Amid the anxious tedium of the Covid crisis, there have been two new political and economic phenomena that have brought a wan smile to my lips. One has been the wailing of Airbnb millionaires who now find that the global travel boom has collapsed, and their investments are all but worthless. And the other has been the sound of the great British middle class – or at least some sections of it – finally discovering just how many vicious lies they have been told, over the years, about the life of Riley enjoyed by British people on benefits. “But how can anyone possibly live on that?” they cry, as after penniless weeks of wrangling with the notorious Universal Credit system, they discover they cannot even claim enough money to pay their rent, and may be left with as little £40 a week to cover all other costs.
If nothing else, in other words, the Covid crisis has briefly revolutionised public awareness of how cash-starved, and how unfit for purpose, large areas of Britain’s public sector now are; and how our increasing acceptance of a low-wage, low-rights economy has also come to affect our entire labour market. As we emerge onto our doorsteps to take part in the weekly cheer for NHS workers and carers, we cannot help but be more conscious than a few weeks ago of the abysmal pay and conditions endured by many essential workers, from those who deliver much-needed social care in the community, to those who are vital to our food supply chain.
We are also more aware of the condition of an NHS so weakened by a decade of austerity that at the outset of the epidemic, NHS England, at least, had no stockpile of pandemic equipment and supplies at all. And in recent days, it has become increasingly clear that after a decade of savage local authority spending cuts, many councils simply no longer have the public health capacity to conduct the kind of detailed testing and tracking of the virus, at local level, that has been so successful in countries such as Germany and South Korea.
Billionaires waddling amid austerity
Yet despite this avalanche of evidence about the chronic underfunding of public services, and about the grotesquely unjust distribution of wealth and earnings in our society, advocates for the current economic system, including former Chancellors George Osborne and Sajid Javid, are already to be heard insisting that nothing must be done, post-Covid, to rock the economic boat, either nationally or globally. Their vision of the future is one in which once the Covid crisis is over, with countries taking on trillions of new debt to bail out their economies, it will be back to 2009, only much more so; as governments across the West impose swingeing austerity measures on their people, in order to repay those loans.
And the question raised by these assumptions is simply this: whether, after the pandemic, politicians of the left, the centre-left and even the centre-right really think that the social fabric of countries from Italy and the UK to the United States itself, can tolerate another decade of crushing austerity in the public sphere, accompanied by massive and growing inequality in the private sphere. The world’s billionaires are now waddling the planet loaded with notional personal fortunes which could easily bail out entire low-income countries. The financial system which crashed in 2008-9 remains fragile, and still vulnerable to the worst excesses of the global casino economy.
Social conflict and environmental breakdown
Meanwhile, the world desperately needs a huge wave of public and private investment designed to shift the global economy onto a sustainable low-carbon basis, preferably within the next decade; the economic structure of many countries has become so imbalanced, and so poorly structured in terms of rewarding hard work and valuable labour, that rising levels of social unrest and of vicious right-wing populism seem almost inevitable. The global economic system, in other words, is broken, in ways that may soon also drive it to a political breaking-point; and that makes it all the more worrying that so far, there has been little but deafening silence from politicians of the left and centre-left on how they plan to deal with this threat. There is already talk, among the G7 and G20 governments, about post-Covid debt forgiveness for some of the world’s poorest nations.
Yet there is no clarity about how Western centre-left leaders like Keir Starmer in the UK, or Pedro Sanchez in Spain, or for that matter Nicola Sturgeon in Scotland, imagine they might shift their countries onto a path that would reflect the social and spending priorities unleashed during the Covid crisis, while at the same time repaying their colossal new debts under current rules. To put it bluntly, it is not possible; and since the alternative is to accept a future of mounting social conflict and environmental breakdown, it is difficult to avoid the conclusion that somewhere, somehow, the rules will have to be changed, and the global financial system reset, on a more sustainable basis.
What that basis might be is something to which the best brains of our time should now be bending their attention. A presumption towards massive green investment and job creation might be the essential starting-point; and beyond that, the ground-rules should be clear, as they were at the founding of the postwar economic system at Bretton Woods in 1944 – that the system must be stable and flexible enough to allow governments to offer their people basic levels of economic security and opportunity, and social support.
Today, of course, our global priority is not growth, but long-term sustainability. Yet unless, amid this crisis, we can find a generation of statesmen and women with that same scale of vision, ready to start work on a new global settlement for the times we face, it is hard to imagine a post-Covid future not dogged by economic insecurity and injustice, and the constant conflict it generates; as well as by the growing fear of a climate catastrophe that we could have acted to prevent, if only our leaders had risen to the challenge of the times, during the Covid crisis of 2020.