Recent articles reporting on the work of scholars, moral philosophers, and research analysts about the opportunities for change in the economy after Covid-19 point to hope for action to address the deficiencies of neoliberal shareholder capitalism as an economic model that supports the common good.
For the common good
Catherine Thomas, an interdisciplinary graduate fellow, David Kalkstein, a postdoctoral scholar, and Gregory Walton, an associate professor, all in the psychology department at Stanford University write that the coronavirus crisis has laid bare the health, social, and economic inequalities that have been growing in the United States for decades. This moment of upheaval is leading to calls across the U.S. for structural reforms to the social and economic systems in our country.
Take universal basic income (UBI), a policy that would provide ongoing monthly cash payments to individuals to cover basic needs. Advocates of UBI have long touted its inequality-reducing effects, as it would make the biggest difference for working-class communities. In two online studies, we see that rates of UBI support have reached 69-75%, compared to a maximum of 55% pre-COVID-19. In our first longitudinal study tracking 2,300 Americans between late March and late April, the greatest gains in UBI support were among conservative women, the same group that helped drive Trump’s ascendancy. In a second study of 400 Americans in April, over 80% of respondents expressed support for universal health care, 88% supported universal unemployment insurance, and 74% supported free public preschools. And this momentum is mirrored at the federal level. Following a bipartisan push for direct cash payments to Americans as part of the CARES Act, bills for basic income have now been proposed in the House and the Senate as of May. Milton Friedman wrote, “Only a crisis—actual or perceived—produces real change.” The many crises of these past few months have set the foundation for possibly momentous social change and policy reform. Americans must now decide: Will this calamity further divide us—reinforcing inequalities and further polarizing Americans across party, race, and class lines? Or will we carry forward this sense of togetherness to become a nation united—working towards common goals and ensuring prosperity for all?1Patrick Riordan SJ.,Senior Fellow for Political Philosophy and Catholic Social Thought at Campion Hall, asks “Who is going to pay for it all?” People now speculate about the possibilities opened up by the coronavirus pandemic, there is a frequently expressed hope that the ‘system’ might be reformed. The system is variously taken to refer to neoliberalism, globalisation, financialisation, increasing inequality, and the marginalisation of politics in the face of economic power. Capitalism is another shorthand for the system, stressing the freedom of markets and the curtailment of state interference. If reform is to happen, recent contributions to Catholic Social Teaching would insist that it needs a legal foundation: Pope Francis in Laudato si’ (§189) echoes the demand of his predecessor Pope John Paul II in Centesimus annus (§42) that the free market be constrained within an appropriate juridical framework.
A juridical framework to ensure that markets serve the common good would have to include many more principles than ‘protect property’ and ‘enforce contracts’. Many familiar liberties would also find their place, such as those listed in the Universal Declaration of Human Rights – the liberty to pursue a career, to take a job, to migrate – along with necessary constraints such as the freedom of speech and expression limited by the duty not to deceive with misinformation about products or services. Consumer protection legislation, workplace health and safety legislation, employment law, are all now part of the robust juridical framework constraining economic activity. But, we must wonder, surrounded as they are with so many legal constraints, why do markets not deliver a sustainable quality of life for everyone? Why does economic activity continue to destroy the natural environment and dehumanise and exploit and marginalise so many people? The teachings on those principles are complex we must highlight and foreground the neglected aspects of the principles: property holders have duties as well as rights, duties to use their wealth to benefit all, especially those most in need; and contracts are to be fulfilled, but such contracts that are exploitative of the needs of the poor are immoral and should be renounced, not enforced.2Ed Broadbent, Chair of the Broadbent Institute, and Brittany Andrew-Amofah, Broadbent Institute’s Senior Policy & Research Analyst, discuss a progressive federal budget and how to pay for it. To “build back better” post-COVID, our efforts must be focused on transitioning towards a green economy and infrastructure program. The Task force for a Resilient Recovery, a project of the Ivey Foundation, outlined 5 bold moves for a green recovery, one that would reduce emissions, bolster electric power, protect our natural environment and see the creation of clean, competitive jobs. With a total investment of $55.4 billion over 5 years, this plan could provide the substance for the “building back better” slogan.
The creation of an early learning and childcare system, universal pharmacare and a green economic recovery, will require new progressive tax measures to implement and sustain them over time. A recent Broadbent Institute report laid out a pandemic fiscal plan to pay for an equal and just recovery. Included are key items such as a wealth tax, the closure of tax loopholes and cracking down on offshore tax havens. In light of COVID-19, an excess profits tax is also necessary to ensure that above-average company profits acquired throughout the pandemic should be used to benefit the public, rather than line the pockets of CEOs and shareholders.3The call for structural reform in the US, the moral suasion of CST (Catholic Social Teaching), and plans by the Canadian government for “building back better” are positive signs of hope that our recovery from Covid-19 will create improved conditions that benefit the common good.
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