This post expands on the fifth key pillar for building a new economic paradigm as outlined in Our Call to Reimagine Capitalism. Read the first post in this series, “An Introduction to Ideas, Rules, and Power and How They Shape Our Democracy and Economy” here.
Audrey Stienon, Associate, Reimagining Capitalism
This time last year, many of us were making new year’s resolutions for 2021 with hope that after months of chaos, this would be the year where some normalcy would be restored to our lives. On many levels, this came to pass. Most notably, over 3.6 billion people have been fully vaccinated against COVID in the past twelve months, allowing many of us to plan for year’s end celebrations with family and friends.
Nonetheless, it is impossible to look to 2022 without noticing the rumbling warnings of the storm clouds gathering on our horizon. During a year of record heat, floods, droughts, and storms, world leaders concluded the COP26 meetings in Glasgow while leaving us on track to experience an estimated 2.4 degrees of warming by the end of the century — an outcome which threatens to expose hundreds of millions of people to life-threatening climate conditions. Misinformation and conspiracies continue to run rampant across our virtual networks, feeding discord and mistrust precisely at a time when unity of action and purpose have been paramount. And, of course, the emergence of a new COVID variant acts as an unwelcome reminder that borders are meaningless in fighting the growing number of crises that now threaten all of humanity.
In this context, we must recognize that, whether we want it or not, unpredictability rather than stability is the new normal of our lives. Whether it is to come from climate change or the development of new groundbreaking technologies, change is coming, and it would be as futile to try to prevent this as it would be to hold back a flood. Instead, for the new year, we as a society must resolve to embrace change, learning to ride the waves so that we find stability amid the tumult — and in so doing, retain greater control over the direction that change takes us.
This degree of comfort with change requires that we become more resilient, and thus able to regain our balance after a wave hits us. We will need to get better at quickly and efficiently redistributing our weight and resources to stay afloat, holding on to others for support without accidentally knocking them off balance, and making space for new ideas — perhaps even risky ones — for how to chart a more stable course. Furthermore, not all change is harmful, and given the continued inequalities and divisions of our society, much change is necessary. By becoming comfortable with change, we can make repairs so that we are more likely to stay afloat when the next storm breaks.
Our economy can be a critical system for helping us recover from and adjust to rapid change and these unpredictable shocks, helping us to reach a new level of resilience.
Unfortunately, not only is our economy itself vulnerable to being overwhelmed by new shocks, it also actively contributes to a number of the crises that we are facing. The norms of economic behavior that we follow as consumers, producers, employers or investors do not encourage us to consider the consequences of our decisions on others, and so we see companies pursuing profits while polluting entire communities, or while unveiling digital metaverses that promote discord and corrode social trust. Inequality remains staggeringly high, robbing the majority of people of the financial resources they need to invest in moving their families away from environmental dangers or in learning jobs skills demanded by new technology. Policymakers who drag their feet on, or even actively oppose, efforts to address these challenges remain in power through the monetary support of the largest companies and the wealthy. And government and community systems have been weakened to the point of no longer being able to ensure that the people most threatened by these impending crises have the power to participate in the shaping of social and economic systems that will protect them.
If we are to survive as a prosperous, democratic society, we need our economy to stop being part of the problem and instead become part of the solution. Indeed, there is no feasible way in which our society can build enough resilience to survive — let alone thrive — in the face of these crises without the support of a vibrant, competitive, and inclusive economy.
We need an economy that people can reliably depend on for wealth and income, one that everyone can benefit from when times are good, and one with social insurance and financial systems that efficiently distribute resources to where they are needed when times get bad. We need markets structured to foster innovation and reward people who take risks to find profitable, competitive ways to solve new societal problems; we also need guardrails against attempts by those who would use the power they have gained from past innovative success to prevent the next great idea from competing with their own. We need government and community institutions to be flexible and equipped with as many economic tools as possible to respond to whatever challenge materializes. And we need networks and institutions of global cooperation that will turn our interdependence with people around the world from a liability to an asset in presenting a common front opposed to shared threats.
The good news is that the resilience we build against one crisis will better prepare us for the next challenge. Efforts to reduce carbon emissions, for example, will limit the extent that climate change — by disproportionately hurting already vulnerable communities — exacerbates existing global inequalities. Similarly, efforts to limit power inequalities — by increasing multi-racial participation in democratic systems, or reducing global poverty — will ensure that solutions to the climate crisis are strengthened from input from all of humanity’s knowledge and experiences.
All told, we at Omidyar Network believe that the level of our individual and societal resilience will make the difference between our being a society in which the ideas and energy that we collectively contribute to overcome the challenges ahead form the basis of a new, broadly shared prosperity, or our being a society that loses control and is torn apart by the waves.
Although many of our partners organize their work around countering specific challenges — such as the climate crisis or fight for racial justice — our priority is to build cross-sectoral economic resilience so that we are prepared for new challenges in whatever form they materialize. Therefore, all of our work is ultimately intended to boost resilience by dismantling existing economic systems that foster instability and building in their place systems that uphold a democratic, inclusive, equitable, prosperous, and sustainable society.
By shifting the ideas and values that underpin the economy, our partners are strengthening our understanding of the ways in which markets can exacerbate problems such as climate change or racial inequalities, and providing proposals for how we can design economic systems and tools that prepare us for the challenges ahead.
By working to change the rules that structure the economy, our partners are shaping markets that incentivize businesses and people to contribute to the common good, while dismantling systems that currently reward harmful behavior towards people and planet.
By building power for workers and communities, our partners are creating a more equitable balance of power across market actors, and ensuring that the people who will be most harmed in any crisis have a say in designing the policies and systems that will prepare and protect them.
Finally, as a funder, we are ourselves cognizant of our power to contribute directly to resilience during and after crises. At the start of the pandemic, we launched an Economic Relief Advocacy Fund to provide immediate support to national and local groups working to address the economic toll of the pandemic on working people. We also have helped set up the Carry on the Fight Fund to build the long-term capacity of grassroots organizations in Arizona, Louisiana, Michigan and Minnesota to push for systemic reform.
We as a society may be heading into a storm, but that does not mean that our fate is sealed. People built this society — its communities, its markets, its governments — and we, as people, have it in our power to determine the strength and resilience of these systems from here on out. Therefore, as we each take the time to reflect on ways that we can be better people in the coming year, we invite each of you to also consider the ties between you to and the people and communities around you, and to resolve to start the new year prepared to fight for the ideas, rules, and power that will protect us, all of us, in the choppy waters ahead.
This is the final post in our “Reimagining Capitalism” series. Read the other posts here:
Pillar Four: Rebalancing the Relationship Between Government, Markets, and Communities
Pillar Three: Building Counterweights to Power
Pillar Two: Building an Anti-Racist and Inclusive Economy
Pillar One: Grounding Our Economy in a New Ideas and Values
An Introduction to Ideas, Rules, and Power and How They Shape Our Democracy and Economy