How will COVID-19 change our world?
Some want to be optimistic.
The pandemic is proving to us all, they say, that the aggressive, no-holds-barred capitalism that characterized the past four decades is helpless and useless in a crisis such as our current one. Now, more than ever, it seems, a lot of folks are finally realizing that our survival depends on strong public services and a well-funded, thriving public sector.
When companies that produce necessary medical equipment use the COVID-19 crisis to engage in profiteering, forcing governments to bid against each other for crucial supplies, even ardent free enterprisers get outraged.
Ontario’s populist-right Conservative premier, Doug Ford, who used to revel in attacking downtown socialist elites, now pledges that we in Canada will never again depend on foreign-owned, private corporations for life-saving medical equipment.
Satire site The Beaverton saw humour in the premier’s road-to-Damascus experience, and circulated a headline that read: “Conservative Party submits Doug Ford for tests fearing he may have contracted socialism.”
Even in the U.S., some suggest that, in the words of journalist Howard Fineman, the “pandemic has turned us all into semi-socialists.”
In a comment on progressive presidential candidate Bernie Sanders’ withdrawal from the race, Fineman argues that “if Bernie has lost the nomination, he has won the argument. COVID-19 has made it for him … the pandemic makes it clear, even to greed-is-good Wall Street suits — especially to those who live in New York City — that the collectivism they hate can also be the only way to save the human race and global economy …”
A bottom-up approach for Canada; hope for the environment
The Canadian Trudeau government is not in the hard-right, free-enterprise-above-all camp. Still, in different circumstances, Justin Trudeau and, especially, his finance minister Bill Morneau, might have been more tempted to prop up corporations as a way of keeping the economy afloat — which is still, in large measure, the U.S. approach — than to massively transfer funds to individuals and families.
In their response to COVID-19, however, Trudeau and Morneau have largely heeded the counsel from the progressive left. They have taken a bottom-up approach to stabilizing the economy.
The federal government’s Canada Emergency Response Benefit (CERB), which will put money into the pockets of gig-economy workers who do not qualify for employment insurance, was largely NDP Leader Jagmeet Singh’s idea — as was the government’s very recent decision to raise its wage subsidy for small business from 10 per cent to 75 per cent.
On the wage subsidy, the NDP and the main lobby group for small business in Canada, the Canadian Federation for Independent Business (CFIB), have found themselves to be unaccustomed allies. These trying times have made for strange bedfellows.
The goal of subsidizing wages, and not just dishing money out to enterprises, is to tie companies to their workers while the economy is in a forced shut-down. The public money is for salaries and wages, not for businesses’ bank accounts.
Many allow themselves to hope that when we finally emerge from this period of confinement, our societies, throughout the world, will have become more collectivist, more sharing, more generous, and more publicly rather than privately focused, in such a way that we will not be able to turn back.
Even the environment, they say, might benefit.
Our current forced economic shutdown has been a boon for air quality everywhere, for instance, and some hopeful people are ready to believe that, as societies, we will not want to return to the old, polluting status quo. The public, they say, will insist that when we rebuild our economies we do so in a cleaner and more sustainable way.
That’s the hopeful view, but there is also a much darker scenario.
The fact is that the pandemic has exacerbated and exaggerated social, race and class divisions.
Those of us who can, are working remotely, or otherwise sheltering in place. Many, however, do not have that luxury, and the list includes a lot more than doctors and other well-paid health professionals.
There are, also: nurses and maintenance workers in hospitals and other health-care facilities, shop clerks in grocery stores, warehouse workers, truck drivers, public transit workers, agricultural workers (including thousands of guest workers with few rights), and many factory workers in industries that are not shut down (including those producing medical supplies).
And sheltering in place does not mean the same for the denizens of the Bridal Path (Conrad Black’s ‘hood), or for the billionaire family that abandoned its Manhattan penthouse to rent a mansion in the exclusive Hamptons for a cool $2 million, as it does for the millions who live in crowded apartments in densely populated neighbourhoods.
In the U.S., this stark fact has resulted in a significantly higher rate of infection and mortality for African-Americans and other people of colour than for the population as a whole.
And as governments have moved to stanch the economic bleeding wrought by COVID-19 there have been loud and insistent voices warning that this crisis must not become an opportunity to foist “socialism” on our countries.
Preserving the economic status quo
Republican U.S. senators and conservative ideologues complain that combined, federal and state income support measures exceed what some minimum wage workers earn.
“A large slice of the U.S. workforce will make more money by not working than by working,” David Henderson, an economist at the conservative Hoover Institution in California tells Fox News.
Fox also reports that some low-wage workers are resentful that by not working others can now receive more than they earn at work. (The U.S. is not currently contemplating the 75 per cent subsidy for workers’ wages and salaries which is coming soon in Canada.)
Nobody Fox interviews suggests the solution to this disincentive problem might be to raise the pay of low wage workers.
The general assumption in influential conservative circles is that those who control the levers of political and economic power must do everything possible to assure that the COVID-19 crisis does not become a pretext for reducing the current level of inequality in the U.S.
As well, the coronavirus has not stopped Donald Trump from proceeding with his determined program of slashing environmental regulations.
Trump is moving full steam ahead with plans to weaken fuel efficiency standards for cars, relax restrictions on mercury emissions, and reduce limits on ash from coal plants that is particularly harmful to people suffering from respiratory illnesses.
Now, as the pandemic rages, conservative lobbyists want the U.S Congress to give Trump the unchecked authority to slash a broad range of health, safety and other regulations on business — supposedly in the interest of aiding economic recovery. For instance, they want to see the end of environmental review requirements for major infrastructure projects.
And, while most of us try to survive social distancing and isolation, an elite few are preparing a brave new world of private sector expansion, coupled with severe public sector austerity.
The president of the World Bank, David Malpass, a Trump appointee, warns central bankers and other economic decision makers, that when economies start to open again, what we will need most of all is “discipline.”
In a phone call with G-20 finance ministers late in March, Malpass said many governments will have to:
” … implement structural reforms to help shorten the time to recovery and create confidence that the recovery can be strong. For those countries that have excessive regulations, subsidies, licensing regimes, trade protection or litigiousness as obstacles, we will work with them to foster markets, choice and faster growth prospects during the recovery.”
In other words, it will be business as usual, back to policies based on the untrammeled free-market.
Optimists who, today, cherish the hope that the pandemic will usher in a fairer, more enlightened and more sustainable age should prepare themselves to be bitterly disappointed.
Karl Nerenberg has been a journalist and filmmaker for more than 25 years. He is rabble’s politics reporter.