There Is No Alternative — Or Is There?

“There is no alternative.”

The phrase was popularised by former UK Prime Minister Margaret Thatcher to signify that certain debates were over. The most famous example was how globalised capitalism in the form of free trade and free-markets was the best approach, not only to grow economies and build wealth but also to distribute services. The question is: Do we really have an alternative?

As we saw with the global financial crisis of 2007–2008, and currently with the COVID-19 pandemic’s devastating economic consequences, deregulated free-market capitalism holds immense risks. While the stock markets in high-income countries took a hit during the early stages of the pandemic and the resulting lockdowns, valuations are returning to normal. High street still suffers, which point to the discrepancy between the real economy and the market value, pumped up on ‘cheap’ money. This past Saturday, the S&P 500 hit a new all-time high[i]. Yet, there are increasing concerns that momentum can swing fast in our boom-and-bust cycle, putting the stock market on uneven footing at risk of suffering a massive relapse[ii].

The global economy measured in GDP per capita has been growing exponentially, almost without major interruptions, since at least the 17th century, the time of the first industrial revolution[iii]. In the same period, the world become increasingly interconnected and globalised. Economically, we have experienced a proliferation of bilateral and multilateral free trade agreements, and supply chains have become increasingly complex and global in scope. As a case in point, Apple’s supply chain spans across 43 countries and six continents around the world[iv].

The rising global interdependency, together with socio-cultural globalisation and the democratisation of information have been key factors in creating a massive countertrend against globalisation. Globalisation has not kept its promise to everyone. Rural areas are slowly dying in high-income countries as jobs are outsourced. New jobs are hard to come by and traditional values are being neglected, which makes many resonate with anti-globalisation sentiments such as Donald Trump’s ‘America First’. In a post-financial crisis world, where a race toward the bottom and lower costs is taking place, the question of whether uninhibited economic growth is solely positive has been raised. The escalation of climate change and increased economic polarisation and inequality have only added to this concern.

With COVID-19, global supply chains are being forcefully disrupted. On top of this, we are seeing signs of a potential geopolitical fragmentation with China and the US as two polarised superpowers. We are at a point in time, where the outcomes of the US Presidential election, the speed and location of successful COVID-19 vaccine development, and the future of intergovernmental organisations are just a few examples on the long list of critical uncertainties shaping our potential future trajectories. The feeling that the future is increasingly uncertain is even taking its toll on our mental health[v], amplified by the pandemic[vi]. To better navigate in this uncertainty and not succumb to the complexity, it is imperative to realise that there are choices.

Something I have learned from working with the future at the Copenhagen Institute for Futures Studies, is that there is not only one clear path in front of us. A path which we must follow, a predetermined track for the future. There are, in fact, multiple futures. Which one we will find ourselves in depends on the choices and actions we make now — and actions have consequences. Often the most impactful consequences are created when elements in systems collide in unexpected ways and sometimes, the change to mitigate these consequences are outside our reach. So, we need to prepare for both the worst- and best-case scenarios and the plausible futures in between.

We are facing the choice of whether to continue down the road we are on or actively make the decision to pursue new paths, away from the boom-and-bust cycles and inequality of free-market capitalism. Because the future is not pre-determined. Contrary to what Thatcher preached, there is always an alternative. Where we go and how we get there depends on the decisions we take now.

Mathias Behn Bjørnhof, Futurist & Advisor

Copenhagen Institute for Futures Studies

Sources:

[i] Rattner, N. (Aug 22, 2020). “The S&P 500′s return to a record doesn’t tell the full story with 60% of stocks still with losses”. CNBC. https://cnb.cx/31ol76f

[ii] DeCambre, M. (Aug 22, 2020). “Investor whose winning stock-market bet amid coronavirus returned over 4,100% says ‘we are in a boom-and-bust cycle, an epic, monumental boom-bust cycle’”. MarketWatch. https://on.mktw.net/2YrB6i0

[iii] Roser, M. (2013). “Economic Growth”. OurWorldInData.org. https://bit.ly/3j9GfmK

[iv] Petrova, M. (Dec 14, 2018). “We traced what it takes to make an iPhone, from its initial design to the components and raw materials needed to make it a reality”. CNBC. https://cnb.cx/32jc9q1

[v] Rosser, B. (Nov 7, 2018). ”Why inability to cope with uncertainty may cause mental health problems”. The Conversation. https://bit.ly/3aW2KZh

[vi] Dastagir, A.E. (Aug 13, 2020). “The pandemic is taking a toll on Americans’ mental health. A new CDC study shows who we need to worry about most.” USA Today. https://bit.ly/3lhIIxo