Page 75 - COVID-19: The Great Reset

years the world over, the rate of inflation has fallen for many
goods and services, with the exception of the three things that

matter the most to a great majority of us: housing, healthcare and
education. For all three, prices have risen sharply, absorbing an
ever-larger proportion of disposable incomes and, in some
countries, even forcing families to go into debt to receive medical

treatment. Similarly, in the pre-pandemic era, work opportunities
had expanded in many countries, but the increase in employment
rates often coincided with income stagnation and work
polarization. This situation ended up eroding the economic and

social welfare of a large majority of people whose revenue was no
longer sufficient to guarantee a modestly decent lifestyle
(including among the middle class in the rich world). Today, the
fundamental reasons underpinning the loss of faith in our social

contracts coalesce around issues of inequality, the ineffectiveness
of most redistribution policies, a sense of exclusion and
marginalization, and a general sentiment of unfairness. This is
why many citizens have begun to denounce a breakdown of the

social contract, expressing more and more forcefully a general
loss of trust in institutions and leaders. [70] In some countries, this
widespread exasperation has taken the form of peaceful or violent
demonstrations; in others, it has led to electoral victories for

populist and extremist parties. Whichever form it takes, in almost
all cases, the establishment’s response has been left wanting – ill-
prepared for the rebellion and out of ideas and policy levers to

address the problem. Although they are complex, the policy
solutions do exist and broadly consist in adapting the welfare state
to today’s world by empowering people and by responding to the
demands for a fairer social contract. Over the past few years,
several international organizations and think tanks have adjusted

to this new reality and outlined proposals on how to make it
happen. [71] The pandemic will mark a turning point by accelerating
this transition. It has crystallized the issue and made a return to

the pre-pandemic status quo impossible.

What form might the new social contract take? There are no
off-the-shelf, ready to go models because each potential solution
depends upon the history and culture of the country to which it

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