The Roaring 20’s

Let’s avoid Gatsby this time

The parties were bigger. The pace was faster. The shows were broader. The buildings were higher, the morals were looser and the liquor was cheaper’

This quote from F Scott Fitzgerald’s ‘Great Gatsby’ is the antithesis of the COVID stricken world, though might also describe what many now yearn for. And, despite the onset of more severe lockdowns, a new, maybe more sober, roaring 20’s could be upon us.  

We need to first get through the US presidential election. One underestimated gift a Biden victory can give is calm, a diminution in political noise that allows the contours of a post-COVID world to become clearer and that potentially helps to channel the enormous frustration and stress that billions have experienced into something positive.

When, together with Barack Obama, Joe Biden left the White House just less than four years ago, globalization was alive but ebbing, democracy had its integrity and America was troubled though still widely respected.

Today, these ‘pillars’ of the last thirty years are cleaven down, and the rhyme between the world of today and previous, similar periods in history (i.e. 1910’s) is deepening. The lack of collaboration between governments during the coronavirus crisis is a particular cause for concern here.

We should not however lose sight of the fact that this great trial of humanity has also given cause for optimism and that it will have exciting consequences, not unlike the ‘roaring 1920’s’. Many of the innovations of the 1920’s happened in human areas – culture, media, the role of women in society. In the 2020’s the great innovations may occur in ethics, values based policy making, mental health and finance – all areas to have been stress tested by the coronavirus crisis.

For example, the health sector is ripe for a revolution in at least three respects. Economically, it is enormous – for example health spending accounts for 18% of US GDP. Yet, the coronavirus crisis has uncovered a wide variance in the quality of health care systems, though a resulting universally held admiration for health workers. In 2021, governments – aided perhaps by the OECD – should perform a post mortem on the policy aspects of the coronavirus crisis and the lessons to be learnt, especially for health.

One outcome is that the delivery of health care can be changed in radical ways. Another lesson that may become manifest in 2021 is the importance of mental health, and the need to uncover the links between stress, life cycle events such as retirement and conditions like heart disease and incorporate this better into health practice. Health may be further revolutionized by virtue of having attracted the attention of capital markets during the crisis, and it may well be that we see the reemergence of a biotech bubble, and that health care stocks edge out IT companies in quality growth portfolios.

The intersection of healthcare, technology and finance shows how fields are increasingly overlapping. One such overlap is the novel encroachment of values into policy making. The EU is an example – during the period of globalization it was a creature of economics and geography (it added 14 new members since 2004, most of whom are in Eastern Europe).

Now Europe is slowly and so far unconvincingly embarking on a values based approach whereby aid to the likes of Hungary is tied to that country’s respect for values such as democracy, the rule of law and the role of the LGBTQ community in society. In time, a values based approach to politics will give the EU more coherence and the focus to become a leader in environmentally friendly technologies.

Another way values based policy making can be expressed is through taxation, where initiatives on corporation and digital taxes suggest a tax revolution is building. Part of this might incorporate an approach to tax workers according to the social contribution of their role, reflecting one of the lessons of the coronavirus crisis.  In that way the taxation system may adapt to a changing age.

Similarly, we may find that ethics, philosophy and new laws need to spring up to marshal the impact of social media on politics, of genetic editing on society and to better police ‘total’ forms of conflict between nations.

One presumption of a ‘roaring 2020’s’ outlook is that all of the change takes place in Berlin, New York and Shanghai. This time it might be different. The countries with greatest potential in terms of large, growing populations and scope to build economies and societies are the likes of Indonesia, Ethiopia, Nigeria and Brazil.

The challenges they face – sustaining economic productivity, designing urbanization and building household wealth are well known, and the best way to face them is to focus policy around human development. The decisive factor for governments in these countries is the extent to which they create societies that like Europe are free or that like China, are controlled.

Back to F Scott Fitzgerald. The Great Gatsby ends badly, with the American Dream and Gatsby himself tarnished. It may well be that near record indebtedness and climate damage might do the same for the 2020’s, but the great surprise may be that longevity, political entrepreneurship and the blossoming of large emerging societies are what end up distinguishing the 2020’s.

Have a great week ahead,

Mike