There is an Alternative: Another World is Possible
Gerry Hassan
Sunday National, March 22nd 2020
The world is in flux, filled with uncertainty, confusion, panic and fear where many, if not all, of the assumptions that have defined politics are now open for challenge. Many things are still unclear but one certainty is that the dominant global economic model of recent decades is now being openly questioned.
The Financial Times Sebastian Payne talked this week about ‘the ideology of last week’ –meaning the assumptions of the past four decades politically. There are still numerous voices clinging to the wreckage of the old order and trying to minimise the crisis and consequences which flow from it. The same paper’s Robert Armstrong wrote in the last few days that this ‘is a global crisis, not a crisis of globalisation.’
Despite all the rhetoric it is clear that some countries – including the Boris Johnson and Donald Trump administrations – hanker for a return to the old normal and business as usual as soon as they can. Yet elsewhere it is clear that another approach is not only desirable, but possible.
Take the UK Government. It has given mixed signals. Boris Johnson and Chancellor Rishi Sunak have regularly invoked the language of the ‘war economy’ but until Friday past their actions fell well short. Now forced by the scale of the crisis, especially in London, they have suddenly become less ambiguous in their line on pubs, bars, nightclubs, restaurants and other places where people gather.
Unlike Nicola Sturgeon and the Scottish Government they have not from the start been clear in their guidance about what people should do – hoping that an element of ‘nudge’ psychology and people taking responsibility for their own well-being would be enough.
Rishi Sunak’s announcement of the coronavirus retention scheme, and supporting workers in businesses to 80% of salary if they are furloughed to a ceiling of £2,500 per month, is a reversal of everything that recent Conservative and New Labour governments stood for. This Westminster government has actually listened and acted on the advice of Francis O’Grady, General Secretary of the TUC.
But telling are the areas in which government has refused to act. One is Statutory Sick Pay – £94.25 per week and 17.3% of average earnings – the lowest in Europe apart from Malta. Self-employed workers can at the moment only look to this level of support. And carers are still excluded from any kind of assistance. This last-ditch defence of the punitive welfare state – created by Tories, Labour and Lib Dems – is damning.
It is not an accident that most of the references to a ‘war economy’ take us back to one narrow set of references: the Second World War, 1940 and mythology of the Blitz. This has become a reflection of the absence of powerful stories which have reach and resonance in contemporary Britain – with progressive and collective values.
Too many forces try to accommodate the threadbare reality of stories, with The Economist’s Bagehot commenting that: ‘In abnormal times the British instinctively turn to history for both inspiration and a roadmap. And what year in history could be more inspiring and instructive than 1940?’ Bagehot even made that fatal summer synonymous with today’s battle, saying that: ‘Covid-19 provides Britain with an opportunity to recapture the memory of the Blitz for the whole nation rather than for a political sect.’
We need to challenge British exceptionalism and look around the world. The French have their incorporating story of republican values: liberté, egalité, fraternité; the Americans have their once uplifting tale of ‘the American dream’ which has now gone sour. Germans have a sense of coming to terms with their past; Italians a belief in irreverence and challenging, even ignoring authority. One defining image this week was Italians from balconies and their windows singing and marking their communality in adversity.
Other countries have shown earlier and more enthusiastically the route that the UK Government reluctantly embraced. In Denmark firms which risk losing at least 30% of their workforce will have government pay 75% of wages of employees who would otherwise be laid off – initially for three months.
Norway has guaranteed laid-off workers the equivalent of their full salary for the first 20 days. Unlike the UK the government has strengthened unemployment benefits; while the self-employed who find their work stops for more than two weeks will get support equal to 80% of their average income. And in Sweden the state will cover half of the income of workers who have been let go, with employers asked to cover most of the rest of their income.
This is not very surprising considering the World Economic Forum earlier this year rated Denmark as the most socially mobile and cohesive country in the world (the UK 21st; USA 27th); and in the past week the World Happiness Report – a serious, substantial piece of research – put Finland in first place for happiness, with the UK 13th and USA 18th.
There is more to this than facts. It is the relationship of facts to how such countries see themselves and the stories they tell themselves – rather than dwelling as we do on the war and the Blitz. Sweden has a national story of the folkhemmet (‘people’s home’) – an inclusive account of national purpose which has comparisons in Norway (Norge for folket) and Denmark (Danmark for folket)
It is not just the Nordics who have been bold. Germany has relaxed the criteria for kurzarbeit, meaning ‘short-time work’, under which the state will pay 60-67% of the previous wages of employees whose hours are reduced by businesses in trouble. The use of kurzarbeit halved the unemployment increase during the 2008 banking crash. The government has learned from this with more firms now eligible, temporary workers covered, while social security contributions firms make on behalf of affected workers will be fully reimbursed.
This is a watershed moment – transforming the politically possible. Yet the widespread use of wartime references disguises the intentions of much of the political class in the UK. They are hoping that by acting with dexterity and flexibility the crisis will be temporary and the new situation an aberration; and as soon as possible we can return to the unsustainable economic and social order which began to crumble in the past few weeks.
Robert Armstrong in the Financial Times dismissed the seriousness of the crisis, writing that economically it is comparable with such shocks as ‘the Fukushima earthquake and nuclear accident, US-China trade conflicts and other recent disruptions’.
Nick Macpherson, ex-Permanent Secretary of the UK Treasury compared the current sudden shock to that of the 1914 assassination of Archduke Franz Ferdinand and then dismissed the post-war period up until the mid-1970s as ‘the forty years of Keynesian inflation which paid for two World Wars’ – regarding this as the potentially disastrous route which societies might embark upon in the present.
The right-wing are struggling to come to terms with new realities but so too are many on the left – acclimatised to years of being on the defensive. Lewis Goodall accurately summarised this on BBC Newsnight stating: ‘Britain is becoming a quasi-socialist state’ – one ‘less individualist, {and} more collectivist.’
Perhaps the most persuasive explanation so far has come not from conventional politics but from historical perspective. Ian Goldin, Professor of Globalisation at Oxford University observed huge similarities between the global crises of 2008 and 2020. The first was ‘a financial virus’ which enveloped the world due to financial institutions and globalisation; the second is a ‘coronavirus’ which has become a global pandemic due to the deep reaches and interconnections of globalisation.
Goldin poses that we have two fundamental international choices. The first is 1918 where countries retreated into isolationism and international lack of co-operation – with the USA’s refusal after the First World War to join the League of Nations aiding the rise of fascism and the Second World War.
The second is 1945 which saw nation-states learn the mistakes of 1918 and contribute to the creation of an international managed order of capitalism. This saw workers across developed economies such as the UK gain the greatest increases in living standards, prosperity and security ever seen in human history so far.
The future choice is framed against the backdrop of the past 40 years – ‘The God That Failed’ – and neoliberalism’s collusion and ultimate collapse into a zombie capitalism defined by the dinosaurs of robber baron oligarchs – old and new, and the demise of its pretences at any kind of social conscience from corporate social responsibility to philanthropic capitalism. On the latter where are the likes of Bill Gates, Mark Zuckerberg, Elon Musk and Jeff Bezos in our hour of need?
Unfettered capitalism it seems is only for rhetoric, illusion and good times for the few. It cannot handle and deal with sequential crises which demand that we co-operate, identify the common good in our societies, and build alliances domestically and internationally. This is a pattern now established over many crises – 1918, the 1930s and 1970s, 2008 and now today. How many times are we going to have to relearn these basic facts from history?
If we are to learn from our mistakes we have to recognise the profound ones made in 2008 – including by Gordon Brown and Alistair Darling. While they acted quickly and decisively to prevent a domestic and international collapse, they ended up by the nature of the banking bail-out propping up and subsidising finance capitalism and hence paved the way for the decade of austerity as the Tories forced the rest of us to pay the price. Never again can this happen.
More fundamentally once we have got past the immediate crisis we cannot aspire to go back to the supposed golden age of post-war capitalism which contained the seeds of its own destruction. Instead, we will need to create more robust institutions and networks of co-operation – able to adapt, evolve and embrace a global politics which cannot just be about growth as the route to prosperity.
The future has to be about co-operation and about the strength of solidarity, equality, interconnectedness and mutualism. It has to call-out the damage which individualism, inequality and a winner-takes-all view of the world does to most of society, bar the pampered, privileged elite (and their apologists in finance capital, media, think tanks and the insider class) that benefit from it.
The right have temporarily adopted some of the language and practice of the left – but in the UK and across the world they soon will revert to type and to what failed us unless we seize control of politics and the future.
Another world: one we create and own is not just possible, but within reach. No longer are politics, society and the economy about different versions of the same economic order – one brutal and lacking compassion and the other a bit more caring and social but accommodating the same forces of privilege.
We can now say with confidence that there is an alternative, and we now have to create the detail, policies and politics. This will start by abandoning the conceits which informed the lies and deceptions which held us in a collective straightjacket until last week – driven by putting an economy for the few and elemental version of globalisation as above debate. Politics and our choices matter more than ever. Let’s make that alternative happen for the future of our society and the planet.
