The Virus That Has Reset Capitalism

5 min read
17 March 2020

Let's do a science fiction exercise. Imagine that we are at the 51st World Economic Forum in Davos, from Tuesday to Friday of the third week of January 2021. The previous year, January 21-24, 2020, the topic was Stakeholders Capitalism. It was about moving from maximizing shareholder profit, as proposed by Nobel Prize winner Milton Friedman, to working for every stakeholder group.

The forum was started by the two ‘winners’ of the 2018 and 2019 editions, the President of the United States, Donald J. Trump (who euphorically exposed his economic achievements), and the Swedish social activist, Greta Thunberg, who complained the warning ‘the house is on fire’ had not been taken seriously and warned us that ‘nature does not negotiate’. 

None of the 3,500 leaders gathered in Switzerland in early 2020 warned of the danger from the Coronavirus, even though it had already been detected in Wuhan, China three weeks earlier (December 31, 2019). Surely in January 2021 in Davos, the talk will be all on Coronavirus, of the supposedly learned lessons, of how Capitalism has been reset and mutated in Talentism.

For many experts, Covid-19 has been a ‘black swan’ (concept created by Nassim Nicholas Taleb in 2001 to refer to a highly improbable event that finally happens). In reality, it is a ‘grey rhino’ as described by analyst Michelle Wucker in 2012, referring to the crisis in Greece. Wucker herself has stated the Coronavirus is a high-probability, high-impact event. An obvious, visible pandemic has reached us with a high potential impact and highly probable consequences. It is a zoonotic response (transmission from animals to humans) to Globalization 4.0. This is how Gaia behaves towards those who try to tarnish it (because ‘the Earth is going to survive’, Antonio Guterres, Secretary-General of the United Nations).

The Coronavirus has been like a ‘surprise exam’, like those that we do at school, on Digital Transformation. There was much talk of digitization, of robots doing everything (29% of economic activity in 2018 and presumably 42% in 2020) and of the Singularity law (the time when machines will be ‘smarter’ than people, according to visionary Ray Kurzweil). 

All these companies are talking about Digital Transformation, but less than 20% of them have taken advantage of it. In our country, Spain, less than 5% of workers (possibly 3%) were technologically and mentally prepared for e-working; in the Nordic countries, the figure could reach 25% of professionals. There is no digital maturity, just the opposite. 

Techno-Talent: people who are used to being able to work from anywhere (80% want to do it), to being able to learn online (since 2000, training via the internet has multiplied by 9, although the degrees are less than 10% and masters less than 25%) and to be able to buy online (in fresh products it is less than 1% of consumption). This is the spearhead of Employability. In the words of Warren Buffet, the world's largest investor, ‘When the tide goes out you can see who is wearing the swimsuit’. Who is taking advantage of technology as a springboard for their talent or merely for entertainment?

Moving From Capitalism To Talentism Is More Important Than Ever

In my book ‘From Capitalism to Talentism’ (2012), I spoke of a new era in which Talent is more valuable than Capital, as the new engine of the Economy. A new time that meant death for three historical institutions: universities, political parties and the media. I did not say they would disappear without a battle.

In fact, populism has been fed from the universities, founding political parties supported by the media (the extreme right is at the other extreme: nothing academic, personalistic and with the media as enemies). The world's leading virologist, Belgian Peter Piot (who discovered AIDS) has commented that Covid-19 is much worse than Ebola for its contagion ability. 

However, the performance of these three groups has been generally regrettable. The media are spreading fear (a contagion that exacerbates the Coronavirus, because it is very difficult to separate the ‘fake news’ from the real information), the universities are merely reacting (don't we finance them to investigate?) and the political response is being (with some exceptions) short-term, biased and partisan, without greatness or broad-mindedness.

Faced with the necessary global connection, the governance of the planet, every continent has applied different policies, which Xavier Ferràs, an expert in Innovation and professor at ESADE, has called the 3 D: Discipline in Asia (following their millennial culture), lack of coordination in Europe (a Union more economic and bureaucratic than anything else) and Social Darwinism in the United States and Brexit.

The Chinese quarantined and now support this collapsing Europe (the role of the United States in World War I and II, which gave them hegemony); Donald Trump and Boris Johnson consider it to be a ‘foreign virus’ and prefer to maintain the economic system in exchange for a few lives (the Artificial Intelligence that manages ‘The Economist’ ensures this will give the presidency to Joe Biden).

In general, authorities have aimed to ‘flatten the curve’, as proposed by the New Zealand microbiologist Siouxsie Wiles on Twitter with a drawing by Toby Morris (in his first five days, 4.5 million retweets). It is based on CDC's 2007 paper ‘Interim Pre-Pandemic Planning Guidance: Community Strategy for Pandemic Influenza Mitigation in the United States: Early, Targeted, Layered Use of Non-Pharmaceutical Interventions’. If people are homebound, contagion is reduced. Of course, this comes at a brutal cost to the economy as a whole, both from demand (consumers) and from supply (workers). Killing flies with cannon shots, although there may be no other way.

Christine Lagarde, the French economist who heads the European Central Bank and has previously led the International Monetary Fund, warned us this crisis of 2020 may be similar to that of 2008. In this case, the slowdown economy. This time it is not worth saving the banks and lowering wages. Now we are faced with the ‘save yourself who can’ so typical of savage capitalism when we need Conscious Leadership, cooperation on a global scale and the use of science (to begin with, the objective measurement of Leadership). 

No Western leader has told the truth, perhaps out of ignorance, perhaps out of fear of reality, perhaps out of fear of loss of popularity. 

Xavier Ferrás

What Can We Learn From Other Countries?

Let's learn from who has done best in this crisis: South Korea--a country in true Digital Transformation. They had the first case on the same day as the United States, on January 20. With more than 50 million inhabitants, it has distributed an app to all its citizens that monitors the temperature of the human body. If there is a fever, the test is performed (it is not wasted unnecessarily). If it is positive, the person gets quarantined. They are geolocated to verify that they do not move. If a cluster appears, the zone is isolated. 

South Korea has performed 196,000 tests (compared to the US at 4,300, because they are very expensive). 8,000 cases in Korea and only 66 deaths. Data for information, responsibility as adults (not as the spoiled teenagers that politicians believe we are) and social discipline in democracy.

Trump, meanwhile, declared a state of national emergency and proposed $50 billion in federal funds for the United States.

As I write these lines (mid-March), the Director-General of the World Health Organization, which has proclaimed the pandemic, has pointed out there are 181,909 cases in 134 countries and 7,118 people have lost their lives (most of them, elderly people with respiratory problems). These numbers, unfortunately, continue to grow. And science has responded--there are eight vaccine prototypes, 80 types of antiviral tests and more than 150 scientific articles on the subject. 

Yes, this little bug has transformed the economic reality into a new recession, it has declared China the winner in its trade war with the United States (democracy must be seriously transformed so as not to become mere spectacle) and Leadership (as talent to influence others) is more valuable than ever. Let's take note.

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