Having dropped the ball by allowing the guilty not only to avoid justice but to profit from the financial downturn they created in 2008, governments now have another chance to defend the public good as part of the recovery from the COVID-19 crisis.
Securing essential goods and shortening supply lines – i.e. countering globalization – should be high on the list, along with strict anti-trust regulations to break apart large corporations to prevent them from vulture-like preying on weakened companies. In that same vein, a pay-taxes-where-you-do-business philosophy must prevail, eliminating the use of tax havens and the myriad tricks – legal and illegal – used to evade both taxes and accountability.
There will be a public appetite for change, just as there was following the meltdown of 2008, so governments should strike while the iron is hot. There will be an especially large push to punish China for both the current pandemic and its history of predatory practices – some of that will be racially motivated, but many people are eager to see both the blame and substantial punishment, up to and including forfeiture of foreign assets owned by the dictatorial regime and its proxies.
That said, we’re unlikely to see much in the way of change coming from governments whose patrons are happy with the status quo, no matter how harmful to the planet and the bulk of its people. And the public has proven too detached and uniformed for measures such as boycotts, class-action lawsuits and petitions to be effective.
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That doesn’t mean there won’t be changes in the aftermath of the current crisis.
There’s already much talk about national security as it relates to essentials, including pharmaceuticals and protective gear. Removing untrustworthy countries such as China from the mix seems like a natural first step, though there will be resistance by corporate interests. Food security also falls into that equation, though that topic predates the current situation.
At the corporate level, businesses will be rethinking supply chains, both in terms of removing unfriendly nations from the equation and in diversifying their sources, the better to weather future storms, of which there will be more. This has the potential for repatriating some production lost to globalization, as manufacturers look to sources closer to home, though automation is likely to keep job opportunities to a minimum.
Measures such as working from home and online shopping that have spiked at this time may have lasting impacts on how we live, do business and acquire goods. That kind of shift brings change, and change isn’t always for the better, and certainly not without cost to some portions of the economy (i.e. people).
In a report this week, the Conference Board of Canada predicts we’ll emerge from the crisis different in some ways, pointing to shortened supply chains, growth in digital platforms and the use of technology such as 3D printing.
“The severity and length of COVID-19 disruptions in global supply chains could prompt businesses to rethink the way they operate at home and abroad, accelerating trends that were already under way prior to the COVID-19 outbreak,” reads the report, COVID-19 Global Supply Chain Disruptions.
“We expect consumers and businesses to rely more on digital solutions after the crisis than they did before. Businesses that can take advantage of online platforms and other digital technologies will be in a better position to handle supply chain disruptions, both now and in the future, and to grow production and sales over the longer run.”
While suffering some ill effects from the economic downturn that’s hurt some in the tech industry, the sectors giants are poised to do well. That’s especially true of the likes of Google, Facebook, Apple and Amazon – with a multitude of critics and looming legal action. The situation bears watching, suggests the Washington Post’s Elizabeth Dwoskin in a piece this week.
“Tech titans spent much of the last year playing defense, fending off dozens of federal and state antitrust investigations and a public wary of their power.
“But the global coronavirus pandemic is prompting a dramatic reversal of fortune for the tech giants. Amazon and Facebook are capitalizing on the fact that they are viewed as essential services for a public in lockdown, while Google and Apple are building tools that will enable state health departments to provide a critical public service, tracing the course of potential new covid-19 infections,” she writes.
“The tech giants’ deep pockets will enable them to withstand the coming global economic recession, a stark contrast to what industry insiders and analysts expect to be the biggest shake up of the tech landscape in years. As many start-ups collapse, tech giants will expand on the power they’ve accumulated using the playbook of the last decade: snapping up talent, buying or copying rivals, and eroding traditional industries. Some of those weakened companies may disappear altogether and cede even more territory to tech.”
That would seem to indicate governments will have to step up both the controls on invasive technologies employed by such firms and push harder for anti-trust measures that would break up the behemoths into much smaller companies, leaving none with control of large segments of the market.
Already the biggest lobbyists in Washington, those companies are pushing hard against any controls – Europe has led the charge in privacy legislation and fines of the industry’s practices – and they’ll be stepping up their offensive post-coronavirus.
With many businesses in a fragile state, legislators should be gearing up to protect them not only through financial supports today, but with strict regulations and plans to breakup large quasi-monopolies to prevent them from preying on weaker competitors.
Such moves would enjoy popular support from the public well aware of the financial hardships, and would stand firmly on ethical grounds. But doing what’s right doesn’t come naturally to the political classes, as we’ve seen in past crises, where changes have typically been for the worse, resources concentrated in fewer hands.