Coronavirus or not, a recession was coming

When the recession comes, will it be the wealthy or workers who will be made shoulder the burden?

Insider has had a lot of time to think recently, particularly about the narratives that we are all subject to from various sources within society, whether it is Government, the media, special interest groups, or far-right conspiracy theorists.

Many of these daily narratives play a significant role in forming our collective social mindset, in steering certain policies or lines of argument that become socially accepted. Often such narratives are logical and are posed with the common good of society at heart, but this itself is problematic because what is “in the common good” is open to interpretation and a variety of contrasting views, and it is on this aspect, in the context of the current coronavirus situation, that Insider would like to focus this week.

Coronavirus has had a devastating impact on families and businesses throughout the world, and, yes, it has been the catalyst for what looks to be another harsh and damaging recession. In fact the IMF has warned that the world is faced with the worst economic crisis since the Great Depression of the 1930s. This is where Insider begins to question the narrative; is it correct to blame this impending catastrophe solely on the virus?

There is more to this than Covid-19

Coronavirus

Of course Covid-19 has accelerated and deepened its impact, but the facts show the world economy was heading for a fairly significant downturn as it was. All major economies in the world were in decline since late last year; the US-China trade war was indicative of much deeper problems; most major EU economies were in recession or just hovering above; and while Ireland was experiencing what appeared to be solid growth, it was clear we were bracing for impact. Being a “small open economy” we are always susceptible to external economic shocks and of course the impact of Brexit was, and is still, looming large.

'Even when such efforts at avoiding taxes are not successful, right wing neo-liberal governments will go to bat on their behalf to ensure such multi-nationals keep every cent'

So let us not rush to blame the Coronavirus for all of our woes; the irrationality of organising society on the basis of the market system meant another crash was imminent. Of course it would not necessarily have hit so hard, or fast, and so it may have been possible to flatten the curve of the economic impact, so to speak, but it is widely accepted that another recession was coming.

The Department of Finance has been quick to talk up a recovery next year or whenever the Coronavirus threat has subsided, but it is hard to see what that optimism is based on given the wider world economic outlook. It is likely there will be a bit of a surge in economic activity once restrictions are lifted but that is unlikely to be enough to overcome the broader underlying problems.

Will the wealthy 'pull on the green jersey'?

The problems facing Capitalism can be summed up by the imbalance created due to high levels of productive growth and profits for big business and rich investors, and, by contrast, the declining levels of income, job security, and social stability for workers and consumers.

This is exactly why we have seen such an increase in the number of billionaires throughout the world in recent decades while at the other end of the scale, workers in many sectors have had to battle just to see basic wage increases keep up with the cost of living.

Many of these same workers who are now being lauded as “heroes without capes” and are rightly seen as essential to the functioning of society, and they are the very same workers who, in recent years, were forced to take strike action for better pay and conditions. This begs the question: if we are facing another harsh recession and even the prospect of another lost decade, which sections of society are going to be forced to make the sacrifice this time?

'This crisis has shown the collective goodwill and spirit of self-sacrifice of ordinary workers, but it has also exposed the glaring inefficiencies of the capitalist system'

Will it be the low- and middle-income workers and families again? Or will it be the richer sections of society, the top 20 per cent who own more than 72.7 per cent of all net wealth in the country? Will they be asked to “pull on the green jersey” for the greater good? After all we are all in this together, aren’t we?

At the risk of sounding cynical I think we all know the answers to these questions, and in reality, even if that top 20 per cent were somehow made to carry their fair share of the burden the system is structured in such a way that it allows them to avail of all kinds of loopholes and get-out clauses. Even when such efforts at avoiding taxes are not successful, like in the instance of Apple and the €14 billion it owes this State, right wing neo-liberal governments will go to bat on their behalf to ensure such multi-nationals keep every cent.

Do we want to go back to a two-tier health service?

We see another example of this with millions in taxpayer funds being funnelled to shareholders in the private hospitals the State has now leased in order to deal with Covid-19. After years of a brutally inefficient two-tier health system, all of a sudden we now (temporarily had least ) have a single-tier health system run on behalf of the public.

This situation has offered us a great opportunity to do away with this failed two-tier model once and for all. Insider would guess that the idea of going back to a model that has been proven to fail will not sit well with the majority in society.

Frontline heroes — Staff from the Orthopaedic Outpatients and Physiotherapy Departments in Merlin Park University Hospital. Photo:- Mike Shaughnessy

This crisis has shown the collective goodwill and spirit of self-sacrifice of ordinary workers, but it has also exposed the glaring inefficiencies of the capitalist system, from shortages of PPE for frontline workers to shortages in tests and ventilators which are linked to decades of under-resourcing of public services.

Economic pressures within the system now force workers into a false choice between the good of the economy and that of public health. What this crisis shows us most is the necessity for us to move beyond the limitations and false choices of the current social and economic structure; it is time to start a serious debate within society that challenges the narratives of the status quo and which seeks to outline real, lasting solutions, to the deteriorating state of the current social and economic order.

 

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