What is to be done about the problems of credit? COVID-19 has laid bare the damage that decades of austerity has wrought on our healthcare systems. We can see that if humanity is to have the moral fitness to survive the next pandemic, we cannot return to the way things were. We must have a robust system of credit to stably finance badly needed investments in our healthcare system. The lessons learned from this crisis must also be applied more generally, as austerity has been applied generally for the last 40 years. The same system of stable credit must be made available for investments in schools, roads, bridges, electricity, mass transit and beyond to investments in advanced technologies, to propel us into the future and make the discoveries necessary to uplift all of human civilization into the 22nd century. The good news is that this system of stable credit already exists, and we have learned from COVID-19 how to use it.
What we have seen from COVID-19 is nearly instant expenditure on a massive scale. Where did this money come from? The banks that were all collapsing? The idea that we can’t have investments in these needed public sectors because “where will the money come from” is dead. The money comes from the sovereign power issuing the money for the needs of its citizens, and that’s where it always comes from. The money could have been invested at any time in the last several decades instead of austerity. It was only ideology that prevented it. And now the whole world is wise to the neoliberal lie.
Is money scarce? Ask yourself, are ideas scarce? Because money is just an idea. A social construct. Money is a useful tool, as all good ideas are. But who controls the idea? Everyone? Or a select few? We have been conditioned by the select few who feel they should control the idea, that money must come from them, and investments in the public can only come if the market can bear it. But as we all now know, the money always comes from the government creating it, and when the government wants, it can create it for any purpose and at any time. Who should control this idea? Everyone? Or a select few? Why would anyone still answer a select few anymore now that we have all seen the truth of how it actually works?
We must understand that our ability to control our own system of credit is the ultimate expression of popular power. Money is a tool to be wielded for the betterment of humanity, not some alchemy to be wielded from up on high by a priestly Delphic class. Budget cuts, downsizing and rightsizing must become intolerable vocabulary. Ridicule and scorn should greet anyone anywhere who says we need to layoff nurses, doctors or teachers. We must never again allow the argument that we cannot afford to invest in our own well-being. A system which makes investing in ourselves impossible can only exist to loot whatever existing wealth was already created in some earlier era.
In the West, a potent symbol of the failure of the neoliberal order to provide for the basic needs of the public has been the emergence of the Public-Private Partnership, or PPP. Created to help fill the void in public financing left by neoliberal “market-based” reforms, PPPs have been lauded for revolutionizing areas like public infrastructure development. The truth is that given a rational system of public credit, there is no reason the government cannot finance the construction and maintenance of infrastructure itself. The reason government is unable to under neoliberalism is by design, in order to make the merger of state and corporate power inevitable. The old definition of PPP must be swept away, and a new post-pandemic paradigm must take its place, focused on prosperity rather than austerity.
Not only in our own countries, but internationally we need a united front against austerity. It is essential that we unite with all countries in fighting the deficit hawks and building a new economic paradigm capable of creating the kind of public wealth necessary to confront all emerging challenges in the 21st century. The next virus may be much less forgiving and longer lasting. Keeping everyone locked inside indefinitely is not viable. We need to have a medical system where we “overspend” on our own healthcare, much to the chagrin of the deficit hawks, so that we have the extra capacity when we need it, to protect the afflicted and the most vulnerable without closing down society entirely.
Fortunately, the true nature of money creation stands exposed for us all to see, so the question of how we will create this “new” economic system is simple. It already exists, we can use it at any time for productive investment in our collective future, and the excuses peddled previously to promote austerity were just myths in the service of oligarchy.
This united front will also serve to strengthen traditional diplomatic and scientific ties between nations, which will be crucial going forward in such an interconnected world. What sort of world can we build post-Covid that will be worth living in? Immunity cards? Right to travel IDs? Tracking apps? The only viable future for humanity will be one of prosperity and peace. Prosperity allows us to finance needed infrastructure investments to weather the next pandemic with excess capacity and advanced technologies. Peace allows us to develop the ties necessary to work together to solve global issues confronting humanity.
What might international cooperation towards building peace and prosperity look like? It might look like a simple cooling of tensions between East and West, North and South. It might look like the West joining the rest of the world in the Belt and Road Initiative for international development. It might look like a debt jubilee and reforms establishing low-interest credit for productive investment as a principle in international finance. New credit for building hospitals, schools, roads, sanitation and power. International crash projects for advanced Generation IV nuclear reactor designs which are much cheaper and safer than existing pressurized water designs. Mining the moon for Helium-3 for use in advanced nuclear fusion designs could also be a valuable project to cooperate on, as could advanced infrastructure projects like Hyperloop and a Bering Strait Tunnel to connect East and West physically, and culturally. There is no limit to what we can achieve with international cooperation and a sane, stable system of public credit. We must stop the war of words on the “Communist Chinese” spreading the “Wuhan virus” which only serves to strengthen the divide which geopoliticians exploit to remain in power. A new paradigm means realizing that China is as communist as bailout capitalism is capitalist. It means realizing that the West’s model of neoliberal austerity has failed and brought nothing but misery to a vast portion of the planet. Realize that much of the world previously under attack by our neoliberal austerity now considers the “authoritarian” Chinese to be their best friend for all the low-interest credit their Belt and Road Initiative has brought to their countries.
We can’t be blind to some of China’s failings, just as we can’t be blind to our own. If we are to influence China at all in the 21st century, we must first put our own house in order and adopt a new paradigm ending the neoliberal failure of the last forty years.
Carey List is an engineer who loves history, and lives in Ontario, Canada. He can be reached at email@example.com.
The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of The Duran.