Innovation & Class War Goes Viral

The Covid-19 crisis, caused by the affluent elite, is hurting the poor unequally.

As the initial shock of the Coronavirus crisis is passing the blame game has started, with China and the US trading insults and the WHO caught in the middle…

countercurrents.org

Beyond high level political polemics, there is a growing realisation that this crisis is not affecting people equally and that the economic order of things is undergoing rapid change. Undoubtedly the speed of the global spread of the pandemic has been facilitated by a globe-trotting elite. They represent the living face of the globalization of both production and consumption that is as central to economic growth as it has been to ecological decline and viral spread. Reams of paper have been consumed describing the heroic efforts and risks taken by doctors and nurses, with belated recognition of the sacrifices made, for very low pay, by carers and delivery couriers. However, in our rush to buy loo roll we have forgotten that not everybody can afford to bulk buy, or afford treats to deal with the problems of living in cramped, overcrowded urban apartments. Even worse the exploitation of agricultural workers has been as naked as it has been ruthless. Both Germany and the UK have been flying in poor Romanians, who have often had to circumvent restrictions to escape coronavirus hotspots to reach airports, to pick their harvests. These pickers are not doing this out of any reason, other than a shortage of alternatives. It is hard, badly paid work, for a gang master, offering often very poor ‘hostel’ sleeping arrangements and casual in nature. Have a read of Two Caravans by Marina Lewycka if you want to understand just how exploitative it actually is. Clearly low paid Eastern Europeans are not worth as much as west Europeans. They are somehow less deserving in their humanity.

In the UK, people are aware that this is making a mockery of Brexit and wonder why unemployed and poor British people are not able to do the work. Clearly German and British governments are able to organise the transport of workers, so the logistics of getting people to the countryside are not the challenge. No, the reason is simple: systemic failure. Minimum wage casual work will be evaluated by those who might consider it in terms of two factors, one of which the rest of us rarely have to think of. First, the simple and sensible question of how much will they earn, compared to the benefits that they will lose by working? Second, how much bureaucracy will there be to return to the benefits system once the work is over and how long will it take the state to actually convert their application into cash? Many people are living day to day or week to week. Thus any payments gap represents a risk to their ability to provide the most basic needs for their families. In short, the poor have no faith that the rest of society will stand by them if they do this work.

This crisis has simply revealed the extent to which exploitation is at the heart of current economic models. If we really want to develop resilient societies then casual, minimum wage, zero hours contracts actively undermine that. They may, through a focus upon economic efficiency and optimization, provide firm level robustness. However, that robustness has been overwhelmed by events and exposed our total lack of resilience. At a systemic level, robustness has been earned at the price of wider social resilience, as growing numbers are left behind, under the guise of talent managements renewed focus upon performance and strategic contribution. Economic resilience has been lost to global specialization, as manufacturing has moved East and food chains become global.

Both the New York Times and The Guardian have identified this crisis as a form of class war that, as firm level robustness is overwhelmed by events, is becoming inescapably revealed by our dependence upon a previously invisible and disposable army of down-trodden workers. Whether these pricks upon our collective conscience will be enough to change things beyond the crisis is debatable. However, such concerns are coinciding with a growing realisation of the dependencies created by globalisation. Most visible in the shortage of local capacity to manufacture medical ventilators, masks and clothing, it is becoming clear that there will be shortage of fruit, vegetables and other foods this summer as international supply chains are interrupted.

Response, in the short term, has been a wave of support for the visible productive poor; in supermarkets, old peoples homes and delivery couriers, if not to the less visible agricultural labourers and warehouse workers. At a household level, the desire for greater resilience has been expressed through a surge in both the cultivation of vegetables and home cooking/baking.

Going forward there is an emerging consensus that the crisis has plunged us into a global recession that is getting worse with every day of lockdown. Given the costs to States of supporting health systems and populations through lockdowns, their ability to apply Keynsian reflationary measures to stimulate demand will be highly constricted. Frankly it is hard to see how most western countries will escape without increasing taxes, reducing public spending, or both. Strategies likely to ensure that those hardest hit will be squeezed even harder.

At a firm level, companies are realising the need to respond to what Snowden¹ calls a complex environment to leverage their core competencies in order to develop new products and enter new markets. Hence the decision by Dyson (famous for their hand dryers) to leverage the competencies in innovative consumer engineering to develop ventilators. Success will enable them to enter new markets for medical devices that, given regulatory constraints and the resistance to change of doctors, would otherwise be hard to enter. If you would like structured help in doing this please see www.teecluj.ro and look up our recession survival kit. Those that are unable to make the shift will be victims of what economists are fond of calling creative destruction.

At government level this is a tipping point, where China rises to become the leading power and Europe and America retreat into isolationism. Whether western societies can thrive during a Chinese century will largely depend upon their ability to manage the countervailing pressures of greater national independence and benefiting from global networks. Unlike recent decades this implies a significant economic leadership role for the State.

Practically speaking, the challenge, I would argue, is for us to develop socio-economic structures that are more rooted in specific people and places. That leaders use a mixture of critical thinking and technological opportunity to differentiate to create value from. Whatever else we can learn from societies like Singapore, we can certainly learn from their success in positing economic success as something that enriches society as widely as possible. Then all we have to do is figure out how to ensure that this is also ecologically sustainable….

1https://www.youtube.com/watch?v=N7oz366X0-8&t=4s