From COVID-19 to Shared Prosperity
By Michael Higgins and Sanjay G. Reddy
There may be no more symbolic demand of justice in the world today than ensuring that the benefits of any future COVID-19 vaccine are made available to all, whether poor or rich, wherever they may live. The debate on this issue is playing out right now in the global public square. An alliance of world leaders, international organizations and civil society groups have come together under the #PeoplesVaccine banner to insist that any vaccine be treated as a global public good. They have proposed creating a “pool” of shared rights to the formulas for any vaccine or treatments for the coronavirus so that these can be generically manufactured to ensure treatment for all. This idea faces resistance from those who seek to protect a principle underpinning pharmaceutical company profits, but it is gaining force. The WHO’s World Health Assembly has passed a positive if limited resolution on making any vaccine subject to equitable and affordable access. But this demand is ultimately also a symptom of a much wider need — to reduce the concentration of power, influence, and goods generally, in an ever-smaller set of hands.
Political, social and economic inequality today arise to a considerable extent from a single source: stark inequality in the ownership and control of productive assets. By broadening the distribution of rights over productive assets we can ensure a more inclusive, democratic society, and also a more productive, efficient and environmentally sustainable one.
To get there, we need Shared Capital Initiatives. They comprise familiar examples, now being recast in new forms, such as employer and producer cooperatives, distributed land use and ownership rights, and supports for small and medium sized businesses and informal sector enterprises. They also include novel forms such as collectively owned social venture capital and wealth funds providing dividends or other benefits to all, citizenship-based basic allocations of capital, shared rights to influence the digital platforms now central to economic life, and data trusts or intellectual property pools of the kind being used already in relation to some diseases and proposed for COVID-19.
A New Dividend for Workers
The recent pandemic underlined the importance of front-line workers now seen as essential, but long overlooked. Nurses, cleaners, delivery staff and others have borne risks and costs that others have not. Many come from otherwise marginalized sections of society. How do we ensure that they don’t become martyrs receiving hollow praise but no meaningful dividend? Income supports, although welcome, are insufficient. Durable inclusion requires changing the position of workers in the productive economy, including through expansion of their rights. In Europe and the United States, the decades following the Second World War saw the extension of rights to women and others, and large-scale investments in health, education, housing and social programs. Shared Capital Initiatives, which give workers more rights to benefit from the social product, can help to restore livelihoods, economic security, and a sense of enhanced citizenship including for the growing number in precarious employment — or today, unemployment. The glimmers offered by the past suggest a vision that can be realized more fully today.
Bailouts are Opportunities
The last response to the economic crisis in 2008 witnessed public monies being prolifically offered, and with few conditions, to bail out corporations, while fewer supports were given to small businesses, homeowners and ordinary citizens. This had the effect of cementing the high inequality that had arisen over the preceding decades. The present economic crisis has already led to even more severe economic consequences and the need for supports to save ordinary businesses and jobs will be even greater. There have been some laudable efforts this time around to ensure that bail-outs don’t go to firms based in tax havens and that the funds received are not used for share buybacks, executive bonuses or even ordinary dividends. We should similarly ensure that any monies being spent help to shift the nature of our economy, from one that is geared towards the financialization and concentration of capital, to one that is more focused on real activities, and more widely distributed.
Bailouts should be seen as investments which must generate societal as well as economic returns. The state can use this opportunity to build a more resilient productive economy, all the while pushing firms in a more democratic and inclusive direction. For instance, funds could disproportionately be directed to small- and medium-sized enterprises which have limited current access to alternative sources of finance, and for which bankruptcy would mean being taken over or supplanted by larger firms. Bailout funds for firms beyond a certain size could be made conditional on voluntarily accepting environmental, social and governance standards, beginning with increasing the representation of their own workers on boards.
Gateway to a Democratized Economy
By freeing people from economic traps arising from insufficient resources, more broad-based and generally secure asset ownership can provide employment security and add to economic efficiency. People will be better able to participate in public life and social interactions on a level playing field, without a sense of inadequacy stemming from material lack. Shared Capital Initiatives can generate economic and social stakes which motivate and encourage more broad-based participation in society and allow for greater voice and influence.
Shared Capital Initiatives can help us shift from a shareholder to a stakeholder economy, and to a more democratic society. The events set in train by one illness can help us to treat another.
About the authors:
Michael Higgins is a human rights and international relations expert based at New York University’s Center on International Cooperation. He is the Pathfinders Program Director for the Grand Challenge on Inequality and Exclusion
Sanjay G. Reddy is a Professor of economics at the New School for Social Research in New York and is a contributor to the Pathfinders Initiative.
