Opinion: Neil Mackay: Scotland can lead the world when it comes to revolutionising the economy in the face of pandemic … here’s how

Just a few days ago, for instance, I was taken aback by the boldness of thought which came from one of Scotland’s leading economists, Professor Ronald MacDonald.

MacDonald and I spoke about what can only be described as his revolutionary vision for a post-Covid economy. I wrote about his ideas in our sister paper, The Herald on Sunday, at the weekend. To put it mildly, MacDonald wants to completely reimagine capitalism – to recalibrate how we live so the world becomes a fairer, safer, saner place.

MacDonald isn’t just a big brain at home here in Scotland and Britain – he’s among the leading 1% of economists in the world. When he speaks, others really should listen. Nor is MacDonald a natural radical. In Scotland, he’s probably best known for pouring economic cold water on the case for independence.

In person, he’s mild-mannered, avuncular and charming. This isn’t a rebel by any stretch of the imagination. But what he says is truly rebellious – at least from the point of view of those who control the levers of power when it comes to politics and finance.

Self-evidently, it says a lot about our world that the term "revolutionary" should ever be applied to ideas that champion decency and fairness. But then inequality and a brutal social darwinism are the hallmarks of the society in which we currently live.

MacDonald is simply saying what a lot of ordinary folk will see as common sense. The only difference is that unlike many of us, MacDonald can back up his common sense worldview with a lifetime of knowledge and study. Intellectually, he’d be a difficult man to shout down at any time but the world we live in today makes any attack on his ideas seem dull, lazy, stagnant. Yesterday’s thinking.

The ideas that MacDonald is putting forward would have been dismissed just a few months ago as crazy by the middle-brow commentariat and political class who’ve spent their cosy careers singing hymns to unfettered free market capitalism. Our think-tanks and political parties are populated by a courtier class of hired hacks and group-thinkers whose intellectual horizons go no further than the tips of their noses.

Now, though, in this post-Covid world, real thinkers can look at the world and see that not only is the time ripe for change, and ripe for debate about change, but also ordinary people are desperate for change, they want to hear big ideas that will make their lives better.

I see the central message of MacDonald’s call for change as this: a shift from shareholder capitalism to stakeholder capitalism. In other words, it’s not those distant shareholders who only call the shots, it’s you too. How many jobs have been lost, and lives squeezed, in recent years following the 2008 financial crash, because shareholders wanted to wring more money for themselves out of the companies we work for. The idea that an ordinary worker can be thrown on the scrapheap because an absentee shareholder wants more money, more luxury, more "stuff", is so audaciously brazen, it’s almost criminal.

So at heart, MacDonald simply wants to recalibrate the economy so it’s fairer for all. He proposes a wealth tax on the super-rich, and also a land tax. His plans don’t fundamentally threaten business or entrepreneurs. They’re needed to invest and help rebuild the economy post-Covid. In fact, he suggests making life easier by providing grants rather than loans to small and medium-sized companies.

Another intellectual pillar of MacDonald’s vision is that GDP should no longer be the sole measure of a nation’s success. We need to measure ourselves not by wealth alone, but by health, social care, the environment and the quality of citizen’s lives.

Isn’t this the essence of decency? Isn’t this the kind of ideas our grandmothers instilled in us when we were all young? That money doesn’t buy you happiness. That you don’t measure a person by what’s in their pocket but in their soul.

MacDonald wants “a new form of social contract” where government instigates a “wellbeing fiscal stimulus”. There can be no more austerity. Social capital is as important as capital. Happy, community-minded people who trust each other and their government will be productive wealth-creating citizens.

Key to managing this change is the greening of the economy. If we replace our old dying oil industries with new green energy utilities, if we start building and retro-fitting green homes and factories, we will create jobs and wealth, and help keep climate disaster at bay.

I’m simply giving you the headline bullet points from MacDonald’s new study on changing the economy. It makes for compelling, convincing, and necessary reading.

But will it lead to anything? Will those in power listen to him, or is MacDonald a wise man shouting at the storm?

There is hope. The First Minister Nicola Sturgeon has indicated in the past that she has the bravery of thought to also imagine a new form of economics. Earlier this year, before the pandemic, she said that it was “morally indefensible” to focus purely on growth as the measure of a nation’s success. Sturgeon also backs a Universal Basic Income although, some fear that rather than lifting people out of poverty, UBI could institutionalise poverty.

What matters is that Sturgeon has an open mind to economic change. If we cast our eyes around the world, there are few leaders of similar inclination.

The ingredients for change are all there. We are facing financial ruin in the face of coronavirus, with devastation worse than 1929. God knows where that leads us in such a divided and fraught era. So we have to act. An economist of great standing has written a roadmap for change. A leader is in office who has the intelligence to see that change is needed. Most importantly, the people want change, and we want it now.

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