Written Interview given by Prof Dr. Dennis Snower, President, Global Solutions Initiative, to The Diplomatist
With the advent of the COVID- 19 pandemic, various countries around the world launched their relief packages in an attempt to soften the effects of the pandemic. How do you think policies have worked out till now, will this help allay the simultaneous disruptions caused on the demand and supply side, and what is the way forward?
Though economic stimulus packages were important and very welcome in the short run, they do not necessarily solve the longer term problem. The pandemic has given rise to what I call the “Great Economic Mismatch”, where demand (for things requiring close physical interactions) and supply (of things compatible with social distancing) are not in balance. To overcome this mismatch and rebuild economies in a sustainable way, we need to focus more on “readaptation policies”. In the medium term, these policies should promote the channelling of resources to activities compatible with social distancing; and in the long run, policies must ensure that economies are more resilient to the kinds of unforeseen shocks that generate a Great Economic Mismatch, such as pandemics.
The current global scenario has highlighted how important digital technology is and as a consequence the digital economy is gaining prominence. In your recent paper, you have highlighted that “digital governance regimes have developed along different lines from their counterparts in the offline world and many of the grave problems that threaten our economic, social and political progress have arisen on account of this governance divergence”. How would you address this problem and what could be the solution, according to you?
Though digital technology has brought many advantages and has proved vital during the current pandemic, the current system also threatens to erode our wellbeing, our social cohesion, our democracies, and our autonomy. We have a system whereby users receive digital services for free or low cost, and in return have data about themselves collected for free, which is used not in their own interests but in those of third-parties to gain influence: over our buying choices, our social behaviour and our politics. To counter our increasing dependence on a system that exploits our data against our own interests, we must put power back in the hands of users, by giving them control over their own data and how it is used. We must enable collective bargaining in the digital sphere, to protect users’ rights and act on behalf of vulnerable people and in their interests. Such a reform would make the whole digital system more efficient and transparent.
G20 is a unique forum that holds major opportunities for India. The country will be holding the G20 presidency in 2023. What in your opinion should be the issues and agenda that India could focus on addressing that are yet to be taken up?
India knows best, what its vision and legacy will be. What is needed urgently is to have a new perspective on what constitutes wealth. In recent decades, wealth has been understood and defined in terms of growth, profit and shareholder value.
The new normal after overcoming Covid-19 needs to understand wealth as progress for society, for the environment and for people in disruptive times. The idea of shareholder value in the business world needs to be translated into stakeholder value. What is needed for better, safer and healthier lives for empowered individuals in thriving societies? What does that mean for business, governments, civil society? This could be a powerful debate during the Indian presidency.
You have said that the perspective that economics is “value-free” and is concerned with the means of distribution and allocation of resources should come to an end. Would you please elaborate on how and why do you think so?
The subject of economics needs to be redefined, not merely to be concerned with the allocation and distribution of resources, but to explore the mobilization of resources for the achievement of wellbeing in all its facets. Since an important aspect of wellbeing is living in accordance with one’s values, economics then ceases to be value-free.
What milestones has the Global Solutions Initiative been able to achieve?
The GSI aims to bring together thought leaders from politics, business, science and civil society to develop ideas on how to overcome the pressing global crises of our times. Multilateralism is not only for governments, but also for the global civil society. Overcoming the current trend toward national- and silo-mentalities is the precondition for sustainable solutions. Without a system change, which promotes the recoupling of economic, social and environmental prosperity there won´t be any progress. The goal of the GSI is to support that narrative to become the central idea for international cooperation.
Since we are getting closer to the Covid-19 vaccine now, what economic policies should we focus on in a post-Covid world?
Economic policies should promote the adjustment to the “new normal,” a state of the world in more advanced digitalization. These state needs to serve human ends and that requires putting the users in control of the data about themselves. The new normal is also one in which resilience, rather than just efficiency, becomes a driver of economic policy.