Ecological planning for post-capitalism

The future starts right here

The pandemic has already forced governments to break the old rules, and put people’s needs before pleasing the markets. Now is the time to drop the austerity that left governments powerless to deal with the environment and start coordinated ecological planning. Before the conservatives do.

by Cédric Durand & Razmig Keucheyan 

Cheaper to scrap: industrial activity today is driven by disposability

Bálint Pörneczi · Bloomberg · Getty

Martin Luther King described capitalism as ‘socialism for the rich and rugged free enterprise for the poor’. That is certainly true in normal conditions. Over the last 40 years the French government has created a market for public debt giving private operators control of its credit. It is even more true in a crisis. After the 2008 financial crash, governments around the world implemented economic support measures worth 1.7% of global GDP; by early April this year they had already spent 2.6%. Some countries have gone much further: the US had spent 10% of its GDP, and the UK 8% (Le Monde, 4 April 2020). And this is only the beginning.

Central banks have also mobilised huge amounts. The European Central Bank, unlike its Japanese or British counterparts, still refuses to finance governments directly, but it has agreed to buy €1,120bn of securities on the markets, in both government bonds and those issued by multinationals such as BMW, Shell, Total, LVMH or Telefónica. It is also facilitating bank access to liquidity. The fetish of financial stability means that investment funds, banks and major enterprises, including the worst polluters, are the first beneficiaries of state aid. Socialism for the rich has never been so protective.

Yet because of the gravity of this crisis, and the way it affects the productive economy rather than the financial sector, Martin Luther King’s definition no longer quite fits. The US Treasury is sending cheques for a modest amount directly to Americans, just as central banks use helicopter money to subsidise households and businesses without involving commercial banks or requiring any quid pro quo. As of 22 April, more than half of all employees in France’s private sector were on state-subsidised furlough. The French Economic Observatory (OFCE) estimated the monthly cost of measures allowing employees to go on receiving a proportion of their income at more than €21bn.

Neoliberal dogma (...)