A More Progressive Society or a More Dystopian One?
One of the few consolations of the coronavirus pandemic is the possibility that it could lead to some progressive changes in the economy and politics. Every day of the unfolding crisis is an argument for universal health care, competent government, and better treatment for members of the working class—such as nurses, transit workers, supermarket clerks, and employees at food-processing plants—whose enormous contribution to society has been brought into plain view. About a month ago, I noted some encouraging signs for progressives, such as the rapid moves in Congress to expand paid sick leave, raise the level of unemployment benefits, and provide financial support for small businesses. But in the past few weeks, there have been worrying developments, too, such as more than thirty million people being laid off or furloughed, and Donald Trump ordering workers in meat-processing factories to stay on the job regardless of the health risks they face.
These developments raise some alarming questions: What if the virus ends up benefitting the big and powerful, accentuating inequality, and boosting populist extremism? What if it’s a force for dystopia rather than social progress?
Let’s start with the economy. So far, the big winners from the COVID-19 shutdowns are a handful of tech giants whose monopolistic power was already a major concern. As old-economy firms like Hertz, J. Crew, and AMC Theatres flirt with bankruptcy, Alphabet (the parent company of Google), Amazon, Apple, Facebook, and Microsoft have all just reported that their over-all revenues increased during the first quarter of 2020. Facebook’s revenues rose eighteen per cent, as homebound people everywhere flocked to its services. “In Italy . . . we’ve seen up to seventy per cent more time spent across our apps,” Mark Zuckerberg, the firm’s founder, chairman, and chief executive, said in a conference call with Wall Street analysts. “Instagram and Facebook Live views doubled in one week. And we’ve also seen time and Group video calling increase by more than a thousand per cent over March.”
Zuckerberg said he didn’t expect this huge spike to be sustained as the pandemic recedes and economies reopen. “But in some areas,” he went on, “I think we are seeing an acceleration in preëxisting, long-term trends like the dramatic increase in online private social communication that is likely to continue.” Satya Nadella, the chief executive of Microsoft, agrees. “There is no turning back, for example in telemedicine,” he said during Microsoft’s earnings call. “If you look at even what has happened in this first phase with A.I. bots powering telemedicine triage. That’s going to change, I think, what health-care outcomes look like. Same thing in education.”
In this new “world of remote everything”—to borrow Nadella’s phrase—work patterns will be different, the tech giants will have cannibalized more offline businesses, and they will be even more dominant than they were before. That is what the stock market is telling us, anyway. As many other stocks have cratered during the pandemic, tech stocks have held up remarkably well. Indeed, five of them—Alphabet, Amazon, Apple, Facebook, and Microsoft—now account for more than twenty per cent of the entire S. & P. 500 index.
What about the workers? For those with the requisite technical skills, the future looks bright. Zuckerberg said Facebook intends to hire at least ten thousand people for engineering and product-development positions. But for the tens of millions of Americans who have lost their jobs over the past couple of months, the outlook is less sunny. As the economy reopens, the majority of them will probably return to work, but many won’t. According to the International Monetary Fund’s latest forecast, the unemployment rate is expected to average nine per cent in 2021. This February, before the shutdowns began, it was 3.5 per cent.
For laid-off or furloughed workers who have managed to navigate an overwhelmed jobless-claims system, the expansion in unemployment benefits that was included in the recent federal stimulus, known as the CARES Act, has cushioned the blow, thus far. But Lindsey Graham and other Republican senators have made clear that they have no intention of extending this expansion beyond July, which means people who are still out of work by then—and there will probably be tens of millions of them—will face tremendous hardship. Before Congress raised the level of unemployment benefits, allotments averaged about four hundred dollars a week across the country, according to the Center on Budget and Policy Priorities. Imagine trying to raise a family, or even sustaining yourself, on that sum.
People who go back to their jobs will be in better shape. But with such a large number of jobless workers, the modest rise in wages that we’ve seen during the past few years may well be reversed. As businesses have struggled to find enough workers, they have been forced to raise wages. That tight labor market is now a thing of the past. In turn, this suggests that income inequality, which, over the past few decades, has risen to levels not seen since the nineteen-twenties, will remain at those levels, or possibly increase further.
To be sure, such an outcome isn’t inevitable. After the wrenching experiences of the Great Depression and the Second World War, the United States and other Western countries enjoyed about three decades of equitable growth, in which wages rose broadly and inequality fell. But this required a regime shift in economic policy, which included a commitment to full employment, more government spending on social programs, the strengthening of labor unions, restrictions on the financial sector, and higher tax rates, especially at the top.
What brought about these changes wasn’t a sudden change of heart on the part of the “business community” or the Republican Party. It was pressure from below in the form of political mobilization, labor activism, and popular demands for change, combined with new thinking about how to organize the economy. Amid all of this ferment, talented social-democratic politicians like F.D.R., Clement Attlee, and Per Albin Hansson put together coalitions of voters to support far-reaching reforms that lasted decades. If we want to create a fairer economy coming out of the pandemic, we will need a similar wave of mobilization and political boldness.
A progressive turn is certainly possible, but so is its antithesis: a further upsurge in right-wing populism, and the strengthening of antidemocratic forces. Last week’s edition of The Economist had an alarming piece about how, in many places, authoritarian leaders are exploiting the pandemic for their own ends. In countries such as Hungary, Turkey, and Cambodia, COVID-19 “is creating opportunities for autocrats and would-be autocrats to tighten their grip,” intimidate their opponents, and expand the surveillance state. China has arrested democracy activists in Hong Kong, The Economist reported, and Russia is considering a scheme in which everyone in the country would have to register on a government Web site and have all of their movements tracked.
Fortunately, our own wannabe strongman is also a bumbling cable-television addict, whose claim to possess “absolute power” to order the reopening of the American economy was widely scoffed at. But even a bumbling demagogue can be dangerous. Two weeks ago, Trump tweeted, “LIBERATE MICHIGAN!”—an apparent reference to the state’s stay-at-home orders. On Thursday, groups of protesters, some of them heavily armed, showed up at the state capitol building, in Lansing. On Friday, Trump, in another tweet, urged Michigan’s governor, Gretchen Whitmer, to talk with the protesters, and described them as “very good people.”
The people out protesting are a small minority: opinion polls show that a majority of Americans still support the emergency measures that states have introduced. But the scenes from Michigan are a further indication that we can’t automatically assume things will turn out well after the virus is gone. Simply hoping that things will move in a progressive direction when the shutdowns end isn’t enough. Creating a fairer, more inclusive economy is hard work, and it will inevitably encounter resistance. Concentrations of economic power have to be confronted. Workers’ rights and bargaining power have to be extended. Democratic freedoms have to be protected. Demagogues have to be defeated, during pandemics more than ever.