Let's imagine in a time after the pandemic that you've been appointed to come up with an ambitious action plan for a rejuvenated economy. The timer is ticking and you've got work to do.
What would you do with that power? What policies would you propose?
Personally, I would want to engineer a wholesale shift from the 'linear' economy we have right now (with its throwaway culture) to a 'circular' economy: that is, from wasteful practices of extractive and unsustainable consumption (prefixed around 'growth' and selling as many new disposable products as possible) to a more 'conservationist' and eco-friendly economic model.
We also need to go further than a stale old Keynesianism, in my opinion, if we hope to revitalize economies after the pandemic. I'd lsuggest a gradual balanced transition towards "
workplace democracy" and workers' self-management (i.e. having a decisive say in the management of their firm and a share in the profits).
I'd also propose:
- a graduated wealth tax of 5% on those worth 2 million $ plus and up to 90% on those worth more than 2 billion $
- social ownership of capital and co-management of enterprises (employees get 50% representation within boards of directors)
- temporary ownership (via progressive tax on assets), individual carbon taxes calculated to weigh each person’s contribution to global warming and tax them accordingly
- a public inheritance of circa. £102,000 for every adult coming of age
- economic rent redistribution to create a more equitable share of natural resources
- a cap of 10% cent on shareholder voting power, social dividend financed by "Sovereign Wealth Funds” to invest public money in well-functioning enterprises and universal basic income equivalent or capital endowment for every citizen
- land value taxation.
I like a number of these ideas, certainly. (I would make one proviso on land tax, that it should be deferrable until after death. This is because there are many people like me who once long ago bought a house in a place like London, which has ballooned in value through no wish of theirs and which they can't profit from, unless they sell the family home. Now that I, like many, depend on a modest pension for income, I don't see why I should be forced out of my own home, with all its memories, in order to pay an annual tax bill I can't afford. The state can have as much as they like of it when I'm gone, no problem, but I don't think anyone wants to induce a spate of elderly suicides.)
I think, though, that the virus is not going to be the trigger for such radical changes as some of the ones you list. I don't think there is a need to abandon private capital. The way I see it, capitalism is like atomic energy: a tremendous source of innovation and prosperity (e.g. who's going to make the Covid 19 vaccines?), but needing close control to prevent accidents and unhealthy side-effects. "Social ownership of capital" sounds like a very dubious concept to me - unless you can put my mind at rest by explaining it more fully.
However, taxes must go up, that's clear. For one thing we all have a better appreciation for low-paid workers in health and transport. It's clear they need a better deal and for the services they work in to be properly funded. Asset taxes could be part of that, but income tax should also be made more progressive too. It is absurd for company CEOs to be paid millions per annum. After all, how many luxury yachts does a man need? Half the trouble is that these CEOs all sit on one another's remuneration committees and there is no effective check on what they vote themelves in pay rises. The trickle-down theory is fairly discredited these days, so that's no argument for the status quo. The least we can do is get some of it back to pay for the services we all need.
I would want to see a serious international drive to stop transnational corporations from gaming national corporation tax differences. Applies especially to Big Tech, but others too.
I would also amend employment law to prevent zero hours contracts and what I call "fake" self-employment being abused by labour-intensive organisations (Uber? Deliveroo? Amazon?) to employ people on atrocious wages with poor conditions of work.
I also think that the virus experience has taught us how unhealthy much of big city public transport has become. Many places could capitalise on the experiments people have made in home working and in getting to work on foot, by bike, etc., to allow these changes to be made permanent, where feasible for the people involved. What we cannot afford, above all, is for people to take to their cars again in a bid to avoid public transport.
Air travel will I hope be permanently reduced by this virus. It is a horrible way to travel and a lot of business travel is a waste of time and money, done really because of the tradition that you need to go and see the other person out of respect, when in fact a lot more can be done remotely, as we have discovered.
One further cautionary note: there is the danger of the mindset that this virus is a reason to spend lots of taxpayers' money on lots of things we'd like to see. The opposite will be the reality. This virus has cost economies vast amounts already and we will have to work harder for less to pay off the debts.
