The Covid-19 crisis will provide opportunities to fix some of the world’s big problems, like looming environmental catastrophe and economic and social inequality. Will we seize those opportunities? Frances Cowell sees some intriguing possibilities.

The world that emerges from this crisis will be different from the one that went in to it. Most agree about that, and many see that as an opportunity to address pressing issues, such as looming environmental catastrophe, widening inequality, capitalism itself. In this article we consider how nine interlocking issues, already evident before the crisis, could redefine the working of what many perceive as malfunctioning in our capitalist economies.


No longer the realm of ‘tree-hugging greenies’, climate change had already entered the mainstream debate, with the widespread realisation of the massive economic and demographic upheaval that it has brought and will continue to bring. Alas, action had not kept up with the rhetoric.


Widening inequality of income, wealth and opportunity between über-rich and ordinary citizens, associated with the ‘winner-takes-all’ internet economy, has been aggravated by tax and social policies that inherently favour the already-wealthy, notably in the USA and the UK.


Artificial intelligence (AI) threatens to extinguish or redefine many jobs – even those demanding advanced skills, leaving many to ask what work will replace it.


A maturing millennial generation, responding to these and other issues, manifest attitudes and behaviour to work, family, ownership and consumption that are quite different from those of its parents and even its older siblings. Many seek a meaning in what they do and flexibility in how they do it that goes beyond just being paid.


Firms that hitherto pursued a pure profit objective are responding by emphasising their purpose over their profit motive. The wellbeing of all stakeholders, including employees, suppliers, customers, the environment and society at large now figure in the corporate equation.


Distributed working, facilitated by the ubiquity of the internet, is being adopted enthusiastically by emerging organisations that need to contain costs; while employees lean on bigger employers for the right to work from home.


Whether by choice or lack of it, many people find themselves working in the gig economy, which affords them plenty of flexibility and freedom, but without the rights and protections of regular employees. A new ‘precariat’ can be vulnerable to poverty as soon as work dries up, they reach retirement age or, if in the USA, they fall ill.


People are asking if, given the economic and social dislocation that these forces are bringing about, the long dismissed idea of universal basic income (UBI) might have a role to play after all.


Single payer public health cover and pension provision, hitherto perfectly taboo, entered mainstream political debate in the USA, potentially disentangling health insurance and pension provision from employment, as it already is in most parts of Europe.

Put them together and what have you got?

These forces, each important in its own right, together push in a similar direction. Take climate change, inequality and maturing millennials: capitalism as we know it could be in for a shock.

Millennials are now the most numerous bloc in the labour force of many developed countries, and they are the generation most severely affected by climate change and inequality. For many, the current version of capitalism, with its hang-all-else profit motive, aggravates both of these big problems, depriving young adults of the opportunity to achieve their potential. Tellingly, those who have the choice, often prefer to work for firms that have a purpose beyond profit – many even volunteering their time to not-for-profits (NfPs) and non-government organisations (NGOs).

To attract new talent, many firms profess commitment to all their stakeholders, even claiming to put purpose over profit. To this end, in 2019, 181 bosses of big firms got together in The Business Roundtable to issue a statement of ‘collective purpose’. A priori, a good thing, it can be argued, but one that can be easier said than done: many company bosses find the conflict of purpose and profit hard to juggle. As the Council of Institutional Investors, which represents, among others, occupational pension schemes, put it: “accountability to everyone is accountability to no one”. Many corporations will find themselves paying lip service to their purpose, while continuing to focus on returns. In other words, a new version of the greenwashing many perfected in order to give a veneer of environmental friendliness and responsibility to their profit-maximising activities.

Meanwhile, organisations set up primarily for a nonprofit purpose, such as NfPs and NGOs, can face a similar conflict between purpose and economic necessity. Even when run on a shoestring and staffed entirely by volunteers, they still have other expenses to fund. And the fact remains that the better funded they are, the more purpose they can achieve – a dilemma Europa United knows only too well. Many rely for this on the generosity of individual and corporate donors. But donations and sponsorships come at the cost of independence and credibility, as donors and sponsors may seek to influence or constrain what the organisations do and how they do it, forcing them into a Faustian bargain.

You thus have the situation where both types of organisation are in a sense working for two masters: purpose and money, albeit with different emphases. Because of the nature of money and the fragility of purpose, the former is more likely to prevail most of the time in both kinds of organisation. You may join an NGO because you believe in what it does, but will be dismayed to see big sponsors pulling strings.

And inequality has not gone away. Those fortunate to have skills that are in demand can choose their organisation and even how much time they put into their work. They enjoy all the rights and protections of employees, while those who don’t have sought-after skills can find themselves relegated to the gig economy precariat, with none of those rights and protections.

Enter UBI and publicly funded health insurance and retirement schemes. The objection from the political centre right to UBI is that it rewards indolence, but the available evidence does not support that argument: rather, people work not just to earn money, but also for the place in society and the sense of self worth it gives them. Witness those millennials happily accepting less salary to work for things they believe in. An interesting permutation of UBI would entail it being used to reward civic engagement – more Purpose Based Income (PBI) – to compensate people and organisations that work voluntarily for purposes. This would give the precariat recourse to a revenue back-stop, allowing them, too, to allocate time to causes they believe in.

Money still makes the world go ‘round

Organisations established to turn profits will always be needed, but in concentrating solely on that objective, the tax they pay would in part be directed to bona fide, unconflicted purpose based organisations, who in turn no longer have to enter a Faustian bargain to cover basic costs. That could eliminate, or at least assuage, the conflict between purpose and profit in both types of organisations.

Individuals may then choose some combination of working for profit-and purpose-oriented organisations, topping up the pay gap from their allocation to PBI. People’s choice of occupation and personal purpose now becomes a real choice: you no longer need a private income to do something you really care about, because you are freed from the burden of selling your time and talent just to cover basic living expenses. With health care and pensions disentangled from paid employment, giving your time to a purpose no longer means forfeiting your rights to a social safety net.

An accountable NfP, purpose oriented sector would compete with fully accountable profit seeking firms for talent, which would have the effect of keeping both kinds of organisations honest with respect to their purpose and economic contributions.

Is this world feasible? Perhaps and perhaps not. What is clear is that many people are ready to countenance big changes to how our economies function. And when you consider the radical changes that took place following previous shocks, such as the step change in income tax following WWI and the transformation of the banking sector and introduction of social safety nets following the Great Depression and WWII, recognising purpose as a valuable end might not look so radical after all.

Frances Cowell
Australian-born and European by adoption, Frances Cowell writes and speaks at conferences about investment risk and governance, financial market stability and business ethics in financial markets – and the implications for the wider political economy. She believes Europe must urgently assume the lead in protecting and preserving liberal democracy, the rule of law and the multi-lateral institutions and alliances that it depends on.

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