We came out of the pandemic richer, poorer, more digitized, and less globalized.
Inequality becomes evident not based on who you are, but where you are. The richest regions have received vaccines while the poorest received far fewer. The global inflation that started from the supply crisis is hitting harder those who have less than others. Currency devaluations are more intense in weaker economies than in strong ones. High interest affects those who need credit and favors those who apply.
Whom do the bells toll for this Christmas?
In the Christmas symbol of fraternity, as for salvation through love, the bells will certainly toll for the One who was born in the manger. There is nothing more symbolic today.
We are facing one of the greatest challenges of a humankind that was never before so connected, so inclusive and so fragile in its attitudes of solidarity. We are now facing the Omicron variant of Covid 19, which emerged from a developing country and is affecting developed countries, especially those citizens who were not willing to get the vaccine. As long as not everyone is vaccinated, the risks will be great. Developed countries know better now that failing to share their surplus vaccines with countries that need them to complete their protection is goal against themselves.
The less favored countries’ agenda is health, in the first place, and the maintenance of minimum standards against hunger and poverty. In the most favored ones, health also ranks first in theirs, followed by maintaining a sustainable economic level, where the environmental issue is certainly at a very high level in their scale of values.
In democracies, the vote is given to a candidate or party that best interprets the resolution of their problems. Moreover, the winds show that the social agenda is strongly predominant in developing countries, from a social perspective. Europe is showing its preference, as recently seen in the German elections, for the social environmental and liberal agenda . In our Latin America, the most recent elections are veering in the direction of resolving social issues, as in Peru, Honduras and recently in Chile. I will take Chile as an example of the victory of young Gabriel Boric, 36 years of age, who for the runoff election, shifted more towards the center than to the radical left. From his recent statements, it is clear that he is seeking to put Chile in a new social democratic order, which has little to do with the socialist models of Latin America’s past. His vision is to reduce social differences in a country that has the highest GDP/per capita in Latin America, with a strong middle class, but with a lower-middle class unable to support private social security, pay for education, health or insurance, and a price evolution due to low competition in a relatively small market. Chile gives us a lesson in democratic civility; two days after the elections, the opponent Kast already met with Boric and offered him a minimum common agenda. The Constituent Assembly, led by left-wing politics, received the clear message that, even though it is aligned with a series of Boric’s ideas, there will be no interference from him, as it is a long-term project of the Nation. This civility in passing the baton, plus the alternations, show that there are precepts that will be respected, even in the great clash of controversial ideas. The great hope is that a mature and enlightened society, like the Chilean one, will be able to make significant advances in its new social model.
What does this teach us?
First, economic sustainability is only possible if social minimums are taken into account. Maintaining socially and environmentally oriented economic sustainability means offering short-term solutions that alleviate suffering and, in the medium and long term, provide structural sustainability. Hunger and misery are unacceptable. Increasing wealth in an exacerbated manner amid the greatest pandemic crisis is ethically questionable. Therefore, the population’s response to politics is certainly that they should correct this aberration in time. That is where the risk of populism lies if what the voter wants is not understood correctly.
The New Social Model of democracies will be guided by the preservation of the minimum standards for a decent life and offering the maximum in opportunities. In addition, I curiously note that this agenda is not new, and that it was precisely a German conservative Christian Democrat Chancellor, Ludwig Erhard, who preached the economic system of the social market. The market mechanism’s limits were when it affected human dignity. Thus, a minimum wage was put in place, because if the market were allowed to flow solely by supply and demand, wages would fall to unsustainable levels. Bread, milk, and flour would receive stimuli against hunger. The State would establish a minimum health and retirement support network. Moreover, that is how this journey began. Later with the evolution of unions, social contracts would take this stance to the point of unsustainability. With the economic evolution, the State expanded the benefits, becoming a state of privileges, increasingly abandoning the State of Opportunities, where through competence, competition and market, the best stood to win. Something was displaced in globalization; what was domestic went to other regions and the purchasing power of citizens increased even though their employment was threatened. The pandemic has, in a way, created a global disarray in the supply chains, and certainly new jobs will be created by bringing back displaced services and products. A work to be revisited is the New Social Model by an unforgettable personality, Hanns Martin Schleyer,1) president of the Confederation of German Industries in the 70’s, who unfortunately lost his life to the terrorists of the Bader Meinhof Group. In this work, Schleyer proposes the model of the social market economy as a great opportunity for German and international entrepreneurs, for social inclusion and for the new demand. His model worked, as we can see from the evolution of his country.
Nevertheless, the New Social Model, today, in a much more digitized, technologically advanced world, needs inclusive visions where large-scale innovation also focuses on social technologies. These technologies, in addition to being insertive, will bring large scale and prominence in consumer countries, that is, the developing ones. New vision, youthful boldness, innovations that benefit many, will have a smaller investment by the State, making room in their budgets and this will be recognized by the population, which only wants to improve its living conditions through their performance. May the bells remind us of this legacy.
Merry Christmas and Happy New Year!
Ingo Plöger is a Brazilian Entrepreneur, President of CEAL Brazilian Chapter
1) Hanns Martin Schleyer, Das Soziale Modell; Stuttgart Dfegerloch Sewald Verlag, 1974