What will survive the time of Covid?

As we start to feel our way out of lockdown, it’s worth asking, what will come back and what will be gone for good? Few people now expect that we can return to how things were before Covid-19 emerged. As I’ve said before, it has popped a bubble that was ready to burst, and the long term consequences will all be about that bursting, not the direct impact of the disease itself.

The lockdown was conceived as pressing the pause button on the economy, but this is a false analogy. An economy has no pause button; there is no mothball mode. The economy is being strangled. Businesses, starved of revenue, do not pause, they die, as surely as we die if deprived of air. Subsidies, loan guarantees and so on, are not simple drop-in replacements for revenue. Many businesses have now closed for good; their lost output is not stored as pent-up demand, but is a permanent loss. Those which survive will, in many cases, be saddled with a huge burden of debt.

For years, I’ve described how we allowed our manufacturing industries and brick/mortar businesses to decline, offshoring that area of mass employment to China and other countries, where companies have the freedom to exploit their workers and trash the environment. Having made ourselves over-reliant on unreliable supply chains in return for short term gains for a minority, we have discovered that this was actually a form of hidden and delayed cost, and the bill just came in. We are now suffering the consequences, and of course, the costs will be shared by us all, unlike the gains. We focused on the financial economy, confusing wealth concentration with wealth creation, and dismissing ordinary workers as a drag (scroungers, idlers, people who should get on their bikes), as if they were a load to be carried by the “wealth creators” who sat above them – the risk-taking masters of the universe who moved the big money around. In doing this, we built our house on sand.

Today, those who were previously dismissed as unskilled are revealed to be the only truly vital workers in the economy, the ones who absolutely have to go on working no matter what. Those masters of the universe can stop for a while and sit at home while the NHS, the utilities, the emergency services, the bin men, and the grocers get on with the functions that we most need, but refused to recognise and value as such. As one outcome of the time of Covid-19, those vital functions should be uprated very substantially in esteem, and in pay and conditions. Will it happen? Well, since most of them are in the public sector, don’t hold your breath. As for the financialised economy, revealed as a weak structure, it is proving once again that it only works if backstopped by the state. It is not a free-market, private enterprise after all; it relies on crony government to bail it out every time it gets into trouble. It needs to be scaled back and properly regulated; we have to recognise that good regulation is not “red tape”, it is what makes trade happen, but this is a basic challenge to the belief system of a fanatical right wing government.

The controlled demolition of the economy has accelerated many changes which had already begun. The decline of the high street; the closure of thousands of pubs; the decline of traditional advertising-funded TV and newspapers. Now, all the shops and pubs are shut, and many will never re-open. It’s tough, but it was happening anyway. Don’t fight the tide, like Canute. What’s new is the closure of travel, tourism and entertainment. After Covid, these will come back, but at nothing like the scale they were before. Those places which had become totally reliant on tourism were like monoculture farming, hit by a total crop failure. They will suffer like the pit towns of south Wales 30 years ago.

Is there anything positive about all this? Possibly, if we look at it the right way. I would start with the hierarchy of needs. Before Covid, we had taken the bottom layers for granted and were focused too much on the top layers. These are self-actualisation, served by industries like travel and tourism, the desire for experiences, the consumer economy, fashion-following etc; and the desire for esteem and respect, and all the froth and frippery that goes with that – competition for status symbols, positional goods, prestige, inflated titles and so on. This trend went hand in hand with the financialisation of the economy, the disparagement of manual work (“we think, they sweat”) and the god-like status awarded to “entrepreneurs” however ephemeral the businesses they start. The impact of Covid will force our attention to the lower layers, which are the basic life-sustaining needs of food, water, and shelter; and security of the person and property, employment, and health. These are largely met, in this country, by public services and utilities – the very industries which had to be kept working through the lockdown. After Covid, it will take time for people to raise their focus once again to the upper layers. We have the chance to use this time to rebuild our public sector, to make it robust and secure, properly funded and staffed, and to see this as the absolute necessary foundation that it is, rather than something to be run down, minimised, privatised and sneered at. The war fought by central government against local government has to end, and its primary weapon, the financial tourniquet, released. Covid should, if there is any justice, make the NHS politically bulletproof, although I doubt this will stop the fanatics in the Cabinet from seeking to privatise it further and sell off chunks to the US.

There will be millions of people unemployed, many of them long term. We’ve been round this block before, courtesy of Thatcher, and need not repeat the mistakes again. Rising industries, led by the return of offshored manufacturing, could provide a lot of jobs, but this will need some mechanism to be put in place to value the resilience of local supply chains. The market, on its own, cannot do this; it needs public policy action. We also need to get rid of the stigma attached to unemployment. Sadly, once again, a right wing government which holds the profound belief that only markets can recognise value and that public policy is always wrong, cannot do what is required.

Advertising-funded newspapers and TV were already declining; Covid will finish many of them. I would expect one or two print newspapers to fold and, most likely, Channel 4. Many theatres and cinemas will not re-open; even once they are allowed to fill their seats, who will want to sit in a crowded space for 3 hours with a hundred other people? Even once a vaccine has been distributed, many will just stay away. New media will eat their lunch. Even last year, Facebook and Google were taking an increasing share of advertising spending; they both need to be split up, reined in, and properly taxed, but again, our government has neither the will nor the power to do so.

We’ve just about stopped flying, and cut down hugely on driving. These will both bounce back to some extent, but with luck the new patterns of work will prove sticky. We don’t need a third runway at Heathrow; this is blindingly obvious. HS2 is a white elephant; local trains that work really well are what we actually need. Less car use is a great thing. It would be tragic if we threw public money at trying to do CPR on dead industries whose demise was always necessary.

You may have noticed a theme here. The lockdown response to Covid has been immensely destructive; however, there are opportunities to build a better world, but only a government with a mind open to such a thing can even attempt to do so. Our government wasted most of February and March advising us to avoid going on a cruise and to sing Happy Birthday while washing your hands. No attempt was made to limit or stop people coming into the country, even from areas where the disease was running riot, and around 20,000 people did exactly that, seeding the infection beyond all hope of containment. Nothing was done about ventilators, PPE or testing. The scale of this failure is staggering. No government has been so negligent in my lifetime. There is still no mass testing, no mask wearing, and inadequate supplies of PPE. The carnage in care homes is appalling. A cabinet full of yes-men appointed for their loyalty to Johnson and their Brexit fanaticism, rather than their competence, has shown the stuff it is made of.

Do not be fooled because the government abandoned right-wing shibboleths such as austerity, the small state, obsession over deficits, and the belief that markets are the sole source of truth. They discovered the magic money tree whose existence they denied, and have shaken it hard. But, deep down, they still believe the nonsense that comprises the main body of neoliberal economic theory, including such canards as trickle-down, the efficient markets hypothesis, the quantity theory of money, and the Phillips curve. None of these things actually work in the real economy. The right wing ideologies of austerity, deregulation, climate denialism, the historic strategic error of Brexit, and building up the wealth-concentrating finance economy at the expense of the wealth-creating real economy, are far more dangerous than the wacky beliefs of anti-vaccination groups or those who blame 5G for Covid-19. Those far-out, flat-Earth kind of beliefs have no real traction here in Britain, so are no threat, but the ideologies which drive our government’s policies are just as crazed. The most immediate avoidable disaster is a crash-out Brexit in just seven months time. Finally the government have admitted what they denied so loudly, that there will be customs checks at Irish Sea ports, but there is no time to implement them. Just when our economy lies bleeding on the floor, they are about to shovel sand into the gearbox. We may survive Covid, but will we survive the wrecking actions of Boris “killer” Johnson’s government?

One more point is worth considering. Governments have taken authoritarian powers to confine us, close down businesses, and impose sweeping restrictions on basic rights. Only a major threat to life could justify such powers, and only public support enables them to be imposed. All the same, a precedent has been set for government to take dictatorial powers on the back of a crisis. This appears to be a bigger issue in the USA, where many constitutional rights have effectively been suspended, despite the constitution not having any provision for suspension because there’s a bug going round. One obvious question is, who gets to decide what is a big enough emergency? How many anticipated deaths justify drastic measures with such severe impact? The point also arises, not so much whether the current public health emergency justifies such measures, but more fundamentally, that the only rights and freedoms which are worth anything, are those which always apply, even in difficult times. Are there any? What will be the long term changes in the balance of power between state and people? The right normally claims to be in favour of a small state, minimal government and maximum liberty (albeit with a focus on the liberties of the rich). But when push comes to shove, they reveal their tendency towards autocratic government. Johnson is a case in point; he talks the talk of freedom (“every Briton’s right to go to the pub” etc) but his actions – proroguing Parliament, for example – show his true colours to be dictatorial.