A world turned upside down?

Image Credit: Pixabay: Matryx

With the after-effects of the Covid-19 pandemic set to majorly affect the poor, Brianna Walsh asks whether it’s time we change how the world economic system works.

When NPHET advised an imposition of level 5 restrictions across the Irish state, the contentiousness of Covid-19’s economic impacts could not have appeared starker. The discourse continues to rage on Twitter and throughout the media, sparring outrage across society as we encounter division; save lives or save the system we depend on to survive in the first place? Our businesses and livelihoods versus our health. A face off which leaves scars either way. What many politicians, journalists and tweeters fail to realise, however, is that the debate is long settled. This pandemic is not just the cause of economic devastation, it is a consequence of a structure that has been broken for years now. A structure that is in urgent need of reform. 

What I have found notable since the very beginning of this catastrophe is how quickly we dismissed its existence until it coughed its way all over our own front doors. The disease and its effects have not sparked global economic disaster; they have opened the Western world’s eyes to a harsh economic reality that has always been there. One that we have been fortunate enough to get away with ignoring thus far. Dare I say we benefit from our ignorance? 

Our market-focused economy that favours privatisation, globalisation, supply chains, and a capitalist agenda has been detrimental to human and environmental rights for decades. The 26 richest people on earth in 2018 had the same net worth as the poorest half of the world’s population, some 3.8 billion people. Global extractivist policies trap the Global South’s most vulnerable in cycles of poverty, in which their resources and labour, indiscriminate to age, are exploited at the expense of basic needs, adequate social structures and ecosystems. 

All of a sudden, as a result of Covid-19, the poorest within more developed economies are starting to experience effects of a similar scale. Recent escalation highlights the impact that Coronavirus has had on the Irish and Western economy. Recession looms, jobs are lost, and weak healthcare systems fail to carry Covid-19 on their backs. We are left to wonder why it all fell apart so swiftly. Covid-19 is arguably comparable to natural disaster, entrenched impoverishment, or colonial legacy. When such disaster hits, the exchange value system our economy is built upon crumbles, and those at the bottom find themselves buried. 

What is “exchange value” though? Essentially, this is the idea that markets are the best way to run society, under which material productivity is the priority. The focus is on the facilitation of exchanges; producing goods and services that serve no wider purpose to society, but certainly make money. It is founded on the belief that people will purchase things that they want or need, and that consequently, these things are valuable or of “use”. In reality, all this does is stimulate economic growth for the wealthiest and reduces the quality and quantity of essential societal services, as privatisation and pointless employment prevail. Covid-19 has shone a light on what happens when this fragile system is hit and there are insufficient structures in place to deal with the aftermath, be it to our health or our wealth. What those at the helm must rapidly understand is that the world economic system has to change and not just in a minor way. At least if the Global North wants to survive another tragedy of this scale. As for the developing world and the environment; perhaps they will be the ones reaping long-awaited benefits as a result! 

But how could the economy possibly be re-imagined? And what may restrain this as we look forward to a hopefully brighter future? Currently, states such as the UK, Spain and Denmark are adopting a “state capitalism” approach, in which exchange value remains the focal point of the economy, but the state steps in to support the market in crisis. For example, the extension of welfare supports and the nationalisation of certain services. However, the longevity of this approach is questionable as a vaccine remains a distant goal. In addition, it does little to implement the sustainable cooperation needed to affect the global change necessary on a wider level.

If these measures are to be extended, this pandemic could provide the platform to make significant socio-economic change in the adaptation of a state socialist system. Despite the persistent wariness of authoritarianism, if done well, such an economic shift could successfully refocus society’s gaze from growth to sustenance, so that when disaster does strike, basic provisions such as healthcare and housing are prepared and freely available for those most affected. In addition, this is an opportunity to finally make concrete efforts to tackle the impending climate crisis. Amsterdam’s authorities are planning to adopt Raworth’s “doughnut” model in efforts to mend their post-Covid economy. The doughnut contains the minimum we need to lead a good life at its centre and places the ecosystem at its outer ring. In the middle lies the balance; where everyone’s needs are met without damaging the resources of our planet that we rely on. 

The Coronavirus has shown us one thing for definite; namely, what we should not be doing. The dangers of a capitalistic market economy has finally hit home. The Coronavirus has shaken us in a way that the financial crisis of 2008 and eco-degradation clearly never could. It has taken the elderly and sick from us, exhausted our frontline workers and made many more redundant. The focus on economic growth, privatisation, and global value chains is no longer just unsustainable for the Global South and the environment, it is unfeasible for everybody. What we should replace the system with is still up for discussion. It is essential that we have this conversation, and that we have it together. The final thing this pandemic has taught me? In times of urgent, universal deprivation, we have the capacity to do a lot more than we think. Willpower, resources, and human solidarity are there if we really need them. So why wait for necessity? Why wait for a third wave?