Now that the COVID-19 pandemic has highlighted anew the flaws of economic deregulation and market liberalization, a new policymaking paradigm seems to be emerging. In a report released recently, the G7 Economic Resilience Panel demands a radically different relationship between the public and private sectors to create a sustainable, equitable, and resilient economy. Panel members, among others, include IIPP director Mariana Mazzucato and French economist Thomas Philippon.
In preparation for our IX New Paradigm Workshop on October 27, we had the opportunity to speak with the German envoy for the G7 Economic Resilience Panel, Stormy-Annika Mildner, about the process leading up to the G7 report, and the panel’s attempt to develop a new economic consensus, which was modelled (in spirit, not content) after the famous Washington Consensus that determined global economic policy making for almost a half-century. Said new econ-political vision, as proposed by the G7 Economic Resilience Panel, is the so-called Cornwall Consensus. It sets out seven priorities for public-private investment, global standards and better governance, including on health and climate change.
As Stormy-Annika Mildner explained in her discussion with us, the G7 Economic Resilience Panel was originally initiated with a strong focus on increasing resilience of global supply chains. However, the massive challenges and insufficiencies encountered with the old economic paradigm during the Covid crisis, led the group to consider economic and social resilience in broader terms.
At the core of the Cornwall Consensus is the idea to carve out a new pact of solidarity, says Mildner; and the understanding that openness and liberalization don’t automatically lead to wealth and prosperity but should be accompanied by government policies reflecting concerns of well-being, inequality, protectionism and climate change.
Key recommendations made by the panel include an intensified cooperation among countries through enhanced channels of communication and official playbooks to not only exchange data on shared vulnerabilities, but also bundle efforts to enhance the quality of investments. An example brought up in the report, and stressed in our conversation with Mildner, is the recommendation to initiate a CERN type mission-oriented research center that can incubate climate innovations and pool pooling public and private investments aimed at decarbonizing the economy.
Additionally, the panel recommends that existing governance structures and standards be adapted to the realities of the 21st century, and socio-economic progress be considered in broader terms than growth and GDP.