Will covid change the relationship between individual, market and state? | thearticle

The second lockdown has come like a dark autumn cloud after a brief burst of summer sunshine. Families will suffer, jobs will be lost and people will die. There is understandable anger and

frustration. Libertarians argue that the gravest threat we face is not from the virus but from the assault on our freedoms. I have some sympathy with that argument. But it is what it is. We

need to get through this. Instead of raging at the present we should be thinking about the future. Like many, I no longer look to our leaders for guidance on how to live my life and keep my

family out of harm’s way. It isn’t just the incompetence. It’s the system itself and the rules of the game which brought us to this pass that are obsolete. Normal is broken. In the

post-Covid world we will need new rules. We inhabit a modern world. But evolutionary psychology teaches us that our instincts remain those of the Stone Age hunter gatherer. In a crisis, like

our ancestors, we seek out the familiar and do what we can to protect it. When the pandemic is tamed, whenever and however that happens, we will emerge from our places of safety looking for

normality, how things were before. This happened after the 2008 financial crash. We were on the edge then. Millions of lives were wrecked by a dysfunctional system. Central banks and

governments (in Britain a Labour government) spent more than £2 trillion to rescue the banks. Taxpayers, victims of incompetence and greed on a global scale, were left to face the next

crisis and the one after that with a carbon-guzzling economy that is broken and unequal in its rewards. To do this again would be criminally negligent. This pandemic is a once-in-a-lifetime

opportunity to take a hard look at the world we have made and reshape it to make things better. But will we? Oxford philosopher Toby Ord argues in his book _Precipice_ that Covid is not the

first and by no means the last threat humanity will face. It is in our nature to define such events (like the 2008 crash) as a temporary misfortune we can fix before reverting to normal.

It’s a mixture of stoicism, short-sightedness and self-interest_. _Ord goes on to say that imagining a calamity that might threaten humanity itself is beyond our ken and therefore beyond our

capacity to prepare for one. We are stuck in the normal. Ord is an avowed gloom merchant. His job as a researcher at Oxford University’s Future of Humanity Institute is to keep a score card

of potential threats: asteroids, pandemics, bio-weapons. His book is alarming, but also compelling. Our headlong pursuit for more, bigger, better, faster, richer without pause for thoughts

is creating the conditions for what scientists call the “Anthropocene extinction”: a man-made catastrophe arising from uncontrolled growth, human migration, climate change and the relentless

destruction of habitat and species The pandemic has brought the world to a shuddering halt. It is a public health emergency. It is also a social and political upheaval as well as an

economic shock. It is local and global. Its themes are strikingly similar across the world: the desire to exploit other species; unrestricted population movement and capital flows;

underfunded public health services; inequality of outcome. The temptation when we come out if it will be to focus on what went wrong, who was to blame and to fix the (relatively) little

things: stockpiling PPE, testing, forecasting, command and control structures to deal with national emergencies. This is necessary. But we must look beyond this crisis. We need a fresh

mindset that draws on what we have learnt. The starting point should be rethinking the relationship between the citizen, the state and private enterprise. This is not about socialism. It’s

about resetting capitalism by striking a better deal for the taxpayer. When monumentally important decisions are made affecting entire populations at vast cost to the taxpayer where should

our priorities lie? When governments, custodians of the magic money tree, intervene to fix a crisis and rescue the economy, who benefits and who loses? Where, in a word, is the citizen’s

dividend? We are already being warned that, come the reckoning, there will be need for further belt-tightening, to achieve the holy grail of a balanced budget. The spectre of austerity, of

cuts to public services and another downward spiral in wages, looms for the ordinary citizen. Yet companies are being bailed out, as they were in 2008, with no requirement to share the pain

or offer a reciprocal benefit to the taxpayer. In April the British government extended a £600m credit line to EasyJet to keep it going. A month earlier the company had paid out £180m in

shareholder dividends. Despite this, no conditions which might have protected its workers or contributed to a cleaner environment were attached to this bail-out. The government argues that

it’s not its job to tell companies how to run their business. And yet it is happy unconditionally to hand over hundreds of millions in taxpayers’ money. In France and Austria airlines were

bailed out on condition they reduced their carbon footprint. This not an isolated example. In her excellent piece in _Foreign Affairs,_ Mariana Mazzucato, a professor at University College

London, highlights the case of the California-based drug company Gilead. It received $70m in federal government funding to develop the Covid-19 drug Remdesivir, which was administered among

others to President Trump. Yet in June the company fixed the price of a single course of treatment at $3,120, around 10 per cent of a blue-collar worker’s annual salary. The International

Energy Agency estimates that, worldwide, governments subsidise fossil fuels by around $180bn. The US government alone provides $20bn year in subsidies. European Union subsidies amount to

£60bn. The UK leads the EU in subsidies to fossil fuels, significantly more than is spent on renewables. The pandemic has driven prices down, presenting governments with a golden opportunity

to phase out subsidies and go green. But will they? The same “heads-I-win, tails-you-lose” attitude applies to Big Tech. The Google algorithm, Uber’s GPS software, Siri, all these benefited

from state help. Yet Big Tech, like big Pharma, is notoriously tax-shy. Then there is the question of how we define value. Public infrastructure — roads, rail — are essential to creating

value in the private sector. Without them, nothing would move. The same goes for state education. Without taxpayer-funded education businesses would have no new recruits. How can this be

better reflected in a new deal between the state and the private sector? A Universal Basic Income (UBI) would be one route to a fairer cut. Another would be the citizen’s dividend through a

sovereign wealth fund. Many oil producing countries have built funds worth billions, which are put aside for hard times. Technology is the new oil. Companies like Amazon, Google and Facebook

have accrued unimaginable wealth. Some of this should be shared with taxpayers to provide the universal fast broadband from which those companies would, in turn, benefit. Mazzucato argues

powerfully that creating value in the economy is collective effort: a symbiotic relationship between the public and private sectors. Instead, the UK persists with a lamentably one-sided

relationship between government and the private sector: repeated failure rewarded by yet more public sector contracts — test and trace, PPE, prisons, the scandal of privatised mental health.

There is often no competition, or scrutiny of the huge rewards that flow to shareholders and company directors. It’s a very bad deal. It’s time to rethink the status quo, because it doesn’t

work — at least not for the citizen. The state needs to toughen up and get more bang for its buck. A MESSAGE FROM THEARTICLE _We are the only publication that’s committed to covering every

angle. We have an important contribution to make, one that’s needed now more than ever, and we need your help to continue publishing throughout the pandemic. So please, make a donation._