Keynes,
the crisis of neoliberalism & why capitalism can’t be reformed
Covid-19 has turned the world upside down, making all that was considered impossible now seem possible. In the context of a new crisis for capitalism and the undermining of the neoliberal order globally, the ideas of the liberal economist John Maynard Keynes will increasingly gain traction in terms of the policies of capitalist governments, writes CILLIAN GILLESPIE. The Covid-19 crisis is wreaking devastating havoc on the lives of working-class and poor people throughout the planet. Not only in the form of the virus itself but also in the economic crisis accompanying it, considered by many to be the worst since the Great Depression of the 1930s. The International Labour Organisation (ILO) estimates that 50% of the world’s workers will see their living standards decimated as a consequence of this.1 This sharp economic downturn comes just over a decade after the Great Recession of 2008. The recovery that followed was weak and massively lopsided; deepening inequality by intensifying existing neo-
liberal trends of growing wealth disparity, increasing workplace precarity, stagnating wages, unaffordable housing and eroding public services. In the context of the coronavirus crisis, however, capitalist states have been forced to take measures that break with the neo-liberal orthodoxy that they had been wedded to for several decades. This is perhaps exemplified in the decisions of the current Fine Gael caretaker government to – albeit temporarily – create a one-tier health system, with hospitals being brought into the public system; ban evictions; freeze rents; and increase public expenditure through, for example, the €350 ‘Covid-19 Unemployment Payment’. Throughout the world governments have quickly implemented stimulus measures on a scale greater than the period 20082009. For example, such a programme implemented by Trump recently accounts for 10% of the GDP of the US. In 2009 this figure, implemented over the course of months, was 5%. The implementation of these policies is in effect a recognition of the limitations and indeed failures of the private market, and the necessity for state intervention and public investment to deal with a public health emergency of this scale. Of course, the same applies to the pre-existing emergencies in housing, mental health, climate change etc., which should also be recognised. The two-tier health service SuMMEr 2020 l SocialiSt altErNativE l 9
