Three issues on which progressives should focus
English original of article published in Avanti! December 2020
The last great economic crisis in Europe and America, the financial collapse of 2008, led in most advanced countries to political gains for the right, often the populist and anti-immigrant right. The even more severe health, social and economic crisis of 2020, caused by the covid-19 pandemic offers a theoretical chance for a political shift in the opposite direction, back to the left and to forms of socialism and progressivism. But this is not at all inevitable. In fact, there looks to be an equal chance of this crisis leading to another shift to the right.
Within the major countries of Europe, only in the United Kingdom does it currently look likely that the next political swing will be to the left. Under its new leader since April, Sir Keir Starmer, the Labour Party has overtaken the governing Conservatives in the opinion polls. This is not surprising: the Conservatives have been in government in the UK now for 10 years, and in Boris Johnson have produced the least competent prime minister in living memory to handle the twin challenges of Brexit and the pandemic.
This has presented Sir Keir Starmer with what in football terms is an open goal. Starmer exudes competence, calm and intelligence, unlike Boris Johnson. But there are two reasons why he could still miss the goal. The first is that there does not have to be another general election in the UK until 2024. Many things can happen during the next 3-4 years. The second is that while to the British voter he epitomises moderation and skill Starmer has not articulated any real vision for what Labour would offer in government under his prime ministership. He has time to come up with his vision. But unless he does so, and does so convincingly, his election victory cannot be taken for granted.
Yet at least in the UK the centre-left can feel the wind in its sails, some momentum behind it. The same is not true of either France, Italy or Germany. In France the left is marginalised: the basic choice for the 2022 election currently looks like more of President Macron and his centrist Republique en Marche party or else a party and president more to the right, even potentially Marine Le Pen and her National Rally party, previously known as National Front. In Germany’s general election in September 2021 the only progressive party likely to form part of a new governing coalition looks like being the Greens. And in Italy, as you know, the centre-right has been ahead in opinion polls ever since the 2018 elections.
Nor is there any brighter sign for the left in other European countries. In Spain the left is in government but is highly constrained by the effects of the pandemic and by the rise in the country’s public debt. Like in Italy, being in government during the crisis means that eventually you are likely to be blamed for any resulting decline in living standards or expectations for future generations. And progressive policies always cost money, money which at a time of economic crisis is going to be scarce.
The United States offers little comfort to progressives either. President Trump was defeated but he and the Republican party still won the votes of impressively large numbers of the traditional supporters of the left, namely the working class and recent immigrants, especially Hispanic immigrants. In Congress, Joe Biden’s Democratic Party lost seats in the House of Representatives. The election of President Biden was better than the alternative, but this was no victory for progressivism or anything close to socialism.
Yet as I said at the start, in theory the socialist and progressive left ought to be able to provide some of the answers to this crisis. The pandemic has exposed growing inequality in many countries, both of income and, crucially, of job security: it is clear that to be poor makes you likelier to die of the coronavirus and, if you survive, likelier to remain unemployed or financially insecure for longer after economic recovery begins. The pandemic has also exposed how badly suited were public health systems and welfare systems to dealing with the sudden spread of this deadly disease: the left should be able to blame incumbent, often centrist or centre-right governments for past cuts in public services and fiscal austerity.
The harsh truth remains: when money is scarce, socialism and progressivism are difficult to implement and to make credible. Nevertheless, there are three big issues on which socialists and progressivists can usefully focus, for they imply an agenda that could even be popular.
The first place where progressives should focus is in the labour market. The big trend of the past 20-30 years in Europe and America has been the rising share of income going to capital and the declining share going to labour. Even as countries have become richer and richer on the formal measures of GDP-per-capita, average wage levels have in many countries been stagnant or declining. The two countries where this is most evident are Italy and Japan, but relative to the returns to capital and therefore the incomes of the highest-earners, the story is true elsewhere, too.
There are many reasons for this, including the weakening of trades unions and collective bargaining, cheap-labour competition from China and other huge emerging economies, technological change and deregulation of labour markets to permit more insecure, short-term employment contracts. Governments are reluctant to intervene for fear of creating higher unemployment, especially of the lower skilled.
Yet that does not mean that intervention is impossible. Progressives should study hard the case for higher (or in Italy’s case, the introduction of) statutory minimum wages. Collective bargaining arrangements, where they still exist, do not cover workers on short-term contracts and in the most insecure jobs. That is where direct state intervention to require higher minimum wage levels would be most advantageous. There is also a strong progressive case for improving the security of short-term and part-time contract work, to reduce exploitation of vulnerable workers.
The second place to focus is on the environment. This is not easy: another harsh truth is that many green interventions in the past have hurt the poor more than the rich: they have been regressive in terms of income distribution, because typically they consist of measures to raise taxes on polluting activities, which includes ordinary driving and domestic heating. All the talk early on in this pandemic of “building back better” risks actually imposing even more costs on the poorest in society.
What progressives need to develop is an environmental approach that takes its lessons from the progressive taxation of income in the past: by targeting income tax on higher earners, governments were able to use the money raised to finance welfare measures for the poor and vulnerable. A similar approach could now work for environmental taxes: there is scope for a grand bargain, under which high carbon taxes are levied on the most polluting activities, particularly the means of transport and other energy used by wealthier people and larger houses, with the funds raised being used explicitly to support either greater welfare spending or tax relief for the poor.
The “gilets jaunes” protest in France in 2018-19 consisted originally of ordinary people protesting against higher fuel taxes being imposed on them for environmentalist reasons. If such protests are to be avoided in future, there will need to be explicit and credible measures to make environmental taxes progressive and redistributive.
The third area of focus would be helped by an environmental grand bargain, but is still the hardest to achieve. The welfare states of the 1970s, 1980s and 1990s focused on building public pension provision as well as (in most countries, though not Italy, at least not as comprehensively) unemployment insurance. Public pensions have now become hugely costly, depriving other public services of funds. What progressives now need to do is to reinvent the welfare state to fit with the era of longer lives and an ageing society, by persuading Europeans to do what the Japanese do, namely to embrace longer working lives and later retirement ages with enthusiasm, while spreading public funds across the generations and not just the elderly.