This is a transcript of the presentation Mark E Thomas gave to the Imperial College MBA students and Alumni on Thursday 8 October 2020.  We hope to have a video available on our YouTube channel soon.


Good afternoon everybody.

Since we are on Zoom today, we decided to split the session into two parts, each with a bit of me talking and plenty of time for discussion afterwards.

My overall thesis is that we can build a much better world than the one that we have been on track for. And the two parts of the session look at different aspects of that thesis:

  • The scenarios we face post-COVID
  • How we can build an attractive future 

Part One: The Virus and What It Could Mean

Let’s begin by looking at the course of the virus itself.


In this chart I am using the FT/ONS numbers for death toll which are more comprehensive than those reported by the government.

The slide shows four scenarios for the death toll from the coronavirus. The highest rather faint line is the laissez-faire line: what would have happened if the government had done nothing significant to contain the virus – no lockdown in March. The results of that would have been over 400,000 deaths in the UK. And most of them would have happened by now. For comparison, that is approximately the number of people who were killed in the UK during the Second World War.

Fortunately, we did have a lockdown, and when it came it was rather effective – according to the FT, total deaths so far are around 70,000: a terrible number but far short of 400,000.

The red line is what would have happened if the government aimed to remove all restrictions on public activity at the end of May (and assuming that people’s behaviour reverted to normal). It shows a second spike leading to almost the same number of deaths as a laissez-faire line.

The orange line represents what would happen if the government aimed to unlock sequentially, but to keep the rate of infection, R, around 1. In this case, the number of daily deaths would remain rough roughly stable, so that by April next year there would have been around 120,000 deaths – again still rising. And because restrictions would still be partly in place, that would also be very bad for the economy.

The dotted orange line shows a scenario in which the virus was well under control until the beginning of September, and then gets out of control – if control were not regained, we could still see more than 300,000 deaths.

Finally, the Green line represents what would happen if the government had followed the approach adopted by New Zealand: hard lockdown followed by a transition to Test, Trace and Isolate once the numbers are low enough. In this case, the number of deaths would continue to decline rapidly, and the ultimate death toll would be around 75,000 – almost all of which have already happened. So far, we’re tracking quite close to the green line, but of course there is a real risk of a second spike now.

But let’s assume that we manage the virus well and avoid a second spike. What would that mean for the economy?

The solid red line represents the estimates from the Office for Budget Responsibility. As you can see there’s been an enormous plunge in economic activity in quarter two, and they’re anticipating quite a sharp uptick in quarters three and four. The dotted red line indicates what would happen if we had growth at 4% per annum thereafter.

And the grey line shows, for comparison, what happened after the Global Financial Crisis.

So this is a rather curious picture – on the OBR projections, we are experiencing a far worse recession than the one after the Global Financial Crisis – but they are expecting a much more rapid bounce-back.

Is that what is actually going to happen? The answer is that nobody knows, not even roughly, because it depends so much on policy decisions.

If we had a committed market fundamentalist like Jacob Rees-Mogg setting policy, we would see a no-deal Brexit at the end of the year – which the government’s own estimates say would be extremely damaging to the economy – followed by savage cuts to public spending. That might produce a profile rather like the bottom of the grey area.

On the other hand, if we had a leader like Franklin D Roosevelt or Clement Attlee in charge of policy, we would expect some form of New Deal with much greater support both for business and for the population, and that might produce a profile rather like the top of the grey area.

The US New Deal introduced by Franklin D Roosevelt saw enormous public investment programs and job creation schemes, which is what ended the Great Depression. In the UK, after the Second World War, Clement Attlee’s government followed the blueprint of the Beveridge report and invested to build the NHS and to construct the Welfare State. In both cases, the results were better for the economy overall, and far better for the typical member of society.

On the face of it, this looks like a no-brainer – why not go for the New Deal approach? Well the obvious question is what would happen to the debt?

Most of the data on this slide come from the Bank of England, which has compiled 300 years of economic history for the UK. And the very end comes from the Office for Budget Responsibility estimates. As you can see the OBR is estimating that debt is around 100% of GDP.

Is that a problem? There are already many voices telling us that 100% is ruinous and that we need to prepare for another round of austerity. But that’s not what the rest of the data show.

In fact, 100% is not staggeringly high, it’s not even rather high, it is almost exactly the average level of debt that the UK has held over the last 300 years. There is no factual basis for the debt hysteria.

In fact, even if the debt went a long way above a hundred percent, there would still be no reason for hysteria. Just before the Industrial Revolution really took off, around 1820, debt to GDP was over 200%. Immediately before the Golden Age Of Capitalism (the post-war period 1945 – 1980) debt to GDP was over 250%.

These were the two most successful periods in the UK’s economic history. Very high debt is demonstrably not an obstacle to growth. And the growth itself reduces the rate of debt to GDP.

So I think you will hear a lot of noise about ‘ruinous levels of debt’ and the supposed ‘need to balance the books.’ Almost all of that will come from politicians and journalists; and almost none will come from serious economists in reputable universities – and now you can see the reason.

So we have a choice between a world of austerity or a New Deal style world.

What does that really mean for people?

Today’s median earner takes home just under £25,000 year. What will that figure be in 2050? Well of course it all depends what trends we follow.

If we were to follow the pre-2010 trends, by 2050 the median earner would be taking home almost £35,000 a year. At the other end of the spectrum, if we follow the coronavirus with a no deal Brexit and permanent austerity, we might be looking much more like £16,000.

In the first case, the average person would have a far easier life than today – though still not luxurious. In the second case most people would be living in or near today’s poverty line.

The UK would have become a bit like South Africa: a small number of immensely wealthy people living surrounded by intense security to protect them from the impoverished masses.

That process is what the 99% Organisation calls mass impoverishment, and that is what we were set up to prevent.

But the crises we face are not just COVID-19, Brexit and mass impoverishment: we also face a climate emergency!

And once we factor in environmental trends, the choice looks even more stark.

You can see that, if we carry on as we have been going, we will neither succeed in tackling mass impoverishment nor in dealing with climate change. And since the two factors would be likely to interact, the endpoint is probably even worse than the diagram suggests.

But if we invest to build a greener, more prosperous, fairer society, we could end up in a very different place: a world where rather than our children being the first generation that expects to be poorer than their parents, they can expect to be substantially better off in a much greener world.

We’ve seen indications that it is a choice that we face, not an inevitability.

Why don’t we simply choose:

  • no mass impoverishment,
  • no environmental degradation,
  • lower inequality, and
  • a constructive role for everyone in society

– in other words a positive future for our children?

After the break we will come back to the question of how we can create such a future.

Part Two: What It Would Take to Build a Better World

Before the break, we saw the range of possible futures open to us. And we saw that at one end of that range is a rather attractive future. In this part of the presentation we will look at what we have to do to build that attractive future.

The economy is the system we have put in place to provide goods and services for people.

It’s a complex system, of course, but we can think of it as being a bit like a pie in which the size of the pie represents the goods and services which are available to be distributed, and the slice represents what each person actually gets.

In this analogy there are three problems we need to fix:

  1. for the last decade, the pie has hardly grown at all in the UK;
  2. when it does grow, some of that growth is bad for the environment; and
  3. most people’s slices are smaller now than they were in 2007.

How are we going to fix this?

In principle, the answer is simple:

  • firstly, we need to make sure that when we do grow the pie, the growth is not harmful; and
  • secondly, we need to grow it faster and share it more fairly.

That will produce the desirable future that we talked about in Part One.

Let’s start by looking at the issue of good growth and bad growth.

We can split all economic activities into three ‘buckets’:

  1. the good bucket which contains all activities that do not harm the environment: planting trees and insulating houses, for example would fit into bucket A;
  2. the could-be-good bucket which contains activities which, though desirable in themselves, have at least some environmentally harmful consequences – agriculture, public transport and energy generation would be in bucket B;
  3. the bad bucket which contains activities which we would be better off without – fossil fuels, for example.

Once we know what sits where, we can aim to grow bucket A quickly; to transform bucket B – for example by switching to renewable energy for electricity generation – and to shrink bucket C as fast as we can.

When we do that, the picture looks a bit like this.

Now this chart is really good news. You can see that about 80% of the U.K.’s GDP is already in the good bucket – only very minor transformation is required. And most of the rest is in the could be good bucket. There is major transformation needed – but in principle it is straightforward to see how this would be done. It is only the extraction of fossil fuels that cannot be transformed and sits in the bad bucket. In other words, the structure of the UK economy is really helpful for containing environmental damage.

So if we target investment at growing the good bucket and transforming the could-be-good bucket, while shrinking the bad bucket, we can both produce economic growth and reduce emissions.

And that would clearly be good for the environment. But what about people? How will we end mass impoverishment?

That brings us back to thinking about the pie – how will we grow it, and how will we share it more fairly?

Although it’s true that policy formulation is very complex, fundamentally there are only four types of policy. Every policy either grows the pie or it does not grow the pie; and it either shares the pie fairly or it does not.

That gives us this picture.

At the top right are the shared growth policies which both grow the pie and share it fairly. Take fundamental research, for example, we have been gradually funding less and less of this – and yet it is the engine of our future prosperity. Or education; or civil infrastructure; or healthcare – all of these things help everyone in society. We want to see far more of these.

At the top left are policies which do grow the pie, but they don’t share the benefits fairly. Very aggressive automation, for example, could enable us to produce lots more valuable goods and services, which might be good for society as a whole, but would also lead to many job losses. If we do nothing balance these policies, the pie may grow, but many people will find their slice shrinking dramatically.

And this brings us to the need for the policies on the bottom right. These policies can be used to balance type I policies so that everybody shares in the benefit that growing the pie can offer. So if we did have aggressive job automation over the next 10 years, some of the casualties could be mitigated by retraining and direct job creation schemes, and some of the balancing would need to come from a strengthening of the safety net. A good policy portfolio is a balanced policy portfolio.

Finally there are the vulture policies which neither grow the pie nor share it fairly. A no-deal Brexit would be an example. The government’s own analysis shows that no deal Brexit would be expected to shrink the pie. When that happens many people are bound to suffer, even if some hedge fund managers do extremely well. We simply should not implement vulture policies.

So if we look back over the last 10 years, we can see that the main reason for a lot of our problems is that we’ve had a preponderance of Type I and Type III policies, and far too few Type II and Type IV policies.

What would happen if we shift policy formulation to produce a balanced portfolio of type I, type II and type IV policies?

It would not create utopia, but it would bring us to that type of attractive world that we talked about in Part One, in which the next generation is substantially better off than today and our children have an appealing future to look forward to.

And, perhaps surprisingly, given the scale of the problem, the actions we need to take are individually neither particularly radical, nor very complex.

In fact there are really only five actions we need to take.

The first action is a democratic reset. At the moment there is nothing in our unwritten constitution which prevents the government enacting a policy that it knows will be harmful for 99% of the population. It is simply taken for granted that they would never do that. The last 10 years show us that we cannot rely simply on taking it for granted; we need constitutional protection.

We also need far more in the way of checks and balances than are currently present. Looking at the state of the US today shows that democracy is fragile, and risks being captured by powerful interests representing only a very small fraction of the population. And recent events in the UK have shown that the same is true here. All countries need to learn from the US experience.

The second action is self-evident: we need to base policy on facts not myths. The dominant policy of the last decade has been austerity – and this was justified on the basis of the state of public finances: the level of debt to GDP. But as we saw in Part One, as a matter of fact, this is no justification. Austerity was based on a myth, not the facts.

The third action, we have already talked about. Formulating policy for abundance and solidarity – using that matrix of policies to ensure that we grow the pie faster and share it more fairly.

The fourth action is to invest wisely in the future. Because of austerity we have been unwisely under-investing, and there is a great deal of catching up to be done.

And finally, the fifth action is to ensure clean, competitive markets. This is the point about making sure that ethical businesses outcompete the unethical ones, rather than the other way round.

There is a conventional narrative of the role of business in improving the world.

In this story, good behaviour is synonymous with good business. If you treat your customers well, they will be more loyal; if you treat your employees fairly they will more than repay it with commitment and creativity; if you contribute to the rest of society, you will be rewarded as a good corporate citizen.

In this story, ethical behaviour and competitive advantage are more or less synonymous.

There have been a number of recent initiatives implicitly based on this theory. In the UK, Julian Richer and the CBI have combined to launch a good business charter. In the US, the Business Roundtable persuaded 181 CEOs to sign a pledge which ‘redefined the purpose of the corporation’ from shareholder value maximisation to stakeholder value maximisation. And in both the US and the UK, B-corporations are a kind of certification of ethical practice.

And there are certainly good examples of companies which have both behaved ethically and been successful – not least Julian Richer’s own company, Richer Sounds. The top ten in the UK include: Pukka teas, Neal’s Yard, Triodos, and Ecover.

But if we look at the really successful companies, what do we see? Five very large companies now make up 20% of the market value of the entire S&P 500:  Facebook, Apple, Microsoft, Google and Amazon. They are all under investigation by House judiciary’s antitrust subcommittee for anti-competitive behaviour. In addition, they all avoid taxes. Amazon is notorious for its treatment of its workers. And Facebook has been complicit in abuses of democracy. Are these the five most ethical companies in America? I hope not.

So, what is really happening here? In practice, one of the easiest ways for a business to be competitive is to externalise its costs: to pollute without paying the costs of clean-up, to avoid taxes, to underpay staff – and leave the rest of society to pick up the bill for this. And so an ethical business finds itself at a disadvantage when competing with an unethical one. Amazon exemplifies the power of externalisation as a competitive weapon.

At the moment, the playing field is tilted against ethical businesses.

So the obvious way that businesses can help is by behaving ethically. The less obvious one is by helping to change the system to level the playing field.

We have recently started a project jointly with Imperial College, the Institute for Public Policy Research and the Impact Project (which coordinates the international accounting standard setters). This project is aimed at quantifying the externalities and adjusting the accounts accordingly. It is the first step towards re-engineering the profit motive into a force for good.

Those are the five key actions.


So, to summarise:

  • in part one, we saw that the UK faces a stark choice – but also that it is a choice: we can choose the future that we move towards and that we leave to coming generations;
  • in part two, we saw in outline the kinds of policy shift – and shift in mindset – that will be needed to move us towards an attractive future for our children.


At the same time as the book 99% was published, we set up the 99% Organisation. I hope I’ve given you a flavour for what we are aiming to achieve with the book and the movement: ending mass impoverishment, creating a world fit for the younger generations to live in: greener, fairer and more prosperous than today.

Thank you very much indeed for your questions so far. Please do sign up and join us: we need your help.

Thank you.