“Ideas without illusions”, a phrase attributed to, best captures radical centrism. So the challenge to centrists is to come up with ideas that stand a chance of working. Ideas that answer the question, ‘how on earth are we going to get economies started again?’
Of the many economic problems we face, two of the biggest are loss of income and increasing debt. Government policies have so far been mostly directed to replacing some of the lost income. This is welcome but more will be needed. Debt has received less attention. My hunch is that debt forgiveness of one kind or another will help determine the shape and speed of any recovery. A small hint of what lies ahead was given by the UK government’s recent decision to cancel £13.
All these ideas end up with the government providing the money. A lot more than is currently being contemplated. Centrists pride themselves on their pragmatism and, in contrast to ideologues, their ability to change their minds in light of new information. One key lesson of the crisis is that we have a private sector too devoted to cost-cutting. Too many CEOs achieve greatness by cutting rather than investing or innovating. We need to change the incentive structures present in many of our companies. Those short supply chains are good for profits but have too many vulnerabilities.
That’s not necessarily an argument for public sector provision. Perhaps it’s a forecast that ESG investing will now move from niche to mainstream.