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Issue #1919      June 15, 2020

All that is solid melts into the air ...

The coronavirus pandemic appears to be causing mayhem to the capitalist system, which has shown signs of crumbling for a couple of decades at least. Perhaps this is the last straw? It’s certainly proving to be the case in the US, where this final straw is compounded by the protests of another rancid act of police brutality in the form of extrajudicial murder of George Floyd.

However, the lack of solidarity with the Black community by Trump is not the only sign of his racism recently. The lack of action by the abominable US President to the pandemic is also a racist act. The majority of the poor in the US – the Black and Hispanic communities – are more susceptible to the coronavirus than those slightly (and a lot) wealthier, and yet, Trump chooses to ignore it.

I wonder if he’s ignoring the backlash? Obviously not, having brought the National Guard in quickly. How much longer do the governments representing capitalist ideologies around the world think they can continue to govern people who are being deprived of a living wage? Working people are finding that the system of deliberately high unemployment is forcing them to either accept lower wages or face the sack because there will always be someone wanting to replace them.

This is how capitalism works: in order to compete with other companies, costs must constantly be reduced, and no matter how much workers produce value for the bosses, they are expected to do so on constantly reduced wages.

Suddenly, with this pandemic, the rigid economic ideologies etched into the capitalist system have had to be reassessed. After years of tightening our belts, and our government cutting funds to essential services in order to bring in a budget surplus, our Australian Prime Minister has seen the need for massive stimulus packages – from $17.6 billion, through $66 billion to $130 billion. Welfare recipients received a lump sum $750 from the first package, then small businesses got cash payments up to $100,000.

But the biggest surprise was the doubling of the JobSeeker (previously Newstart) payment. How do we interpret this? Previously, $279.50 per week was easily justified for the “dole bludgers,” but was inconceivable for all those middle-class workers whose jobs succumbed to the COVID-related shutdowns! The PM will find it politically impossible to reduce JobSeeker/Newstart back to $279.50 in the event of defeating the virus. The economy will need to be stimulated to bring about a recovery.

Has Scott Morrison realised (unlike Donald Trump) that there can only be a minimum amount of time a government can expect to keep its citizens in poverty before something gives? Is Morrison’s Coalition government restoring the welfare state? Takes me back to WW2 when John Curtin’s Labor government spent huge amounts to boost production for the war effort, which ended unemployment, and then post-war continued to spend for “reconstruction,” providing people most of the welfare state seen today. That governmental over-spending produced a vibrant society which lasted until the neoliberal putsch of the 80s.

We now see that all the government “spiel” about bad budget deficits contributing to government debt meant cutting funding to essential services, (such as building new hospitals and schools, etc.) was pie in the sky. Artificial caps have also been kept on all kinds of essential public spending, such as housing, social security, and infrastructure. Public housing stocks have been sold off, and public assets sold. And who suffers the consequences? The poor, the homeless and vulnerable. We should be ashamed of the high number of homeless in this “rich” country! But we now realise that governments can borrow as much as they need. Whereas what our government’s dereliction of its duty to its people has led to is private debt at more than 200 per cent of Australia’s GDP (an increase of eighty-five per cent since the ’90s, putting Australians amongst the twenty highest in the world), while in actual fact government debt here has never reached even half of GDP.

Australian treasurers have been telling us how well Australia has weathered the 2008 financial crisis, which caused severe hardship globally. But now we have been hit with a double-whammy – devastating fires in the Eastern States and the pandemic. Alone, one of the two would have been damaging to the Australian economy, but following on so quickly, have dealt a death blow to the system of capital in the country. It’s tempting to blame the capitalist system for all the above: the blind greed of the banks in 2007-8; the constant denial of climate change and its effects by our fossil-fuel loving government, and the inevitability of a deadly virus emerging from the industrial type of farming which capitalism and its industrialisation of agriculture create.

We are living in a new global economy, very different from the post-WW2 benign welfare state, and this is leading to a painful restructuring in which the working class is experiencing widespread insecurity. Hence the increasing distrust world-wide with the electorates flailing around looking for “experts” – even “messiahs” – to lead it out of this mess. Progressively, we are realising that all these so-called “experts” have no idea what they’re doing. The ruling elite are incapable of leading us: most of the common people have more sense in their little finger than the current “leaders” of the Western world, because the common people try to live their lives for the betterment of each other, not for what they’re putting in their own pockets.

Although I digress here, the prime example of complete non-sense was how the IMF dealt with the Greek crisis, by putting pressure on Greece to repay its debt whilst simultaneously ruining its economy with impossible austerity measures. A great example of shooting oneself in the foot as what they ensured was that Greece’s debt would never be repaid.

This brings me to wonder what Australians can expect post-pandemic with the current “leaders” in Canberra. We have obviously reached the stage of late capitalism’s death throes, but what is there to take its place? Will the coronavirus pandemic prove lethal to this government’s neoliberal ideology? It certainly has cut a vicious swathe through it. No doubt the ALP are breathing a sigh of relief they lost the election.

It would be a fantasy to believe that the humane measures adopted by Scott Morrison to save lives, such as housing the homeless and actually allowing people enough money to live on, will remain his priority once this pandemic has passed. Morrison has been quoted as saying “Business as usual when it comes to the policy frameworks that we had prior to the election” and will be doing everything necessary to get the economy back on track.

We are already hearing rumblings from Frydenberg of a recession. Soon we’ll be hearing how there is no money to support the poorest amongst us. No doubt phrases like “pulling in our belts,” “living within our means,” etc. will come to pass. This government will be keen to re-introduce some of the most extreme pro-business measures into legislation, especially the Ensuring Integrity Bill. We can be sure that the working class will be expected to pay for this, and we need to be prepared to fight every inch of the way. ACTU please note!

Class division will remain and the gap of inequality grow ever wider, while Dutton brings in ever more odious bills under the pretence of security in order to prevent any dissent. Morrison’s dramatic return to a welfare state in order to cushion the economic effects of COVID-19 will disappear in a puff of smoke. Already we’re hearing his PR rhetoric with regard to JobMaker. He plans “to get everyone back in the room. To bring people together.” I seem to remember Hawke saying something similar in the ’80s in order to get the trade unions to co-operate with the government to survive the severe capitalist-driven economic crisis then. The present government does not have Hawke’s charisma or subtlety. It will continue its blatant attacks on unions and slashing of corporate taxes while cutting funding to essential services.

If we’ve learnt anything from history it is not to repeat it. Post-COVID-19 we face high unemployment and increased insecurity and this government will press ahead with its employer-friendly, neoliberal ideas to divide and force the workforce to compete for jobs. Using the excuse of the huge “debt” it inherited in order to bail out and save the country from the pandemic and economy, it will continue to flout its responsibilities and further neglect its duty to build the infrastructure necessary for Australia’s future. Our liberty and future prosperity are in peril if we continue to place our faith in an ideology that has proved unable to respond to the carnivalised merry-go-round of global capitalism.

It will be mesmerising to observe the effects of COVID-19 on what have been the previously rigid economic ideologies of our government. So long as we’re not mesmerised into thinking that our present leaders have our well-being at the forefront of their recovery plans. Now is the time for our trade unions to gird their loins.

Next article – The Royal Commission into Aboriginal deaths in custody

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