I once asked a UCL student selling Marxist magazines how he thought this activity will, within his lifetime, bring about a Socialist revolution (his preferred way of bringing about Socialism). His answer was lucid: Currently, we find ourselves in a stable period. Most people are too comfortable to seek radical change and the others are thus too pessimistic that change is possible. As a revolutionary Socialist, one can only carry on and prepare: small, incremental, growth of one’s organization, getting the word out to some and keeping an eye on your competitors. Real change becomes feasible, so my fellow student advised me, only in times of crisis, insecurity and societal upheaval. When the status quo is not comfortable any longer for the many and things are already in flux, more are keen to shape the direction of change. Suddenly, ordinary people who never cared much for politics find themselves on the streets. Now it makes a huge difference whether your ideas are already established within a committed group. If they are, your organization may be the vehicle ready for the disenchanted to join to express their dissatisfaction and seek change. If not, it may be your opponent who can benefit from the crisis.
Covid-19 has brought our societies into crisis and the resulting changes must be viewed as a dangerous threat to liberal democratic institutions. Victor Orban’s curtailment of the legislative branch in Hungary is such an example. However, it is also a golden opportunity for the improvement of economic institutions in the name of social justice. Here I want to consider the latter. What is the kind of economic change that has become possible for society to pursue? How can a crisis be an opportunity?
Contrary to my Marxist friend, I do not wish to consider here the abolition of private ownership in the means of production. I am fine here with market economy, but consider myself a market constructivist: what kinds of markets exist in a society depends on legal frameworks, property rights, consumer preferences, technological advancement, government regulation and subsidies, state-owned enterprises, trade regimes, entrepreneurial activities, public investment, etc. Furthermore, all these conditions are amenable to change by social and political forces. Markets, from a social view, are not natural phenomena we have to deal with, but rather creations of consumers, businesspeople, movements and states. If we want, we can determine the shape that markets take in a society and thus determine the nature of the economic regime with which we have to live.
Government is not the only force that shapes markets and sometimes seems powerless to do so. But sometimes the survival of markets is threatened: due to the restrictions imposed as a result of the Covid-19 crisis, consumers cannot buy, companies make a loss and the bankruptcy of some may change the nature of the market for a long time. Thus, markets may need public support to survive. Governments have already promised unbelievable credit guarantees in order to ensure the economic survival of firms after the crisis. These firms are not just aided by these guarantees, but their survival and their prospected profitability depends on it. Thus, government may find itself in a situation where it can set conditions for financial aid and expect them to be accepted.
Why should government only hand out their aid with ‘strings attached’? What are the political goals that need to be promoted in this way – other than economic stability? This is where concerns of political philosophy enter. One goal to have in mind is concern for crass inequalities and the least well off in society. Restricting top managers’ salaries, ensuring a living wage and the maintenance of the poor may be conditions attached to corona-aid.
Another goal is concern for the environment. Here, some philosophers have argued that states have a responsibility to facilitate the kind of institutions in which others can fulfil their individual responsibility to emit less Greenhouse gases (for example, Simon Caney). States have a responsibility to advance innovation and shape markets in green products. Yet the financing and development may crucially depend on companies’ willingness to participate. Many see such investments as too risky and prefer to spend profits in share buybacks. Although, the feasibility of this has been proved by the idea’s implementation in some countries, with the Netherlands introducing an economic recovery model intended to balance environmental concerns.
Thus, as a condition for Corona-aid, states may fulfil some of their climate responsibilities and tie them to companies committing to green investment and development. There are other normative ideals may also be relevant in considering the priorities on how to shape markets. This crisis constitutes a moment of real change, my Marxist friend was waiting for. Now it is on us to use this momentum to improve our economy in the light of our social problems. Yet, it is imperative that we make use of this crisis as an opportunity to improve our economy not only in terms of ‘traditional’ economic goals such as growth and prosperity, but also in the light of other societal problems.