Pandemics and the State of Welfare

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In the midst of what might possibly be the worst recession since 2008, and staring down the barrel of overwhelming economic, social and human disaster, there is widespread recognition that increased welfare spending is critical not just to contain the fallout from the pandemic, but also to effectively combat it. By ensuring timely delivery of essentials and basic income support, one can minimise the chances of people venturing outside, and hence contain the spread of the COVID-19 virus.

There are valid concerns raised as to whether these measures go far enough in helping workers or whether institutional mechanisms will be able to convert announcements into genuine progress on the ground. This blog post analyses the arguments behind the justification of introducing welfare schemes in today’s times, and the underlying economic logic behind them. 

The increase in welfare provision is sorely needed in a catastrophic situation such as the one we face. But while the readiness to deploy instruments to achieve this is unprecedented, the measures themselves are not. Much of the welfare measures rolled out by governments are standard income support and welfare packages, larger in scale but with no fundamental changes in their basic design. Much of these measures, moreover, have been advocated by many to deal with fallouts from economic crises in the past, only to be met with middling levels of success and acceptance by the powers that be. The impact of the coronavirus has shown us how quickly governments can turn over the fundamental principles of austerity if they are pushed to do so. 

This post does not simply aim to criticise government policies of the past in light of current actions, but to outline a warning for the future. The problem of economic distress will not go away once the pandemic does, because then we will be dealing with battered economies, high unemployment, and weak to non-existent growth. In such times, when the threat of the virus has ebbed, there will be calls to roll back the welfare measures of the government. These calls will have to be countered stringently, on the grounds that the need to protect welfare and ensure government assistance is not contingent simply on the existence of a virus, but on the inability of the economic machine to provide for welfare.Read More »

COVID-19: A Bigger Challenge to the Indian Healthcare System

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Covid-19 has reached the community spread phase. Developed or underdeveloped, rich or poor, all countries are affected by this today. However, they are facing these challenges – shortages in medical supplies and difficulty stopping its spread – in different magnitudes. In an attempt to stop the spread to save lives, Prime Minister Narendra Modi announced a 21-day lockdown, starting from 25th of March. Developing countries across the globe are looking down quickly, after witnessing the helplessness of the US, UK and the rest of Europe – though these are the countries with much stronger healthcare systems and much better availability of doctors. In Italy, doctors are forced to prioritize whom to save and whom to leave untreated.

India’s healthcare infrastructure is incapable of dealing with this crisis today. Shortages in medical supplies and an inability to provide adequate testing are the major issues. However, the Prime Minister’s announcement to allocate 15,000 crore rupees (USD 2 billion) for building infrastructure can strengthen the fight against coronavirus. Also, state governments are trying to expand facilities to deal with this situation.

The majority of Indians finance their healthcare themselves. About 62 percent of households’ expenditure on healthcare in 2017 was made through out-of-pocket payments. In comparison, the equivalent figures for the European Union (excluding UK) is 22.29 percent and for the USA and UK it is 11 percent and 16 percent, respectively (Table 1). While many patients diagnosed with Covid-19 will need Intensive Care Unit (ICU), there is no clarity from the government regarding who will pay these expenses. Read More »

‘Climate Emergency’, COVID-19 and the Australian capitalist state

covid-19-4926456_1920Now is the hour of our collective discontent. In order to pursue the agenda set out for this blog post series, namely: ‘to precisely identify the strategic, structural/epochal, or more contingent factors involved in the emergence of particular state–capital hybrids, as well as the specific institutional, organizational, and legal forms that facilitate such emergence’ (Alami & Dixon, 2019) my contribution examines the Australian state over the summer of 2019-20, into the COVID-19 pandemic. I argue that the COVID-19 pandemic highlights the instability and amenability to capital of our present conjuncture in ways that the bushfire crisis did not. Further, the pandemic renders our present conjuncture potentially far less stable and amenable to capital than declaration of a national ‘climate emergency’ could have, and therefore the left should consider how to force deep reorientations of state-led action (and therefore form and function) while it can.

The need for an adequate state theory

Existing scholarship on neo-Marxian theories of the state are the foundations of an appropriate diagnosis of this moment, though in the heart of an historic conjuncture is not the time to attempt a full synthesis or unified theory. Instead we should begin by using our compounding crises to work through our existing analyses and critiques. In keeping with this research agenda, I will begin with a Poulantzean reading of the state – not the blunt Althusserian structuralism of his earlier work, but his later and more nuanced work on the state theorised as an ever-contingent social relation. The state is thus conceived of as a material condensate of the balance of class struggle, meaning it is possible to isolate points of rupture and work upon and through them to alter the balance of power.

Without a reconfiguration of political and economic power, the crises we face will not resolve, but escalate by orders of magnitude. A neo-Marxian theorisation of the state reframes this political moment with a materialist analysis of the issues confronting our societies. The points of possible rupture have now become more apparent and should guide leftist strategy into and through the COVID-19 pandemic.

From ‘climate emergency’ to global pandemic (from theory to praxis)

Over the 2019-20 summer, Australia burned. Vast swathes of the country were covered in marauding fires; communities were evacuated; homes were destroyed; irreplaceable heritage landscapes were lost forever and millions of animals perished. Those physically distant from the fires were nonetheless impacted by the resulting cloaks of particulate matter draped across the country at levels ‘unmatched in terms of severity, duration and extent’ in Australia’s recent memory.

Much of the resulting political jousting focused on whether or not funding had been cut for core services that would have ameliorated the situation. Over the course of the summer, communities mobilised to meet the relentless blazes, with numerous online fundraising campaigns set up to try and resource volunteer fire services. Rolling demonstrations and protests were held across the country, demanding action from state and federal governments.

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In Service of Neoliberalism – The Art and Science of Perpetuating the ‘State versus Market’ Dichotomy

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How should one assess a book on economic policy that takes a dim view of the state and redistribution in a country that is home to multiple and intersecting inequalities? Economic inequality and the role of the state in tackling inequality emerged as a major talking point in the last decade and it is likely that it will continue to animate academic and policy debates in the following decade too. Therefore, it would not be unreasonable to evaluate any book on economic policy based on the seriousness with which it engages with inequality and how it imagines state intervention in the economy. This review seeks to do precisely that by unpacking the conventional wisdom about the nature and role of the state presented in the book In Service of the Republic: The Art and Science of Economic Policy by Vijay Kelkar and Ajay Shah.Read More »

The local state origins of national economic development

Korea_busan_pusan_harbour_cargo_container_terminal.jpegDuring the high period of global neoliberalism (1980-2008) the international development community essentially banned the heterodox concept of the ‘developmental state’ from polite discussion. One of the reactions to the global financial crisis and the Great Recession that ensued after 2008, however, was a growing call for the partial revival of the developmental state model. Most attention in this revival of interest has predictably followed the line that began with Chalmers Johnson’s pioneering work on Japan’s developmental state; which is to say that the discussion has overwhelmingly centred on the purpose and role of national-level developmental state institutions. This discussion is somewhat incomplete, I would argue, if not a little misleading. This is because a great part of the historic economic development success attributed to the ‘top down’ developmental state model since 1945 is actually success brought about thanks to the innovative and determined activities of sub-national ‘bottom-up’ developmental state institutions, which we can term the ‘local developmental state’ (LDS) model. Read More »

The Moral Economy of Housing

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We must be insistently aware of how space can be made to hide consequences from us, how relations of power and discipline are inscribed into the apparently innocent spatiality of social life…(Soja, 1989, p. 6)

We are first and always historical-social-spatial beings actively participating individually and collectively in the construction/production—the ‘becoming’—of histories, geographies, and societies. (Soja, 1996, p. 73)

The fortification of housing insecurity, if left unchallenged, will constitute a normalized social basis, in which an ever-growing number of impoverished households are routinely ostracized. Analyzing the dynamics of this social condition demands robust explorations of the concrete reality in which housing, in general, is developed, reproduced and institutionalized over time and space.

At its most fundamental level, housing is more than a market segment or policy, it is a social relation that serves as the kernel of human survival, which can have profound consequences for the actors involved, the actions they take, and the outcomes that follow. As such, housing provides a set of meanings and values, a material form of emotional, cultural, political and economic significance. It is an institution that points to polyvalent higher order social arrangements that involve both patterns of social mobility and symbolic systems that infuse human activity with a powerful essence. Housing insecurity, therefore, is not a just a means of financial dispossession, but an ontological crisis concerning personal identity and the relationship to the rest of society.

Thus, the inherent task is to conceive of a situational dynamic that structures a housing system that enables residents to profoundly overcome socioeconomic inequity. The mission is to construct a moral economy, so to speak, that is generated along the lines of a systematic effort to maintain a high quality of life, whereby value, norms and obligations are metabolized through particular fields constituted by dynamic combinations of meanings and practices that embody a generalized sphere of community, a realm of possibility to enhance the development of one’s potential.

Overall, the intention is to allow for a normative discussion about what possibilities exist for assessing housing as a spatial activity that altogether adheres to socially determined aesthetic and moral expectations, that is, to approach housing as a language of dignity, as opposed to a vocation of spatio-temporal fixes. Hence, the responsibility of providing the means of socially equitable forms of shelter is not an insurmountable challenge; it can be administered in the name of social stability.

What is requisite is a recognition of moving beyond close instrumentalism and incrementalism with respect to short-term benefits of goal-specific tasks. This presupposes a negation of distancing from outward signs of housing insecurity, which inherently is a society-wide phenomenon, since institutional benign neglect only contributes to the slippery slope vulnerable people continually risk, toward the untouchable-caste status of homo sacer.

References:
Soja, Edward W. (1989), Postmodern Geographers. New York: Verso
Soja, Edward W. (1996), Thirdspace. Oxford: Blackwell.

David Fields is a political economist from Utah. His work primarily centers on international political economy, with particular concerns on the role of finance in economic development. He also delves into the political economy of community planning, in order to promote socially equitable housing cross-nationally. This post was first published on the URPE blog. E-mail him at: dfields@utah.gov.

 

 

Finance Damages Democracy – and Brexit Will Make it Worse!

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The ‘do or die’ Brexit deadline this Halloween has come and gone without bringing much certainty about the policy and political landscape going forward. UK voters who hoped for a clear-cut end of the Brexit saga were disappointed as big questions remain unanswered while new ones have been added: What will the December election bring? Will there be a second referendum? A different deal? A further extension? 

There seems, however, one definite outcome of the Brexit process: UK democratic institutions have been hollowed out permanently. Individual politicians have certainly contributed to this outcome. However, it would be too easy to blame the disintegration of democracy in rich countries entirely and exclusively on Johnson, Trump, and the like. Rather more systematic and structural trends are at play, which raise the old question of whether capitalism and democracy are compatible or rather contradictory systems. The claim that capitalism will usher in democracy, since free markets rely on an open societal order, or at least fundamentally weaken authoritarian regimes, has been proven untenable. This is particularly clear as the Chinese Communist Party tightens its grip over social media, using information technology to survey ever-growing parts of Chinese people’s lives.   

It is striking though that among rich countries the crassest examples of democratic disintegration are unravelling in the two Anglo-Saxon economies which have been hailed as economic success stories during the 1990s and early 2000s: the UK and US. Much of their growth spurts over this period was fuelled by the increasing size and influence of their finance industries and so is the current hollowing-out of their democratic institutions. In brief, we are currently experiencing the effects that financialisation has on democracy. Of course, capitalism and democracy are generally difficult to reconcile as convincingly argued by Polanyi. The fact that a democratic order calls for equality of all citizens before the law and provides all of us with the same vote, while our economic order simultaneously introduces a strict hierarchy based on ownership is possibly the clearest illustration of the conflict between democracy and economic order. But it is further stoked under financialisation. This blog post unpacks how financialization affects democracy in a variety of ways, through three examples, namely social provisioning, the Euro crisis, and the Brexit saga.Read More »

Advocates of the SDGs have a monetarism problem

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UN Secretariat Headquarters, New York. UN Photo.

More expansionary fiscal and monetary policies are needed to meet the Sustainable Development Goals

This month, the international community will gather at the United Nations in New York to review progress on the implementation of the 17 Sustainable Development Goals (SDGs) that are intended to reduce poverty, hunger and economic inequality and promote development, particularly in developing countries. But only one of the SDGs, #17, says anything about how to finance all the efforts. While SDG 17 calls for more international cooperation and foreign aid, it only suggests that developing countries strengthen domestic resource mobilization (DRM) by improving their tax collection and curtailing illicit financial flows, etc.

While important, this approach neglects much bigger problems with the prevailing set of macroeconomic policies that hamper the ability of developing countries to increase public investment, employment and scale-up the long-term investments in the underlying health and education infrastructure needed to achieve the SDGs. The policy framework used in many developing countries is characterized by an overly restrictive low-inflation target achieved by using high interest rates and backed up by strict inflation targeting regimes at independent central banks.Read More »