There is uneasiness about tomorrow; about our livelihoods, our wellbeing and our lives. Bounding this uncertainty is the immediate imperative. How we plan to resume work, requires that we solve for both the virus and the economy simultaneously. To achieve this, requires behaviours that stem the contagion as we work towards a future-state in which we can return to work, to family duties, and to social lives. The progress we make on both fronts, will determine the shape of the economic recovery.
The aftermath of the impact of COVID-19 requires a framing of the problem inside the fiscal impression of Viral Spread, Public-Health Responses, Knock-on Effects, and Public-Policy Rejoinders. The financial impact of Virus Spread hinges on unlocking information on immunity, transmission rates and modes, and mortality rates. Gauging the monetary impact of the Public-Health Response requires economic analysis of lockdowns, travel bans, physical distancing, comprehensive testing, contact tracing, capacity of health care provision and treatments.
The third frame requires an appraisal of the impact of Knock-on Effects emanating from rising unemployment, shuttered businesses, corporate failures, credit defaults, market volatility, and financial system vulnerabilities. The final boundary that frames the problem is the commercial impact of Public-Policy Rejoinders to mitigate knock-on effects including widespread bankruptcies, support income for furloughed workers, protection of the financial system and the viability of the most affected sectors of the economy.
In 2008, governments tapped $1 trillion from the public purse to provide bail outs. Voters were not amused. Since then, regulators have agreed that creditors be forced to “Bail-In” — or share the burden of losses. The idea is to sell debt to investors. Ford is today the largest fallen angel of the current downgrade cycle. Ahead, is the evaporation of 40 to 50 percent of discretionary consumer spending that translates into about 10 percent reduction in GDP, without taking into account second- and third-order effects. Spending on airline flights could drop by about 70 percent; and spending on restaurants may fade between 50 to 90 percent. Conversely, there is an increase in precautionary saving.
COVID-19 did not bring us to this crisis. Rather, it has made unhidden the brittleness of the things that our lives and livelihoods rely on. COVID-19 offers an authoritative opportunity to reinvent ourselves, reposition the nation, and restart the economy. It is a prospect we never imagined to have. Confronting inequality from behind a Rawlsian veil of ignorance is a sincere place to start. It will demand the dismantling of every unfreedom that blockades the development of capability and reasoned agency.
But a new glass and steel attic, erected on a termite riddled great house, built to manage a plantation economy will not inspire the public manifestation of faith required by pilgrims wanting to walk towards something authentic. Heidegger said that what is unique to the being of man is that, “in its very being, its own being, is an issue for it.” A cat does not concern itself with being a cat. But people do concern themselves with being certain kinds of persons.
This is because, unlike cats, we define our own being as we go along. We are continually faced with possibilities from among which we can choose and, at each choice, we actualize at least one of the possibilities available to us, while closing off all others. This grasping of only some possibilities defines us as one kind of self, rather than another. We carry out these choices daily, and therefore, living the life of a person, is a matter of constantly taking a stand on who we are, and being defined as who we are by taking that stand.
The causes of inequality are fundamentally ideological and political, rather than purely economic or cultural. Socio-political mobilizations have reshaped societies and inequality structures in bourgeois “ownership societies” in Britain, “slave societies” in the United States, and “colonial societies,” such as India. Elites always naturalize inequality. They contest that existing levels of inequality are “natural”.
If we do not open up new perspectives, in terms of social progress and economic justice, and if economic policy persists to benefit only a few, then we run the risk that politics will increasingly be about identity, and the nativists will declare victory. Educational justice must be verifiable and effective. Socially disadvantaged children benefit from smaller educational investments than their socially advantaged peers in France.
Flattening the curve requires more voting rights for workers, and a limitation of the concentration of voting rights for single shareholders in large companies. The basic idea of “social-federalism” is that socioeconomic relations between countries should be subject to binding objectives regarding social, fiscal, and environmental justice.
A single market economy that allows for friction-free flows of talent must be based on a common and verifiable system of social objectives for wages and labour rights. Fiscal justice requires a minimal common taxation of the largest transnational economic actors, and environmental protection such as verifiable targets for emissions. Together with the 2008-2012 bank bailout and money creation, the 2020 health crisis will challenge long-standing discourses and will feed social demand for innovative intervention grounded in truth and justice.
