The Undrowned World

It is predicted that, because of the coronavirus pandemic, 2020 will be the first year since the Second World War that global GDP falls. Output in so-called ‘emerging markets’ is forecast to drop by 1.5%, the first decline since records began in 1951. Two billion people – a quarter of the world’s population – are living under lockdown of some kind. According to the former chief economist of the IMF, global trade and commodity prices are experiencing a 1930s-style collapse.

In ‘developed’ economies the picture is no different. There are 33 million unemployed people in the US, over a fifth of the workforce. The European Union is undergoing a more severe economic contraction that the US, “the deepest economic recession in its history” according to the European Commissioner for the economy. While Britain faces the worst economic recession for over three centuries.

And yet despite an economic downturn of unparalleled dimensions, the world is only just about on course to deliver the carbon emission reductions necessary to keep within 1.5 degrees of warming, the level identified by the IPPC as the ceiling above which massive crop failures, inundation of cities, huge refugee flows etc. become inevitable.

Carbon emissions, forecasts the International Energy Agency, are set to drop by just under 8% in 2020 (they were flat in 2019).This will be the largest ever fall in CO₂ emissions. By a fortuitous coincidence, according to the UK website, Carbon Brief:

Global emissions would need to fall by some 7.6% every year this decade – nearly 2,800MtCO2 in 2020 – in order to limit warming to less than 1.5C above pre-industrial temperatures

But this benevolent trajectory won’t last. Even if Boris Johnson’s reckless breaching of the lockdown is not imitated by other countries the lockdown will end, this year or next. Most people will eventually return to work even if many others won’t have jobs to go to and depression conditions – long-term low growth – ensue.

Lockdown cannot go on forever. It is true that economic recession need not – in fact often doesn’t – lead to higher mortality and suffering (recession followed by austerity does, however). Indeed, evidence suggests that people in Britain are welcoming the changes, such as cleaner air, that lockdown has produced. But the palpable benefits it produces – through the suspension of economic activity – indicates that this is not a normal economic crisis.

Invariably, in economic downturns, economic activity continues at a reduced level or the government steps into the breach, as it did in Great Depression America, and creates paid work. But in the coronavirus slump, whole economic sectors have been stopped in their tracks.  As Marxist economist, Michael Roberts, notes, this is not something that can continue in perpetuity, with governments – ideally – supplying the cash transfers to make sure no-one is destitute. In the absence of productive economic activity, governments cannot continue indefinitely inventing money based on debt – jobs will disappear and hyper-inflation will take hold.

In other words, the sustainable path the world has – quite by accident – found itself on, is not sustainable.

This is not an argument for scaling back the lockdown before it is safe to do so as is happening in the UK. Evidence from New York indicates that maybe a fifth of people have had the virus but herd immunity – the point at which the virus stops being transmitted – requires 60-70% of the population to have been exposed. Sending people back to work before that has occurred, or a vaccine developed, clearly risks many more people dying.

But it is an argument for acknowledging something. The fixation on economic growth that has, quite justifiably, been criticised as a form of insanity, masks something equally disturbing, and intractable – the dependence of the vast majority of people on that economic growth. Without it, under this economic system, jobs and livelihoods vanish.

This is quite apparent by looking at the UK, where over 16 million people have less than £100 in savings, but it is even more glaringly obvious by examining a country like India. In the country which was formerly the world’s fastest growing major economy, 90% of the workforce are thought to making a living in the ‘informal’ sector. Working as rickshaw pullers, baggage collectors and street vendors, amongst other occupations, these people are “daily wage earners” – if they don’t work, very soon they – and their families – don’t eat.

In the current circumstances, the need for direct cash transfers so people can survive – in India and the UK – is obvious. Indeed, basic income is not something exclusively for the developed world. Finland may have recently concluded that basic income improves mental and financial well-being, but the same was already true for India. A basic income pilot in the state of Madhya Pradesh between 2010 and 2013 reduced debt bondage and increased the confidence of the recipients.

But the world economy now confronts a quandary. In order to head off the most catastrophic effects of climate change, curtailment of economic activity – in addition to re-sourcing and clean technology – is necessary. The inadvertent coronavirus slump shows how radical it needs to be. But an indefinite lockdown – not even considering the restrictions on personal liberty – will have equally catastrophic economic effects, even if (a very big ‘if’ admittedly) people are supported through it by government spending.

Put simply, it is not possible to build a sustainable and equal society on top of an inactive capitalist economy. Something has to give. And building a just society on top of capitalism, albeit active capitalism, has been the default position of many supporters of basic income and modern monetary theorists.

Ultimately this is an argument for imagining what a ‘rational’ economy would look like. What would the contours of a post-capitalist economy be? How would it ensure that the dependence people have on economic growth taking place, and capitalism functioning well, is relieved so that the economy becomes genuinely sustainable? In dismantling the machine of capitalism, how would the social calamities of hyper-inflation and destitution be averted and how would public services be funded?

Is there a Parliamentary road to social democracy?

In an alternative universe, the British Left would now be readying itself to fight the massed ranks of the establishment. Following Labour’s victory in the 2019 general election, the civil service, the military, the City of London, the CBI, the media, the judiciary, the Conservative party, a significant section of the Parliamentary Labour Party, even foreign governments would all see themselves as engaged in a life or death struggle to undermine the implementation of Prime Minister Jeremy Corbyn’s red-blooded socialist programme. Parliamentary coups, bureaucratic stalling, capital flight, manufactured economic crises, even military disobedience will all be on the agenda.

Parliamentary socialism would be put to the test just as it was under Harold Wilson’s governments of the ’60s and ’70s – just to seal the sense of historical continuity, Corbyn had a cat called Harold Wilson.

As we know now, none of this will happen. It isn’t necessary. Jeremy Corbyn was successfully undermined before he got to Downing Street. The irony that what has actually happened in the first months of 2020 is a level of public spending and economic intervention that Corbyn never dreamed of should be tempered by the realisation that none of it undermines the wealth or power of society’s elite – in fact it is likely to solidify it.

We are looking at two general elections where Corbyn’s chances were, possibly fatally, torpedoed by his own side. In 2019, Corbyn’s alleged personal responsibility for allowing antisemitism to run riot in the Labour party became, after Brexit, the issue of the campaign. It undoubtedly had an effect, likely cementing the popular sentiment that he should never be allowed to become Prime Minister. But it was an inversion of the truth.

However, the most revelatory and sobering aspect of the whole sordid affair is that all this effort was expended to stop a political programme that wasn’t even socialist.

It might seem semantic to point out the differences between democratic socialism and social democracy but they do exist. Whilst the former seeks changes in ownership and the disappearance of a small class of capitalist owners, albeit gradually, the latter is content with a mixed economy, some public ownership, regulation and a strong welfare state. Social democracy is a modus vivendi with capitalism.

Whilst it is true that Labour under Corbyn mulled over different forms of ownership, its political programme, expressed in the two manifestos of 2017 and 2019, never went beyond the boundaries of social democracy. This was expressed in renationalising utilities, ending NHS privatisation, raising corporation tax (to below what it was in 2010), ending the Work Capability Assessment, creating a Ministry of Labour, setting up a National Investment Bank and using the state to orchestrate an economy-wide shift to renewable energy. In terms of ownership, Labour went no further than promising that one-third of company boards be reserved for “worker-directors”, territory briefly occupied, but hurriedly vacated, by Conservative PM Theresa May.

In the context of four decades of neoliberalism in Britain, this platform was undoubtedly radical, certainly admirable, but it wasn’t socialism. In the words of conservative journalist Peter Oborne, Corbyn was “asking for nothing more drastic than a restoration of the social democratic settlement that prevailed in Britain between the end of World War II up to the rise of Margaret Thatcher in the 1980s.”

The two ‘Corbynite’ manifestos didn’t mention the word ‘socialism’ once – in contrast, for example, to Harold Wilson’s 1974 manifesto which proudly proclaimed its “socialist aims”. Even Evan Durbin, the intellectual leader of Labour’s right-wing in the 1940s, thought it axiomatic that Labour was a democratic socialism party that, once in power, would nationalise industries employing “one third of the wage-earning population”. Corbyn proposed no such thing.

That is why the idea, propounded by current shadow foreign secretary Lisa Nandy during the Labour leadership election, that Corbyn wanted to “nationalise everything” was such a lazy caricature.

One may wonder why Corbyn’s mellow social democracy provoked such a furious reaction, not only among Conservatives, but from his own side. My guess is that Britain’s political settlement, created by Margaret Thatcher and congealed by Blair, Brown and Cameron, has enticed so many powerful people onto the PFI-privatisation-outsourcing gravy train that even mild, post-war consensus leftism, was perceived as an existential threat.

But the elite rejection of the social democratic option will have consequences far beyond squashing the reluctant ambition of Jeremy Bernard Corbyn. The raison d’être of the Parliamentary Left since its beginnings in the late 19^th century, has been that capitalism, by dividing society into those who own (lots of) property and those who don’t – a class society in other words – inevitably created discontents which have to ameliorated by government. If they aren’t, other lethal solutions – imperialism or Fascism for example – will step into the breach.

In the 1990s and early 2000s, it appeared as if this dilemma had been deftly sidetracked. Rising wealth and ever wider home ownership (the “patrimonial” capitalism of Thomas Piketty) could plausibly be seen as nullifying capitalism’s discontents. This inherent satisfaction might manifest itself in unattractive ways – turnout fell to 59% in the 2001 general election for example – but apathy, more politely ‘electoral fatigue’, was infinitely preferable to destructive social conflict.

Such apolitical complacency has been blown apart in the last decade. Merely because the beneficiaries have been, in general, the populist right rather than the Left, doesn’t mean that the sources of discontent – lower wages, worse employment conditions, vanishing opportunities for home ownership – are not real. It might be argued that, paradoxically, the driving forces behind right-wing populism come from asset-rich older generations, while younger cohorts often without property – the under-40s for example – are less prone to its allure.

However, this was always a simplification and ignores how Corbyn did better – nearly achieved power in fact – when he was an anti-establishment figure than when he tried to make peace with the neoliberal wing in his own party. More to the point, when the dust from covid-19 settles, the coming economic conditions will likely be more extreme than those of the 1930s’ Great Depression (which led to Nazism and world war). Mass unemployment, bankruptcies, evictions, depleted incomes, even greater concentration of economic power all call for a social democratic alternative just at the point when its British iteration at least has been banished to the shadows. Alternative Parliamentary ‘safety valves’ – the Liberal Democrats and also the Greens – are either discredited or hampered by a shallow marketing approach to politics, attempting to hoover up voters nobody else wants.

We may well come to see what John F. Kennedy meant when he berated those who make a peaceful revolution impossible.