Albena Azmanova, Author, Associate Professor of Political and Social Thought, University of Kent, UK, speaks to ENA elaborating on a series of policy proposals aiming at reducing the general precarity and insecurity of our era, which has been exacerbated by the crisis.
She argues for the overcoming of the classic redistributive approaches and for the shifting interest from inequalities to poverty and from intervention in the realm of redistribution to the realm of production.
Interview by Nikos Erinakis, Director of Research, ENA Institute
Instability, insecurity, precarity, inequality: Concepts that illustrated our modern societies pre-Covid19 state of play. How will the pandemics impact these situations?
Upon receiving the Nobel Prize in 2013, economist Robert Shiller declared that “rising inequality in the United States and elsewhere in the world” is the most important problem faced by society. When I heard that, I remember thinking “Really? Have we already eradicated poverty?” At the time, I was writing my book Capitalism on Edge, which came out with Columbia University Press in January. This idea really became one of its key themes: that we are wrong to fixate on inequality; that we are mislabeling the problems and rushing into a battle against the wrong enemy. I know that this sounds shocking, so let me explain.
Fighting economic inequality has become celebrity politics, voiced by eminent economists such as Joseph Stiglitz, Paul Krugman, Thomas Piketty, and even by Christine Lagarde of the IMF. On the Left, it has become the new common sense. Thomas Piketty has urged that unless we radically reduce inequality, xenophobic populism will overtake liberal democracies and demolish them. Conferences, research centers, and even academic degrees in Inequality Studies have mushroomed over the past decade. And meanwhile, despite public outcry, inequality gets worse by the year. I believe that our predicament shows a misdiagnosis of the real social problem. Our preoccupation with inequality is out of place because it mistakes a symptom of our social problem for the problem itself. Moreover, it is a dangerous fixation because it employs the same logic that created the problem in the first place.
Now, poverty, clearly, is a grave injustice – but as the philosopher Harry Frankfurt remarked in his book Inequality (2015), the poor suffer because they don’t have enough, not because others have more and some far too much. For much of history, rising inequality was the by-product of economic growth, so it went hand-in-hand with alleviating poverty, by improving the living standards of everyone, including of the worst-off. Thus, we need to think about affluence as a process of wealth-creation, not just as a good to be distributed. It is the way wealth is produced that determines if it benefits everyone or nearly no one. Equal societies can be poor, and affluent societies can be unequal.
To criticize inequality implies endorsing equality as an inherent good, so the outrage against inequality seems very radical, makes us feel that we are on the right side of history. In 2019 the Party of European Socialists adopted a programme called ”Eight resolutions for equal society”. But this fixation on equality is rather strange, because in fact, economic equality has not been a core ideal for Left politics — we seem to have forgotten this. Karl Marx did not advocate for material equality under communism – the formula of distribution he proposed was “each is to receive according to one’s needs”. His gripe was with exploitation and the pursuit of profit under capitalism, of which inequality was merely a symptom. If you eliminate inequality, but continue with chasing profits, it does not change much – the destruction of human lives and nature continues.
There is also a dangerous conceptual trap: Our fixation on inequality is a fixation on individual’s material wealth. This retains the harmful individualistic logic typical of neoliberal capitalism. Putting the stress on the individual wealth sidesteps the notion of collective wellbeing that has always been fundamental for social democracy and for socialism. Most importantly: a privately-wealthy society, even if not too unequal, can be publicly-poor – “private affluence and public squalor” is how John Kenneth Galbraith described Western societies in his book the Affluent Society (published in 1958). Today this is truer than ever: Western societies, despite the economic crises they have experienced, are spectacularly affluent. But this wealth is private, while the public sector is extremely impoverished — public services have been systematically cut and public enterprises eliminated over the last decades. This combination between private affluence and public poverty emerged at the end of the 20th century: as center-left and center-right governments committed to globalisation (that is, to global market integration through free trade), competitive pressures increased. Concurrently, new technologies allowed many jobs to disappear due to automation (the production of electric cars required less workers) or to relocate (say, in call centers in India). Global integration created opportunities, but it also made national economies more vulnerable to international competition. For the sake of maintaining the competitiveness of the national economy in the global market, governments irrespectively of their ideological position, embarked on privatization of public companies, flexibilization of the labour market, slashing of funds for essential public services such as healthcare and education. This has generated massive economic instability for ordinary citizens – for men and women, young and old, for the skilled and unskilled, for the middle classes and the poor alike. We are in this conundrum because contemporary capitalism had created not just a precarious class (a ‘precariat’) but a precarious multitude. I claim that precarity, not inequality, is what torments the 99 per cent. There are steep inequalities within this precarity, and those who are poor suffer more – and this is unfair. But we should not mistake the symptom for the disease. Let us make the following thought experiment: imagine we redistribute wealth to achieve perfect equality among citizens. We will still have underfunded hospitals and medical staff without essential protective equipment. But instead, if we secure robust essential public services, inequality will cease to be a problem. It is only when wealth is the only apparent source of safety that inequality of wealth becomes a social problem, an injustice.
The pandemic has exacerbated all three problems that existed before its eruption – the massive precarity, the economic inequality, and poverty. But I hope it has made it clear that as a matter of emergency we need to fix above all the root of the problem – the widespread economic insecurity, which I call precarity, caused by the decades-long erosion of the public sector. Focusing on material inequality as an evil, misses the point. None of us can be sufficiently rich to provide for ourselves the quality of life that comes with excellent public healthcare, solid education, and thriving culture.
The Covid19 crisis destabilized some of the fundamental pillars of the last 3 decades of globalization? Will something “new” be born or will we gradually be directed to a “business as usual” direction?
What became apparent, is that the global economy is not composed of national economies integrated through trade, but is actually a network of supply chains that span the globe – we have a truly transnational production process. These supply chains were critically disrupted by the lock-down. China is a top producer of medical gloves, gowns and other crucial equipment – like ventilators – but to make these ventilators, it imports components from Switzerland. Even if we try to repatriate some links in the production chains repatriating the whole chain is a fool’s errand. However, here is an opportunity to reshape globalisation – by imposing higher standards of labour and environmental protection. This is the power of the supply chain – China needs the EU market – it will have to comply with EU standards to sell its products. We can integrate the world according to new rules – the Green New Deal can only happen as a global deal. This is the case because if we do not reduce the competitive pressures of the global economy – where the economic advantage lies with those who exploit workers and destroy the environment, the Green New Deal will remain a fantasy.
What should be the appropriate policy mix in order to tackle the crisis’ consequences & secure a sustainable & fair recovery path? Can the classic Left-Right dichotomy give answers to the current policy dilemmas?
A cross-ideological consensus is emerging with regard to the economic recovery, of a return to the growth-and-redistribution policy logic that was a trademark of the post-WWII welfare state. Such a policy turn, however, would be unfortunate, as it would undermine the environmental justice agenda. The inclusive prosperity in the second half of the twentieth century was achieved through intensifying production and consumption in a completely unsustainable way. It seems indeed that the EU is going this way: it has nominally made strong commitment to the European Green Deal, but at the same time the European Commission refused to attach green strings to the financial help offered to industries, leaving it to national governments to make these decisions. This is a missed opportunity. We should also be steering away from a commitment to growth-and-redistribution, and focus instead on fighting precarity – because this is the real problem of our societies and this is the real problem of citizens. We should be recasting the social justice agenda away from growth-and-redistribution and onto economic stability and sustainability. This is how we can bridge the social justice agenda with the environmental justice agenda.
Universal Basic Income, Guaranteed Minimum Wage, Job Guarantee etc Which of these tools can be more suitable the day after the pandemics? Maybe a combination of some of them?
What I called ‘massive precarity’ is generated by two factors. On the one hand, funds for essential public services were cut already before the financial meltdown of 2008 – and deepened in the following decade for the sake of financial stabilization. The Covid-19 pandemic has brought to light the significance of social infrastructure – in terms of public investment in science, and the availability of well-funded public health service accessible to all. Countries which have coped well (e.g. Taiwan, South Korea, Australia, Germany) have universal and affordable public health insurance programs. This is what should take priority – public investment in science and health. Let me give you an example: back in 2017, the European Commission proposed, to speed up the development of vaccines for pathogens like coronavirus. This happened within the Innovative Medicines Initiative (IMI) – a public-private partnership whose function is to back cutting-edge research in Europe. The pharmaceutical companies in this organization, however, rejected the idea, probably because it seemed unprofitable to them, and the Commission did not pursue it further. While it is sound economic judgment for the drug companies as private economic actors not to prioritize vaccines because they are less profitable than chronic medical conditions, is completely irresponsible for public authorities to act with such complacency with respect to the public interest.
It was called a ‘market failure’ but this is ‘government failure’ – the decision of a public authority, in full knowledge of the problem and understanding of its responsibility, to decide to meekly follow the preferences of private economic actors. We should fight this deficiency by asking public authority to do its job – provide the public goods no individual citizens or economic actors can provide for themselves – from vaccine research to clean air. The second factor generating social precarity is automation – it destroys more jobs than it creates; but this is exactly the promise of automation – that we will be able to satisfy human needs with minimal input of labour. Universal Basic Income and Job Guarantee are solutions for this. We could design schemes for job sharing – in this way people would have both a secure job and more time for other valuable activities (family, culture, community, leisure). We could be developing more social enterprises – companies that operate on a commercial basis, but their primary purpose is to serve their communities – not to turn a profit. This is now done through the European Social Fund, but on very small scale because the funds are limited – however, the know-how exists.
Both from the Left & the Right reluctance is expressed on whether all these “guaranteed” tools may be efficient. The ones point out the possible dismantling of the Welfare State & the further deregulation of employment, while the others stress the economic burden & the moral hazard. Are these critics legitimate?
These criticisms are legitimate, but one needs to square the circle – we cannot continue destabilising our societies further through cutting the public sector and making jobs more insecure – or we will have massive riots – think “The Joker”. But we cannot return to the old formula of progressive politics either – ‘redistribution, recognition, representation’. We need to ask: “We want inclusion, equality, representation and recognition within what kind of society?” Life of infinite stress, insecurity, environmental destruction and threat of medical crisis? Is the private affluence that we are likely to achieve in this way even worth it?