The post-pandemic economy: More of the same?

As the disruption of the pandemic nears its end, we begin to imagine post-pandemic life in all of its many dimensions, not the least being the nature of the economy in which we live.  It is hard to imagine who has not been affected by this particular economic crisis – most harmfully low income, precariously employed and racialized communities, ironically enough the same communities providing essential workers in personal health care, food and other critical retail. The ground level of our economy was stood on its head for low wage workers and small business with few exceptions.

At the broader level of capital investment in the economy, an early steep dive in equity markets at the pandemic’s outset has mostly rebounded, and projections of unleashed pent-up demand and further public investment post-pandemic have investors salivating over anticipated GDP growth and higher market returns heading into 2022. 

So, post-pandemic we are expecting a return to measuring how well the economy is doing in the traditionally used terms of GDP growth, rising job numbers in aggregate (regardless of their stability or quality), controlling inflation, and the stock market index. All are in service to market capitalism. None are sound measures of human health and prosperity.

In her recent book Capitalism on Edge, Albena Azmanova , observes how after each major market crisis from the Great Depression of the 1930s to the Great Recession of 2008-09 to similar calls with the current global health and economic disruption, capitalism always seems under threat by protesters seeing the opportunity to overthrow its control on working people. Yet, as Azmanova remarks, protests gradually deflate “from revolution to reform, resistance, and now resilience” (i.e. resignation in the face of capitalism’s unfaltering resilience to changing environmental conditions).

Prospects for a post-neo-liberal economy?

In recent years, a new vanguard of economists, many of them women, are challenging the market-focused model of both micro- and macro-economics.

• Mariana Mazzucato in The Value of Everything challenges the financialization of an economy based on prices that generates private wealth accumulation by value extraction and discounts true value creation as a collective process of governments, education, public and non-profit agencies. She argues for the “economics of hope”, “a new type of economy: one that will work for the common good.”
• Kate Raworth’s Doughnut Economics refutes the perpetual growth model of traditional economics and draws a picture of the economy that is both distributive and regenerative by design, i.e. sharing value as it is created by collective action rather than relying after the fact on re-distributing income/wealth from the few who gain from economic activity; and the full-engagement of people “in regenerating Earth’s life-giving cycles so that we thrive within planetary boundaries.”
• Stephanie Kelton promotes “the Birth of a People’s Economy” that is not consumed with the question of “How will we pay for it?” when planning how to best meet our needs, but rather with “How will we resource it?” In that regard, Kelton advocates for aggressive full employment policies during recessions so that our key human resource is not wasted and important care and service work in the community gets done.  

These progressive economists propose wresting how we think of the economy out of the hands of neo-liberal economics and to embed it deeply into society and the reality and experience of everyday community life.  Michel Foucault alerted his students in the 1970s to neo-liberalism’s agenda to separate the economic from the social, give primacy to the market, and assign secondary, residual consideration to social objectives, mostly to keep a reserve workforce available when needed for production.

Forty years earlier, Karl Polanyi in The Great Transformation wrote of the “Double Movement” in the growth of market capitalism since the Industrial Revolution.  Summarizing Polanyi on this point Asad Zaman writes:

“Unregulated markets are so deadly to human society and environment that creation of markets automatically sets into play movements to protect society and environment from the harm that they cause. Paradoxically, it is this counter-movement, this opposition to markets, that allows markets to survive. If this was not present, markets would destroy the society and the planet.”  

But, Polanyi further challenged market proponents who insisted that the market was a natural and inevitable product of human interaction and that human beings are naturally motivated to seek personal gain (profit) in their exchanges with others in the marketplace (Adam Smith’s “barter, truck, and trade”). Rather, Polanyi points to historical and anthropological research that the local economy “as a rule, is submerged in man’s social relationships” for community survival and benefit and not individual interests.  The driving behavioural principles of pre-industrial societies were reciprocity and redistribution within one’s community, not unfettered competition among individuals in a free and open marketplace.

Zaman summarizes further Polanyi’s critique of the dominance of the market economy since the Industrial Revolution:

“All societies face the economic task of producing and providing for all members of society. Modern market societies are unique in assigning this responsibility to the marketplace, thereby creating entitlements to production for those with wealth, and depriving the poor of entitlement to food. All traditional societies have used non-market mechanisms based on cooperation and social responsibility to provide for members who cannot take care of their own needs.” 

Where is the Commons situated in imagining a re-designed economy?

Which brings us back to an economy for the people in our time that:

• at the micro-level focuses not on the firm in the marketplace pursuing profit but on the community and the capacity of its members to “produce, distribute and consume products and services that meet their wants and needs.” (Raworth, p.67); and
• at the macro-level does not measure success by GDP growth, but by metrics that show adequate provisioning for the needs of all; maximizing the participation and contribution of all community members to the social and economic development of society; and not just minimizing the impact of human economic activity on the earth’s natural resources but, in Raworth’s words, purposefully seeking to “re-generate” them.  

In a re-designed economy, Raworth proposes a re-balancing of major societal roles for human well-being and a sustainable future:

• the Household as the “core economy”, unpaid activity, most often performed by women, that provides the base of operation for family members to function in external social and productive relationships;
• the Market, which can produce useful goods and services efficiently through prices and payments, but is powerful and must be carefully regulated to prevent its domination of human activity (“Forget the free market: think embedded market”);
• the Commons as the capacity of community to share resources (their own talents, skills and time; natural resources) and to self-organize for the production of social value and collective benefit.
• the State, providing essential public goods for all; regulating the market to protect the public good; supporting the caring role of the household; and “unleashing the dynamism of the commons, with laws and institutions that enable their collaborative potential and protect them from encroachment.”

In this picture, the Market is not dominant and definitive in driving a society’s progress primarily in terms of economic growth. It is expected that the State will regulate and control the Market’s excesses in the best interests of the public, which would mean policy action such as:

• fair, progressive taxation on income and also wealth as Thomas Piketty proposes in Capital and Ideology;
• living wage legislation, strong and enforced employment standards for workers, and protections for unionization;
• regulatory control, incentives and penalties on the environmental impacts of commercial and industrial activity;
• incentives for and investments in green energy to change the behaviour of households and corporations with respect to climate change; and
• other measures that constrain market activity from its natural tendency to “destroy the society and the planet” (Zaman on Polanyi) in the pursuit of never-ending profit.

This desirable re-set dynamic between the State and the Market, however, would still suggest that the Commons is a residual or minor actor in the game. Not mandated like the State, and not highly capitalized in corporate form like the Market, the Commons appears at first glance to be a weak cousin to the major actors in the economy.

But, in fact, its very distinction from the Market is what gives the Commons its unique role in the economy. The Commons is enacted through individuals and groups that organize formally (e.g. non-profits, co-operatives, trusts) and informally (self-help groups, networks, partnerships, collaborations) to share their capacities and resources (e.g. land, equipment, knowledge and expertise) for achieving missions that often combine social, economic, cultural and environmental purposes.  David Bollier and Silke Helfrich document numerous examples of people self-organizing in their communities for social and economic benefits that meet essential human needs such as food, housing, environmental preservation, financing and insurance. At the same time, the same people who give life to the commons can also be engaged in and contribute to market activities for the production and exchange of other goods and services.

State-Commons Partnership for a Human Needs Economy

While such detailed documentation on the mobilization of Commons across communities offers solid testimony to its value, it has not yet achieved a critical mass to equate with either the State or the Market in societal awareness and understanding.  People like Francine Mestrum contend that we need to re-think what the economy is for. In this regard, she sees the State as a key partner with the Commons in re-framing productive relationships for collective rather than individual or corporate benefit:

“By focusing more on ‘care’, we come to the conclusion that our economic system should produce everything that people need – from computers to trains and food – and that environmental policy should ensure the environment is protected, whilst social policies need to take care of the social needs of the people. This triad of policies represents what is needed to preserve life and to protect not only individuals but society and the environment.”

The partnership between the State and the Commons would be grounded in the active engagement of people in communities for meaningful input into public policy decision-making as well as the design and implementation of local initiatives for social and economic benefits. In this regard the Social Commons can be understood as the creation and mobilization of democratic structures and processes that mandate State leadership to design and implement policies for comprehensive social protection, economic and environmental justice.  

An example that illustrates the conjunction of all three objectives is a public policy commitment to full employment, which would:

1. end the hardship and despair that results from the job precarity and the State’s use of unemployment to control inflation;
2. ensure that everyone who wanted a job and the opportunity to contribute to the community and economic development would be able to get one at a decent living wage; and
3. mobilize a workforce for deployment in the fields of social and environmental care that are historically undervalued for their contribution to both the economy and community health and well-being (e.g. job creation as part of a transition strategy to move from a fossil fuel economy to a green economy; improving job quality in the caring economy).

Again, a job guarantee is part of a full-employment strategy advocated primarily by women economists, researchers and policy analysts such as Marianna Mazzucato, Stephanie Kelton, Pavlina Tcherneva, Naomi Klein and progressive political voices such as Congressional Representative Alexandria Ocasio-Cortez in the Green New Deal. It is potentially a good example of how the Commons in local community can intersect with State economic policy. As Kelton writes:

“While funding must come from the top (federal government), the jobs themselves would largely be designed by the people living in communities that will benefit from the work that is performed.”

Recognition in this way of the role of people in their communities to help frame and implement social and economic policy would legitimate the power of the Commons and enhance its status in relationship to the State and the Market. It would facilitate the shift from a market-driven economy to a human needs economy.