From Market Economy to Market Society and Back?

Mark Carney is no stranger to these posts.  The former Governor of the Bank of Canada went on to hold the same position for the Bank of England.  His term has come to its natural end.  His tenure in both positions was characterized by sound economic management coupled with a strong push for the global corporate culture to make critical changes in light of climate change.  His message for the financial sector was largely ignored, but he was respected for his acumen.

While many wondered where he would next land in the economic/business world, he instead was appointed UN special envoy for climate action and finance.  It appears as a natural fit for his gifts and outlook, and now that it coincides with Covid-19 pandemic, he has taken to speaking about how this special moment should be used to alter our economic outlook.

He has watched as markets have come close to collapse and how economic value itself has been shaken, leaving some to question its present suitability in a post-pandemic world.    Intriguingly, he posits the possibility of how the gap between what markets values and what people value could close, ushering in a new era for capitalism.  As people suffer through economic privation for at least the near future, their concerns are being matched by businesses and corporations that might themselves lose their livelihoods in the months and years ahead.

The effects on companies and consumers will prove profound and a new global economy could result in new ways for both to adapt if they are to survive.  And if Carney is correct, shared values will have to become predominant if prosperity is to return.  As he intriguingly wrote lately:

“Peoples economic narratives will change.  After decades of risk being downloaded onto individuals, the bill has arrived, and people do not know how to pay it. Entire populations are experiencing the fears of the unemployed and sensing the anxiety that comes with inadequate or inaccessible health care. These lessons will not soon be forgotten. They will have lasting consequences for sectors that rely on aggressive borrowing by households, a booming housing market and a vibrant gig economy.”

Carney refers to philosopher Michael Sandel’s observation that the world is inevitably moving from a market economy to a market society.  That distinction is crucial for us to understand, for it will likely spell the difference whether we get through this equitably or not, since, up until now, value has primarily been measured and prioritized by something’s asset to the economic market.  Some of the companies we support the most with our purchases, like Amazon, in trouncing human and worker values, become economic juggernauts on the basis of that inequity and gain instant access to the world’s decision makers and flows of capital.  

Carney thinks we gone too long in just accepting the paradigm that everything’s true value is measured by its price.  That’s a false equation, but it still rears its ugly head even in the pandemic, where growing debate swirls around the willingness to lead older people perish in order to get the economy moving again.  In other words, their value is seen only through an economic lens.  Once we accept that, we are on a way to not just economic but moral ruin.

“When it’s over, companies will be judged by ‘what they did during the war’, he says, “or how they treated their employees, suppliers and customers, by who shared and who hoarded.”  Ouch – that’s totally different to what we’ve had until this point.  

Long before Covid-19, we were acting (buying and voting) as though society existed for the economy and now we see where that got us – fully vulnerable.  An independent market housed in a dependent society is a recipe for disaster.  It is time to balance that equation – to create value-based societies that offer true quality of life along with accountable prosperity.  Carney was once a voice in the capitalist wilderness but has gained increased ethical stature as the perils of humanity are increasingly linked the over-indulgence of our economies.

Should we make the mistake of going from a market economy to a market society, then back again, then Covid-19 and what will follow could ruin us all.