Did the Economics of Lockdown cause a 2nd Wave?July 28 2020 | Dave Fardoe
We all know that lockdown had a massive economic impact. It cost countries billions and put hundreds of thousands of people across the globe out of a job. In many countries welfare systems simply were not setup to deal with the scale of the impact. Indeed, even in those that are, the stress on the system is immense. So it is little surprise that governments are rushing to get people back to work and to convince the populace that with Social distancing, good hand hygiene and face masks everything will be ok.
There seems to be spikes in all the countries returning to pre-lockdown regimes, is this a 2nd wave? Well it’s too early to tell. It’s possible and wouldn’t be that much of a surpise, yet what does it mean, would a 2nd lockdown be viable? It is more likley that we will see governments implementing local lockdowns such as the one seen in Leicester, UK. in this way the majority of the workforce can be kept functioning whilst the areas most affected are isolated and “Treated”. This makes a lot of sense if the economy is the priority, yet if the individual is the priority then surely keeping everyone locked down till the virus is erradicated is the sensible approach. Well no, it can’t be – when you think about a lockdown it seems at the outset sensible, and it was, however it is not without its own consequences – mental health for one, can suffer, domestic abuse can rise, people put off health visits and the whole stress of not seeing loved ones takes it’s toll. Each of these have an economic impact, each of these carry a cost in terms of wellbeing, the individual and the state. So whilst a lockdown is a useful if blunt instrument in the fight against a pandemic, it is not one that can be used over and over.
The interesting thing has been the local versions of the economy that have sprung up. Local businesses began trading in different way, getting around the barriers that normally kept them from entering new markets. Public houses became take aways and market sites. Beauticians became online coaches and vloggers. Retail stores moved online as many other businesses adapted. In the UK at least the government recognised this need to flex and relaxed many rules that had previousy been the barriers to entry. How those rules are to be tightened up will determine the nature of the recovery.
The environemental agenda is being pushed and people young, old, fit and less fit are begin encouraged to be more active, to go cycling with voucher schemes and incentives to buy. These ideas may add a little to the high street and that’s good, yet what about adding more to the households and the green agenda overall? Solar power could be incentivised, innovation hubs setup, Small business taxation reviewed and the gig economy strengthened. Casual trading could be encouraged – food sharing – ride sharing – skills sharing and fix it groups encouraged. Recycle and upcycle initiatives could be rewarded.
Taxes need to be collected that’s for sure yet why not review the taxation system root and branch. Sales tax is ok, online sales tax better. Employed vs Self employed – simplify this, don’t make it complex and threatening. simplify.
Within millions of people are ideas for businesses, sure not everyone is going to hit the sweet spot , yet the ideas are valid so encourage them. push the local models and expansion through franchise – make that simpler and less legalistic. Encourage volunteer groups to form social enterprise – there are dozens of beach cleans – Political parties arranging community litter picking – give tax breaks and startup loans to social enterprises that do these types of task.
Social care needs a radical reform, a new funding model. Yet in may countries such things dont exist at all ? how are they cared for, what can be learnt.
Lockdown was a massive economic hit, yet it showed the power of innovation, these are the areas government should look to, Encourage that innovation and reward it, rather then trying to restart the old economies by simply encouraging us all back to the old ways of working and saying it’s all ok. It’s too early to tell if a second wave is heading our way, and only with historical hindsight will we be able to say if economic imperative was seen as the more compelling argument. we have a choice of how we exit this crisis, back to the old norm’s or if we demand, develop and adopt new ideas to a more balanced circular set of economies.