This year, the Brussels Economic Forum was held online, just as all other events following the coronavirus pandemic. While the event focused on two main themes, restarting the economy and the green new deal, the contradictions between the two clearly showed during the presentation of the various speakers. How do you restart the economy within a debt based monetary system in an environmentally friendly way? On top of this, the age old question of solving inequalities and poverty came back to the fore. Indeed, it seems that the pandemic has, just like previous crises, increased the gap between the rich and the poor.
The key ideas put forward during the conference were:
- Making sure that economic support measures stay in place to avoid a “cliff” effect if they were to brutally come to an end.
- Take advantage of the economic support measures to finance especially sectors contributing to sustainable development and a green transition.
- Rethink taxation in order to finance the green transition, mostly via digital taxation (taxing the digital economy), “green” taxation, as well as thinking about ways in which the EU can harness taxation to have its own resources.
- Develop more resilient economies, especially for vital goods/services, rather than solely relying on imported goods/services.
- Boost public and private investment to finance the green transition.
- Ensure that monetary programmes like quantitative easing reach the “real economy”.
- Change economic indicators in order to measure other important parameters besides GDP.
- Contribute to solving inequalities by setting a minimum wage.
Finally, the conference concluded by staging a debate between two opposing ideologies: liberal capitalism and state socialism. Or more precisely, debating how much of a role should governments have in the economy: a minimal role, or a prominent one. The main takeaway from the debate was to promote the “Nordic capitalism” model, which was presented as a good compromise between achieving certain policy objectives such as more equity, decent working conditions, social security… and the freedom to invest or create a new company without too many burdens. A kind of “third way” or “middle way” between two extremes.
All in all, nothing new under the sun. Most of these ideas have been around at least since the 2008 financial crisis, or even before. The failure to act on them must therefore be addressed.
At a fundamental level, it is how money is created and how a debt based monetary system works that is the elephant in the room no one wants to see or discuss. The over-reliance on GDP and growth directly stems from being in a debt based system and so in order to change the indicators, one must first change the way the monetary system functions. Achieving price stability is no easy task, and failing to do so comes at great cost to society as a whole. Simply look at countries like Venezuela or Lebanon.
However, it might be time to re-examine how our system works at the core and instead of pushing for a shopping list of regulatory measures to compensate for the inevitable effects of playing monopoly.
Perhaps the moment is ripe to consider switching to playing a different game altogether.
COFACE-Families Europe has been reflecting on alternatives to the current economic and financial system and will continue to push for an economy which serves society. See COFACE-Families Europe’s report on “Economics at the service of society”.
For more information about the Brussels Economic Forum please visit the official website: https://ec.europa.eu/economy_finance/bef2020/
Or contact Martin Schmalzried: email@example.com