We are told that Capitalism, at its core, is a crisis-driven economic system. Crises are at the heart of its innovation, transformation of the economy, and are the reason creative destruction is the defining point raised by proponents of this economy-first, anti-social system. However, any reader of history knows that it is only through the leverage and investment of the state that capitalism can find the path around the economic crises it creates. Capital needs to be held-up and protected or -- like most short-sighted adventures -- it runs aground. The alternative is not to hold capitalism up, but to replace it and the response to COVID-19 shows a way forward.
Decades of neoliberal political narratives have attempted to convince us that the only reason for public ownership is to subsidize private capital growth. Neoliberal economics are focused on the transfer of wealth from the public to private capital through commodification of public assets and services. The result has been a society tilted in favour of profit generation through public subsidies of infrastructure and services over human need.
Since the early 1980s, central banks and governments of top capitalist countries have been attempting to save their beloved system. Responding to the collapsing profit rate was their ultimate goal and drove economic and social policy for 40 years. To save our economy and solve the social, health, and environmental crises we now face we must reverse course.
The current economic crisis has led to unprecedented government spending. This spending is funded by borrowing or by 'printing money' (which has an effect similar to borrowing) to support furloughed and unemployed workers to the tune of roughly $80 billion and to subsidize corporate revenue. This has been necessary to prop up basic economic activity in an attempt to delay the impact of the economic consequences of the recession. Unfortunately, neoliberal policy makers are already trying to convince us that giving public services away to private interests is the only way to pay for this debt.
The cheerleaders of neoliberal policy are rising like zombies after the current collection of economic, health, climate, and political crises seemed to bury them for a while. It is not going to be enough for the left to defend the current economic wreck, we must advocate to build something better just to keep what we have. Socialists have the social and economic policy programs to deal directly with these challenges we face. It is time to dust them off and fight for them with abandon.
In theory, debt generated by asset recycling is paid back through private sector partners finding efficiencies or increased government revenue driven economic growth. While this may work in the private sector, it does not work for governments. In practice, asset recycling is similar to other privatization schemes – such as public-private partnerships – that cost governments and citizens more money than traditional public debt-financed investment.