Before explaining myself, here's the editorial in full - in case readers of this blog can't access it behind the paywall. I've highlighted some bits.
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"Virus lays bare the frailty of the social contract
Radical reforms are required to forge a society that will work for all
If there is a silver lining to the Covid-19 pandemic, it is that it has injected a sense of togetherness into polarised societies. But the virus, and the economic lockdowns needed to combat it, also shine a glaring light on existing inequalities — and even create new ones. Beyond defeating the disease, the great test all countries will soon face is whether current feelings of common purpose will shape society after the crisis. As western leaders learnt in the Great Depression, and after the second world war, to demand collective sacrifice you must offer a social contract that benefits everyone.
Today’s crisis is laying bare how far many rich societies fall short of this ideal. Much as the struggle to contain the pandemic has exposed the unpreparedness of health systems, so the brittleness of many countries’ economies has been exposed, as governments scramble to stave off mass bankruptcies and cope with mass unemployment. Despite inspirational calls for national mobilisation, we are not really all in this together.
The economic lockdowns are imposing the greatest cost on those already worst off. Overnight millions of jobs and livelihoods have been lost in hospitality, leisure and related sectors, while better paid knowledge workers often face only the nuisance of working from home. Worse, those in low-wage jobs who can still work are often risking their lives — as carers and healthcare support workers, but also as shelf stackers, delivery drivers and cleaners.
Governments’ extraordinary budget support for the economy, while necessary, will in some ways make matters worse. Countries that have allowed the emergence of an irregular and precarious labour market are finding it particularly hard to channel financial help to workers with such insecure employment. Meanwhile, vast monetary loosening by central banks will help the asset-rich. Behind it all, underfunded public services are creaking under the burden of applying crisis policies.
The way we wage war on the virus benefits some at the expense of others. The victims of Covid-19 are overwhelmingly the old. But the biggest victims of the lockdowns are the young and active, who are asked to suspend their education and forgo precious income. Sacrifices are inevitable, but every society must demonstrate how it will offer restitution to those who bear the heaviest burden of national efforts.
Radical reforms — reversing the prevailing policy direction of the last four decades — will need to be put on the table. Governments will have to accept a more active role in the economy. They must see public services as investments rather than liabilities, and look for ways to make labour markets less insecure. Redistribution will again be on the agenda; the privileges of the elderly and wealthy in question. Policies until recently considered eccentric, such as basic income and wealth taxes, will have to be in the mix.
The taboo-breaking measures governments are taking to sustain businesses and incomes during the lockdown are rightly compared to the sort of wartime economy western countries have not experienced for seven decades. The analogy goes still further.
The leaders who won the war did not wait for victory to plan for what would follow. Franklin D Roosevelt and Winston Churchill issued the Atlantic Charter, setting the course for the United Nations, in 1941. The UK published the Beveridge Report, its commitment to a universal welfare state, in 1942. In 1944, the Bretton Woods conference forged the postwar financial architecture. That same kind of foresight is needed today. Beyond the public health war, true leaders will mobilise now to win the peace."
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Shifts of view such as these are important. They are evidence that 'left' critiques of rising inequality, business-centric policies, employment insecurity (and the 'gig' economy), the destruction of the public sector, and so on, are making sense. After decades of marginalisation they suggest we are entering a moment where a new 'common sense' may be emerging.
But we need to treat this FT view with caution for two reasons.
Firstly, we have been here before. Similar editorials were written at the height of the global financial crisis in 2008 when financial capitalism found its very existence threatened. Then we had editorials on why banking could never be the same, why a different capitalism was needed, why the economics profession itself needed to be overhauled (why hadn't they foreseen the collapse?), and why the offerings of business schools should be radically transformed, perhaps even terminated. But once the bail-outs of the rich had re-stabilised the system (although they never entirely did), such transformative visions were soon forgotten. Certainly there was some additional regulation of the finance sector, but in many respects things rapidly returned to business-as-usual and inequality as usual. And even that is a generous assessment. Inequality has continued to grow in the years since. Centre-right governments sought to pay for the bail-outs and reduce deficits by imposing austerity and hardship on the most vulnerable in rich countries, and by imposing debt conditionality on poorer countries. Right-wing governments have successfully mobilised the populace against foreigners and minorities in their midst rather than against the rich. Financial institutions and their overpaid CEOs have resumed their lobbying for regulation to be loosened, often with success. Students of economics are still taught largely the same neoliberal economics as before the financial crisis. Whilst some FT journalists, notably Martin Wolf, persist in asking questions about the capitalism we have, the FT editorial line soon reverted to supporting market-friendly globalisation.
Secondly, the radical reforms the FT imagines 'need to be put on the table' arenas intended to stabilise the rich world (the global North). The Atlantic Charter and the Bretton Woods institutions, which are cited approvingly, look very different when seen from the global South. They can be said to have stabilised a global order post-War, and a model of development, which has been devastating for many billions in the global South and highly destructive of the natural environment. The COVID-19 crisis is not only one of social security systems and public services. It is also a crisis of globalisation. The rapid erection of barriers in the past month to entering nation-states, replicates barriers already in place stopping free movement of people from poorer to richer countries. These barriers will not be coming down anytime soon. Our model of globalisation itself needs to be put on the table. What is the purpose of globalisation? Who benefits from how it is currently organised? Has the current crisis shown that we need shorter, more localised, supply chains to be resilient? Is there an alternative to the current model of globalisation, one which prioritises keeping peoples and nations connected, which promotes wellbeing first, rather than profits and trade?
In short, democratic socialists of all types should take comfort that some of their ideas are being noticed (basic income! wealth taxes!). It is a positive sign that the FT is doing so. At this moment we should popularise our ideas more, and not seek common ground too quickly with the beneficiaries of the status quo. Our task now is to make the emerging common sense 'hegemonic'.
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