COVID Dividend: will everything change, or nothing?

This is a short addendum to the recent piece on whether or not we can expect to see a significant Covid Dividend:

A Covid Dividend is the value we will reap from the reforms, changes in behaviour and other innovations which were caused, prompted or dramatically accelerated by the COVID19 pandemic that deliver sustained improvements in the social, economic, environmental, institutional, personal and community dimensions of our lives.

It’s basically the unexpected but welcome bonus we get to enjoy as a result of a bunch of changes we’ve come to enjoy during the pandemic, which we would not have achieved without its intense demands and which are at risk of eroding once the external pressure is removed”

In a short note published on 4 April, the Financial Times Editorial Board (as opposed to the Financial Times itself), noted that:

If there is a silver lining to the Covid-19 pandemic, it is that it has injected a sense of togetherness into polarized societies.

Not perhaps the kind of sentiment you’d normally expect from the FT, but an intriguing way to start. The Board went on:

But the virus, and the economic lockdowns needed to combat it, also shine a glaring light on existing inequalities – and even create new ones.

Perhaps not where you would expect the FT to land. Its opening salvo concluded:

“Beyond defeating the disease, the great test all countries will soon face is whether current feeling of common purpose will shape society after the crisis.”

Absolutely. A COVID Dividend. A big one.

And the search is getting a little anxious, strung out between an expectation (hope?) that everything will change – economic policy, universities and higher education, schools, our health and social care systems, the banking and finance sector, sport, arts and entertainment, travel and transport and, hope of all hopes, determined and ambitious action on climate change – and the anxiety (fear?) that, in the end, nothing will change.

Back to the FT Editorial Board.

Harking back to the new social contract that provided a solid foundation for shared sacrifice and collective effort that emerged from WW2, it argues that today’s crisis is “laying bare how far many rich societies fall short of this ideal.”

Basically, the argument is that we’ve gone into this crisis having failed to invest in the conversations, policy making and necessary investments, public, private and civic around which a robust foundation for renewal could be built.

And, unlike the victors of 1945, our current leaders are not investing the time and effort to think about a new foundation for a very different future even as they are up to their armpits waging the war itself.

In other words, it feels like the “war” we are in is WW1, not WW2. And the problem with the failure of imagination, the lack of pragmatic design and failure of collective will after WW1 was, well, we ended up with WW2.

The FT Editorial Board decries the “brittleness” of many economies and societies now in much the same way perhaps as might have been said of those fashioning the settlement after WW1.

In our own crisis, the burdens and costs, as well as the potential dividends and opportunities that might emerge, are not distributed evenly. The Board is blunt. “We are not really all in this together.”

Precarious labour markets make it hard to get help to those who have worked for too long on the edge of  subsistence. Vast monetary loosening, the Board reminds us, will help the asset-rich. And, significantly:

“Behind it all, underfunded public services are creaking under the burden of applying crisis policies.”

So, what to do? The menu isn’t a predictable FT list:

Radical reforms – reversing the prevailing policy direction of the last four decades – will need to be put on the table. Governments will have to accept a more active role in the economy. They must see public services as investments rather than liabilities, and look for ways to make labour markets less insecure. Redistribution will again be on the agenda; the privileges of the elderly and the wealthy in question.

And just to cap it off, we need to think about “policies until recently considered eccentric, such as basic income and wealth taxes…”

The analysis concludes with a quick review of the response to WW2.
From that particular cataclysm, much of it designed by visionary leaders in the thick of the war itself, came initiatives including the precursor to the UN, the Atlantic Charter (1941), a report from William Beveridge (1942) which was the foundation document for the modern welfare state and the Bretton Woods agreement for the post-war financial system (1944).

Now, there’s a healthy debate to be had about the mix and range of items that the FT’s Board has put on the table. But there they sit at least as a provocation.

For some, there might be a concern that, at the height of the fear and fury which this deadly disease is generating and when, in the name of saving lives, everything, apparently, is on the table, including policies which some governments have assiduously pushed off the table, and kept off the table, for some considerable time, we are in danger of taking up some old ideas about the reach and role of government that may not be all that helpful.

The policy choice we’re being offered sometimes seems stuck between a simply binary choice of either Mrs Thatcher or Jeremy Corbyn (and wouldn’t he have read the FT piece with a smirk?).

It’s fine to laud the visionaries of the post-WW2 settlement and the energy and imagination that  turned into a pretty decent run of sustained economic and social development.

But in large measure, their vision has faded or at least done its job. Part of our problem in health and social care, for example, is that many of the provisions of the welfare state and their underlying assumptions don’t seem to be working so well at the moment, not surprisingly. Have a look at Hilary Cottam’s Radical Help for a substantial analysis of that particular dilemma.

The  FT Editorial Board is asking what could a similarly inspired and energetic bunch of thinking leaders do now–likely I hope to be a more eclectic lot than in 1942, not all jammed into the top echelons of institutions public, private and civic whose recent performance suggests they aren’t in especially good shape themselves–to come up with a new settlement for the post-COVID world that suits the temper of our times?

And can we do the thinking and the design about what will happen after it’s over while the war is still raging? Can we think now about the dividend we should reap when this emergency subsides

Footnote

This was the view from Arundati Roy’s piece, in the same edition of the FT as it happens:

But unlike the flow of profit, this virus seeks proliferation, not profit, and has, therefore, inadvertently, to some extent, reversed the direction and flow. It has mocked immigration controls, biometrics, digital surveillance and every other kind of data analytics, and struck hardest – thus far – in the richest, most powerful nations of the world, bringing the engine of capitalism to a juddering halt. Temporarily perhaps, but at least long enough for us to examine its parts, make an assessment and decide whether we want to help fix it, or look for a better engine.

Apart from admiring how many sub-clauses and commas a novelist can cram into such a short space, the sentiment is the same, if open to some contest.

Seriously, she and the FT seems to be asking, what should we be trying to get out of all of this?

Something new, sensible, imaginative and relevant to our time? Or a simple and sorry “snap back” to the way things were? Which really isn’t much  of a dividend at all.

A lot of pain for not much gain.

Sad, as the great man might put it.  Very sad.