth. The OWM uses annual growth in GDP as the measuring stick for the health of society. As long as the economy ‘grows,’ society is considered to be doing well. Whether people thrive or not, whether everybody gets the education they need in order to thrive, or whether 1% keeps sucking up more or less all the extra capital created and thus creates immense inequality regarding both wealth and opportunity, does not show on the measuring stick. GDP itself does not show to what extent the work of everybody creates monopolies for the few.

Capitalism cannot figure out by itself how not to end up in monopolies on land, resources, patents, technology, algorithms, information etc. and how not to keep exploiting people and nature beyond what people and nature can regenerate as flourishing people and flourishing nature. Capitalism literally capitalizes everything around itself until there is nothing left that can be turned into a product in the market, and capitalism cannot, of its own accord, stop producing trash. It cannot clean up after itself. It cannot even regulate itself so that it does not crash from time when the risk taking exceeds the ability to produce value that matches the debt and its interest.

As we entered the corona lockdown, these downsides to capitalism had taken capitalism and the old western model to the point where:

Capitalism cannot save society, democracy, our freedoms and responsibilities, nature, or even itself. Capitalism that actually worked and served its purpose has always been capitalism that was defined by rules and regulations created by governments.

Unfortunately, governments chose to use a measuring stick for economic health, GDP growth, that camouflaged — or perhaps even encouraged — the problems that capitalism cannot solve.

As societies, we therefore need another measuring stick. This stick has to be as spreadsheet friendly as GDP and it must be based on measurable indicators, not estimates.

The one great thing that has come out of the corona pandemic is that governments around the globe have shown they can actually overrule the current economy. Politicians are in fact in charge, not the market, not capitalism. As a species, we are free to change our rules and focus on something other than economic growth. The market and capitalism only rule us if we let them.

We need a healthy economy, of course, but does that mean constant growth? How about striving for long-term balance and stability? Long-term prosperity within the means of what nature can replenish. We are free to choose our economic infrastructure.

By using GDP growth as the measuring stick for a healthy economy, it may not be impossible to save nature and living within our means, but definitely does not make it any easier

An alternative model

A model that might replace GDP and GDP growth as the measuring stick for a successful society is a model that measures complexity and connectivity in each economy, the economic circuitry, so to speak. This model might therefore measure and factor in the following:

  • The extent to which individuals are both consumers and producers (should be high). Nobody should be a consumer only, which would require many more unskilled jobs and jobs that are only one day per week or a few hours per day. Many of these jobs would be service jobs that cannot increase their productivity and that would therefore look very bad in the OWM.
  • The extent to which individuals sell and buy in several places; there will still be a need for industry scale production and people holding one fulltime job in one company only (low connectivity), but the new measuring would encourage local food production, artisanship and culture (high connectivity) and thus create more robust local communities and economies.
  • The extent to which countries are self-sufficient and produce products of both high and low complexity; there will still be import/export of specialty goods from different regions of the world, but the model will not reward, say, fish caught in the North Atlantic being shipped to China to be filleted, frozen and then shipped back to Europe.
  • Travel distances for people and goods (should be low).
  • Improvement vs. deterioration of local nature and biodiversity (biodiversity should be high).
  • The degree to which products can be re- or upcycled close to their manufacture (should be high).
  • The ratio of meaning-making production (culture and education) to material production (should be high).
  • Household debt (should be low).
  • Medicine consumption, particularly psycho-pharmaceuticals and painkillers (should be low).

In order to accomplish this it would make sense to introduce progressive taxes on income, energy intensive travel, square meters of homes and offices, capital gain, and market share. The bigger the market share, the higher the corporate tax; the startup would pay no tax, companies with 40% market share, say, 40%.

The hoped for consequences

Capitalism would still be working, citizens would still be free to run businesses, but the results would be measured differently and the economic and personal rewards would be different. Spend your money on square meters and air travel and pay high taxes, spend it on local artisanship, culture, education, and services and pay low taxes.

Most of today’s economists will probably react to the above with horror: the model will not create economic growth! True. According to the old Western model, the above will not promote the old kind of growth, and that’s the point! Instead, it will prioritize local production, culture, education, wellbeing, quality over quantity, creativity, product diversity, connectivity, and creating work that leaves nobody out and does not make people and nature sick. It will create balance in society; economical balance among people and balance between people and the rest of nature.

Among the things that are economically useless in the old Western model is music. There is no way to increase productivity in music (can’t improve the performance by playing faster), it may benefit the tourist industry, but playing more music does not increase BNP per se. If we played more music, though, wellbeing would most likely increase, societal cohesion would increase, if we all spent time learning to play an instrument instead of consuming and travelling, nature would benefit tremendously.

If we changed the measuring stick, countries would be considered economically successful if mental health improved through, say, community vegetable gardens and local music and culture. Particularly if household debt also fell, as people would spend less money on energy-intensive goods, travel and food and more on local services, culture and produce. If, say, 50% of people’s food were grown in walking distance from their kitchen in cooperative gardens, it would improve the environment, local resilience, social networks, many would most likely eat healthier, and to the “old Western model” GDP it would look like a disaster.

Economist, futurist, author, full member of the Club of Rome. Works at Next Scandinavia, Nordic Bildung & European Bildung Network. www.lenerachelandersen.com