Coronavirus – valuing Living Standards more than traditional Economics

Overnight, years of pursuing economic growth measured by GDP at the expense of non monetary values such as: social conditions, the cost to the environment and other living measures have been jettisoned after the coronavirus hit the UK.

Behaviour has changed for the collective good.  There is shame in selfish behaviour and greed such as stock piling and driving to second homes. Behaviour and jobs that help the greater community such as nurses, bin men and supermarket workers have gained a higher significance than their pay cheques indicate.  

The shock of coronavirus will change the economy in so many ways.  Firstly the obvious focus on the healthcare system and its importance has shown that it remains sacrosanct in the UK.  The value of health and healthcare systems are being appreciated after years of under investment.  The NHS has been shown to have a value far beyond what is recognised in economic terms.  

The environment is benefiting, with images from space showing pollution clearing across the globe.  This is a global problem and the coronavirus has globally required countries to change their behaviour.  Travel has fallen, emissions have fallen, behaviours changed, the planet, oceans and air are improving in front of our eyes. The Coronavirus has achieved something that environmentalists have struggled to mobilise.

The digitalisation of the world is showing that children can learn from home, individuals can work from home (in many cases), parties can be had on line and much of the flying is non-essential.  Transport on the roads and trains is also proving to be non-essential and less important as we transition into a futuristic digital society.

Universal payment to citizens not to work has often been discussed in academic circles, but now with the ‘furlough’ scheme we have a real life example of how this could work.  This was once considered a socialist ideology, but has now been adopted by a Conservative government in supporting people through a ‘lock-down’.  

Overnight, we have had to adjust and change our behaviours to a new normality.  This is not easy for some, and others are finding little change to their daily routines.  Adjusting to the benefits of spending more time with family, adapting to different working conditions, embracing the digital world and socialising in a different way.

The old ‘economic measures’ were not working in many areas.  Interest rates of zero percent meant no interest rate cuts were possible to re-ignite the economy.  Asset prices that meant young people could not afford homes.  A wealth gap in the US that has skewed the nation to a point where the richest 1% own the same wealth as the bottom 80%.  Countries where health is so poor that obesity levels have become the normal and not the exception.  Healthcare services stretched and under funded.  

The importance of non financially measured benefits such as health levels, health services, exercise, relationships, clean air and food security have all been given a greater importance over traditional economic gauges, in this moment of crisis.

Now more than ever we should look to change the measure by which we regard the success of our economy. Progressive countries have started to move towards ‘Living Standard’ Indicies that record the benefits of a healthier nation, a healthier planet and lead to a healthier economy.

We have experienced a window of time in which ‘living standards’ are prioritised and shown us a different way of living.  How will coronavirus be measured in terms of GDP and Living Standards.  For sure the traditional economic measures will be ravaged with GDP seeing a huge hit.  Its a shock for sure, but overnight the public have put their confidence behind the scientists and the government in dealing with the threat of coronavirus.  Maybe in terms of living standards, it will have improved, as the air quality improves, the health service improves and a feeling of better community increases.

We have seen change is possible and the pain of change can be softened by governments.  Listening to Scientists, preventing deaths, money to facilitate the common good and health. This is the absolute opposite to the decade of austerity experienced since the financial crisis.   

Now we are listening to the scientists about the virus it is time to listen to what they are saying about the environment.  Death by global warming may not seem as imminent and something for future generations to be borne. But we are in this together and just as the younger generation are supporting the older generation through the coronavirus crisis, that needs to be returned in supporting a healthy planet for future generations.

It feels like the right time for us to value what is important to society and humanity in our economic indicators, and make a change from the traditional measures of economic success.