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What to expect from the the day after

by on 04/04/2020

I read economic articles in various newspapers and publications and what I miss is a clear idea, where this virus crisis leads.

 Perhaps those who write that the economy should be organized at a lower level than it was before the epidemy, are right, but that cannot happen if part of the people will profit from the situation,  while the other part will be totally forfeited.

 The economy is about connection between each element in it.  Like a cobweb, if a part of it tears, it loses it’s strength, and everything falls apart. Then something new needs to be started.  It happened twice in the 20th century after two world wars.

After the first world war the economy was left to the chaotic power of the market, Europe split to fractions, while some adopted as solution the communism and others Nazism.  After World War II, at least the western part understood the need to try something different. This is how today’s economy we live in, came into being.

The West decided to cooperate, created the European Union, voluntarily decolonized the world, established international cooperation systems, institutions, and thrived. 

On the other hand, the Russian empire, has closed into itself behind sealed borders. Created a rigid bureaucratic hierarchical economic system, led by self nominated lifelong serving politicians.

We do not want the communist economy, and the western economy, based on the need for continuous economic growth, does not seem to be very effective, solving situations of revolutionary collapse of economic activity. Above all this, the threat of environmental collapse is still with us, if we will continue as before the pandemic. Therefore it is necessary to think of some new way out.

In my opinion, everything starts in finance and banks.  Central banks will probably pump an incredible amount of money into the financial system, without thinking about what next.  But how will they do it is a big question. When money goes to banks and financial institutions, everything will be dependent on how banks behave.  And we know what banks are. They are institutions that want to increase profits and reduce risks. This does not seem to me to be the right approach. Another way is to distribute money to everyone.  If this is a one-time event, it probably won’t help much to accelerate the economic activity. If it will be in form of securing a minimum income for everyone, the question will be, whether people will continue their dynamic creation, or they will degenerate into passivity, or addiction to virtual reality?

Let me quote a short article I wrote about a year ago, that ended with:

 If you speak about the bipolar world of the future, I would predict the divisions of people to majority, living in virtual reality, and those who create and manipulate this world.

But we’re not there yet, but maybe the virus will accelerate the change to something similar. To a world, where most things happen in the virtual reality.  Do we want such a world? Can we prevent such a world from emerging? We can already see that the whole economy is managed virtually, and at the end there are those who deliver goods directly to customers. So all we need for our existence is production and delivery agents. The rest will be all virtual on the internet.

 We know that most of the production can be done without workers.  Everything can be automated. In the end, even delivering goods can be done without workers. So what’s going to happen?

 Will we still meet for beer?  Or will beer be virtual too? And if governments give alms to citizens, will there be a plumber to maintain our clogged toilet?

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