Never let a good crisis go to waste.
Winston Churchill’s famous words from the darkest days of world war
2 have taken on a more sinister meaning as the decades have passed.
This quote was actually meant to be an inspirational message of hope to the British
people but these days more cynical onlookers see that people with ill intent can use a crisis,
just as well as those who are virtuous.
The Great Reset is a collective name given to a series of economic policies that are attempting
to use the recovery from the coronavirus as a way to supposedly build a better,
brighter, more sustainable world.
This policy was first unveiled by the World Economic Forum and the United Kingdoms Prince
Charles, and since this announcement, it has gathered support from a laundry
list of economists, politicians, business people and celebrities.
But it has also gathered a fair bit of criticism. Just 72 hours after
its announcement a petition to stop it gained 80,000 signatures, which is kind of fair enough.
The whole premise of this proposal does sound very ominous.
Economic plans titled the great something have not exactly had the best track record.
The fact that this plan is leveraging a disaster, alongside the fact that it is pushing some pretty
spicy policies means that major conspiracies have been surfaced ranging from this plan
will make us all poorer, all the way up to this plan will make us slaves to the lizard people.
Now in fairness, the marketing around this Great Reset has not helped its case at
all. If someone was to try and research what this plan actually was they would be presented with two
extremely bizarre adds that explain absolutely nothing, and a 2 hour panel, which was extremely
boring even to a major economics nerd like myself, and also kinda equally as unhelpful.
We know this because well, we had to research this plan to make this video.
So it sounds like Some Economics need to be Explained
And to properly do this we are going to need to answer a few questions.
What is The Great Reset actually proposing to do?
Do these ideas have any merit?
Who are the players involved in pushing this agenda?
And is this actually a nefarious scheme or just the victim of terrible marketing?
Intro add
Now perhaps one of the largest concerns shared amongst rational onlookers to this
great reset proposal is the distinct lack of support from economists.
Time magazine has created a page to help explain the idea and it has broken the propsal down into
features from it’s key supporters. There are models, cellists, reddit co-founders,
ex royals? But outside of Klaus Schwab, the chairman of the world economic forum,
there are no economists… for what it’s worth Klaus Schwab is actually an engineer by education,
but he is brilliant in his own right so that one is fair enough.
Now a lot of this is because people like prince harry and
Meghan Markle are going to attract a lot more attention than Paul Krugman,
or Thomas Piketty. Something something decline of society, but you know what fair enough.
Plenty of brilliant idea’s made it nowhere because they failed to get any attention.
The second reason this page of supporters is devoid of economists is because “the great reset”
has for better or for worse become more than just an economic plan...
it has become a bloated wishlist of things ranging from independent
media to demilitarisation… support for the arts to sustainable architecture.
Which may very well be credible and important arguments in their own right but
only work to make this whole proposal more confusing at best, or most confronting at worse.
So for the sake of simplicity, we are going to go
ahead and ignore all the fluff that has been tacked on here and focus purely on
The Economic Proposals
Because oh boy there are a lot of them but the foundational point of all of this hubbub is this
single point, so if you remember just one thing about the great reset make sure it is this.
The great reset plans to Ensure that every recovery stimulus
both fiscal and monetary from now on must include green conditions.
Given that 2020 has been a very rocky year and fiscal stimulus has been a major topic
we have spoken about these policies many many times on the channel.
We explored infrastructure spending by china just last week, we looked at quantitative easing
in japan and the united states, and a host of other policies from a diverse group of nations.
One common theme we saw amongst all of this is that fiscal stimulus is a great
opportunity to put money towards something that needs to be improved in the nation.
If a country desperately needed new highways, more funding for schooling, or you know maybe
even a stronger military, fiscal stimulus is a great way to provide that spending.
The key objective of stimulus is to get money out into the economy
and into the hand of people so they can go and spend it. That spending keeps businesses open,
people employed, and quality of life-improving.
Now pretty much any type of government spending will achieve this, throwing money off the tallest
building in a selection of major cities will achieve this, but there are alternatives
that achieve the same core results while also having happy little side effects.
Infrastructure spending is a great example of this that we talked about briefly in our
last video. I don’t want to repeat too much but governments putting money towards building new
pieces of infrastructure will achieve their goal of getting money out into the economy in the form
of paycheques for workers, contracts for builders, and commissions for architects and engineers,
but they will also have something left over to provide utility for decades to come.
What the great reset is proposing is something similar,
but channeled exclusively towards building out infrastructure for green technologies.
There are a lot of advantages to installing solar panels on your home,
so long as you live in a reasonably sunny area,
it will reduce energy bills to the point where the system will pay for itself a few times over,
it also reduces your carbon footprint and may even add value to the property itself.
However, the upfront cost is a prohibitive hurdle for a lot of households.
Similar situations exist on a nationwide level,
a modernized and expanded rail network in a city like las Angeles would work to take
thousands of cars off the road, reducing emissions, congestion, and lost time for
commuters but the upfront expense would probably take it out of consideration.
However if a fraction of the 2 trillion dollars that was rolled out in the
initial wave uf US fiscal stimulus was redirected towards a project like this,
the cost would be comparatively trivial while still achieving the desired results
of putting money into people’s pockets during times of economic uncertainty.
Now I am not a city planner so this example is exactly that,
and there probably is hundreds of better ways to spend this money on renewable infrastructure
but the point is that getting that money out there while redirecting it through a project like this,
or building a wind farm, or a fleet of electric busses, or whatever, is literally a win-win.
Now you might be thinking well that sounds excellent,
even the most staunch anti-environmentalists would agree that its probably better to get
something for those government dollars than nothing at all right?
And well yeah it really is a great idea, but there are problems.
For starters it can be really slow to implement, its all well and good to say we will build some
amazing new wind farm that will power an entire city but there is alot that goes into that.
Plans have to be drawn up, a proposal has to be accepted,
land needs to be procured, turbines need to be manufactured
and only then can tradesman and laborers start to get paid to put this whole plan together.
This could take years, all the while people are losing jobs, going hungry,
and not contributing to economic growth.
Say what you will about just giving money to people, but it is fast.
The second issue with this kind of scheme is that the money
is channeled towards a group that may not need it as much as others.
A typical project like let’s say our wind farm will be handled through a corporation that
specializes in these types of contracts. Their goal will actually be to spend as little money
as possible on labor because any money spent there is money that isn’t taken as profit.
And yeah sure that money will eventually find its way to shareholders or be re-invested in
the company itself, but that is money that is not going to be recirculated
nearly as quickly as a $1,200 cheque in the hands of a working-class family.
The final problem is what to do with the infrastructure once it is there. It could
be privatized in an attempt to recoup some of the expenses of building it in the first place.
But then a potentially vital public service is in the hands of a private company and any
benefits it may provide will be locked behind a paywall of sorts be it a toll for a highway,
higher electricity costs, or a more expensive ticket to ride on the train.
This is on top of the optics of privatization which can sometimes be a bit politically spicy.
Of course, the alternative is to just keep this project as a public asset but then it’s
just another piece of infrastructure that will need to be maintained on the taxpayers’ dime,
which could be unpopular to the people that don’t directly benefit from it.
A potential solution to at least half of these problems would be to have a comprehensive list
of projects pre-planned and ready to implement quickly after a downturn, complete with a plan for
the project to cover it’s own costs or be shared equitably amongst the tax payers who will fund it.
Of course easier said than done, but if governments did have the
forward vision to put some projects in the metaphorical chamber than you know what,
nobody would have any problem with this kind of strategy.
If the great reset was a challenge for governments to create these kinds of plans and have them ready
for the next downturn it would probably have a slightly more favorable reception.
but advocating for doing this right now is just not an achievable goal for many people,
companies, and economies which are simply looking to survive through the next few months.
of course this proposal was just one of many incorporated into the narrative of the great
reset, and the list is... comprehensive… and controversial so lets see what else
The fuss is all about
Now these are the takeaway issues that we were able to discern from
the articles published by the WEF. again probably one of the biggest issues of this
whole proposal is that it’s really hard to tell what the proposal is, but I digress.
It’s time for a speed round to get through them all
One point is a push for investment in technological education so that
workers around the world are better suited for employment
in increasingly tech focused industries, like logistics, manufacturing, and retail.
And you know fair enough, that’s probably a good call. Education is of course something
that I am very passionate about and making sure everybody has access to
good applicable knowledge is vital for maintaining a strong workforce.
So long as this education is directed towards in-demand fields this is an investment that
will pay dividends many times over on an individual, national and global level.
The next proposal is to encourage long term investments by the private sector
into sustainable industries. And ehhh this is a tough one, certainly, there are huge
advantages to carrying this out, but it is market intervention so there will be critics.
A carbon tax is an effective way to achieve this what this point is proposing.
Carbon emissions are what we call a negative externality, this is something that cost’s
everybody in the wider economy regardless of if they are benefiting from those emissions.
Putting a tax on these emissions would mean that external cost borne by society
is also a cost bourne by the emitter, and this money can either just be collected as
revenue to use on public goods so atleast the wider community is getting something for the
metaphorical price they are paying or in the best case scenario it will encourage
businesses to invest into lower-emitting alternatives to avoid this cost altogether.
A large part of tesla’s revenue currently comes from selling
unused allowances for emissions to companies that are less green in their operations.
Now a good group of people would support policies like this but many wouldn’t so
perhaps a more applicable takeaway might be that governments don’t need to subsidize solar farms
or roll out carbon taxes just yet, but perhaps they should stop subsidizing major emitters.
That’s like paying in actual dollars, to pay with intangible costs,
silly stuff, and a suprisingly widespread problem
The next proposal is to roll out a new dashboard for measuring economic success beyond just GDP
metrics, and well you know no problem here either, hey world economic forum I will lend
you the Economics Explained national leaderboard, just get me a ticket to davos next year yeah?
In all seriousness though no problems here, GDP has its uses but it gets way
more attention than it should. Social metrics as well as things like increases
in collective wealth are sometimes far more telling than GDP figures alone.
The next point is to encourage entrepreneurs to establish new
technologically and environmentally ethical rules. [heavy sigh]
Look this is nice in theory, and full disclaimer believe it or not I am personally a big supporter
of protecting the environment, by living below your means, walking instead of driving,
recycling all that good stuff but it just is not the role of business. It’s
really the role of policymakers and the responsibility of individuals.
Businesses generate profit and keeping their motivations “pure”
and singular makes for better economies.
Now if maintaining ethical and environmental standards were baked into that profit motive
well that’s great. People love hearing about businesses that have neutral carbon footprints or
treat their employees well, and those businesses get rewarded with conscientious dollars.
A better solution to this would be to work on making consumers demand
higher standards of corporations and encouraging competition that
could challenge companies that do not meet these standards.
Saying that companies should sit down and sing combyahh with one another
sounds nice in theory, but in practice, they have a duty to shareholders.
You don’t use a hammer to fix a laptop so don’t use corporations to implement ethical regulation.
There are just better tools for the job.
Now so far these policies have been a bit optimistic, but not exactly
evil. It would be difficult to see how people would think this is a plan for world domination
if it werent for one final piece of the puzzle.
Terrible marketing
This is a direct extract from the world economic forums collaboration with time
magazine on this issue, in which the two organizations paint the picture
of a future world where the great reset has been implemented by all governments around the world.
the year is 2023. The COVID-19 pandemic has come to an end,
and the global economy is on the path to recovery. How did we get here?
The U.S. began to change its approach after Nov. 3, 2020, when Joe Biden defeated Donald Trump in
the presidential election and the Democrats held the majority in both houses of Congress.
Following his Inauguration in January 2021, President Biden moved quickly
to rebuild frayed ties between America and Europe, setting up a forum to share
collective intelligence that could inform a smarter form of government.
European governments were eager to learn from the investment strategies
used by the U.S. government—like those led by defense research agency DARPA—to
spur research and development in high-risk technologies.
The European leadership used challenge-oriented policies
to create 100 carbon-neutral cities across the Continent.
Governments used a digital revolution to improve public services, from digital health to e-cards,
and create a citizen-centered welfare state.
Holy partisanship batman
The article continues on like this and I will leave a link in the video
description for those who want to read it in full.
Now you may personally support everything that is said here, and that’s great,
but you have to realize how blatantly partisan this is, it also pushes globalist idea’s in
advocating for nations to openly share their intellectual property.
Now, this is in reality what people take issue with,
the world economic forum, sounds like it should be well a forum,
and one that positions itself above agenda’s like this one way or another.
But of course it isn’t... and understanding what the world
economic forum actually is will tell us alot about what this whole proposal is in reality,
and why even the most staunch rivals to it’s policies shouldn’t be afraid of it.
The World Economic Forum is a Non Goverment organisation
probably best known for their annual meetings held in davos switzerland, werte thousands
of wealthy people descend on a small alpine village to talk about all things economics.
It makes a majority of it’s money through membership fee’s
which are steep!! They range anywhere from $67,000 per year to $700,000
per year depending on the level of engagement with the organisation.
So who are these members? Well obviously very rich people,
or influential public figures that get complimentary invites.
So by virtue of the fact that it attracts the type of people who can afford this membership,
it is influential, but it’s not like the united nations, or international
monetary fund or the world bank (as much as it would probably like you to believe it is)
It’s for lack of a better way of putting it,
a book club for woke billionaires where the only thing they discuss are economics texts books.
The great reset may aswell be the great gatsby, it’s not really a genuine proposal,
it’s a hypothetical to stir up conversation, and maybe a little bit of controversy.
That’s how they get attention,
which is how they get membership, which is how they maintain influence and relevance.
And now since I have totally destroyed my chances of ever being invited to Davos as
a guest speaker to bring you this message go support the channel on
patreon. It might not make up for those sweet sweet guest speaker dollerydoos but
you will be continuing to make these video’s possible just like these awesome people.
Thanks guys bye.