Vote Tory, Get Labour, would seem to be the conclusion to draw from the emergency actions of the Johnson government over the last few days in response to the coronavirus pandemic, and British Chancellor Rishi Sunak’s announcement that the British state will effectively nationalise Britain’s wage bill.
Originally published by @thephilippics. Image above: Chairman Mao says Stay at Home and get on Amazon.
This was all frankly admitted by one unnamed Tory government minister (was it Sunak himself?), who told the Spectator that his government would end up implementing much of Jeremy Corbyn’s programme despite the Tories’ crushing electoral defeat of Labour in last year’s election. The scale of the government’s economic life-support programme extends beyond boosting spending or even continental-style dirigisme (ordering industry to ramp up ventilator production), to directly paying Britain’s workforce while in lock-down. This was in turn followed by the de facto nationalisation of Britain’s railway franchise. It all goes rather further than rolling out fibre broadband to the Outer Hebrides and improving domestic insulation, two key ‘socialistic’ promises that Labour made in the last election. Boris Johnson and Sunak’s emergency package is more akin to the ‘disaster socialism’ that many on the Europhilic left warned against as the supposed dystopian vision of Lexiters. They condemned disaster socialism as likely to lead to an autarkic nation trembling behind its borders, ruled by an overweening state fearfully confronting the contagious, dangerous outside world … Now of course, the very same literal communists who chided the Brexiters for disaster socialism chide the government for not going far enough with disaster socialism, shrieking for continental-style quarantine for Britain, while putting everyone on the state’s payroll. We are now on the brink of covid corporatism — a vastly enhanced role for the state in organising social life, managing the economy, overseeing transportation and directing industry.
The new covid corporatism is not restricted to the Tories in the UK. In the US, the Trump administration is pushing for a universal basic income (UBI) for US citizens — a policy that amounts to the caricature of big government promoted by the old Reaganite right (giving people money for doing nothing) — while also promising to protect American workers from mortgage foreclosures. The latter policy was explicitly ruled out under the Obama administration during the 2008 crash, which bailed out Wall Street in preference to Main Street. In addition to reactivating a Korean War-era state industrial policy, Trump also announced in a recent press briefing that he is open to the federal government taking direct equity in various corporations — partial nationalisation, in effect — in order to support them through the coming slump. French president Emmanuel Macron, whose gendarmes have been battling French citizens for many months in order to crush the protests against his punitive and regressive green taxes, has seized the opportunity of the pandemic to implement a full-scale national emergency to crush the gilets jaunes, while also promising progressive economic measures as a pay off in return for his citizens’ liberties. Ambrose Evans-Pritchard, chief business correspondent of the Daily Telegraph calls for us all to become socialists in order to … to save liberal market capitalism, explicitly channelling Franklin Delano Roosevelt. In a recent editorial, the Economist magazine has casually shrugged off decades of championing market liberalism, passively acquiescing to a new era of big government as a fait accompli. The Canadian company Macquarie Wealth Management even announced that global capitalism is morphing into something ‘akin to a version of communism’ — doubtless a ‘version’ of communism in which they expect to make a healthy profit.
We’re all covid communists now
The virus has reorganised the world’s economy around state-led planning without even a single strike or industrial action, let alone a revolution. It would seem that we are all Covid communists now.
Or are we?
The scale of the disaster socialism sweeping the developed world in tandem with the spread of the pandemic — from Italy through Germany and Britain to the US — is astounding for its sweep and rapidity. The fact that these programmes are being carried out by governments of varied stripes, including governments that were supposed to be ‘hard right’ and ‘neoliberal’ according to their critics, such as the Trump and Johnson administrations, indicates the extent to which these measures are driven by sheer economic necessity. Even the most austere of the austerian states, Germany, has switched gears, extending a large spending programme to buffer the crisis. In some respects, these global measures could be seen as a populist extension of the disaster socialism that was enacted for the banks in 2008, which ended up preserving the rule of the bailed-out classes over the last decade. The current global stimulus being rolled out through multiple nations’ policies could be even be seen as an attempt to ‘socialise’ the bankers’ socialism of 2008 — expanding public support beyond the financial elite to wider swathes of the population, albeit in an inevitably limited, compromised and halting fashion.
Neoliberalism: it’s just never been properly tried
We might quibble about how much stimulus is necessary, where it should be directed and how, but it seems there is little disagreement about the need for it. We could disagree say, about whether UBI is to be preferred to partial wage guarantees as offered in Denmark, or pension contribution holidays or tax exemptions and how best to expand industrial capacity to provide critical medical infrastructure and so on. However it would only be very few, it seems, who would disagree about the need for an urgent and vast response to deal with the roiling scale of economic collapse emanating from data on unemployment, collapsing investment, disrupted supply chains and overburdened, stripped-down health systems. The scale of the shock to the global economy overwhelms even the hardest capitalist logic for justifying the market, for how can ordinary processes of competitive efficiency work when consumption collapses on this scale? Indeed, the very same airline corporations pleading for bail-outs are the ones who have behaved in accordance with neoliberal dictates on enhancing shareholder value — in this case through share buybacks — which is why they now have no resources to sustain them through the crisis.
This ‘disaster socialism’ is an ad hoc series of emergency measures undertaken by governments and leaders of varying competence, but in essence it repeats economic policies from 2008 that have kept the global economy fragile for the last decade, choked up with zombie firms — a fragility now exposed by the virus. It is therefore incumbent on us to look beyond arguments over the efficacy of immediate responses, and turn to consider what our long term economic future might look like. The pandemic can, after all, only affect trends that are already there; it has no agency of its own. Doubtless the pandemic will accelerate and strengthen many underlying secular trends such as automation, indebtedness, as well as consolidating the enormous retailers such as Amazon, Tesco, Walmart, etc., with their enormous supply chains that will overwhelm smaller businesses. Market competition continues to give way to oligopoly, cartels, monopoly. What is also clear from the viral pandemic is that capitalism must necessarily socialise in order to survive — even if only at the level of state-led expansion of ventilator production to help ensure hollowed-out public health systems are not overwhelmed by populations vulnerable to the virus, leaving them inaccessible to the work force.
Once again the necessity of economic socialisation — or even socialism — across various countries to sustain capitalism is forced upon us by capitalism’s own development. Given this economic result, we should perforce consider what is the political system most fitted to the new economic order emerging before our eyes. It is a question posed especially sharply in Britain, where a Tory government is delivering an economic programme to the left of that offered by the Labour Party in the last election, all the while enjoying robust approval ratings. The contradiction of this fact alone — Boris Johnson implementing Jeremy Corbyn’s programme — poses a political question: who is trusted to govern and why, and what is the political vision that should accompany economic necessity?
In reflecting on the crash of 2008, Colin Crouch published The Strange Non-death of Neoliberalism in 2011, reflecting on the resilience of neoliberal policies in perpetuating austerity. Yet from the vantage point of 2020 what is striking is how rapidly neoliberalism crumbled in the face of a viral pandemic rather than any social movement or political opposition (after all, there was none: the left populists all capitulated). That the political authority of neoliberalism crumbled away so quickly shows that it had, in fact, been hollowed out long before. As the political structures of neoliberalism disintegrate, neoliberals and so-called ‘classical liberals’ are left in the position of communists in 1991, pathetically insisting that their system has never been truly tried or implemented, that the practice, not the theory was flawed, that it was thwarted by conditions that were impossible to predict — all the while failing to draw any significant conclusions from what, on their own terms, is clearly a theoretical ideal too pure for this fallen world.
Yet the disaster socialism that is replacing neoliberalism is if anything, even less appealing. It is the fever dream of millennial socialists, who have always motivated all their political arguments by disaster — the disaster that would ensue if Britain left the EU, the disaster that will ensue from climate change, the disaster that will ensue from resource depletion, the disaster resulting from species loss and human over-population … If the new global disaster socialism is socialist at all it is an avowedly passive, consumerist vision of socialism, in which we get paid by the state to live under martial law as we supposedly work from home while living on the backs of an underclass that are compelled to work for Deliveroo and Amazon while the rest of the productive economy crumbles away: fully automated luxury authoritarianism. Meanwhile, the boomer generation are killed off by a virus that targets them, freeing up assets for cramped millennials in flat-shares.
We live out a script written over a hundred times in Hollywood disaster movies and TV shows in which we have been prepared for the collapse of civilisation and the need to fundamentally mistrust each other. That so many of those advocating luxury communism last week — complete with asteroid mining in space — are now shrieking for locking us up at home while they dust down planning for war-time economies only indicates the authoritarian opportunism of so many millennial socialists. The very same people who darkly warned of far-right populists inaugurating a new era of fascism insistently demand that civil liberty be brushed aside to justify emergency powers.
The instinctive authoritarianism of governments and elite figures in pursuing lock-downs partly reflects the legacy of neoliberalism in as much as it reflects the underlying technical incapacity of the state — insufficient testing kits, insufficient ICUs, insufficient hospital beds, insufficient ventilators — to be able to withstand worst case scenarios projected in the pandemic. Health systems that have been stripped-down in the interests of curbing public spending, and over-regulated in efforts to construct efficient market-style competition, now have no spare capacity to respond to potential shocks. However and perhaps more importantly the authoritarianism also reflects political incapacity too — the inability of states to mobilise their citizens. Neoliberalism hollows out not only state capacity but political capacity, too. Without such political capacity, the only option left is to assert greater state control over the population. What is being offered now is the prospect of a digital Keynesianism in which cash is funnelled directly to the consumer, without the need for even the show of large public works schemes — and without any of the social solidarities of class and nation (let alone the requisite administrative capacity) that were needed to sustain earlier Keynesianism,
This is why, as James Meadway has pointed out, the analogies to war-time economies are false — we are witnessing a massive programme of demobilisation, not mobilization. This reflects the fundamental lack of political authority and state legitimacy: the political capacity for mobilisation simply does not exist except perhaps in China, and even there it is clearly more coercive than voluntary. During the last emergency regime following the terror attacks of 11 September 2001, the Bush administration of the time only mobilized US citizens to the war effort to the extent that it encouraged them to keep on shopping to keep the economy afloat. In today’s emergency regime, we are being demobilized even further, confined at home, not even allowed to carry out our patriotic duties of consumption together in public.
Hall of Mirrors
Keynesianism, the economic programme of the post-war period that failed in the 1970s, is now being revived to substitute for the failure of neoliberalism, which was in turn an attempt to revive the failed liberalism of the interwar period to substitute for the failure of Keynesianism. Humanity seems lost in a labyrinthine hall of mirrors comprising endless historic dead ends, grossly distorted images and misshapen reflections. The permanent emergency politics of the last few decades is now being extended to legitimate a new economic regime, which will inaugurate a new order of state capitalism. This takes us back to the original question. Given the dystopian ugliness of the disaster Keynesianism being rolled out now, what is a politics more suited to our new era?
Writing for Novara Media, Grace Blakeley tackles this question directly. She argues that the viral pandemic will accelerate the emergence of a new oligarchy of state-dependent big business. She urges us to be ready to democratize this new state capitalist regime, advocating the revival of sectoral bargaining as part of a programme of political change in order to enhance accountability. In her view, state expansion and democratization should go in tandem. However her vision of democratization is a technocratic one that accepts the politics of fear driving the new capitalism, but seeks to make it more accountable through a variety of new state management boards. Her argument bears the imprint of the neoliberal era that is already crumbling away, in which she gives voice to the interests of the squeezed professional managerial classes (the PMC). How can their position be best secured in the new corporatist structures?
If we do genuinely wish to democratize the economy, the first question should be, to what purpose? The element that is missing from Blakeley’s account of democracy — and the element that makes any model of supposed socialism actual and meaningful — is freedom, that is to say, increasing the scope and degree of control over social life exercised by the mass of ordinary citizens. In the millennial socialist version of democracy, the masses are made up of renters, the precariat, the vulnerable — those in need of protection by the covid corporatist state, overseen by a new elite of technocratic planners. Yet without a collective and popular will to self-government that can be given political voice, representation and institutionalisation, ensuring ‘accountability’ and ‘greater public scrutiny’ under the new state capitalism will ultimately amount to little more than a jobs boom for the middle classes, enjoying the perks and powers of a new generation of quangos. Without a vision and purpose for democratisation, the new covid corporatism will continue stumbling from one emergency regime to another.
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