During the COVID-19 shutdowns, Labour enthusiastically supported the government’s furlough scheme, and demanded that it should continue. A progressive opposition should have asked the question that any progressive movement should ask: does this increase or reduce inequality? If it increases it, we should propose alternatives.
Undoubtedly, the furlough scheme increases labour market inequality; giving three or four times as much to higher-income earners as to those in the precariat, and scarcely anything to those on the margins. It is subject to high and predictable fraud, with greater ease for members of the salariat to cheat. Even when evidence revealed that, Labour persisted in supporting the furlough scheme. This suggests that it lacks an anchor of progressive values. It recalls New Labour, epitomised by Peter Mandelson and Tony Blair’s rejection of concern over inequality. Under them and the Conservatives, private wealth has risen from 300% of GDP to over 700%. There is only one rich country where income and wealth inequalities are greater: the United States.
As argued previously in openDemocracy, income and wealth inequality are much greater than conventional statistics reveal. Building a new income distribution system that reverses the trend towards greater inequality should be top priority. Raising the minimum wage, while welcome, would do little for the precariat and nothing to tackle the structural reasons for inequality.
If Starmer wants to prioritise “security”, the only way to do so would be to move towards a basic income as the foundation of a new distribution system. But he and his colleagues are resolutely opposed to even considering that, in fear of being attacked by the Conservatives. They merely say that Universal Credit must be improved. This is the most regressive social policy of the past century, with its spiteful conditionalities and sanctions, high exclusion errors and poverty traps. As with the welfare system in the US, it has even become a major cause of indebtedness, providing insecurity to its intended recipients. No progressive should be giving it the time of day. But Labour lacks the courage to oppose it resolutely. Timidity rules.
Timidity holds back progressives
The left, globally, must devise a strategy to dismantle rentier capitalism. Yet there appears to be no recognition that this is the problem. Among the priorities should be a comprehensive critique of the vast subsidies given to special interests. According to Treasury statistics, tax reliefs and subsidies come to £430 billion a year. Most have no moral or economic justification, and are regressive. Furthermore, there is an urgent need to develop a strategy to weaken intellectual property rights. It is absurd that big corporations can string together patents that give them monopoly profits for twenty years, or in the case of pharmaceuticals forty years.
While developing a plan to build a new income distribution system, including an overhaul of the tax system, the primary issue should be developing a strategy for addressing the ecological crisis. Clearly Biden’s Democrats will be vastly better with this than Trump, and Labour could only be better than the Conservatives. But the crisis poses a problem for traditionally social democrat parties.
They believe in economic growth and maximising jobs. So far, whenever a conflict between jobs and ecology arises, labour unions on which they depend opt unerringly for jobs. Social democrats are trying to shift ground by offering “green jobs”. But there are ample reasons for scepticism.
Neoliberal risk to eco crisis
There is a danger that they will not be able to identify enough decent green jobs and that more resource depletion and global warming effects will be shifted into the blue economy, which the European Investment Bank, the European Commission and the World Wildlife Fund predict will create more income and jobs than the terrestrial economy by 2030. The social democratic left seems oblivious to the fact that the growth model it has favoured for decades has created a marine ecosystem crisis of epic proportions.
There is a corresponding danger that Labour, as well as Biden’s Democrats, will persist with a neoliberal economics approach to the ecological crisis. This is based on attempting to value ‘natural capital’; the belief that if a market value can be placed on all of nature then incentives can be designed to conserve the valuable bits. Critics have exposed the errors of this approach. There is no avoiding a reassessment of economic growth per se. Social democrats seem unable to address the ‘de-growth’ movement or its rationale.
This leads to what progressives should be doing on fiscal policy. The need for tax reform and a higher overall tax take has never been greater. Where does Labour stand? We simply do not know, or even know whether its leaders are taking the need seriously.
Progressives must advocate for a wealth transfer tax and, above all, a high carbon tax. There is an open door. In the US, over 3,600 economists signed a statement in favour of carbon taxes coupled with carbon dividends, a form of basic income. In Britain, that could be funded by a commons capital fund based on pollution levies.
Industrialising education
Then there is the crucial area of educational reform. Here again, social democrats have been collaborators in creating what is a cause of their loss of support. As part of the Third Way model, neo-liberal economics were extended to all levels of education. Social democrats inhaled the view that schooling and universities should be designed to create ‘human capital’; preparing people for the job market, to be good jobholders. They have seen ‘the education industry’ as an extension of the market economy. This is a new philistinism.
One is entitled to think that, as this marginalises subjects and thinking not geared towards producing human capital and jobholders, the teaching of culture, history, literature and civics will be neglected. As an academic, I can testify that this is precisely what has happened. A result is a citizenry ill-prepared to withstand the appeal of populists selling simplistic slogans. Is there any sign that progressives want to reform the education system, or have policies to do so? Neither Biden nor Sanders have shown any.
One could extend this critique. There is nothing transformative on offer. I hope I am wrong to think that progressive creativity will be shunned in a complacency induced by Biden’s victory, and that this will not be a period of re-heated Third Wayism. The omens are not good.
The precariat should lead the revolt to strengthen the backbones of those who are in a position to develop transformative alternatives. If they do not or cannot, the Biden bounce will be a blip, and populism will soon have another chance to forge a dystopia that none of us should want.
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Guy Standing | Radio Free (2020-12-16T11:51:49+00:00) Will Biden lead a progressive revival or a populist backlash?. Retrieved from https://www.radiofree.org/2020/12/16/will-biden-lead-a-progressive-revival-or-a-populist-backlash/
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