Is our capitalist economy an unparalleled engine of prosperity, or a human and ecological disaster? Two contributors debate whether the system is worth savingby Paul Wallace, Ann Pettifor / July 10, 2020 / Leave a comment
It is tempting, when living through a once-in-a-century event such as the coronavirus pandemic, to say everything must change: that it’s time to tear up the rulebook and to create a completely new kind of economy. Tempting, but wrong. In fact, what we need is to rebuild the existing capitalist economy, which for all its faults has been an engine for greater prosperity not just in Britain but around the world.
The measures taken to suppress the pandemic have already exacted a huge economic cost as GDP has collapsed. The full reckoning in higher unemployment will follow. The overwhelming priority must be to try to claw back the ground that has been lost. A sustainable recovery is indispensable if we are to minimise the social harm from lost jobs and lower living standards.
The crisis has highlighted the value we put on health and exposed the failings of social care, making the case for more funding of these vital services. But that will require more public money. That in turn will require a buoyant economy. It’s fashionable to decry GDP, but it is the tax base that generates the revenues needed to finance the public services and to pay for welfare.
The pandemic has alerted us to other risks, notably that of climate change. Tackling this is a global endeavour, but Britain can play its part by greening its economy. That will require massive investments, both public and private, in new infrastructure, which will be far easier to make in a growing economy.
No man is an island, wrote John Donne. Britain will not be able to recover from this crisis unless its trading partners do as well. Even before the pandemic struck, globalisation was in trouble. But the way out of this mess requires a restoration of international trade that helps to spread prosperity around the world, rather than a blinkered retreat into economic nationalism.
It is not mere temptation, Paul, to call for a transformation of the economy. It is justified panic. We need to change the system if…