THIS week witnessed headlines proclaiming Scotland has the worst economy in the developed world, largely based on the latest GDP figures, which saw GDP fall by 2.5% in the first quarter of the year. The release of these figures fed into a growing demand from some to ignore scientific advice around our collective health and safety, and prematurely lift lockdown measures in an effort to get the economy "back on track".
Such demands are often predicated on a false assumption that our health and our economy are disconnected; or worse, that there is a trade-off to be made between doing what is right for our health and what is right for economy. In reality, our health and our economy are inherently intertwined.
None of this is to underplay the economic crisis from the fallout of the Covid-19 public health emergency; rather, it is to ensure that it is viewed in its unique context, recognising that while the GDP figures may appear drastic, this is a crisis quite like no other. Instead of seeking to intensify flagging economic activity – as we might traditionally see in response to crises – we entered a period of rapid, prolonged demobilisation of vast swaths of the economy to protect public health and conserve productive capacity. In that context, it should not come as a surprise that GDP tumbled.
Lockdown hammered economic activity, and, importantly, saved lives in the process of doing so. The long-term benefits, both societal and economic, of having demobilised our economy into a period of hibernation massively outweigh downward growth trends, staggering though they are may be in their scale. You can bring an economy back to life, but the same cannot be said for people.
READ MORE: ‘Bleak outlook’ for families as coronavirus shrinks GDP by a quarter
In recent years, Scotland has led the way in highlighting the limits of viewing economic strength solely through the lenses of GDP, looking instead to reimagine our economy through the perspective of wellbeing. As such, when we see falls in GDP, it is important to contextualise what, exactly, it does and does not measure. It does not measure, for example, in the health of our society, nor does it indicate progress towards climate goals, or levels of inequality – all of which are central to creating economic resilience and sustainability. While the immediate focus must rest on safeguarding public health, as we navigate this challenging new landscape, there remains a broader need to shift onus away from growth for the sake of growth and towards ensuring the wealth we create in common is redistributed throughout our society.
The public health crisis has not only created new economic vulnerabilities, but it also exposed deep fractures in our economy that long predate this crisis, as evidenced by the pain of this crisis being disproportionately felt by marginalised communities. Amid this crisis, as we rely on government programmes, unions, public services and key workers to protect us, there rests a moment to reflect on the failure of the UK’s trickle-down approach and to instead reimagine a fair, resilient and sustainable economy.
There are practical steps we can take in the immediate term to help make this a reality. As the viability of sectors such as airlines are plunged into doubt, several wealthy corporate bosses – after decades of lobbying for deregulation and absurdly low taxes – turned to the state requesting "no strings attached" taxpayer bailouts. Attaching conditions to corporate bailouts can play a role in reforming the economy to expand public wealth, embed workers’ voices, and ensure it is sustainable by design. Moreover, historically low borrowing costs offer an opportunity to use this moment to invest in a Green New Deal, rooting climate justice and economic justice at the heart of our economy.
Moving forward, it is likely that we are heading towards another, deeper recession. The UK’s response to the 2008 financial crisis should act as a template for how not to respond to a crisis. Now, we face a choice: either continue down the scorned path of austerity, which oversaw the slowest economic recovery in a century and was linked to the preventable deaths of so many, or use this moment to invest in an economy fit for the future.
Many of those demanding prematurely lifting lockdown to get the economy ‘back on track’ want to see a return to normal, but normal was part of the problem. Out of the post-crisis reconstruction must emerge a new consensus; one that fundamentally shifts how our economy is operated, and in whose interests.
Miriam Brett is the director of research and advocacy of think tank Common Wealth
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