THERE’S truth in the old adage that you can only really fix something once it’s completely broken. If that wisdom holds up, then sometime in the future we might see an economy built around fairness and equality – because at the moment we’re headed for financial destruction.
If the whole dysfunctional House of Horrors that is our current economic system comes crashing down, and is smashed to pieces, then maybe the next generation will create a financial set-up that makes sense and has decency at its heart. The only problem is, of course, that we’re going to have to live through the agony of the destruction before the reconstruction comes.
And disaster is coming – in Scotland, in Britain, across much of the western world and the rest of the globe. We’re hurtling towards an economic collapse that’s going to make the Great Crash of 1929 look tame and orderly. The 1929 crash brought us global war and fascism. Those were just two consequences. Who knows what lies ahead after 2020?
Before we even turn to the hard facts of what’s happening economically, we need only look around and sniff the air to realise something frightening is coming. In the years running up to the coronavirus pandemic we created an economy based on inequality. It wasn’t that inequality was an accidental byproduct of the economy – inequality was built in. We drove down wages, we made jobs precarious, we stripped rights away from workers. We created a world for shareholders not ordinary people. Inequality rose to its highest levels since 1979.
Our high streets started to die as online retail crushed independent shops and shut down giant chains. But food banks proliferated, and pound stores boomed.
Before coronavirus came along we knew that artificial intelligence and robotics were going to strip jobs away – not just in manufacturing but in white collar industries as well. We knew our children were so saddled with debt just to get an education that they’d probably never get on the housing ladder. Taxes were for working dopes, not millionaires.
So even without coronavirus we had created an economic landscape which suggested nothing but widespread pain and suffering. Just for good measure, stack the legacy of Tory austerity on top, and factor in all those cuts to public services.
The economic disaster that’s hurtling towards us also comes at a time of social unrest and political division. Anti-racist demonstrations are being confronted by the far-right. Economic pain can only play into these tensions. Put simply – if I’m angry enough to be out on the street for a political cause, how much more angry will I be when I’ve no job, money or food in the cupboard.
Add to this mix the divisions in Britain, Scotland and the western world over issues like Brexit, populism, independence, and even matters like trans rights – and we see a country and a world looking at economic collapse at a time when we’re at each other’s throats. We need to be united to deal with the coming agony, not divided. However, we know that won’t happen. Social media alone is enough to stand in the way of ordinary people truly coming together.
More than 600,000 UK jobs have gone between March and May. That’s 600,000 extra people unemployed. The number of people on benefits rose by 126% to 2.8 million. Unemployment is nudging three million – about 10% of the workforce. That’s a totemic number for anyone who remembers Thatcherism. No-one imagined in the early 1980s that we’d ever see so many out of work. But we did. And today, three million on the dole is just the start.
We won’t even know the true cost of coronavirus and lockdown until wage support schemes end in October. We’re looking at a Christmas of misery for millions. Once the furlough scheme ends god knows how many more workers will be laid off. In total, the furlough scheme is currently supporting nine million people.
We live in a world where the footballer Marcus Rashford has to shame the UK Government into feeding hungry children during school holidays.
Just look at the voices issuing warnings. Frances Grady, secretary-general of the TUC, says the labour market is “on red alert”. Nicola Sturgeon’s most trusted economist, Andrew Wilson – the former SNP MSP who wrote the party’s Growth Commission report on independence – says Scotland and the UK are heading for serious trouble.
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“What’s clear to me,” he says, “is the UK is set to be the worst performing economy in the developed world and Scotland’s probably going to be a bit worse because of the nature of our sectors and how the virus has behaved north and south of the border.”
Scotland’s unemployment rate is now the highest in the UK. Unemployment in Scotland stands at 4.6% – up from 3.5% the previous quarter – that’s compared to a UK rate of 3.9%. England is at 3.9%, Northern Ireland 2.3% and Wales at 3%.
Unemployment rose in Scotland by 30,000 to 127,000 between February and April but that only shows the early effects of lockdown on the economy. The economy has shrunk by almost a quarter since the start of the pandemic. GDP fell by 5% in March and then by a further 18.9% in April.
As this speeding bullet comes flying towards us, our governments seem to be standing with their fingers in their mouths. Where was the economic planning for this? Did the Scottish and UK governments blunder into the economic catastrophe of coronavirus as blindly as they blundered into the pandemic itself.
What’s for sure is that change is going to come from this. It’s a tragic truth of history but change only really happens when the middle class suffers. The French Revolution wasn’t a peasant uprising, it was an uprising by lawyers, journalists and doctors based on economics. The economic pain from coronavirus is already wounding the middle class – white collar workers are looking at dole queues for the first time in their lives.
Brexit was a spasm of rage from the working class over an economy that had left them behind. Whatever outpouring of anger emerges from a battered middle class in the wake of coronavirus we can be assured that it will put Brexit to shame.
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