Never Waste a Crisis: A Practical Guide?

by | 20 Mar 2020

It is too early to predict how the COVID-19 pandemic will unfold and over what period of time. But we should expect that, much like September 11, the world afterwards will be very different to the world before.

We know we should never waste a crisis, but the right seems more adept than the left at making use of them. Now is a good time for progressives to think about what we should encourage and what we should resist during the current crisis and in the reconstruction which will follow. The last thing we need is a repeat of the 2008 global financial crisis. Then, the eye-wateringly large taxpayer bailouts of financial institutions were accompanied by short-lived expressions of banker regret and questioning of the economic system. This soon evaporated with a return to business-as-usual, economics-as-usual, plutocracy-as-usual and one-percentism on steroids. Austerity and ‘fiscal responsibility’, tax cuts and squeezes on public services were imposed to pay for the bailouts. The ordinary victims of that crisis were encouraged to blame others, not the ultra-rich or the economic system for the crisis. Encouragement to ‘kick down’ not ‘kick up’, saw a rise in racism, xenophobia, ‘strong-man’ leaders and (largely right-wing) populism.

Naomi Klein’s Shock Doctrine showed how corporate elites used “the public’s disorientation following a collective shock — wars, coups, terrorist attacks, market crashes or natural disasters — to push through radical pro-corporate measures.” Whilst supporting measures to contain the virus, progressives need to ensure the longer-term outcomes from this crisis are better.

With the present COVID-19 crisis, calls for bailouts of affected industries, for corporate tax cuts to stimulate the economy, and even for banking de-regulation, are already being voiced. Others have written about the machinations already underway in UK sport to benefit from disaster.

Struggling to get government attention is how employment will be shored up and how employees, and especially casual, precarious and insecure employees and those with few assets will be compensated for quarantining themselves whilst ensuring they can place food on the table. There are exceptions of course – France has placed a moratorium on rent and utility payments; others, such as Hong Kong, are introducing basic income style cash payments to all permanent resident adults. We do not yet know if even such measures will be enough.

Winners and Losers

Who might be the ‘winners’ and ‘losers’ as COVID-19 evolves? Our initial thoughts are captured in the attached Figure which is, necessarily, summarised at a high-level of generalisation and is far from comprehensive. We have divided the chart into losers and winners on the horizontal axis, and into short-term (as the pandemic unfolds) and long-term (in the pandemic’s aftermath) on the vertical axis. Anticipating the future is always speculative, but we have tried to take a broad-based initial look at the trends. We also acknowledge that a great deal relies upon judgement. Some thoughts on those judgements.

Industry and Economy: clearly some industries will benefit from COVID-19. These include, less troublingly, producers of medical supplies and equipment but also, more troublingly, the online shopping, online education, big tech, security and surveillance industries. The instinctive response of the Israeli government to apply anti-terrorist surveillance of all its citizens, like China, is a disturbing sign of the times. It is reinforced by the perception in some quarters that governments which have undertaken the harshest and most restrictive measures have been most successful in slowing the spread of the virus.

Nevertheless, most businesses and industries will be hit in the short-term, many in ways from which they will take a long time to recover, if at all: small business in general, tourism, hospitality, live entertainment, airlines, companies with long global supply chains and so on. The challenge will be to ensure that short-term subsidies and bail-outs focus on citizens more than corporations, and that these are structured in ways that do not automatically aim for a return to business as usual. Do we really want to spend billions bailing out casinos and cruise ships? Do we want our vibrant local neighbourhoods to be replaced by global chains, and empty high streets?

Now is a good time to encourage downsizing of the airline industry longer-term; to de-globalize production by encouraging more self-reliant and local production; for international trade and finance institutions to stop discouraging agricultural self-sufficiency, and to reduce the importance of big global companies in the supply of goods and services; to mention only four examples. It is also a good time to ensure that all the inevitable short-term adaptations which will be made are not uncritically embraced in the longer-term. For example, the greater reliance on online learning must be resisted where it reinforces the process of dumbing-down, algorithm-ising, and casualising teaching, and locking in the big-tech monopolies, and globalized curricula. Big tech may emerge stronger from this crisis, and will present itself as savior because it enables remote working and teaching, big data analysis and surveillance. But this further concentration of its power makes it more, not less, imperative that this largely-US monopoly is challenged, and may finally make the sector more vulnerable to such challenges. Relatedly, who owns and benefits from any vaccine will be contested, which throws into question the inequity of the current international IP regime. Here we can learn from earlier campaigns to remove patents from anti-HIV medication in the public interest and make drugs available affordably and globally.

Important too is the mainstreaming of innovative approaches to social security, such as basic income, which may be useful in weathering the current storm and beyond. Having such universal transfer systems available – and not only for those on welfare or in employment – will both help in the present and make future transitions, such as a Green New Deal, easier.

Now too is also the right time to start preparing for who will pay for the massive fiscal injections currently being put in place. After the financial crisis, the approach was ‘tax cuts and public service cuts’. Unless we want to contribute even further to growing inequality, coming out of the other side of this crisis must involve tax rises and levies focused on the rich and redesigned safety nets.

Climate change: in the short-term the natural environment wins as GHG emissions decline and air and water quality improves, much like they did in the 2008/9 financial crisis. There is already evidence of this – indeed, it may be that some of the are avoided. The longer-term effects are more uncertain. On the one hand the COVID-19 experience makes it clear that addressing climate change effectively is entirely feasible for a determined state. It throws into doubt the ‘too hard’ and ‘too expensive’ arguments. On the other hand, the temptation to get back to ‘normal’ and restore the status quo ante and business-as-usual will be very strong. Progressives must find ways to argue the former.

Government and geo-politics: short-term losers will be those with the fewest resources, those in insecure employment, in the poorest countries, and those in war zones. It is surely inevitable that death rates in Syrian refugee camps, in Yemen, and in many of the world’s poorest countries will be far higher than in the rich world. It is also true that COVID-19 may be relatively low on the list of concerns that people in those countries will have. War, hunger, and other fatal illnesses will be more pressing, and notions of isolation and social distancing may have little relationship to lived reality or practicality. COVID-19 will only intensify the already existing crisis.

We can expect borders to be intensified and not only in the short-term. Walls between states, within states, between public spaces, between poor and rich areas, are already going up more rapidly and more completely than previously. COVID-19 is doing more than simply intensifying an existing trend. The boundaries going up are affecting the poorest more than the richest, even as no-fly rules impact the business and leisure of the wealthiest global citizens. These walls will not uniformly revert to ‘normal’ when the COVID-19 crisis passes. The COVID-19 crisis could mark the complete end of ‘cosmopolitanism’, both as an aspiration and a global elite practice. New solidarities will be local and not global.

Perhaps paradoxically, COVID-19 is generating local solidarities, as ‘war footings’ so often do, even alongside ‘rational’ self-centered action, such as hoarding and profiteering. If war precedents apply for COVID-19 it can be expected that such anti-social behaviour will be punished harshly. This may provide an opportunity to reflect on the price that ideologies of entrepreneurship, economic self-interest and market-citizenship have exacted during their rise to ascendency. Perhaps we will be able to remember that there is an alternative.

Policies pushing social isolation may simultaneously be driving social cohesion. It is clear that responding to the health crisis will require a great deal of co-operation and social solidarity, and voluntary compliance, at least at the national and local levels. It also requires clear political leadership. This combination creates both opportunities and dangers for progressives. The challenge will be to avoid anomie and promote bonhomie, to reframe ‘social distancing’ as only physical distancing alongside social solidarity and cohesion.

For political leaders the future is uncertain. Those who find themselves unable to manage the crisis will be punished. Those who manage it relatively well will be rewarded/re-elected. This will likely affect incumbent governments, regardless of ideology.

Expertise is a critical dimension of governance. In the short-term experts and expertise will regain some of their lost status, as we are already seeing. Already there have been calls for politicians to step aside and leave things to the experts. But this will not be long-lived. We see experts reaching different conclusions about the best strategies for tackling COVID-19 and drawing different conclusions from how different countries and handling the crisis. This is perfectly understandable but it alerts us to the reality that expertise is always political and never simply technocratic. Politicians must inevitably make trade-offs and choices in a crisis of this magnitude: what to spend on, what health measures to adopt and when – which reminds us that policy needs both expertise and politics. We cannot escape that reality, nor should we.

‘Never waste a crisis’

We need to take seriously the injunction to ‘never waste a crisis’. Can we ensure that the 99% come out stronger from this crisis than we did from the financial crisis and ensure that this time the structures of inequality are seriously challenged? Perhaps we can be guided by a number of rules of thumb.

  • Government not just governance. Bring the state back in as both a guarantor and a provider of social and economic security and solidarity. This means rolling back, where needed, the handover to market logics of the past three decades.
  • Redistributive short-term measures. Prioritise support to individuals and households, and support bailouts for essential industries only with strict conditionalities.
  • Localism before globalism. Support solutions which encourage local and community self-reliance, social networks and local economic exchange, and which reduce our dependence on complex supply-chains.
  • Internationalism not cosmopolitanism. Promote solidarity across countries and regions and ensuring all emerging treatments are available to all people globally.
  • Back some but not others. Be prepared to bring into public ownership key sectors that are struggling. Other bailouts should be conditional on adapting corporate activities to the public good.

We are already seeing that those societies with less inequality and better public systems are coping better with the crisis. With the right politics, the COVID-19 crisis might bring some positive change. Without pushing for bold solutions attentive to distributional consequences, we will revert to inequality on steroids.

Jeremy Baskin is a Fellow at the Melbourne School of Government and the Melbourne Law School.

Sundhya Pahuja is a Professor at the Melbourne Law School and Director of the Institute for International Law and the Humanities.

1 Comment

  1. Thanks Sundhya and Jeremy,
    “Bonhomie over anomie” is the principle we need to live by. In some ways the present experience feels like zooming back 30 years to when neighbours did know each other and help each other out. The creeping attacks on community life that have accrued over that period are only really being grasped now.
    On the rebound from coronavirus, I fear climate and environmental concerns will be some of the first sacrifices. We’ve seen in China already relaxation of energy production standards as they seek to recover stalled industries. I’m worried how the environment vs economy will re-emerge as the dominant frame as societies try to pull out of what will be Depression -era conditions.
    It sounds like the perfect time for the green new deal, but that won’t take place under current regimes in the UK, US or Australia – I think we can guarantee that.
    My great hope is that the increased social connection (and in some ways clarity) afforded by this period off the treadmill will see green groups come together under a strategy that is designed to leverage people’s recalibration of how social life should be structured and change it into a series of demands and strategic relationships with certain elected representatives. Something like a broad popular movement supported by the foremost green-left leaders in parliaments. To not waste this crisis we need rhetoric that draws the connections between health, conmubity, economic policy and the environment. All these should be serving buen vivre, and soon, if not already, people are seeing that there are indeed alternatives, and realising that much of the status quo wasn’t really that great at many levels.
    Converting this into progressive political change though, as history has shown, is far from guaranteed.
    In some ways it seems a little obscene to be strategising already when the virus has barely begun to wreak its havoc. But in the US the right are already trying to exploit this moment to further channel wealth upwards.
    Thanks for your provocative article.


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