‘Only a crisis produces real change.’ What will coronavirus bring?

As increased government spending and investment in public services around the world offers millions of people a lifeline, Ahmed Twaij says we must take this rare opportunity to redefine how we live

New York just before the city was given the order to lock down for the first time in March (Getty)

There is no magic money tree,” former prime minister Theresa May smugly proclaimed in her 2017 election campaign. She was responding to a nurse who had asked how May could “sleep happily” knowing NHS staff had been forced to resort to food banks thanks to years of government austerity measures. 

Fast forward to 2020, have we found that “magic money tree” at last? Somehow, the chancellor has been able to continually provide billions of additional pounds for the NHS and other essential public services in the battle against coronavirus. Such ramping-up in government spending has become a global trend and reversing these socialist measures post-Covid will be disastrous.

Coronavirus has presented us with a prime opportunity to start anew and implement positive, progressive change for society: a clean slate if you will. Previously unthinkable policies have been rushed into law. The prospect of reconsidering the global distribution of wealth has suddenly shifted from former US president Barack Obama’s “hope” to his “yes we can” attitude. We must take this rare opportunity to redefine how we live and promote greater equality.

Over the course of a few months, coronavirus has rapidly transformed our world. Ordinary life is now barely recognisable. R-values, working from home, self-isolation, quarantining and social distancing have now become integral to our daily routines and vocabulary. In government, daily political briefings and near daily policy changes continue to be implemented as we begin to adjust to the “new normal”. In the US, policy changes range drastically from social distancing rules to progressive labour laws that aim to address the fallout after the pandemic. It is vital, however, that in the long term these changes are for the betterment of wider society and not the corporate elite.

For years, government emphasis has been on individualism, the economy and wealth accumulation. Even Donald Trump’s “make America great again” mantra is largely focused on the economy, with GDP being used as a marker of his success. Throughout the years, pro-corporate policies have admittedly led to record-breaking stretches of economic expansion in the US, yet at the same time have driven record highs of homelessness, unemployment and income inequality. We should never have to accept this as the norm. 

This system, which has allowed America’s three richest individuals to accumulate more wealth than the bottom 50 per cent of the population, while one in four are forced to rely on donations for meals, has fostered a deeply divided society.

Talk of a looming civil war has spread in political circles ahead of the election. Due to growing global tensions and the rise in right-wing populism, former secretary of state Condoleezza Rice last year warned of an impending “dangerous and chaotic” world order. More recently, Trump, demonstrating widening divisions, has dispatched “thousands and thousands of heavily armed soldiers, military personnel and law enforcement officers” in response to protests against racial inequality in America.

As coronavirus continues to spread devastation across the globe and exacerbate the divisions within society, it also provides an opportunity to reshape the world we live in today. In the past, major crises have been used to push through formerly unthinkable policies, be they liberal or conservative agendas.

For example, only a few years ago additional funding for the public sector was deemed economically ludicrous, yet in the US and UK government spending continues to soar as a result of the pandemic. Explaining such a sudden shift, one of the most influential free-market economists, Chicago university professor Milton Friedman, wrote in 1982: “Only a crisis – actual or perceived – produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around. That, I believe, is our basic function: to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes the politically inevitable.”

Being a founding father of neoliberalism, however, Friedman’s proposal was the global implementation of hard capitalism and reducing the role of the state to a minimum. His ideas, through a CIA-backed coup of Salvador Allende’s democratically elected socialist government, were first implemented in Chile and has since been referred to as the “Chilean experiment”. Using the crisis of a regime change, students of Friedman, known as the Chicago Boys, were able to force through neoliberal policies which would have otherwise been impossible to achieve.

That, I believe, is our basic function: to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes the politically inevitable

Chile has often been lauded as Latin America’s economic success story, because the standard economic markers such as GDP (which do not take into consideration human factors or standard of living) were found to be on the rise. The reality was Chile precipitously found itself in the midst of colossal wealth inequality, especially given how money could freely flow to the US as American companies invested in former state assets. The divisions grew so deep that they led to mass protests late last year. Journalist and author Naomi Klein refers to this use of a crisis as “the shock doctrine”.

Friedman continued to use this idea throughout his role as economic advisor, and even into later life. In 2005, at the age of 93, he managed to successfully push for privatising Louisiana’s public education sector, using the crisis of Hurricane Katrina as his cover. Writing in The Wall Street Journal, Friedman (from his ivory tower) said: “Most New Orleans schools are in ruins, as are the homes of the children who have attended them. The children are now scattered all over the country. This is a tragedy. It is also an opportunity to radically reform the educational system.” Inevitably, the privatised education sector in Louisiana left children from a poorer demographic at a disadvantage, resulting in an ongoing cycle of poverty. This is not the first time such “disaster capitalism” has been applied following natural or manmade crises.

The disaster that ensued following the 2003 US-led invasion of Iraq paved the way for Paul Bremer’s Coalition Provisional Authority to implement widespread neoliberal reforms, such as fixing low corporate tax rates, privatising public enterprises and opening Iraq’s banking sector to foreign control. Overnight, a country already starved by years of stringent UN sanctions, a corrupt dictatorship and back-to-back wars, suddenly found itself juggling free market capitalism, post-war reconstruction and rising geopolitical tensions. Many profiteered from the disaster that ensued. These reforms culminated in mass protests sweeping the nation last year.

Such political exploitation continues to this day. Former reality TV star Trump has persistently engendered chaos throughout his time in the White House in order to push through unimaginable pro-corporate policies. His anti-refugee fearmongering and racist attitudes paved the way for the “Muslim ban”, the border wall with Mexico and the continued caging of children along the border. The concept is referred to as the Overton Window, which describes the range of political options considered acceptable. As an example, a few years ago the idea of supporting white supremacist groups was inconceivable. Fast forward to 2020 and Trump is found publicly endorsing them on the most public of platforms: the presidential debate stage. With most of the public focused on coronavirus, Trump has even used the opportunity to implement policy changes which would make Friedman proud, from slashing the payroll tax (putting social services at risk), to bailouts for some of the most powerful companies in the world, including airlines.

This does not have to always be the case. Coronavirus could invoke positive change, instead of using the crisis to promote disaster capitalism. In the 1930s, the Great Depression resulted in President Franklin D Roosevelt implementing the New Deal, pushing for greater public spending. Over the period of a few years, things like social security, minimum wage and labour rights were instituted across the US. The economic crisis resulting from the stock market crash and high consumer debt gave FDR the cover to implement socialist reforms to provide relief and recovery in a country where such policies would have been previously unthinkable. As many in the creative industries will attest today, artists often struggle in times of crisis, yet FDR, through the Arts Jobs Program, created jobs for writers and artists, dispatching them to chronicle the impact of the depression. In New York, it is hard to miss the New Deal’s lasting legacy: LaGuardia Airport, the Triborough and Bronx-Whitestone bridges and much of the subway system give thanks to FDR’s ambitious projects for creating jobs at the time. They remain under public ownership to this day. Imagining a time without social security seems ludicrous now, but at the time FDR was able to reshape society, and protect America’s most vulnerable. His multiple attempts to push through universal healthcare coverage, both in the Social Security Act of 1935 and the National Health Act of 1939, however, fell short. Coronavirus could be the much-needed platform to achieve this today.

The crisis caused by the Second World War further led to FDR, in 1942, the year after Pearl Harbour, to dramatically increase federal spending by more than 10 per cent of GDP. Similarly, across the Atlantic, the chaos of the war led to the creation of the UK’s universal healthcare coverage, the NHS, which to this day is deemed the pride of Britain. This form of governmental support is known as Keynesian economics and was largely the philosophy in the US and UK until Ronald Reagan and Margaret Thatcher took power and, with support from Milton Friedman, asserted neoliberal reform and privatised the majority of state assets. Even Chicago’s parking meters have been sold off to private enterprise, and yes, the city continues to pay the private industry millions for their maintenance.

Positive change following a crisis has not been limited just to economic change, but has also promoted civil rights. In 1863, during the third year of America’s bloody civil war, President Abraham Lincoln signed the Emancipation Proclamation, paving the way to abolish slavery. Similarly, the First World War and the success of the Suffragettes movement redefined the role of women in society.

In the same way that the Black Death helped end the feudal system and redistribute wealth, coronavirus has given us the potential to once more have a ‘great leveller’ in our society

With war-based imagery often used to describe the crisis of Covid-19, it is understandable that the socioeconomic impact has, in some cases, been comparable. President Trump has refashioned himself as a wartime leader (probably mindful of the fact that no sitting US president has ever lost a wartime election) and British prime minister Boris Johnson has stated that each citizen is “directly enlisted” in the fight against coronavirus. Walter Sheidel, a Stanford historian, explained that throughout history, major wars and deadly pandemics are two of the “four horsemen”, “great levellers” that reverse economic inequality. Coronavirus has the potential to be such a leveller (the other two being revolution and state failure).

“The Black Death entered England in 1348 through this port. It killed 30-50 per cent of the country’s total population,” reads a plaque in the small English seaside town of Weymouth. Not only did the plague bring with it death and devastation, but being a pandemic and therefore a “great leveller”, it forced the government to adopt labour rights, a rise in wages and a partial collapse of the feudal system. There is no reason similar changes shouldn’t be made in the current pandemic. Unfortunately, in recent history, public disorientation caused by war, natural disasters or financial crashes has often been exploited by those in power to the benefit of the rich elite. In 2008, bailouts for the global financial crisis were fed into the very companies that caused the economic meltdown and ordinary people were made to suffer with deep austerity measures. Amid the coronavirus pandemic, Trump has provided funding and loans to some of America’s largest companies.

Due to the severity of economic shock caused by Covid-19, however, US politics has been forced to rapidly reshape. The dramatic rise in deaths, infection rates and unemployment figures has compelled the Republican presidency to implement previously inconceivable changes, in an attempt to manage the impact of the virus. Since March, nearly $4 trillion has been spent by the US government on tackling the pandemic, almost mirroring FDR’s spending post-Pearl Harbour. I am by no means comparing Trump to FDR but it’s interesting to note how this spending has come from a party whose spiritual leader, Ronald Reagan, once stated: “Government is not the solution to our problem. Government is the problem.”

Recently global disasters have consistently benefited the privileged and wealthy. Private contractors are rushed in to profiteer from the disasters which mainly affect the poor, further lining the pockets of the wealthy. Halliburton in Iraq, for example, left the country in ruins, while packing $40bn into its accounts. With coronavirus, other companies have enjoyed commercial success. Companies such as Amazon, Netflix and private healthcare industries have seen their profits soar. Jeff Bezos was personally able to accrue over $300bn over the short period of a few months, while the general public struggled to get by. The pandemic has left over 33 million Americans unemployed and, according to the Aspen Institute, of the 110 million Americans living in rented accommodation, between 30 and 40 million are at risk of being evicted. These wrenching figures have led many in government to question labour rights and wealth inequality.

In the same way that the Black Death helped end the feudal system and redistribute wealth, coronavirus has given us the potential to once more have a “great leveller” in our society. To address these labour rights and limit job losses, in a remarkably interventionist policy for a Republican president, Trump has effectively provided grants to small and medium-sized companies to promote job retention in these troubling times. Senator Bernie Sanders has gone a step further and has pledged “to make sure that any corporation in America that benefits from emergency aid does not lay off workers, pays workers a liveable wage, provides equity to the government, puts workers on corporate boards, and does not rip-off consumers”. These are basic rights that did not exist previously, yet Covid-19 has allowed us to rethink the employer-employee relationship. Sick pay is still not a requirement in the US, and with the rise of the global pandemic, became a contributing factor to the spread of the virus.

Early in the pandemic it was clear that vital supplies such as personal protective equipment and ventilators were running short. Trump was adamant that “we don’t need it”, when health experts were pushing for his administration to invoke the Defence Production Act, an old 1950s law which allows the president to promote the production of items deemed essential to national security. It also goes against everything a free market economy-loving administration stands for. A month later, however, the president enforced the act and ventilators were rushed into production, showing it is possible that a government can act in the best interest of society and not just corporate America.

Coronavirus has presented itself as being the best argument for universal healthcare coverage. The pandemic has surprisingly led to Trump, an avid fan of a for-profit healthcare system, to promise that hospitals treating uninsured coronavirus sufferers will be reimbursed for their expenses. Some states have been forced by coronavirus to finally address the homelessness crisis rife in their cities. Trump has even promoted some more expensive ideas, including infrastructure investment, despite senior party leaders pushing to scale back spending. There is, potentially, some light at the end of the tunnel.

Recognising the potential for change the pandemic has brought, the Danish government held international conferences on how to make clean energy a key part of global economic recovery. Not only will such projects provide much needed jobs and stimulus packages like many of FDR’s infrastructure projects, but will provide us with a more sustainable, greener future.

Let us hope that the post-coronavirus world, like FDR’s New Deal, will result in long-term change for good for those who have suffered the most, as well as redefine the role of federal government. The NHS, after all, has survived from 1948 until now. We’ve already stretched the Overton Window and it is crucial that we grab the opportunity to push through previously unthinkable policies and provide for a more equal society. A post-Covid world doesn’t just mean riding the subway without a face mask, but should mean heading to a job where you’re paid above living wage, where you have a seat at the board before heading home to a residence you own, with the comfort of knowing your health is covered by a government plan. These hopes are no longer inconceivable. We’ve seen trillion-dollar bailouts for corporate America since March. It’s time the same investment is made in the average citizen. The magic money tree exists – it always has, it’s just how we choose to use it that has varied.