COVID-19 This time it’s different (I hope)

Kevin Albertson

History indicates that periods of time in which there is relative peace and stability lead to increasing socio-economic injustice: wealth inequality; incomes inequality; and social inequality. There have been, throughout history, some attempts to address this problem. For example the ancient biblical celebration of Jubilee is suggested every fifty years. Proclaimed as a festival of liberty, on the year of Jubilee, land and property would return to its historical owners, slaves and prisoners would be freed, debts would be forgiven and, in short, the wealth of the land would be more equally shared.

In practice, history indicates the concept of Jubilee is seldom implemented. Rather, according to a study of the broad sweep of human history by historian Walter Scheidel, the practical means by which inequality has been reduced are: mass-mobilization warfare, transformative revolutions, state collapse, and catastrophic plagues. To these four, we might also add (rather less disruptively) unionisation.

We need hardly be told that, in the period or relative peace since the end of the cold war, inequality has increased in much of the (so-called) developed world. This has been justified, incorrectly, by ideological position that economic growth relies on increasing inequality. However convenient is this story for the “winners” and hoarders of the global economy, it is a fallacy: net economic growth (growth less costs) per capita has declined since the 1970seven as inequality has increased.

There are those who suggest that perhaps COVID-19 will cause a reassessment of the growth in inequalities model. Walter Scheidel has recently argued in, for example, the New York Times and the Guardian that the coronavirus might tip the balance of power between the rich and the poor, reducing inequality. Consider the impact of the 14th century (and following) bubonic plagues in Europe: the population fell by between 30% and 60%. There was about the same level of work to be done, but fewer people to do it. This led to such a shortage of workers that (what we would now call) the working class were effectively able to renegotiate, and on average improve, their position in society, thus the pandemic reduced inequality.

The impact of COVID-19 appears to be the opposite. There are roughly the same number of workers because, mercifully, the death rate has remained relatively low (although what it is precisely remains unclear), however there are far fewer jobs to be done. There would have been fewer jobs anyway, because of automation, COVID-19 has merely hastened this effect; therefore many of these jobs will probably not return.

Even before the onset of the COVID-19 pandemic, there is evidence there were only 1·5 billion good jobs in the world and a global workforce of 3 billion – implying a global un/under-employment rate of 50%. Rather more worryingly only 5% of the working population had great jobs. Clearly, there is not going to be any shortage of workers for the foreseeable future, rather the opposite. Simple economics suggests, in this situation, those who are employed will see their bargaining power in the market (and hence their terms and conditions of employment) decline.

It would appear the COVID-19 is not catastrophic enough to reduce inequality. For the lack of catastrophe, we must be grateful! However, we must recognise that, as inequality increases, societies become increasingly hostile to liberal values. If left unchecked escalating inequality appears to make violent revolution more likely. For the sake of our own self-interest (never mind issues of socio-economic justice) we ought to seek a different path in the future from that on which we find ourselves.

It seems foolish to wait for one of the other four horsemen to turn up to address growing global socio-economic injustice; I don’t think it will be much fun if it does. We could “head the problem off at the pass” and simply declare a year of Jubilee and share the inherited resources of the world. There is enough to go around; enough, that is, for everyone’s need, but not enough even for one person’s greed.

Dr Kevin Albertson is Professor of Economics at Manchester Metropolitan University. Kevin’s most recent books include Marketisation and Privatisation in Criminal Justice and Responsibility Beyond Growth A Case for Responsible Stagnation, both from Policy Press. To read “1979 and all that”, a conservative critique of the neo-liberal policies established in the 1980s please go to https://academic.oup.com/cje/advance-article-abstract/doi/10.1093/cje/bez037/5550923.

Credit photo: pixabay.com

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