Mark Carney says post-pandemic 'bump' not enough for smooth recovery
From credit to climate to COVID: Former bank governor warns of crisis in values
CBC Radio · Posted: Feb 22, 2021 4:54 PM ET
The former governor of the Bank of Canada Mark Carney argues the world’s
ability to deal with crises such as COVID, credit and climate change is
hampered by a fundamental shift in our relationship to finance and
economics. He says our view on what is valuable has been twisted by our
sense of what is profitable. (Chris J Ratcliffe/Pool Photo via AP)
Ideas53:59BBC Reith Lectures: Mark Carney, Part One
2020
BBC Reith Lecturer Mark Carney continues his lecture series entitled,
‘How We Get What We Value.’ In this episode, the former bank governor
focuses on the 2008 financial crisis and the ongoing impact of the
pandemic.
Even a year after COVID lockdowns became the norm worldwide, it
is tempting to imagine economic recovery will quickly follow once those
lockdowns are over.
To any such remaining optimists, Mark Carney advises some caution.
Carney,
55, has built something of a niche dispensing advice in times of
economic crisis: he was the governor of the Bank of Canada in 2008 as
the world navigated the worst financial meltdown in decades, and in 2011
while the world navigated the Euro crisis. He was most recently the
governor of the Bank of England as the country hurtled toward Brexit,
when he stood accused of unleashing "project hysteria" for stepping into
the limelight to warn of the economic consequences of leaving the EU.
Since his own exit from Europe last year, Carney is zeroing in
on the climate change crisis, and what he calls a crisis of values: one
he says has put market values before human values.
In
an era when anti-globalist and anti-expert sentiment is on the rise,
due in large part to the failures of financial markets, Carney, also a
former Goldman Sachs investment banker, acknowledges some may not see
him as the best messenger for more inclusive and fairer capitalism.
But he profoundly disagrees.
"I
have a perspective on this. I've taken actions, including on climate,
and the Euro crisis, and others to help yield a more inclusive system
and a better system for all," Carney said in an interview on the
occasion of the broadcast of his BBC Reith Lectures on CBC Radio's IDEAS.
"We'll
have to have a debate about whether I see things properly, but it's
based on more than a passing familiarity with what happened."
In
his BBC Reith Lectures, delivered in December, and in a book to be
released in mid-March — Carney argues that the world's ability to deal
with crises is hampered by a fundamental shift in our relationship to
finance and economics. He says the question of what is valuable, has
been twisted by our sense of what is profitable, or in his words,
"societies' values became equated with financial value."
"The
market is becoming the organising framework, not only for economies, but
also increasingly for broader human relations with its reach extending
well into civic and family life," he said.
"In parallel, the social constraints on unbridled capitalism, religion and the tacit social contract have been steadily eased."
COVID-19 recovery prospects
In
his lectures, Carney has also turned his attention to the COVID crisis,
and is informally advising Prime Minister Justin Trudeau on navigating
the post-pandemic recovery.
Every country, he argues, will experience a bump in growth as we come out of the more extreme lockdowns.
"That's the easy bit. No one should be doing any victory laps for that first quarter," he said.
"The question is, what's the follow through on that? And that's where stimulus is going to be particularly important."
Mark Carney is the UN Special Envoy on Climate. He argues
there is no tradeoff between the economy and sustainability. What needs
to change is to undo the shift from a market economy, to a market
society — and to examine how we define 'value.' (Tolga Akmen/AFP via Getty Images)
Carney says his own view is that fighting climate change and
working toward net zero emissions is the best stimulus project to rev up
the country's economy post COVID-19.
Carney is currently the UN Special Envoy on Climate and Finance and provides advice on the same topic to the UK prime minister.
Another
key question in the post-COVID recovery, he says: is what happens to
social capital? "Are we rebuilding [it], or do we come out of this
having further drawn down our social capital?"
It partly depends
on whether the recovery benefits everyone after a crisis that has
disproportionately affected groups already economically disadvantaged.
With Carney's move
to Ottawa — his new book, and the launch of a Twitter account, rumours
still swirl about a potential jump into politics.
He dismissed the possibility.
"There are many ways to serve," he said.
* This episode was produced by Matthew Lazin-Ryder and Nahlah Ayed.
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