The Corona virus pandemic has caused the greatest wealth transfer ever in history. Out of both necessity and opportunism, wealth has become centralised in a small number of institutions such as national Governments, Central Banks and Transnational corporations. It is of pressing concern to all of us to address this so we can prevent a harmful centralisation of economic power as well as the subsequent knowledge and incentive problems that a centralised system suffers from.
Various public health measures the Government has taken, such as lock-downs and public sector contracts, have been critical factors in shifting wealth in the economy. Industries reliant on physical interaction ,such as aviation or hospitality, have faced significant challenges whereas the technological sector has seen impressive growth. Over 2020, the FTSE 100 dropped 14% whereas the technology dominated US NASDAQ had surged 42%. Furthermore, Central Government economic power has increased; Whitehall has had to borrow an estimated £393.5 billion and the Bank of England has released £895 billion through Quantitative easing. This combined with the biggest fall in national income for over 300 years of 9.9% last year as well as the increase in unemployment has only exacerbated intensive wealth centralisation.
The knowledge and incentive problems are pervasive amongst centralised institutions which lack the devolved experimentation required for effective outcomes within a complex system. Centralised Track and Trace in England ,which at it’s least successful, only reached 68.6% of close contacts. This is compared to local authorities who supposedly had a 97% success rate at reaching close contacts. Responsibility for success can be attributed to an excellent knowledge of the needs and concerns of their own communities as well as the incentive to help their immediate local society. Excessive centralisation has caused a lack of shared control and efficiency in our economy and politics.
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