Covid-19

Why the West must stop bashing China

philmullan Covid-19, Politics, Rivalries

Problems in the US are for American people to resolve. Problems within Britain are for British people to sort out. The same applies with regard to China’s national sovereignty. Chinese Communist Party repression against Chinese people, the same as the repression meted out by authoritarian regimes anywhere, will not be resolved by other governments or international bodies stepping in with economic or other weaponry.

The basic solidarity principle to follow is that to be genuine, freedoms have to be secured by ordinary Chinese people. History reveals that durable liberty and democratic politics are not things that can be brought about by government bodies nor by outside institutions, but only by the people themselves.

From this perspective, there are five reasons that Western China-bashing is regressive, counterproductive and dangerous.

Read the full article here.

 

It’s time to transform the UK economy

philmullan Covid-19, Creative destruction, Economic policy, Innovation, Investment, State intervention

It is said that crises provide fertile ground for innovation. This is only partly true. The acute pressures, the falling away of pre-crisis norms and the sidestepping of regulations, liberate individuals and teams of people to come up with great ideas about how to do things differently. This fresh thinking can originate better, more effective and efficient ways of conducting existing productive activity, or it can conceive brand new products or services that improve people’s lives.

Certainly in this pandemic and the lockdown crisis, we have already seen lots of inventive deliberation.  But where the saying falls short is that devising creative ideas is not enough for innovation. Innovation represents the implementation of that creativity for social benefit. While crises can be great times for ingenious thought, novel ideas only become innovations when they are applied and are replicated to bring change, improvement and progress to people’s lives.

This conception of innovation brings out the biggest obstacle to seeing much of it happening in the medium-term future. We are not just in a period of crisis, but a crisis within an existing state of economic depression. Depression is not simply an extension to recession, in the way it is being discussed today. It is a protracted phase of economic sclerosis that has become self-reinforcing.

Read the full article here.

The making of an economic crisis

philmullan Covid-19, Economic policy, The longest depression

The UK’s Office for Budget Responsibility (OBR) has offered a grim projection of a one-third fall in output in the April to June period. Even without a second Covid-19 wave precipitating another government shutdown later in the year, the OBR anticipated a full-year contraction of about 13 per cent of national output, worse than anything in recorded history. Some economists speculated this scale of collapse could be greater than any since the Great Frost of 1709 (though, of course, no one was measuring anything like gross domestic product then). This shows how unprecedented this government-determined recession really is.

However, at a Downing Street briefing last week, Rishi Sunak, the chancellor of the exchequer, said something that was even more disturbing and, ultimately, economically damaging. Acknowledging the ‘tough times’ flagged up by the OBR, Sunak sought to offer some comfort: ‘But we came into this crisis with a fundamentally sound economy.’ On the back of this he went on to insist that the economy will ‘bounce back’.

The great danger of this false portrayal of the past is that today’s self-imposed and brutal recession could be extended into a self-imposed and much more vicious depression than we have experienced up until now. This is not inevitable.

Read the full article here.

The destruction of the old world order

philmullan Covid-19, Politics, Rivalries

It is often said that everything changes in a major crisis. But this is not quite right. The changes that happen seldom derive from the crisis itself, but from the acceleration of existing trends. So far, Covid-19 has similarly sped up and crystallised earlier tendencies. As a result, it is helping make the true state of affairs clearer. As the Economist Intelligence Unit concluded, the ‘coronavirus pandemic will not usher in an entirely new global order, but it will change things in … important ways … [and] bring to the surface developments that had previously gone largely unnoticed’.

In particular, three pre-pandemic features of international relations are being amplified and brought to the surface: the changing economic balance in the world; the unraveling of the post-1945 world order; and tensions between the advanced industrial nations.

Read the full article here.

After the pandemic: whither capitalism?

philmullan capitalism, Covid-19, State intervention, The longest depression

To understand what will happen to capitalism after this crisis, one needs to understand capitalism before it.

One of the catchphrases of the pandemic so far is that ‘crises change everything’. Of course, lots will change because of the precipitous economic disruption of the shutdown. Thousands of smaller businesses are already going under and may not return, and this could rise to hundreds of thousands unless the government acts immediately to deliver on its business-support pledges. If the government fails to support businesses and workers, in the same way it has been failing with virus testing and health workers’ protective equipment, millions of individuals and families will endure great hardship. Many may not get their old jobs back. Over the medium term, this can be a bad or a good change, depending on the quantity and especially the quality of new post-recession job opportunities.

However, despite the changes brought about by the economic dislocations, at this stage it is likely that much economic policymaking from the past will endure. This is because crises tend to change things only to the extent to which they draw extant socio-economic features to the surface and speed up pre-existing trends.

Read the full articel here.