Predicting the long-term economic and social cost of the Covid-19 lockdown is something of a mug’s game. Perhaps our country will come through the crisis with an economy and citizenry more resilient than many anticipated. Or it may be that the worst fears prove well-founded and we find ourselves confronted with a job of economic and societal reconstruction such as we haven’t seen since 1945.
Will the worldwide economic shock eclipse that experienced in the global financial crisis? It’s too early to be sure, but some think it might.
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We could do worse than take a steer from the Italian Marxist, Antonio Gramsci, in resolving that any pessimism bedevilling our intellect during these troubled times will serve to ignite the optimism of our will – in particular, the knowledge that we have the ability, as a people and nation, to apply the correct solutions to overcome whatever destruction the virus might wreak upon us.
The question, of course, is what those ‘correct solutions’ might look like, in the event that the worst-case scenario, or something like it, comes to pass. And that presents a conundrum which has the potential to split British politics down the middle (again) and dramatically recast established thinking.
Would the Government default to the nostrums which have held sway for over four decades, and assert that the appropriate response to a floundering economy is a heavy dose of austerity, and that any fiscal deficit is best and most swiftly reduced through heavy cuts to public expenditure?
Or would it learn the lessons of the past 10 years — not to say those of previous global economic catastrophes — that slamming on the brakes at a time when everyone else, households and businesses, are retrenching is the worst possible medicine. It is, of course, the job of government at such times to lean against market logic by maintaining economic activity and levels of employment through spending — thereby ensuring, too, that tax revenues remain sufficiently buoyant to allow for a faster reduction in the deficit.
If it’s the latter, then we are in for a fundamental reordering of economic priorities that might herald a welcome end — in Britain, at least – to the neoliberal orthodoxy that has dominated the approach of Western governments since the mid-1970s.
In normal times, of course, there would not be an earthly expectation that the Tories would entertain such a radical shift in thinking. It would go against all their natural instincts (well, their instincts since at least the days that Ted Heath was leader). But, this time, any economic crisis would take place against a quite different political backdrop to previous such episodes.
For a start, the Tories have just secured a thumping parliamentary majority by winning the support of working-class England. These are voters often inhabiting deprived towns across the post-industrial north and Midlands — Labour’s old Red Wall seats — who, in many cases, stuck a peg on their nose and voted Conservative for the first time. They will justifiably be looking for payback for having made such a sacrifice, and another long bout of economic hardship when they have barely caught their breath from the last lot will go down like a cup of cold sick. The electoral consequences for the Tories in such a scenario would surely be profound.
The authenticity of pre-lockdown Tory intimations of a more interventionist approach designed to bring investment and opportunity to these places will be severely tested when the bill for the virus eventually lands. For it is then that the Tories will be presented with the choice between abandoning 45 years of economic orthodoxy and forfeiting the trust of their new supporters.
In the context of the sudden materialisation of a multi-billion pounds rescue package designed to tackle the immediate dangers, any future quips about “magic money trees” or “Soviet-style economics” will ring decidedly hollow. The money is there. It always was.
And, so the argument will go, if we can direct it towards protecting jobs and industry from the economic shockwaves caused by a pandemic, we can direct it towards supporting job creation and reindustrialisation in the Redcars and Blyth Valleys when the health crisis passes. After all, there are, as John Maynard Keynes contended, “no intrinsic reasons for the scarcity of capital”.
Any wrong approach on the economy would only deepen social inequalities and injustices. Already the virus is throwing these into sharp relief. The rest of us look on as the more hard-pressed within our society struggle to navigate the lockdown. I’m talking about those who are living in cramped and substandard housing, or in densely-populated areas where green spaces are in short supply, or where a lack of educational resources at home means that children may fall behind academically, or where Mum or Dad have jobs — such as in manual labour or the essential services or industries — which preclude their working from home and compel them to take risks with their health.
We see, too, the elderly of all classes living lives of lonely (and literal) isolation with no end in sight. Little wonder that some of them would sooner step outside and take their chances against the virus than endure more weeks of solitary confinement.
All of this would be made worse if the long-term economic prescriptions meant more crippling austerity and, by extension, deeper privation and the gradual disappearance of more day centres, youth services, libraries and other community outlets that provide a lifeline for the disadvantaged and marginalised.
Much has been said and written about how the Covid-19 crisis has the potential to reshape our world, with activists and commentators asserting that these events have proved them right all along. That was perhaps to be expected. But there can be no denying that the crisis will in the coming months present us with a crunch moment in British politics.
The working-class heartlands, once red, now blue, are the new battleground. The way they respond to the economic crash seemingly coming our way may well determine how long the Tories hold on to them.