People have already realized that the economy will change when the peak of the covid-19 pandemic passes. Technological innovations that would have been adopted gradually had their use accelerated dramatically. Parts of the economy have become entirely digital or have an important digital interface. Sectors such as finance, part of the so-called symbolic economy, have practically completed the transition, including using artificial intelligence to make basic business decisions, such as granting loans. In sectors with an important material component, the transformation was in the form of sales, which was digitized. Public services are also moving in this direction, despite the lines at Caixa Econômica branches. From public security, with cameras, cell phone information and deductive algorithms, to public health, with digital consultation, and in online education, there was a leap in the role of frontline civil servants in two months that would have taken a decade in normal conditions. All of this will have an impact on public and private employment.
What is common about these changes? A productivity leap that was revealed when it was necessary. And what is the consequence? The economy will have to reorganize itself to continue to favor this productivity gain and to use it to achieve goals of interest to society.
A great economic intuition of the 19th century was that a gain in productivity that is not shared in a capitalist economy leads to a concentration of wealth and a deficiency in demand that is not sustainable. The individual incentive for companies to invest to be increasingly productive and to beat the competition can be added in an unsustainable way.
Then, we may have the good problem of how to distribute the fruits of greater productivity. That was the history of the West for the past 80 years. It is greater productivity on the front that will allow the government to increase public debt or the monetary base without generating only inflation or capital flight – the new theories do not change that. But greater productivity may not be realized if we try to just go back to the pre-covid world by getting into debt, without finding ways to channel people’s initiative productively. The risk could be an impoverished society with a caste of those whose salaries are guaranteed by the State and everything else fighting the tide.
For Brazil, now, this means that we have to facilitate the use of new technologies and use their fruits to finance numerous activities that we know are essential and indispensable, such as universal sanitation, for the country to reach the level of development that everyone wants. It is to stimulate training and employment in a knowledge society, with high productivity services, and not just being importers of innovations. It is to manage the risks of our extraordinary agriculture coming to face a domino effect, if the world meat market shrinks due to environmental concerns or the success of some laboratory substitute, since much of the grain export is to feed animals. Will crop-livestock integration suffice? More soy in biodiesel, even though the electrification of transport in 20 years may change this calculation?
Let’s think about how to take advantage of the changes in global production chains that will come from the desire for security brought about by covid-19? Not to increase protectionism, but to position ourselves with a secure provider. It is entering a competitive arena, but with opportunities to create jobs for a new generation of Brazilians with more education and entrepreneurs. The health supplies and equipment sector can be a start, perhaps revitalizing our pharmaceutical company. There are many options and the private sector needs tranquility and guidance.
Technology may open the door to a better life, but it will not fall from the sky – we need to create incentives for its adoption and ways to transform the impact on people whose productivity is lagging behind that of “robots” into opportunity and justice. “physical or in algorithms. Many years ago, the popular author Yuval Harari observed that agriculture allowed humanity to take a leap forward, but the impact on some aspects of the quality of life of the majority of the population may have been negative in relation to previous life as hunters. This can be repeated if the world does not think about a new social pact, which we do not yet know how it will be. Taking up this challenge, having the courage to occupy a new space in the world and including our entire population in this improvement must be our ambition. Knowing that it will require a lot of work and imagination, as well as coordination between government, workers, entrepreneurs, science and finance
* EX-MINISTER OF FARM
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