This is an approximate transcript of a discussion Mark E Thomas held with the Thor Lion doscussion group on the evening of 10 June 2021.

You can now also watch a video of the event.


Good evening.

With luck, we are within sight of the end of COVID-19 as a major health and economic risk. That is far from certain, unfortunately, but it is a possibility. I do not want to get into that question because there is a big and important issue that I would like to tackle which is about building a better world after the virus.

So, let’s just assume that within 12 months the virus will be for practical purposes behind us. Where will we be? And how can we move forward?

The virus has hit all countries hard and the UK particularly badly. This chart shows the global picture of the death toll – from the Statista database – and the economic impact – from the IMF via Statistics Times.

Of the 142 countries which appear on both lists, 112 have done better than the UK on both COVID and the economy, 10 are better on the economy but worse on COVID, 10 are worse on the economy but better on COVID and two countries – Peru and Italy – have performed worse on both counts.

So as a country, we have been badly damaged. But the damage has not been uniform: there is a strong correlation between your probability of falling victim to COVID and your financial circumstances.

Indeed, mortality from all causes is much higher amongst those in the most deprived groups. The threat from COVID to health has been greatest for the poorest people.

And so has the threat to livelihoods – there is a lot of anecdotal evidence that the poorest have suffered most from COVID, while the wealthiest have seen their wealth soar. As the FT said,

“The total wealth of billionaires worldwide rose by $5tn to $13tn in 12 months, the most dramatic surge ever registered on the annual billionaire list compiled by Forbes magazine.”

And this is consistent with evidence from previous pandemics.

Source: CovidEconomics12.pdf (

As you can see, the pattern is for the top half of the population to see their incomes rise after a pandemic – and the richer they are the faster their incomes rise; the bottom half of the population see their incomes fall – and the poorer they are the fastest incomes fall.

So, even if the UK on average recovers from COVID, there is a very real risk that many of the most disadvantaged will not recover.

But the question of recovery itself is not clear. Here is a picture of how the UK has recovered – or not – from the Global Financial Crisis, and how it may recover from COVID.

It is not a pretty picture. Not only did the UK never recover from the Global Financial Crisis in the sense of getting back onto the pre-crisis trend line, we never even approached the same rate of growth after the crisis. In fact we never even attained the rate of growth which had been the average of the period 1997 – 2010 (i.e. including the Global Financial Crisis and the Great Recession which followed it).

The Orange line at the bottom is the IMF’s forecast for how we will recover from COVID. It suggests that this will be yet another incomplete recovery.

And if we extrapolate some of these different trends forward, we can see what kind of world we might be heading for in 2050.

But to make it a little more personal, rather than looking at GDP per capita which is a kind of average picture of the economy, let us look at median earnings – what a typical person actually makes in a year.

In 2019, the median earnings were just under £25,000. If they were to increase as they did on the pre-2010 trends, then by 2050 they would be almost £35,000. While not guaranteeing a life of luxury, this of course means that the typical earner would have a far easier and more comfortable life than today.

But, as we saw, we have not been matching those pre-2010 trends, and that is even more starkly the case when we come to looking at median earnings which have actually fallen slightly since 2010. The pie has grown a bit, but most people’s slices have become a bit smaller. So on the post-2010 trends, we could be looking at median earnings of under £20,000 by 2050 – that is a significant reduction and represents enormous hardship to the bottom half of the population.

And of course COVID and Brexit could make matters even worse, especially if we compound the problem with another round of austerity. We could find ourselves looking at a situation where the median earner in 2050 is hardly above today’s poverty line.

That process – where even though the economy grows, many people find themselves growing poorer year on year – is what we call ‘mass impoverishment.’ If it were to continue until 2050, the UK would no longer look like a prosperous northern European country: it would more closely resemble South Africa today – a tiny, wealthy elite isolated from the mass of the population who find themselves living in or not very far above poverty.

When I was born, my parents believed that I would have better opportunities than had been available to them and therefore there was a reasonable chance that I would become better off. The same thing applied to my parents in relation to my grandparents. Many of us took it almost as a law of nature that each new generation would have better opportunities than the previous one. But now we are looking at the first generation in living memory which has a rational fear of being poorer than its parents.

So when we look at these four possibilities, we have to ask which one is more likely. If the UK had a leader like Franklin D Roosevelt or Clement Attlee, they would be responding to this challenge with some form of New Deal and a massive investment programme.

Roosevelt’s New Deal saw enormous public spending, infrastructure investments, job creation schemes, investment in education, reshaping of the tax system, and tackling monopolies. He introduced a new social contract and ended the great depression.

In the UK, after the Second World War, Clement Attlee implemented the recommendations of the Beveridge report, creating the welfare state and the NHS. It also ushered in the Golden Age of Capitalism during which not only did the economy as a whole perform far better but the share of the pie given to the typical person grew dramatically.

With a leader like those, we would be looking – at least – at the left-hand scenario.

On the other hand, as recent years have shown, it is perfectly possible for us to follow far less attractive trends and we could end up at the right-hand end of the spectrum.


So, on the face of it, this choice is a no-brainer – why do not we just go for some kind of New Deal and invest to build a better UK and more prosperous future for our children’s generation?

The obvious issue is affordability. Of course, the economic damage caused by the virus has resulted in a significant increase in government debt. The ratio of UK debt to GDP is now around 100%.

And we are starting to hear voices claiming that this is a disaster for the UK.

One claimed that, “The debts we will have built up by the time the pandemic is over are too big to think about.” If we do not tackle it immediately, their argument runs, the cost of servicing the debt will rise and the government will be, for the first time in history, at risk of default. Even if that does not happen, debt at this level would leave an unjustifiable burden for future generations, “After all, it’s not us that will have to pay this money back, it’s our unborn grandchildren, who bear no responsibility for this mess whatsoever.”

While we may not like it, these voices say, there is no serious, responsible alternative to renewed austerity.

Fortunately, that is economic nonsense. Let us take a look at the facts.

As you can see, 100% is not staggeringly high, it is 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 absolutely 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 clearly 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 economists in reputable universities – and now you can see one of the reasons. We and others have written before about why there is no factual basis for this narrative of unaffordability – there is no rational reason to be concerned about the level of government debtquantitative easing does not imply hyperinflationbalanced budgets are inappropriate for governmentset cetera.

What this chart shows – most importantly – is that we have a choice between a world of austerity or a New Deal style world.

The idea that there is no alternative to austerity is economic nonsense.

So, I think it is clear that the UK faces some real challenges and a non-negligible possibility of a very unattractive future. Fortunately, 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 under Trump showed that democracy is fragile and risks being captured by powerful interests representing only a very small fraction of the population. 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 before, as a matter of fact, this is no justification. Austerity was based on a myth, not the facts.

The third action builds on the foundation of the first two actions to develop policies which both grow the pie and share it fairly – so that everybody in society benefits.

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. 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 to 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 hard Brexit would be an example. The government’s own analysis shows that hard 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 shifted 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 before, in which the next generation is substantially better off than today and our children have an appealing future to look forward to.


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 to make 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.

And there are certainly plenty of examples of companies which have both behaved ethically and been successful. 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 huge 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.

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 all this. And so, despite its reputational advantages,  an ethical business finds itself at a cost 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. We need to level it.

Those are the five key actions.


So, to summarise:

  • we saw that the UK faces a stark choice about the post-COVD world we aim to build – but also that it is a choice: we can choose the future that we move towards and that we leave to coming generations;
  • we also 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.

To help tackle the issues that we have just discussed, I wrote the book 99%, which was published in late 2019. At the same time as the book was published, we set up the 99% Organisation – an entirely volunteer movement which has grown from four members to well over 1200 members, and which has six active projects addressing these issues.

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.

Please do sign up and join us: we need your help.

Thank you.