Oh, the supreme irony of it all! The United Kingdom’s conservative prime minister committed his government to pay 80 per cent of the wages of the unemployed during the coronavirus pandemic. Yet only a few months earlier the electorate resoundingly voted against the Labour Party at the election for advocating a socialist agenda.
Australia’s ultra-conservative government is providing free universal childcare and $1,500 per fortnight to non-employed workers to keep them on the books of their small business employers. Altogether, the Australian Government now is injecting into the economy 10 times what the Labor Government did during the global financial crisis.
At that time the same conservatives accused the then-Labor Government of total economic irresponsibility for spending one-tenth of what they are spending now to keep the economy afloat. There is no significant opposition to this move that I can see.
In their last budgets the conservatives also got away with their refusal to step up spending on adequately combating the effects of climate change, all in the name of economic responsibility.
In the United States, in spite of their own conservatism and of the even greater conservatism of the Republican Party and the president, the Democrats are starting to succeed in turning into legislation Bernie Sanders’ policies on assistance to the unemployed and universally free healthcare. The irony of this is that while the Democratic Party in its primaries gave preference to a more moderate Joe Biden as their preferred presidential candidate, now they are pushing Biden’s opponent, Bernie Sanders’ policies into legislation.
When the lives of millions are menaced by the health crisis and economies are threatened by resultant collapse, all of a sudden there evaporates the opposition to governments commanding the economy and to their skyrocketing welfare spending.
Rampant socialism is starting to rule Western democracies, where the word ‘socialism’ was hitherto a dirty word. Who could have believed this even a few weeks ago?
It has been the captains of industry together with their private media mouthpieces, prominently including the worldwide Murdoch news outlets, which have brainwashed the public in democracies to privatise most government assets.
Banks, energy, telecommunication, the oil industry and even much of education and health have been privatised. All Western governments were urged to get out of running enterprises.
As a result most of the control over media, energy, banks and even education was taken away from national governments and were acquired by giant private corporations.
Hence Western democracies rely only on taxes rather than having any earnings from lucrative and strategically important enterprises, like the energy and steel industries, telecommunications and national airlines.
Autocratic China went in the opposite direction, where the party-state government has become the controlling shareholder in just about every major Chinese-come-transnational enterprise. This enabled them to amass massive earnings to subsidise its enterprises to reduce the prices of goods and services to such an extent to which private transnationals cannot do because even their largest ones cannot match the Chinese Government’s power of the purse.
China was therefore able to drive much of Western and Third World industries out of business and gain near monopoly power in vital industries such as textile, electronics and steel production where they became the factory of the world.
But with coronavirus, national governments in Western democracies started to commandeer major enterprises to produce what their nations needed, such as ventilators and masks. They provided major subsidies to companies to allow them to survive.
There’s been increased questioning of how Western democracies have allowed themselves to become dependent on Chinese-produced goods and of the need for governments to work with multinationals to bring much production back to Western democracies. For example, Andrew Cuomo, the governor of New York, in his press conference on April 5, questioned the need of his state to having to have obtained ventilators from China because the US no longer produces enough of such strategic health equipment.
The realisation in Western democracies that their governments have to have control over major industries to be able to cope with recurrent crises — such as epidemics and the effects of climate change — may actually drive them to embrace democratic socialism to a much larger extent than they were willing to do so before. This could reduce the comparative superiority of Chinese state capitalism over the combined international power of Western social democracies.
Until now China’s authoritarian regime has significantly outperformed Western democracies economically ever since it combined capitalism with major government ownership of capital and political control over the whole economy. But the Achilles’ heel of the Chinese system is the lack of accountability of the autocratic regime.
It would not be impossible for the Western and developing democratic states to maintain democracy while also gaining substantial ownership and control over lucrative strategic industries. This way the democratic states could have more control over their sovereignty and could also subsidise universally free health and education and provide extensive public housing and adequate unemployment benefits.
If so, world democracies may not only survive but become economically, politically and morally superior to the ruthless autocracy in China and by alliance could provide a buffer to China’s expanding power to rule the world.