A recovering economy will not mean a return to the status quo


This summer the phrase “Roaring Twenties” will reverberate around business councils, investment groups and policy strategy meetings. When Covid-19 blocks are downsized, economic optimism grows and investors and advisors contemplate a decade of boom. Judging by Manhattan’s crowded restaurants, a boom is in full swing.

However, despite all this sunny chatter, it is worthwhile for policy makers to keep a fresh eye. a sudden investigation which was recently released by the Pew Research Center in the United States. This suggests that economic dissatisfaction, given an outbreak in the pandemic, has generated a broad desire for reform.

At the end of last year, Pew reviewers asked 4,100 adults in Germany, the United States and the UK if they liked the structure of their economy. You may have thought that the development of vaccines and thus the prospect of an exit from fresh locks would have sparked an optimistic mood. Other surveys by groups such as the Business Think-Tank Conference Council suggest that, at least in the United States, consumer confidence has increased slightly.

But it’s not like that. About two-thirds of respondents in France and exactly half of those in the United States, the United Kingdom and Germany said they wanted a “major overhaul” or a “complete reform” of economic structures. Only a small minority – up to 3 percent in France – said they supported the status quo.

Perhaps that discontent has been intensified by the psychological patchwork of the 2020 locks and ends up dissipating. Time will tell. But it leads to some compelling requests. The survey suggests that the British – whose Conservative party in government has been most successful in local elections – are even more eager than continental Europeans to see higher levels of control and redistribution of government. In fact, 67 per cent of Britons strongly support more corporate regulation, while it is 58 per cent in France, 53 per cent in Germany and 46 per cent in the United States.

The British want a much more expansive role than the state. Sixty-two per cent of Britons believe it is “very important” for the government to build more public housing and 53 per cent for it to increase benefits for the poor, higher than other countries. A full 50% wants a universal base income, much higher than elsewhere. Margaret Thatcher could be buried in her grave.

Now, like all inquiries, these findings need to be examined in context. The fact that the British expressed higher levels of support for regulation and redistribution of government than the French and Germans might reflect the fact that they have had less of this than their peers on the continent in recent decades.

Yet even allowing warnings, it would be foolish to ignore this investigation; if it is only half-right, it implies that we cannot assume that any economic boom and return to the “normal” will automatically lead to voters embracing the status quo. On the contrary, it is possible that the Pew poll will show a larger zeitgeist change, partly driven by the pandemic but with deeper roots, which could reshape political attitudes for quite some time.

I suspect, for example, that one reason there is a great demand for government intervention is that Covid has not only exposed inequality but reminded people how uncertain the future is. There is an ongoing search for protection.

James Manyika, president of the McKinsey Global Institute, agrees. “There’s this sense of inequality, of people, of place – job security is diminished for so many,” he says. In fact, a separate survey of 25,000 Americans which McKinsey published this week suggests that “half of Americans have reported being on the financial edge and unable to cover more than two months of living expenses in the event of job loss.” Campaign respondents reported “feeling they are at risk of being left behind.”

Hilary Cottam, honorary professor at University College London that works in post-industrial communities in Britain, describes how a similar pattern of insecurity and marginalization stimulates change. «U [post-pandemic] The flourish we want can’t be brought about by post-war institutions, ”she told a seminar at Stanford University this week. In fact, Jenna Bednar, a professor of political science at the University of Michigan, said said at the same seminar that the social fabric has declined so far that a complete overhaul of our institutions is needed to create a more collaborative, inclusive system.

However, there is one positive factor that can also be provoked calls for change: the struggle to develop and distribute the vaccine has not only been shown to people who governments can – at times – do good things, including collaboration with the private sector, but that companies can sometimes work together as well, rather than just competition. This could lead to more collaboration in other fields, such as climate change.

However, the key point is this: if (or when) we emerge from Covid this summer, don’t just look at economic data to track what’s happening (say, how fast the growing economy is); keep an eye out if a more subtle change in the zeitgeist is also underway.

Returning to “normal” – whether it’s in offices, schools or restaurants – doesn’t necessarily mean embracing old systems. Political and corporate elites must be warned.

Follow Gillian on Twitter @gilliantett and e-mail to gillian.tett@ft.com

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