By Ranting Panda, 11 April 2020
Ronald Reagan stated that 'the most terrifying words in the English language are: I'm from the government and I'm here to help'. Reagan is the grandfather of neo-liberal economics that aims for small government, to minimise government intervention.
So, it's kind of funny to see neo-liberals calling for greater government intervention to provide public health services and to support people who've lost their jobs. They are lauding Keynesian economics, while criticising the very capitalism that has caused much of the issues the world is now facing in response to the COVID-19 pandemic.
Neo-liberal voters bagged the heck out of the 2008 Rudd/Swan stimulus package that saved more than 500,000 jobs and prevented Australia sinking into recession during the Global Financial Crisis in 2008, while many other first-world countries adopted austerity measures, that destroyed jobs and sunk their economies into recession. Now, many of these neo-liberal voters are lauding Morrison for his $300 billion stimulus package, which will plunge Australia into recession and likely result in significant tax increases: the very things that these voters feared that Bill Shorten would have done had he won the 2019 federal election. Morrison is looking for the Australian government to take over a portion of private hospitals, he is looking to garner support from banks to delay mortgage repayments, to have electricity companies reduce prices ... in other words, he is looking to nationalise many of these services. This is an endorsement of the importance of socialism and a discrediting of capitalism and the neo-liberal concept of small government.
Will all those retirees who are championing this stimulus and who voted to keep their franking credits in the 2019 election, now give them up to help pay for the stimulus that they claim to support? You know those franking credits on which no tax is effectively paid ... (it's paid by the company, who then pay a dividend to retirees, who pay no tax on the dividend, so the government gives these retirees a tax return when they've paid no tax ... yeah, not a bad rort huh? How good is it to get a tax return on dividends that you didn't pay any tax on? Contrast this with how franking credits are supposed to work: Company pays tax, then pays dividend to the shareholder, who also pays tax, so the government refunds the shareholders tax to avoid double taxation). Funnily enough, many of those retirees are quick to criticise welfare recipients for being a drain on the economy, while putting their hands out for unwarranted franking credits to the tune of $12 billion at a time when the government is releasing the biggest public spending program in Australia's history in an attempt to protect the economy.
Morrison's stimulus package is not predominantly aimed at supporting workers who have lost their jobs. When will workers realise that their continued support of neo-liberal politicians is in fact-anti-worker? After all, it's not like Morrison is reviving the economy and protecting workers in order to establish a worker-friendly state. He is only using some elements of socialist economics to shore up the economy so Australia can continue as a capitalist nation, empowering big business to exploit workers and reduce worker pay and conditions. As the leader of the Opposition, Anthony Albanese pointed out in an address to Parliament on 8 April 2020, Morrison's stimulus package is based on the 'structure of the business, not the needs of the workers'. So workers will be treated differently, depending on their employer.
Morrison's stimulus package does not cover every worker in Australia. There are more than one million Australian workers not covered by the Jobkeeper stimulus (Taylor 2020). Further, there are more than one million migrant workers in Australia, who Morrison has explicitly stated will not be eligible for either job-seeker or job-keeper benefits (Pupazzoni 2020). That's more than two million people who lost their jobs and have no income whatsoever. How are they expected to buy food, pay rent, or pay energy bills? The reason that so many are missing out on government support is because Morrison's stimulus is based on the business structure, not people's needs. It is estimated that it would cost a further $25 billion to extend the Jobkeeper program to cover casual and migrant workers (Duke & Bagshaw 2020). That equates to a further 20% increase to the current $130 billion Jobkeeper program. Sound like a lot? Consider the cost of not supporting these people as this crisis drags on. Australia is facing a humanitarian crisis if 2 million people are unable to afford food, accommodation and electricity.
In relation to migrant workers, conservatives have argued they should not have access to the same benefits as Australian citizens. Yet, Australia has been happy to take the $34 billion a year that international students pay for education (Tehan 2019). That amount already outweighs the $25 billion billion increase required to JobKeeper. Australia has been happy to employ migrant workers in jobs in which they are often underpaid and overworked, many receiving less than half the minimum wage (Davey 2018). We've been happy to take their taxes. But now, when the going gets tough and we should be showing compassion to international students and migrant workers, Australia is kicking them into the streets to starve, to suffer from illnesses that they are unable to have treated in Australian hospitals because they can't access Medicare. Morrison has stated that they should just return home if they can't support themselves. Really? If they can't afford to buy food or pay rent, they certainly can't afford a plane ticket. Additionally, many countries have now banned international travel, so how are migrants supposed to return to their country of origin? Morrison stated that international students are required to have the capacity to support themselves for 12 months. Yet, they have lost the jobs they rely on and some of their financial support comes from their families overseas, who are facing the same circumstances of job losses and lack of government support in their own nations.
Is Australia really the country of the fair go?
In the meantime, Melbourne City Council is looking to provide support for the 200,000 international students in Melbourne (Topsfield 2020). Further, the International Education Association of Australia is calling for a hardship fund to help students, with the fund to take contributions from universities and all levels of government. Hopefully, these programs will be established very quickly, because many international students are facing homelessness within weeks (O'Brien 2020).
A stimulus program is necessary, but Morrison's is not comprehensive enough and is not directed at the real needs of many people. Australia is facing a major crisis of poverty, homelessness, starvation and the subsequent social, crime and health issues this causes. Then there are the issues with social isolation, which if it continues too long, will result in civil disobedience and mental health issues as people become more frustrated and desperate to return to a normal life.
And this is just the situation in Australia.
The bigger issue is not just how Australia cares for its own people, but how developed nations look after people in developing countries who do not have the ability to provide welfare as Australia or the UK or New Zealand have. More than one million garment workers in Bangladesh have lost their jobs and now face extreme poverty and starvation (Frayer 2020). Thousands of call centre workers in the Philippines have lost their livelihoods and face extreme poverty. Researchers at UNU-WIDER estimate that the global effects of economic shutdowns could lead to a further half a billion people living in poverty (Sumner, Hoy & Ortiz-Juarez, 2020). They found that most of the poverty will be concentrated in South Asia and Sub-Saharan Africa, with significant increases in the Middle East, North Africa, Latin America and the Caribbean. They further conclude international fiscal support is necessary for these countries to provide health services and avoid poverty, starvation, homelessness, and the subsequent issues this leads to.
There is also the risk that with such a huge increase in poverty, there will be a corresponding increase in slavery. Currently, there are more than 40.3 million people enslaved globally, but this is anticipated to increase significantly, because of poverty and opportunism (Smith & Cockayne 2020). With both workers and business-owners losing livelihoods, there will be an increase in the numbers of desperate people vulnerable to exploitation, and of course, an increase in business-owners willing to exploit them to recover their own losses during and following this crisis. With education systems closed down, there is an increased risk of child labour and trafficking. COVID-19 restrictions have disrupted anti-slavery efforts, so there is less monitoring and response efforts to combating slavery.
For people in developed nations, deaths in developing nations often mean very little. But let's bring this home for a minute. During the Global Financial Crisis in 2008, neo-liberal governments implemented austerity measures. Australia did not. Australia's Labor government ran with a stimulus package, as it's conservative government is now. This saved hundreds of thousands of jobs and prevented Australia from recession. In contrast, the austerity measures implemented by the UK resulted directly in the deaths of more than 130,000 people (Helm 2019). Those are preventable deaths, some of whom died because the austerity policies cut funding to health services. Now, just three weeks into the lockdowns in the UK, reports are emerging of millions of people facing a hunger crisis, with more than 1.5 million having already gone a full day without food (Lawrence 2020). And the lockdowns are expected to last months! This is not going to end well.
It is tragically ironic that in countries such as Australia, the UK and the USA, the population is expecting public health services to treat COVID-19 cases, to save people's lives, and yet much of the population has supported the neo-liberal policies that have gutted funding of public health in favour of privatised, user-pays systems. In the UK, Prime Minister Boris Johnson contracted COVID-19 and was admitted to an Intensive Care Unit for treatment. Meanwhile, for years, both Labour and Tory governments in the UK stripped funding from the National Health Service (Pilger 2020).
The United States under Donald Trump, specifically dismantled Obamacare, which would have helped cover the costs of treatment, now patients are left to pay their own way. In developing countries, such as the Philippines, people are expected to pay immediately for their health treatment, yet many people are too poor to, and now that many workers have lost their jobs because of COVID-19, there are even more people unable to pay for health treatment, risking the likely spread of the virus and increasing death rates.
It is clear from this crisis, that there needs to be socialised medicine. There needs to be socialised welfare systems to protect the unemployed from poverty and homelessness. Energy companies need to be nationalised as many once were. There needs to be socialised education systems, so that anyone can afford a good education, not just the rich. It is clear that privatising essential services and utilities has increased the risk of failure of all these systems during the COVID-19 crisis. The very companies that these services have been outsourced to are now putting their hands out for government subsidies and support. Clearly, this shows the failure of neo-liberal economics.
It is clear that capitalism is just window-dressing for a degenerate society that glorifies wealth accumulation built on a foundation of social inequality and extreme exploitation. But ... when the going gets tough, capitalism is a dismal failure that screams for socialist intervention.
Lenin stated, '... socialism is now gazing at us from all the windows of modern capitalism; socialism is outlined directly, practically, by every important measure that constitutes a forward step on the basis of this modern capitalism' (Lenin 1917).
Socialism is gazing at us from all the windows of our modern capitalist society. Socialism is a necessity. Society cannot be run by the anarchy of the market. Socialism requires an international effort to combat global wealth inequalities, exploitation, and poverty.
Exacerbating the issues in the US, is the feckless President Donald Trump, who essentially requires states to beg him for ventilators. In the worst example of public corruption and moral abandonment, Trump is only dispatching life-saving ventilators, medicines and masks to loyalists, to those who suck up to him, rather than distributing them based on needs ... he even instructed the head of the Coronavirus Task Force, Mike Pence, 'not to call governors in states that are not appreciative'. (Denver Post 2020). Trump has led a bungled response to the crisis, not just in America, but globally. After a 2018 warning that a pandemic was the biggest security threat to the US, Trump dismantled the world's best global pandemic response system because it was set up by Obama (Shesgreen 2020). In China, he removed an expert from the Centre for Disease Control and Prevention (CDC), who would have helped in advising on the containment of the virus (Derysh 2020). In this context, it is not surprising the USA has the world's highest number of confirmed cases of COVID-19 (Smith 2020) and the world's highest death toll (Maxouris & Andone 2020). Professor Bandy Lee of Yale University, is leading the World Mental Health Coalition, who is calling for Trump's removal on the grounds that he is not psychologically fit for office. They argue that he is battling reality, rather than the virus. The group has stated that, 'We have a presidency that is incapable of protecting lives but is making a global pandemic worse — not just through incompetence and ignorance, but through a dangerous detachment from reality, a need to convey false information, and other symptoms' (Derysh 2020).
The world will recover from COVID-19, however, it isn't the world's first pandemic and it won't be the last. As with any disaster, the recovery stage will take much longer than the response stage. The recovery stage will require addressing the global tragedy of poverty and all the consequences of that, which will include homelessness, starvation, sickness and death. Not to mention, increased crime as desperate people try to feed themselves and their families. The world, more than ever, must work together to address this tragedy. While this will impact developing countries more, it will also have a significant impact in developed countries as described earlier.
Ironically, we've seen some benefits from this crisis. With fewer people travelling, there has been a reduction in pollution and carbon emissions (Gardiner 2020). Many workers have been fortunate enough to keep their jobs and work from home. Once the crisis is over, telecommuting practices should be adopted permanently by businesses. Even if their staff telecommute a couple of times a week, this would dramatically reduce carbon emissions. The world must reconsider its consumption of unnecessary products, the destruction of habitats, its renewable energy mix. Because if these things continue unabated, then so will climate change. Just because the world's recent focus has been on the immediate impacts of COVID-19, doesn't meant that the existential threat of climate change has ceased. All that's happened is that we now have a bigger societal issue to contend with in the form of significant increases in unemployment and poverty.
Using cleaner energy would have saved lives during the COVID-19 crisis. COVID-19 is a respiratory illness. Analysis has shown that there is a link between air pollution and increased death rates. This includes in northern Italy and New York, where high death rates correlate with higher air pollution (Carrington 2020).
The effects of the COVID-19 pandemic have been worsened because of pollution and social inequality. Prior to COVID-19, pollution was killing up to seven million people a year, including more than 100,000 in the United States (Gardiner 2020). Yet, ignorantly, the United States government is using the pandemic as justification to roll-back pollution reduction policies and Obama-era policies on auto-mileage standards (Gardiner 2020). New York in particular, has exposed its inherent social inequalities, with most victims coming from poorer communities, which are predominantly African-American or Latino (Pilkington & Rao, 2020). One poignant observation about the reason for this is from urgent care physician, Uché Blackstock, who states, 'This pandemic is laying bare the inequities that have always existed in New York City ... We don’t invest in people, we don’t invest in neighborhoods, and this is what we get'.There are three key priorities over the short-term, medium-term and long-term, which require an international response supported by sharing of wealth, putting people and environment ahead of wealth accumulation and exorbitant profits. The short-term priority is addressing the COVID-19 pandemic. The short to medium term priority is addressing the economic and social issues from shutting down economies globally in response to COVID-19. The long-term priority is to address climate change, which will continue unabated, posing an existential threat to society as we know it if we do not stop the waste, the emissions, and the exploitation of people and natural resources.
References
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