Why do I think we need to adopt a war economy?
This is UK context though it relates to elsewhere. By 'war economy' I mean sonething like the state interventionist model which Britain and others adopted in WW2.
Because of the virus, we are already entering a major recession. Society enters semi lockdown so that people will be spending less and spending on different things.
If you work in the public sector or in an industry which deals in essential services, then you should be ok. Likewise if your company does a lot of trade in deliveries.
This is not everyone though. Lots of people work in hospitality or in service sector industries where demand has just collapsed and will stay collapsed for a few months. These businesses are already going under or laying off staff. Altohgether, this is perhaps ten percent of the workforce.
It means huge government welfare payments from the government but still not enough for families to put food on the table. There is no way that the market can adapt overnight to fill these jobs at this time so their could be an unemployment crisis to compound the medical crisis.
Our government needs to do more direct investment in the economy. Denmark is guaranteeing the wages of 75% of private workers and even Trump's thousand dollar payment to US citizens is more than our government is doing. All they are doing for businesses is to give them loans. What use is a loae if you have no customers for four months?
We need to nationalise key industries to keep people in work. This also makes sense because the virus will stop us importing a lot of things we need. A good place to start would be for the government to convert factories to make ventilators which hospitals are despertely short of. Charities are really struggling at a time when we need them more than ever. This is also a placen where government can, and should, intervene to create jobs.
I think governments of the world will all be forced to transition to something like a war time economy anyway. My worry is that some will be doing it as a reactive, not proactive, way of coping with the crisis. We need to do this now, not in two months time.
Because of the virus, we are already entering a major recession. Society enters semi lockdown so that people will be spending less and spending on different things.
If you work in the public sector or in an industry which deals in essential services, then you should be ok. Likewise if your company does a lot of trade in deliveries.
This is not everyone though. Lots of people work in hospitality or in service sector industries where demand has just collapsed and will stay collapsed for a few months. These businesses are already going under or laying off staff. Altohgether, this is perhaps ten percent of the workforce.
It means huge government welfare payments from the government but still not enough for families to put food on the table. There is no way that the market can adapt overnight to fill these jobs at this time so their could be an unemployment crisis to compound the medical crisis.
Our government needs to do more direct investment in the economy. Denmark is guaranteeing the wages of 75% of private workers and even Trump's thousand dollar payment to US citizens is more than our government is doing. All they are doing for businesses is to give them loans. What use is a loae if you have no customers for four months?
We need to nationalise key industries to keep people in work. This also makes sense because the virus will stop us importing a lot of things we need. A good place to start would be for the government to convert factories to make ventilators which hospitals are despertely short of. Charities are really struggling at a time when we need them more than ever. This is also a placen where government can, and should, intervene to create jobs.
I think governments of the world will all be forced to transition to something like a war time economy anyway. My worry is that some will be doing it as a reactive, not proactive, way of coping with the crisis. We need to do this now, not in two months time.
41-45, M
