Why is this interesting? - The Sea Change Edition

On markets, covid, and new operating systems

Colin here. I’ve long been a fan of the Financial Times, and its articles and writers regularly make appearances in editions of WITI. It was also a constant fixture in the early-morning Balthazar breakfasts with Noah that kick-started several coffee-laden conversations. While other publications hem and haw during different political eras and change voices under different editors, the FT has remained remarkably consistent for its dedication to real journalism, breaking stories, and sharp analysis. Even if I don’t really care about certain topics (say, the nuances of central banking), I’ll force myself to read. And in many cases, particularly with the Lex Column, I walk away having an insight that I wouldn’t have had otherwise. And when Noah and I stopped by their NYC HQ to meet with our friend, an editor there, we had to play it cool when walking by columnists and writers we read every day. 

The FT editorial pages typically espouse viewpoints that you’d expect from the global paper of capitalism, the “free markets, free people” line shared by the likes of The Economist. Which is why I was very surprised to see an editorial page column take a sharp tack in the other direction.

Michael Skapinker, a longtime editor at the paper who I like, tweeted: “Throughout the years I've worked there, the @FinancialTimes has advocated free market capitalism with a human face. This from the editorial board sends us in a bold new direction.” Intrigued, I clicked through and was surprised at what I read. 

Why is this interesting?

The paper came to terms with COVID “Laying bare the fragility of the social contract” and making an argument for needed reforms that will make society work for all. It is something you would see in a far left democratic stump speech, which makes it all the more notable from the pink paper. 

The editorial board commented

Today’s crisis is laying bare how far many rich societies fall short of this ideal. Much as the struggle to contain the pandemic has exposed the unpreparedness of health systems, so the brittleness of many countries’ economies has been exposed, as governments scramble to stave off mass bankruptcies and cope with mass unemployment. Despite inspirational calls for national mobilisation, we are not really all in this together.

The economic lockdowns are imposing the greatest cost on those already worst off. Overnight millions of jobs and livelihoods have been lost in hospitality, leisure and related sectors, while better paid knowledge workers often face only the nuisance of working from home. Worse, those in low-wage jobs who can still work are often risking their lives — as carers and healthcare support workers, but also as shelf stackers, delivery drivers and cleaners.

For a paper that has long espoused the free market, they make a case for larger roles of government, and made comparisons to the policies born out of wartime and post-wartime economies. 

Radical reforms — reversing the prevailing policy direction of the last four decades — will need to be put on the table. Governments will have to accept a more active role in the economy. They must see public services as investments rather than liabilities, and look for ways to make labour markets less insecure. Redistribution will again be on the agenda; the privileges of the elderly and wealthy in question. Policies until recently considered eccentric, such as basic income and wealth taxes, will have to be in the mix.

The taboo-breaking measures governments are taking to sustain businesses and incomes during the lockdown are rightly compared to the sort of wartime economy western countries have not experienced for seven decades.

The paper cited seismic changes in policy: “the Atlantic Charter, setting the course for the United Nations, in 1941, the Beveridge Report, its commitment to a universal UK welfare state, in 1942. In 1944, the Bretton Woods conference forged the postwar financial architecture...”

As WITI is a politics free zone by luxurious design, we will not delve into the implications of this thinking or idea. But I do think that it is notable to see how, among smart people who have been steadfast advocates of an ideal, that thinking can evolve when circumstances change. (CJN

Chart of the Day: 

In case anyone is in the market for puzzles, here’s an excellent comparison of puzzle brands from Jigsaw Junkies. (NRB)

Quick Links: 

Thanks for reading,

Noah (NRB) & Colin (CJN)

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