Can Europe Make It?

Coronavirus and the crisis of globalisation: dangers and answers

“We must demonstrate the superiority of democratic governance over authoritarianism, bringing about a set of practical changes to greatly improve human wellbeing.”

Guy Aitchison Luke Cooper
24 June 2020
Chinese medical workers check passengers' body temperatures on arrival at Nanjing Railway Station, east China's Jiangsu Province, February 2020.
Chinese medical workers check passengers' body temperatures on arrival at Nanjing Railway Station, east China's Jiangsu Province, February 2020.
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Costfoto/PA. All rights reserved.

The following article is an extract from the new report, The Dangers Ahead: Covid-19, Authoritarianism and Democracy, published by the London School of Economics Conflict and Civil Society Research Unit. The report can be read in full here.

The Coronavirus crisis has massively aggravated the existing systemic risks facing the international order. Prior to the crisis a powerful global tendency towards authoritarian governance already existed. Political nationalism has proven very amenable to the economic conditions created after the 2008 financial crisis. At the level of domestic politics nationalism provides a vocabulary of fear and diversion, directing grievances towards ‘aliens’ and other minorities within the polity and raising hostility towards imagined ‘foreign’ enemies outside it.

At the international level it creates tensions between states, which, in the contemporary world, primarily concern economics. But there are still a host of examples of territorial disputes animated by traditional territorial nationalism. Recent examples include the Russian annexation of Crimea, the US proposed Israeli formal annexation of most of the Palestinian administered West Bank, the Chinese territorial claims over Taiwan and the denial of self-determination for the people of Kashmir.

The crisis created by the virus is genuinely universal and global. Solutions to it require international cooperation. Unfortunately, there are good reasons to believe that the existing trend towards authoritarian government will continue in the post-virus world. In a world already beset with a dangerous rise in nationalism the Coronavirus crisis risks adding fuel to the fire.

Shutting down the global economy has created the most serious peacetime economic crisis the world has ever seen. Even with unprecedented state interventions to support employment and prevent bankruptcy, unemployment is spiking rapidly. The public health element of the crisis also compounds inequalities across the world. Britain and the United States are at the apex of a category of wealthy countries where state capacity has been weakened by decades of marketisation exposing populations, and particularly non-white communities and other marginalised social groups, to much higher levels of risk. Poorer countries without the same levels of economic capacity are facing the crisis at a clear disadvantage, due less to bad political choices than structural inequalities. Globalisation, particularly the conditions attached to accessing credit and investment in the international financial system, expose poorer states to far greater risks in a pandemic situation.

At the political level, the response to the crisis poses big questions for human rights and the drift towards surveillance societies. The communications technology being used, or prepared, to monitor and contain the spread of the virus has potentially serious privacy and surveillance implications.

China and the US

As ‘ground zero’ for the pandemic, China is at the centre of the crisis. Its economic strength combined with its lack of democracy also poses big questions for the future of the world system. The country stands out globally as one of a handful of remaining communist party states, a legacy of the failed project of twentieth century social revolution. Unlike most of the ‘new’ authoritarians, i.e. countries at various stages of drift towards authoritarian governance, it openly opposes liberal democratic rights and freedoms.

In Hong Kong, China has engaged in an on-going, violent conflict with pro-democracy protests and has now unilaterally imposed a national security law that dramatically curtails the polity’s freedoms under the ‘one country, two systems’ agreement. In its similarly restless Xinjiang province it has used Han Chinese ethnic nationalism to systematically repress the Uyghur population with a million people detained in ‘re-education’ camps designed to enforce changes in belief system, cultural and religious identity, and politics.

On the other hand, while western states have floundered in their response to the crisis, China has by contrast drawn on its extraordinary levels of state capacity to make dramatic large scale interventions to successfully contain its spread. While it initially tried to cover up the outbreak, once it changed course the results were impressive. For example, when new cases reappeared in Wuhan following an easing of the lockdown, the authorities set about testing all 11m residents within the space of ten days (they didn’t meet the target but still managed over 6m). This is a remarkable logistical accomplishment that underlines the capacity the state has to mobilise and apply social resources. No western country has come close to matching such capabilities.

Reviewing the massive pressures that Covid-19 is storing up for the post-crisis world, the potential for Chinese ‘soft power’ interventions has clearly increased given its impressive response to the crisis. Indeed, looking to the future, the global authoritarian challenge is perhaps encapsulated by the figures of Xi Jinping, the Chinese president, and Donald Trump in the United States.

Under Xi the Chinese state has moved in an autocratic direction. He has cultivated a cult of personality which is summed up, totemically, by ‘Xi Jinping Thought’ being written into the communist party constitution in 2019. China’s rise has become a bête noire for Trump who regularly engages in anti-Chinese rhetoric. Given that China is challenging a world system previously dominated by the United States, this is perhaps unsurprising. But the two countries are also major trading partners and have a very high level of economic interdependence. China has financed the American public debt in exchange for running a large trade surplus in US-China trade. Trump, with his slogan of ‘America first’, has launched an ongoing trade war, introducing tariffs on imports with a value of $360 billion. He has threatened to go further still and also used diplomacy to try to lock Chinese firm Huawei out of the global 5G mobile rollout.

Trump symbolises the global decay of democracy and the hollowing out of its emancipatory ideal. China, by contrast, remains committed to its outright rejection of liberal democratic governance.

The contrast between Trump and Xi is revealing in what it tells us about the state of the global authoritarian threat. Trump is an authoritarian personality governing a liberal democratic system, albeit one full of flaws. Xi shares some of Trump’s preferences for ethnic nationalist discourses, most evident in the Xinjiang province, but in a completely different institutional context of one-party rule.

On the world stage, however, their approach could not be more different. Under Xi Chinese foreign policy has promoted support for the continued existence of a multilateral global order that avoids a collapse in world trade. Chinese nationalism aggressively asserts its interests in relation to what it considers an East Asian sphere of influence, but adopts a more moderate tone elsewhere. China has turned its economic strength into ‘soft power’, notably with its ‘belt and road’ infrastructure investment initiative. While the incentives are clearly different for a ‘rising power’, China is not pursuing an ‘America first’ style policy. It is more consistent in its strategic calculations than Donald Trump; and CCP policy appears much less disruptive and more inclined to the status quo.

But in these very different ways they both encapsulate the ‘authoritarian temptation’ for global elites. China and the US form two faces of the sovereignty-ist, strong state ethnic nationalism that risks becoming a new global ‘norm’.

The world’s two most powerful states are joined in a roll call of others experiencing a drift towards authoritarianism. Vladimir Putin has now been in power for two decades in Russia and shows no sign of letting go; Narendra Modi in India has pursued an aggressive ethnic nationalist agenda on the sub-continent; Jair Bolsonaro in Brazil talks positively about the country’s historic dictatorship; and within Europe the far right has also made considerable gains, governing autocratically in Hungary and Poland and rising in electoral support in a host of other states. Britain’s decision to leave the EU was also motivated, in part, by flag-waving jingoism.

In short, prior to the Covid-19 pandemic many of the most powerful states were moving in this direction. While there is considerable hope, and even expectation, that Coronavirus will bring about a system-change, the new global authoritarianism can also adapt to this changing context.

While there is considerable hope, and even expectation, that Coronavirus will bring about a system-change, the new global authoritarianism can also adapt to this changing context.

We summarise these dangers as four threats.

FOUR THREATS

‘Deglobalisation’ takes a nationalist form

‘Deglobalisation’ refers to a process of uncoupling taking place in the global economy. Since the 2008 financial crisis, regional markets have become more important than global ones. Financial flows between countries have never recovered to their pre 2008 levels.

A range of other indicators also suggests that deglobalisation is happening. Simply put, states (and regional blocs like the EU) are becoming less interdependent with the rest of the world. In other ways, however, the economic model has not changed. Pumping up asset bubbles with debt and speculation continue to be more important than ‘real world’ capital investment.

Many western countries have struggled with low productivity, low investment and low wages going into the crisis and show no signs of reversing these trends since. Austerity was a disastrous economic experiment that compounded the problem because low private sector investment was not compensated for by a more active intervention by the state. As a policy its backers are now few and far between.

An acceleration of deglobalisation looks likely as we move forward. New technology is expected to incentivise ‘onshoring’, i.e. developing more locally embedded production networks, and not ‘offshoring’ driven by lower labour costs. Tackling climate change will require more locally sourced, sustainable agriculture and a radically reorganised transport infrastructure. And the scale of state-investment required to deal with the Covid-19 crisis also illustrates the ongoing importance and primacy of nation states to tackling social and climate emergencies.

These factors all create dynamics pushing towards greater deglobalisation. This could undoubtedly be managed in progressive ways with a new approach to global multilateralism. This would take the form of multilateralist deglobalisation: a managed retrenchment in international capital freedoms that restored greater democracy to states and regions.

There is a danger that the form deglobalisation takes is politically and economically nationalist: throwing up barriers to the movement of people, persecuting minorities and beggar-thy-neighbour economic policies towards other states.

But given the global support for authoritarian regimes, there is a danger that the form deglobalisation takes is politically and economically nationalist: throwing up barriers to the movement of people, persecuting minorities and beggar-thy-neighbour economic policies towards other states.

Less democratic participation, more centralisation

The nation-state has demonstrated its importance in the Covid-19 crisis. This reflects a certain institutional reality in how politics works: it is embedded within particular locations with distinctive identities and citizenship regimes.

But while perhaps ‘inevitable’ it is also full of potential dangers. States like China that have been most effective in fighting the pandemic have mobilised resources centrally and planned their allocation with a very high level of centralisation. Globally this need for emergency, war-like levels of planning does risk normalising bureaucratisation and taking even more decisions out of the reach of citizens.

The feeling of ‘not being listened to’, i.e. a pervasive sense of disempowerment, has been found to be an important indicator of support for Brexit. Populist and authoritarian nationalism tends to feed off the perception of an out of touch, even corrupt, elite. But it is rarely associated with support for remedies that seek to decentralise decision making back down to local levels.

Nationalism substitutes for greater substantive involvement in political decision making through the mobilisation of identity politics. This has already become a norm of political mobilisation in many states, cohering a form of governance based on greater autocracy. There seems little reason to believe that a strategy, which has proven successful for those that use it, will not continue in the years ahead and this requires a robust challenge by democratic forces.

There seems little reason to believe that a strategy, which has proven successful for those that use it, will not continue in the years ahead and this requires a robust challenge by democratic forces.

Surveillance states and the erosion of human rights

Covid-19 can be situated as part of a package of ‘organic’, i.e. genuine, threats to human security that are prone to instrumentalisation by forces hostile to the protection of human rights.

The internet and telecommunications revolution has created extraordinary avenues for ongoing monitoring of human behaviour by states and private corporations alike. The cycle of war and terrorism that has dominated international politics in this century has already led to a significant increase in the power of the security and surveillance apparatus. These processes have already been normalised in states across the world. Securitisation carries particular implications for marginalised communities that already live with harassment and persecution by state authorities.

The major danger going forward is that popular support for human rights still rests on weak foundations in society. While populations will often lack trust in public authorities (itself a problem driving populist voting), this rarely translates into support for a human rights agenda that provides some protections for individuals and vulnerable groups from state coercion.

The abuse of powers assumed by the state in the exceptional circumstances of fighting Covid-19 - and their subsequent normalisation - carries obvious dangers for protecting basic liberties, including freedom of association, speech and privacy.

The abuse of powers assumed by the state in the exceptional circumstances of fighting Covid-19 - and their subsequent normalisation - carries obvious dangers for protecting basic liberties, including freedom of association, speech and privacy. The economic disruption of the crisis and the accompanying debt burdens placed on states may lead to renewed austerity, further jeopardising economic and social human rights.

Inequality goes unchallenged

The convulsions of capitalism we are living through are increasingly settling upon a particular political form: an authoritarian and kleptocratic state. Modern capitalist economies incentivise ‘rent-seeking’ behaviour through financialisation and speculation, rather than pursuing productive investment.

This model has produced eye-watering levels of global inequality. Oxfam has shown that 2,153 billionaires have more wealth than 60 percent of the planet’s population or 4.6 billion people. The economics that produces this inequality requires a high level of capital mobility, allowing money to move effortlessly across borders, concentrating in low tax jurisdictions and with an accompanying legal global infrastructure to enable high levels of financial secrecy.

While the model arose through ‘the retreat of the state’, in a celebration of supposedly ‘free markets’, today it has necessitated ‘the advance of the state’. The system of financial globalisation is now underwritten by the massive fiscal largesse of states propping up this malfunctioning system.

While the model arose through ‘the retreat of the state’, in a celebration of supposedly ‘free markets’, today it has necessitated ‘the advance of the state’.

New authoritarians play a particular role in this context. They do not propose reforms to substantially alter the economic model. Their criticism of globalisation is limited to its alleged embrace of multiculturalism, cosmopolitanism and open borders.

They also oppose the international cooperation needed to confront tax evasion and promote financial transparency. And in domestic politics, by turning attention away from economic inequalities towards the persecution of the marginalised, they can play a helpful role in upholding the oligarchic global system.

FOUR RESPONSES

In response to these threats we propose four alternatives, based on democracy and social justice. We can manage the profound changes under way in our economy and politics by boosting democratic participation. But to do that we have to confront the alternative: a much more authoritarian and kleptocratic capitalism.

So we face a stark choice between a more social democratic, or socialist, approach rooted in the importance of democratic regulation of public and private spheres, or a continuation on the current path where increasingly authoritarian states mobilise to protect private financial wealth: socialising losses on the whole of society, while the profits stay private.

Multilateralist deglobalisation

Since the 1990s ‘alternative globalisation’ (‘altermondialism’) campaigns have advocated proposals for changing how globalisation works in ways that reject nationalism.

Recognising that trade and production should be more locally and regionally embedded does not have to mean supporting nationalism. This agenda is about delivering greater social and environmental justice. In the two decades after the Second World War international cooperation successfully regulated cross border financial flows to prioritise productive investment and trade over financial speculation.

We cannot ‘go back’ to this period, but we can update and develop some of the lessons. Technological developments such as the ‘internet of things’ (connecting physical infrastructure to communications technology to radically reduce production costs) and the need to invest in sustainable energy are likely to change the material incentives that exist in global trade and production. This may result in ongoing stagnation, or even reduction, in international trade. Multilateralism will be vitally important to ensure that this does not adversely affect poorer states.

To deal with this we must ensure the benefits of new technology are shared across the globe. So, amongst other things, globalising knowledge and democratising access to information should go alongside ‘deglobalising’ some production networks. And international regulation will be vital to protect the general interest, and prioritise it over the narrow, particularist interests of wealthy states and individuals at the apex of the new oligarchic model of financialisation.

Globalising knowledge and democratising access to information should go alongside ‘deglobalising’ some production networks.

Defend and extend democracy

The rise of China and the voluntary withdrawal of the US from the world stage under a chaotic and incompetent President will create a strong gravitational pull towards an authoritarian bureaucratic model of state power.

The ostensible success of authoritarian states like China in containing the virus should not lead to the false conclusion that democratic citizenship can be dispensed with in the interests of decisive action. The success of democratic countries, such as South Korea, Taiwan and New Zealand, in managing the pandemic shows that sacrificing democracy on the altar of public health is not necessary.

If anything, the opposite is true. The virus has likely taken a far worse toll than it might have done as a result of China’s initial cover-up, which included silencing whistle-blowers and suppressing information on the nature and scale of the virus. Had there been proper transparency, the virus might have been slowed in its tracks and other countries would have had more time to prepare. There is still no substitute for empowered democratic citizenship when it comes to the protection of basic interests.

The challenge for democrats today is to contest the drive towards a permanent centralisation of state power under the cover of COVID19 and advocate for reforms that would redistribute power to citizens.

The challenge for democrats today is to contest the drive towards a permanent centralisation of state power under the cover of COVID19 and advocate for reforms that would redistribute power to citizens. In the UK, this means opposing the populist constitutional settlement proposed by Boris Johnson’s Conservative party in the context of recent struggles over Brexit. Johnson’s planned reforms would enhance the discretionary powers of the Prime Minister and weaken constitutional checks and balances – the very opposite of the aspiration to “take back control” voiced in the referendum campaign. The reform process, as currently envisaged, is entirely elite-driven with no hint of popular participation.

In response, democrats should demand that any far-reaching constitutional reform should be put to a popular constitutional convention of citizens.

In response, democrats should demand that any far-reaching constitutional reform should be put to a popular constitutional convention of citizens. The convention should be representative of the opinions and interests of people from across the UK. It would be empowered to deliberate on what reforms to the political system are needed and to make recommendations, without having its agenda pre-determined in the interests of any one government or party. Only a popular convention process such as this can ensure democratic legitimacy.

Winning popular support for human rights

The pandemic has revealed the central and overriding importance that populations across the world attach to at least one human right: the right to health.

Both authoritarian and democratic governments have been compelled to shut down their economies to preserve the health and well-being of their citizens (despite the fact the virus mostly kills the least “productive” sectors of the population that some autocrats and neoliberals might prefer to dispense with).

This was emphatically not the case with earlier pandemics, such as the H3N2 virus that swept the world in 1968. Apart from a small libertarian fringe, support for lockdown measures among the general public has been higher than many expected. Citizens and their governments have in the most part been willing to place the common good of public health over the private liberties of buying and selling that underpin the capitalist market place.

While the political and economic consequences of the pandemic pose significant dangers for civil liberties and material well-being, there are also positive dynamics at work that can be built on. In addition to the importance of a robust public healthcare system, the pandemic underlines the interdependence of human rights and their universal character. It makes clear that the right to health cannot be meaningfully enjoyed in isolation, given that no one person is truly safe so long as others have the virus.

This has been accompanied by the recognition that especially vulnerable populations, such as the homeless, prisoners and refugees cannot be abandoned to their fate in cramped and squalid conditions, with Spain even emptying out its immigration detention centres. We can now appreciate how the human right to health depends on the enjoyment of other rights, such as the right to housing (offering a space to isolate); the right to food and welfare support (supporting isolation and a strong immune system); the right to an education (to follow public health advice and rebut conspiracy theories) and the right to a healthy environment (reducing the risk of cross-species contamination).

Crucially, the crisis has also shown the vital role that the political rights of democratic citizenship have to play in guaranteeing transparent and responsive government.

Crucially, the crisis has also shown the vital role that the political rights of democratic citizenship have to play in guaranteeing transparent and responsive government. This includes the right to trade union representation, which in the UK and elsewhere was vital to securing a furlough scheme that protects workers.

The importance of political rights provides additional grounds for opposing the introduction of a permanent surveillance infrastructure under cover of the pandemic. Such surveillance not only threatens rights to privacy, but also enhances the arbitrary power of government to monitor opposition and blackmail dissidents.

Progressives today must make the case for deepening, rather than diluting, human rights protections underpinned by a post-virus vision of the interdependence and universality of protections that can mobilise a broad-based coalition across civil society.

A package of measures to fight inequality

Covid-19 is not a ‘leveller’. The risk the virus poses to individuals and societies is hugely shaped by existing social and economic conditions. Economically the impact of the shutdown is particularly asymmetrical. White collar office workers are more likely to be able to work from home. Meanwhile, blue collar jobs are hit hardest in both the exposure to the virus and the ensuing economic fallout. As we come out of the crisis, we face a perfect storm of rising inequality, increased hardship and growing political nationalism and authoritarianism.

To address this we have to promote a package of measures on a national and international level to tackle social inequality in all its forms. Doing this will require rebalancing the economy away from a model of state-underwritten private wealth generation.

Instead we need a state-managed economy run for the public interest. The state will need to make investments in profitable assets to offset the liabilities accrued through the course of the crisis.

The state will need to make investments in profitable assets to offset the liabilities accrued through the course of the crisis.

To address the explosion of social hardship we are already seeing, measures such as universal basic services or universal basic income should be explored. Greater progressive taxation, coordinated internationally to tackle tax competition and combined with closing down tax havens and delivering tax transparency, can cohere support for an internationalist approach to rebuilding in the post-Covid world. Through these efforts we must demonstrate the superiority of democratic governance, over authoritarianism, bringing about a set of practical changes to greatly improve human wellbeing.

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