People will say that COVID-19 caused this recession. This will miss the forest for the trees. COVID-19 is not causing the recession, it is exposing existing system fragility. Put in other words, capitalism was already an ailing patient – coronavirus is the bug that sent it to the intensive care unit. The final jenga block to be pulled before the tower fell; the straw that broke the camel’s back.

A recession is already happening. At the point of writing, COVID-19 has spread to approximately 200,000 people worldwide. Australia has 565 cases on 19 March 2020. We know that COVID-19 transmission is exponential. Some forecasts have shown that COVID-19 could infect up to 60% of the world’s population. Senior government politicians and officials forecast approximately six months of disruption to our day to day lives as a result. This is about to get a whole lot worse before it gets better.

To be clear-eyed moving into this crisis, we need consider three things. First, we must understand the causes of the crisis. Second, we must determine how the costs of this crisis should be distributed. Third, we must know what to do after the crisis has concluded.

(Photo: Anna Shvets)

People will say that COVID-19 caused this recession. This will miss the forest for the trees. COVID-19 is not causing the recession, it is exposing existing system fragility. Put in other words, capitalism was already an ailing patient – coronavirus is the bug that sent it to the intensive care unit. The final jenga block to be pulled before the tower fell; the straw that broke the camel’s back.

There is a wide array of historical and economic factors that led Australia to here. We should consider two to contextualise our current challenge.

The first is the Global Financial Crisis (GFC). We all basically know what happened here. Put very reductively, a bunch of unregulated, unpoliced Ponzi capitalists engaged in such criminal and speculative activity that they shook the very foundations of global capitalism. The major American financial institutions that engaged in this behaviour were bailed out, and the costs of the financial crisis were allocated to working people across the globe, including Australians.

The second is the 2019/2020 Australian bushfire crisis. We cannot ignore that the COVID-19 pandemic was immediately preceded by the greatest ecological calamity in Australian history. The bushfire crisis destroyed great swathes of our forests and bushland, killed billions of native animals and insects, lives and property were lost, businesses closed, and thousands of volunteers worked without meaningful incomes. The rest of us spent months inhaling acrid smoke. The drought conditions that precipitated the bushfire crisis are still with us. All of this had a major economic impact.

In the GFC, we had a technocratic social democratic government with some high-ranking politicians and officials who were open and eager to implement some Keynesian economic policies in the national interest. Australia came out of the GFC relatively unscathed but, for the last decade, has remained caught in global malaise as capitalism struggles to reinvent itself or find new frontiers for growth.

Our prospects are much worse now – our previous national crisis is too recent (and ongoing), our economy is too structurally predicated on mining exports, financial services and high house prices, we remain in the post-GFC global slump. In this crisis, we can expect half-hearted stimulus to fail. When the downturn is realised, austerity measures may follow and compound the problem.

We must understand that the GFC, the 2019/2020 bushfire crisis and the COVID-19 recession all have the same systemic origin. The system that made high-risk collateralised debt obligations seem a highly profitable and stable investment causing the GFC is the same system that makes burning coal and oil profitable, driving the temperature increases that induce bushfire crises. It is the same system that commodifies everything in its path, “pushing increasingly capitalized wild foods deeper into the last of the primary landscape, dredging out a wider variety of potentially protopandemic pathogens”. The profit motive chases Ponzi schemes, cooks the planet and starts pandemics.

It follows that any sensible response to this crisis cannot follow the ordinary capitalist logic. We must think of new ways to insulate working people from this crisis while simultaneously beginning to envision what comes after. To defend working people right now, we might consider these things for the duration of the crisis:

• A Universal Basic Income at a full-time minimum wage
• Guaranteed special sick leave
• A freeze on rent and utilities bills
• Price controls for essential goods
• Hazard pay for frontline medical workers
• Hazard pay for supermarket workers, and any workers that may deliver provisions in an extended lockdown
• Nationalise all private hospitals to make them available to treat all patients for free
• Bailouts for major companies upon the condition that the public is given a stake in the company
• That any vaccines and antiviral treatments are free at home and internationally, as part of a global foreign aid and public health effort.

I cannot take credit for these ideas. They have been disseminated and discussed on social media and other platforms by other people. But they are sensible, reasonable demands to a world-historic crisis, and we should promote them and agitate for them.

There is no reason that we cannot finance these things and more. Australia has a net debt-to-GDP ratio of about 18.3%, and a gross debt-to-GDP ratio of about 40.7%. The United States has a debt-to-GDP ratio of 106.9%, France a ratio of 98.4%, the United Kingdom a ratio of 80.8%, Germany a ratio of 61.9%. Following World War II, the United Kingdom’s total government debt exceeded 200% of GDP. We have lots of fiscal room to move here, and that’s assuming deficits are problematic. Countries are not households, and progressive economists encourage us to run substantial deficits to make substantial and necessary public investments. If we decide we are concerned about debt and deficit, we may consider taxing the rich to mitigate the deficit.

There is also the question of strategy. It is difficult to agitate in a crisis where social distancing saves lives and people are already locked out of their workplaces. The normal instruments of political power available to working people – meetings, rallies, demonstrations, strikes and pickets – will be unavailable to us in physical space. It is difficult to imagine Occupy Wall Street having occurred during a pandemic. It is difficult to imagine the efficacy of a strike where the country is in lockdown and nobody is working anyway.

Beyond the immediate demands, society must collectively return to the problem that we ought to have resolved in the Global Financial Crisis. Are we willing to rethink? Is there really no alternative to such an irrational and inhumane system?

For those of us not on the front lines of this crisis, we may all find ourselves with an unprecedented amount of time to think together and communicate in digital space. I hope we can use it to imagine a better world – and how we might build it.