The 2008 financial crisis ended the optimism of the 1990s. The crisis showed the flaws in the economic approach that promised to make everyone better off through less regulation, privatization, and globalization. But instead of changing course with the Great Recession, governments doubled down on the same failed approach. They bailed out the banks and financial institutions that caused the crisis, while ordinary people paid the price through budget cuts and reduced public services.
This failure to create a new, believable vision of prosperity after 2008 is now threatening Western democracies. Without a shared economic vision, the gap has been filled by political movements that focus on tribal identity and “us versus them” thinking. Societies built around such divisions cannot support the diversity, debate, criticism, and rule of law that democracy requires. These democratic values depend on shared rules and facts, which clash with identitarian thinking.
The solution, as I argue in my recent (open access) book Reimagining Prosperity (2024), is to create a widely shared vision of prosperity that can unite democratic societies. This vision needs to reimagine both what prosperity means and how to achieve it, creating confidence that “we” as a society know how to build a better tomorrow. This shared belief in a prosperous future is the most important foundation for a sense of belonging in diverse democratic societies, bringing together people with different backgrounds and beliefs around the goal of creating a better tomorrow.
Visions of prosperity are also essential for democracy and cooperation between nations. If prosperity stops being the foundation of society and gets replaced by identity politics, it would pose an existential threat to supranational projects such as the European Union. The EU was created to build a rule-based system focused on shared values. But rules alone can’t hold the EU together without this shared vision.
In recent years, EU institutions have recognized that they need to reimagine what prosperity means. Their main response was the European Green Deal, which called for changing how we “produce and consume”. Across various policy areas explored in my book, we can see the EU gradually shifting its understanding of how the economy works and should work. The EU has moved away from the idea that markets and private companies are the main drivers of prosperity, toward an approach that emphasizes collective steering of the economy.
But this shift still hasn’t created a widely shared, credible, and hopeful vision of prosperity. The program has focused more on environmental issues than social ones, presenting a narrow, technocratic vision of the future that doesn’t show how ordinary people can participate in building it. Worse, today's return to old-style economic thinking, for example, in the Draghi Report—promoting deregulation in the name of “competitiveness”—risks repeating the same mistakes made after (and before) 2008.
To save democracy—both within countries and among them—and to keep the European project alive, the EU and its member countries must help create new answers to urgent questions such as “what is prosperity and how do we achieve it?”. Several key lessons are important for building this new vision.
First, prosperity isn’t about endless consumption. When young adults today complain they’re worse off than their parents, they’re not upset about lacking consumer goods. They are concerned about not being able to access basic needs: material goods, including housing and healthcare, and social goods such as starting families and caring for elderly parents or children, alongside institutional goods e.g., trustworthy government and economic security. Restoring access to these fundamental needs must be the foundation of any future prosperity.
Second, the new vision of prosperity must present futures where more than just a privileged few can actively participate. Interesting, meaningful lives must not be reserved only for tech billionaires, scientists, or urban elites. This means, above all, we need to rethink our technological future and show how a wide range of people are needed and can contribute to building a prosperous society. This vision asks more from governments than just following wherever tech leaders want to go, or fantasizing about returning to a glorious past of well-paid manufacturing jobs.
Third, prosperity in the 21st century must reclaim both time and community. Digital platforms, driven by algorithms designed to capture attention, undermine the conditions needed for healthy social relationships. At the same time, the increasing isolation of individuals makes aging and caregiving increasingly difficult. Shared prosperity will require freeing up time and supporting healthy face-to-face relationships.
Much of the energy and direction for articulating a new vision of prosperity will need to come from local communities, social movements, and community organizations. Yet to enable this new vision to take shape, governments at all levels—through laws and policies—have a crucial role to play in helping open up new and inspiring possibilities for the future of prosperity. It is through this simultaneous articulation of both the “what” and “how” of prosperity that our democracies and societies can be renewed.
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Cover:
Nairy Baghramian “Scratching the Back- Drift (Yellow Ribbon),” forms that look more architectural than natural surge out of the niche. Credit: Amir Hamja, The New York Times
