Читать книгу Sustainable Futures - Raphael Kaplinsky - Страница 16

The Covid-19 pandemic crashed the global economy.

In the first half of 2020, the UK economy declined at the fastest rate since the beginning of the Industrial Revolution three centuries ago. In the US, the unemployment rate mushroomed to 25 per cent of the labour force. Germany, long the lead economy in Europe, fell into recession. The economic car-crash was not confined to the high-income countries, but affected the global economy. For the first time since its growth spurt began in the 1980s, China decided not to produce a target for its rate of economic growth. The collapse in world trade (more than 30 per cent in the first half of 2020) was the largest on record. But not all citizens suffered equally. Despite government programmes to support employment and production, as a general rule the poor were hit more by the economic collapse than were the rich. And that was as true for distributional impacts within countries as between high- and low-income economies. A simple indicator of the scale of this challenge can be seen in the cost to governments of trying to arrest the rate of economic decline. In April and May 2020, high-income countries injected $17tn into their economies. This raised an already high average government-debt/GDP (Gross Domestic Product) ratio of 109 per cent in mid-February 2020 to 137 per cent in May.

Governments and citizenry alike ponder how the economy will recover after the pandemic? Will it be a V-shaped recovery – rapid growth following rapid decline? Or might the recovery be W-shaped – rapid growth, followed by a second collapse, and then recovery? Perhaps a U-shape – rapid decline and a period of prolonged stagnation before revival? How about a K-shaped recovery – with the rich getting richer and the poor getting poorer? Each of these scenarios assumes that a recovery is inevitable, that the shape of global economic growth will not take the form of the ‘dreaded L’ – a sharp decline and no recovery. Underlying most of this speculative frenzy is the belief that it was Covid-19 that disrupted ‘normality’. As if what existed before the pandemic was sustainable. As if the Great Recession which followed the Financial Crisis of 2008 was a temporary blip which could be managed with a modicum of tinkering to economic policy.

This optimism about the prospects for renewed future economic growth – a return to ‘normality’ – is misguided. The global economy witnessed historically unprecedented rates of economic growth after the Great Acceleration in 1950. But this growth surge began to taper off after the mid-1970s. The fundamentals had turned. Deep structural flaws which undermined sustained economic growth had begun to emerge. Their impact was delayed by the expansion of globalization from the mid-1980s. But the relief was temporary. The structural weaknesses in the Mass Production growth paradigm poked their heads above the surface in the burst high-tech bubble in 1998–9. After a brief respite, they then re-emerged frontally in the global Financial Crisis in 2008 which resulted in the greatest economic decline since the 1930s. Again, the impact of these structural problems was temporarily masked, with the reflationary economic policies failing to address underlying structural problems, particularly with regard to the size and character of the financial system.

This is the story which is described in this chapter. In documenting this growing spectre of economic unsustainability, I will begin by reviewing the rise and then the slowdown in the rate of economic growth after World War 2. I will show how this slowdown resulted from a decline in investment- and productivity-growth. Two sets of related factors explain this fall in the underlying drivers of growth. The first was the exhaustion of the productivity gains delivered by the Mass Production techno-economic paradigm. I will discuss this phenomenon in Chapter 5. The second – the subject matter of this chapter – was the economic policies adopted after the triumph of neo-liberalism in the early 1980s. These not only resulted in an increasingly unequal society but also decisively shifted the political economy of growth in favour of the financial sector and (as I will show in the next chapter) the interests of the plutocracy. The post-1980s neo-liberal era was characterized by a decline in investment in long-term innovation and growth, intensifying financial speculation, deindustrialization, rising debt, increasing economic volatility and the adoption of austerity economic policies. The chapter concludes by highlighting a number of developments intrinsic to the evolution of the Mass Production economy which threaten the sustainability of the global economy. These developments made sustainable economic growth unlikely, even before the economic collapse resulting from the Covid-19 pandemic.