Before the pandemic, many political pundits (and average people) talked about Trump’s re-election with confidence, but they always cited the same reason; as long as Trump keeps the economy in good shape he should be ‘good to go’ in November.
Fast forward six months into 2020, the pandemic has drastically changed the way we live and think about our lives while throwing both national and global economies into complete chaos.
When many people think about the word ‘economy’ and the meaning behind the word, they automatically think of stock markets and unemployment numbers. These are the ways we measure how good, or bad, our economy is doing. But have we ever stopped to think about the fundamental concept behind our revolutionary modern economy?
Unless you are a historian, I’m going to guess the answer to that question is no, especially because it is not easy to grasp the true role of economics in our own modern history.
But many historians have already cited one economic invention that changed the game completely: credit. Today we take credit for granted. Many credit card companies and banks send us excessive mail and make many phone calls just to get us to sign up for another credit card, but if you stop and think about what credit is, it is the economic equivalent of trust.
A credit score is essentially a measurement of how much the financial institutions trust you to pay back your loans. They use this score to determine how much money they should loan you, for how long, and at what interest rate. But there is one more imperative lenders have to factor in; how much hope they have for the future collective economy, and that as we now know, is inextricably linked to local, regional and global politics.
You might remember President Obama’s iconic campaign poster. Although a graphic designer can breakdown this image and analyze it with many different artistic frames, if you examine it from a content standpoint, there is only one word on it: HOPE. The meaning behind that word singlehandedly holds our global economy together.
Capitalism revolutionized the global economy because it enabled ordinary people to gain capital to invest in their businesses for the first time. Not only did these investments give non-elite people hope in their economic future, but they showed the world that reinvesting your wealth in the production of other people’s wealth makes you wealthier.
In 1776 Adam Smith, the father of modern capitalism, had to reimagine the entire economy when he came up with this concept. But if you think about it, the only magical thing he added to the former economic model was the concept of trust in the future.
If lenders have trust in the future, they trust that they can give out loans to people in charge of production. If production is ramped up, then the economy grows faster, making people trust the economy more. As long as each person is doing their part, this economic circle reinforces itself, and different people begin to build wealth.
Nevertheless what happens when the collective society begins to doubt the future? The pandemic and its economic consequences have already generated mayhem in the present. Still, the thing that seems scariest of all is the near future, especially for young people right now.
How will COVID-19 affect the younger generations down the road in two years? Five years? Ten years? It is not like we had anything definitively planned out because that is not how life works, but our current collective instabilities have redefined our worst economic nightmares.
The best and most structural way to regain trust in the future is to elect leaders that lead with hope for the future. The main difference in leadership styles between Biden and Trump is that Biden leads with the hope of a better future. Trump leads with the hope to bring back the past. His slogan ‘Make America Great Again’ doesn’t correspond to any functional economic model, while the simple message of ‘hope’ and ‘yes we can’ is the basis of our current capitalist global economy.
Capitalism theoretically is a great idea, but we all know that human errors and human ego screw up great theoretical dreams in reality. Unfortunately, ideas and theories get more complicated when humans are involved. Globalized capitalism is very different from the original capitalism that Smith envisioned 200 years ago.
Today American production is outsourced to Asia. Corporate lobbyists have managed to use their profits to deregulate government restrictions instead of paying their fair share of taxes, not to mention paying their workers’ fair wages and good benefits. And the list goes on and on.
It is safe to say that deregulated capitalism is dangerous for our health and our environment. It exploits the systems of oppression that are already in place worldwide, which make the economic, political, and social gaps between each different group of people larger. In short, deregulated capitalism sows division and benefits from oppression.
But just because capitalism has been functioning like that for centuries doesn’t mean it must continue to oppress and divide. Maybe with the momentum for justice and equality that we see right now we can build a new capitalistic future: we can reimagine capitalism to work for everyone. We can make capitalism a win-win institution.
That depends less on protesting and boycotting and more on the powerful using their wealth to change institutions. At least that has proved to be the most effective method thus far.
I use the capitalist model not because it is the best political and economic model, but because it is the model the world currently uses. I don’t think anyone knows for sure what the best model is, but as a human race, we have had thousands of years of experimentation and this is what we have come up with so far.
If we assume, as capitalism does, that economic growth is the supreme good because justice, freedom and happiness all depend on economic development, I really think that Biden is the better choice for our economy this November.
Lastly, our future economic stability will depend on the outcomes of the election and what the scientists will come up with to prevent COVID-19 mortalities.
Politics and economics have always depended on science for progress. Science is the engine of social, economic and political progress. Because new inventions, discoveries and developments fuel economic growth.
The government might print the money, and banks might pump credit into the financial system, but scientists, engineers and entrepreneurs ultimately create monetary value. And so far, our societal faith in science and scientists has paid off. Since the scientific revolution, our economy continues to grow bigger due to the new scientific inventions.
If we trust in science and pick leaders who lead with hope, we might get out of this mess better than we ever were.
Resource:
Yuval Noah Harari “Sapiens: A Brief History of Human Kind” Chapter 16, pages 305-315
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