Monday , June 1 2020
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Shall we play the cat and mouse game?

Image: Denis Defreyne

In the cat and mouse game, we take 90 mice and release them into an enclosure.  We then send 100 cats to go catch them.  The inevitable result is that at least ten of the cats return without a mouse.  Indeed, because a few of the cats turn out to be super-predators who catch several mice each, perhaps a fifth (20) or even a quarter (25) of the cats return without a mouse.

There is an obvious response to this, but it is not permissible in the game.  Instead, and at great expense because training cats is hard, the cats which return without mice are made to undergo courses to improve their mouse catching skills.  This works enough of the time for the highly-paid training organisations which provide mouse catching courses to continue getting paid.  Nevertheless, every time the game is played, at least ten cats return without mice.

Once again, the obvious response to this is not permissible.  And so, having used the carrot of training, we now turn to the stick of coercion.  The cats that persist in returning without mice are to be incentivised by cutting the amount of food they receive, as this will inject a degree of urgency into their mouse catching activities.  The fact that the loss of calories and the stress that accompanies hunger makes hunting mice even more difficult is to be overlooked.  And if a few of the cats die from malnutrition, this can stand as a warning to the others.

In Britain, the real-life cat and mouse game just got a lot harder, with an additional 856,500 people added to the Universal Credit queue as the impact of SARS-CoV-2 on the economy begins to bite.  As the BBC report:

“The number of people claiming unemployment benefit in the UK soared to 2.1 million in April, the first full month of the coronavirus lockdown…

“The benefit claimant count does not include everyone who is out of work, since not all can claim assistance, but it does indicate the trend.  In another indication of the bleak employment landscape, the number of job vacancies fell by nearly a quarter to 637,000 in the three months to April…

“The jobless figures only cover the first week of the lockdown and they are expected to worsen sharply in the coming months.”

What remains of social security following the four decade neoliberal assault is precisely the cat and mouse game set out above.  Governments take no responsibility for creating employment or even for creating the conditions within which employment can be created.  Instead, the various victims of a fast failing globalised industrial economy are blamed for their inability to find jobs which no longer exist.  Initially, the neoliberal carrot of education and training will be used to persuade the unemployed to take on student debt in order to train in new – and often equally redundant – skills designed for a labour market which (particularly if they are sick, disabled or over 50) has ceased to exist.  The longer they remain jobless, the more the system reaches for the stick of sanctions designed to deprive them of an already inadequate income until such time as they have only the network of foodbanks – which cannot cope in the face of the pandemic – to fall back on.  For a growing number, even this is not enough.

The cat and mouse game only works, however, if those on the receiving end of the punishment remain a tiny minority of the population.  This has been achieved in large part since 2008 by the growth of a “gig-economy” in which employers are able to exploit the poor because even the most exploitative forms of work are preferable to the privations of the Universal Credit system.

The big spike in unemployment caused by the response to the pandemic, therefore, carries a huge political risk.  As the numbers falling back on the tattered and torn remnants of the social safety-net grow – and what we have seen so far is just a fraction of the unemployment to come – the lie that the unemployed, sick and disabled have only themselves to blame will be exposed for all to see.  As I explained last month:

“Two million job losses at the average wage means £900,000,000 per week (£46,800,000,000 per year) of discretionary spending removed from the economy.  That adds up to a lot of business failures and, in turn, to even more jobs lost and even more business failures…”

The political response to this – at least for now – has been a version of the cat and mouse game in which the government does the obvious thing that is not permissible under the usual rules – it steps in and provides the missing ten mice.  That is, it uses its power to borrow and to create new currency out of thin air to subsidise wages and to bail out corporations that would otherwise fail.  None of the major corporations that are benefitting from the secretive Covid Corporate Financing Facility, though, will be obliged to undergo training courses on how to find customers who don’t exist or how to sell unwanted goods and services to people who don’t have any money.  Nor will the over-paid CEOs be slowly starved to death in order to incentivise them into making their businesses profitable again.  When this is all over, they will be able to retreat to their Caribbean island tax havens largely unscathed while ordinary people are left to pick up a far bigger tab in the same way as they were in the aftermath of the 2008 crisis.

It was this blatant difference in the rules of the game – socialism for the corporations, austerity for everyone else – which opened up the bitter political divisions that gave rise to nationalist populism, Brexit and the election of Donald Trump.  In France, a clueless elite almost triggered a revolution by the seemingly innocuous policy of imposing a green levy on diesel fuel.  And the austerity of the past decade is a mere foretaste of the full-blown austerity which might be imposed upon future generations to pay back the currency fraudulently borrowed into existence by the banks to bail out the already wealthy.  Alternatively, faced with widespread public protest, governments may be forced to turn to some version of “helicopter money,”  “People’s QE” or a universal basic income to spread the hardship a little less unequally.

In the end, though, while banks and governments are free to print as much currency out of thin air as they want, they cannot print real wealth.  Creating wealth requires cheap energy that no longer exists, depleted mineral and organic resources that are constrained by planetary limits and a biosphere that isn’t choking on the pollutants that we have been dumping into it for centuries.  And none of those wider crises will have gone away when this pandemic is over.  

This time around, currency created out of thin air will rapidly disappear into thin air again.  Stagflation looms in our near future.  A massive collapse in the price of so-called “assets” – particularly those that only exist as bits on a computer database – also looms large.  Indeed, it may even be that the elite cannot even be roused to save themselves from their own folly.

As you made it to the end…

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