Is there likely to be an upswing in alternative economic models?

01/04/2020

Answer: Ingolfur Blühdorn, head of the Institute for Social Change and Sustainability (IGN)

Johannes T.: It’s really interesting to see how many different solidarity movements, cooperations, and platforms have suddenly sprung up, locally, regionally, but also between provinces, either to support COVID risk groups or to shore up more local economies. My question to you is, do you think alternative economic models like cooperatives, the platform economy, or the economy for the common good will continue to experience a new era and upswing even after COVID-19?

Ingolfur Blühdorn, head of the Institute for Social Change and Sustainability (IGN) :

A departure from the established economic and growth model would be urgently needed, not only because now that the golden decades of prosperity are behind us, we have seen how socially, politically, and ecologically destructive this model is, but also because despite great efforts – think, for example, of the ECB’s stimulus measures and the externalized social and ecological incidental costs – our economy is achieving at best only moderate growth rates.
This doesn’t mean, however, that a shift to an alternative economic and social model is likely to happen. Based on the theory of sustained unsustainability (cf. Blühdorn 2020), it is more probable that the coronavirus crisis will not result in a complete structural transformation but rather only in minor corrections of the current model.

The newly formed solidarity movements and the feelings of togetherness that could be observed especially in the early phases of the pandemic are not actually surprising: This is a common phenomenon in crisis situations. Similar solidarity movements occurred in the aftermath of the 2008/9 banking and financial crisis, during the refugee crisis in 2015, during the debate on the climate crisis in 2019, and in other, similar situations. The COVID-19 situation is different, however, as it affects all parts of society and has created widespread fear and insecurity. This has resulted in solidarity movements and a new sense of a united front in many different parts of society.

If and to what extent these movements translate into permanent cultural and structural changes depends on a number of parameters. The 3 recent crises named above provoked similar reactions and demands for widespread structural changes to the ones being expressed now during the coronavirus crisis.  The corresponding movements did not achieve any basic cultural or structural changes. Quite the contrary, in fact – the much-maligned socioeconomic system was actually strengthened:  Consider, for example, the austerity policies introduced in the wake of the banking crisis and the impacts of the increase in right-wing populism since the refugee crisis. Similar reinforcement tendencies are also emerging in the context of the COVID-19 crisis.

What is certain is that in times of fundamental denormalization and widespread uncertainty, a number of things are back on the table (i.e. being repoliticized) that would have been only marginally significant before the crisis. At the moment, not only are globalization and the global division of labor up for discussion again, but the underpayment of entire occupational groups, precarious employment conditions, and dependence on cheap foreign labor (for example, in nursing) are all of a sudden being recognized as major, unacceptable problems. Especially the market-liberal doctrine that the state and government should not interfere in market activity but rather privatize, deregulate, and liberalize, now also appears to have failed even more obviously than it already had after the banking and financial crisis.

But just the fact that these topics are being politicized once again does not mean that a structural transformation will follow. Rather, the desperate calls for a return to normality as quickly as possible suggest that in the throes of the crisis, we may have forgotten that this so-called normality was already urgently in need of transformation before the corona crisis, according to numerous experts. The measures adopted so far indicate that, despite the initial solidarity movements, the corona crisis could actually lead to a further reinforcement of sustained unsustainability. A particularly important aspect will be the extent to which strong and persistent political coalitions for structural change will emerge and act in the coming months.