Where we are and how we got here
By January 2023 two thirds of UK households will be in official “fuel poverty”, meaning that more than a tenth of their income has to be spent on energy bills, according to a study published by the University of York in August 2022 (Two-thirds of UK families could be in fuel poverty by January). The UK’s cost of living crisis, already triggering both an upsurge in food bank use (New figures released by the Trussell Trust) and widespread strikes, seems to be rushing headlong into a full-blown humanitarian emergency, with people freezing and starving over the approaching winter.
The causes of the crisis run deep: increases to the money supply in western countries, through quantitative easing and low interest rates, continued for too long, the disruption caused by the COVID pandemic, the creeping but ever accelerating effects of climate change, the long slump in real wages and growing inequality since the 2008 financial crash and, in the case of the UK, the additional effects of Brexit (Brexit inflation).
Since February 2022, however, another critical factor has been added to that toxic mix: Russia’s invasion of the Ukraine. In the words of a House of Commons report: “Prior to Russia’s 2022 invasion of Ukraine there was an increase in demand for oil and gas as economies around the world came out of lockdown. Supply did not generally keep pace with the higher demand for various reasons. Increased gas prices fed through to increased electricity prices. The Russian invasion of Ukraine in 2022 caused oil and gas prices to jump due to concerns about disruption to supply. Sanctions on Russia and the potential for an embargo on Russian oil and gas have pushed oil and gas prices up further still.” (House of Commons research briefing: domestic energy prices)”
The confrontation between Russia and the West over the Ukraine rapidly turned into an economic war, with both sides attempting to destabilise the other by damaging their opponents’ economies. Though, as we have seen, there are other factors affecting the cost of living crisis, some of which, such as climate change, and power imbalances in societies, will only exacerbate the situation further in the longer term unless addressed, the lion’s share of the immediate emergency in energy prices would seem to derive from this conflict over the Ukraine. That is a vital fact to appreciate: that the looming humanitarian crisis is part of an economic war currently waging between Russia and the West.
How to deal with Putin
Once we have done that, we should cast our minds back, and ask ourselves how, as a nation, we have addressed similar “economic wars” in our past.
If we look back to World War Two, when the UK’s food and energy security was in a even more parlous state than it is today, and attacks on the Atlantic convoys threatened mass starvation, we successfully protected our entire population, even the poorest and most vulnerable, through rationing, price controls, subsidies and redistributive taxation (Income tax progressivity and inflation during the world wars ), spreading the burden of the cost of conflict fairly according to ability to pay, ensuring that society continued to function and no one went without the basic supplies needed to sustain life.
We should also, not for a moment, delude ourselves that we are not in a similarly serious situation today. More likely than not, we would currently be in the midst of World War Three, if not for the apocalyptic nuclear dimension that would entail, indeed that the conflict could still entail if it is allowed to spiral out of control.
So let’s get one thing out of the way first. Does the damage we are suffering, and potentially about to suffer, mean that we should essentially concede defeat? That clearly is one of Putin’s aims: to seed dissension among his Western opponents, and the economic war is key to that. The Ukraine is far away on the other flank of Europe, the risks of catastrophic escalation are high and, in terms of the causes of the war, no side involved is lilly-white: though that is perhaps an unsurprising observation, as in the realm of politics, and even more so geopolitics: few sides, if any, are ever lilly-white.
Unfortunately, even if we ruthlessly set aside all moral obligations, and selfishly just thought of ourselves, there is no easy way for us out of this conflict with Putin’s Russia. We need to remember that this is an oligarchical regime that cares nothing for democracy or the lives, let alone the sovereignty, of others. It has already interfered in our domestic politics in ways that are likely to have been to the significant long term detriment of most of our population, and may have seriously undermined our democracy. Furthermore, there is every reason to suspect that Putin himself has authorised at very least two murders on our soil, one involving a radiological attack, and the other a chemical weapon. In the first a former Russian security officer was killed whose “crime” was to help expose Putin himself for using “false flag” terrorist bombings against the Russian population in order to win an election (Moscow bombings or The questions Russians are afraid to ask), while in the second attack the primary target survived, but there were “collateral” casualties among British civilians, including one death and others left with long term health conditions. If Russia had been a poor emerging nation without nuclear weapons and considerable economic influence, it is safe to conclude that our missiles and drones would have been on their way long ago.
Whatever scope existed for an amicable compromise, perhaps with an independent and non-aligned Ukraine as a neutral bulwark between Russia and the West, was swept off the table once Putin invaded and that invasion turned into a campaign of sustained mass murder, when the Ukrainians had the temerity to successfully resist. Let Putin feel that he has “won” this conflict and, as a psychopath, he will feel emboldened to go further, if only to settle new scores. For aggressors without conscience, perceived weakness only encourages further attacks. Sooner or later we would be forced again into a similar confrontation, but would then be starting from a more vulnerable position because of everything we had already conceded. In all likelihood, with ourselves and whoever remained among our Western allies, at that point, now backed into a corner, and with Putin feeling emboldened to take his aggression just that one step further to finally defeat the West, and the stakes for both sides therefore higher, the risks of escalation into a direct military conflict and then nuclear war would be even greater than now. Alternatively, we would eventually be forced to surrender everything, including the conversion of what is left of our democracy to permanent “Londongrad” writ large, where our politics and our lives would be dominated indefinitely by foreign oligarchs linked to tyrannical regimes. (“Londongrad” is explained here: Russia report press notice)
Of course, the unconditional defeat of Russia, in the same way as we once defeated Nazi Germany, is impossible, because that would trigger a nuclear exchange from which there would be no victors, indeed, possibly very few left alive in the entire northern hemisphere of the planet. Aside from Russian victory, possibly caused by the West losing its stability, unity and resolve, or a full-blown World War Three, there are three, not necessarily mutually exclusive, possible outcomes to the Ukrainian conflict. One could be Putin’s outright defeat, possibly associated with the fall of his regime. More likely, would be an indefinite stalemate and ceasefire, such as was roughly the situation between North and South Korea from 1953 until 2018, or a negotiated settlement, possibly even involving Putin himself. In the latter case we must enter any such negotiation from a position of strength, in order prove to Putin and his successors that they lost more than they gained, regardless of any “face -saving” posturing they are allowed to adopt for domestic consumption, or the conflict will resume in fairly short order, and in an even more dangerous form, well within a decade.
Therefore, we are trapped in this economic war with Russia for the foreseeable future. The situation may even grow grimmer, for example if China opens a “second front” for Western powers by blockading Taiwan. That means that our government must take the economic war as seriously as it does aiding the Ukraine or strengthening the defences of NATO. We can’t win that overall conflict, or achieve any form of acceptable enduring peace, without also prevailing in the economic war. Now, key to winning that economic war is doing whatever is necessary to protect our entire population, just as we did in World War Two. If not we will forced into division and, one way or the the other (and there are two ways if you stop to think about it), our democracy will be crushed. Plus, of course, many of us will be freezing and starving this winter.
What’s right, and what’s wrong
Let’s now, as we should, restore the moral dimension to this discussion (and by “morality” is meant a fairly conventional “Golden Rule” style morality as explained here: How to live with yourself and others, or basically that we should not be wilfully selfish). Two things should now be immediately obvious. Whatever its imperfections, we have a moral obligation to protect a reasonably functioning democracy from brute aggression and the mass murder of its citizens. Also, we have an obligation to help each other, and the broadest shoulders must bear the greatest burdens, even in “normal” times, whatever that means any more, and even more so when we are facing off against a common external enemy that continually seeks to divide us. Everyone must be protected from the economic aspects of this conflict: no one should be left behind. We need to restore some basic decency and implement similar measures to those used successfully in World War Two to preserve the civilian population: rationing, price controls and redistribution.
Now we need to throw a few more facts into this debate. Firstly, as far as we can tell, according to the latest available official figures, this isn’t, yet, a crisis of contracting overall resources, at least not for the UK. The recovery from the Financial Crash of 2008 was slow and protracted, and punctuated by pandemic, but in the latest available figures at the time of writing, for Q1 2022, the UK real term, i.e. inflation adjusted, per capita Gross Domestic Product was slightly higher than ever before (ONS: UK real net domestic product per capita). We have more billionaires than at any other point in our history, whose total wealth increased to £653bn, up more than £55bn, or by 9.4%, from 2021 to 2022 (Sunday Times Rich List UK has a record number of billionaires). Regardless of all the eternal factors, actually solving our cost of living crisis is very obviously a matter of redistribution.
As we shall see later though, a real contraction of available resources is likely if this crisis is mismanaged, if whole chunks of our economy collapse due to rising prices, especially for energy, or if a massive decline in the real incomes of the many produces a dramatic slump in demand. The subsequent economic scarring could last decades.
Secondly, we have to consider the morality of allowing extreme price rises in the event of a shortage in a critical commodity. When there is an imbalance between demand and supply it can often be beneficial to allow market forces to drive up prices. Higher prices reduce demand, thus encouraging the conservation and efficient use of whatever it is that is in short supply.
In terms of encouraging energy savings, though, it should be obvious that just a fraction of the 54% rise in the energy price cap in April 2022 ought to have done that: now, instead, we face people, businesses and institutions being unable to pay for basic needs. However, in the longer term higher prices also incentivise an expansion in supply, potentially eventually eliminating the shortage altogether. So price rises in a shortage can eventually help people, and therefore be moral.
Nevertheless, that “eventually” is absolutely key here: and “eventually” could even mean not at all. In the mean-time, demand is “managed” by pricing poorer buyers out of the market. If what is being supplied is essential, such as heat or food, that “management” of demand can be lethal. “Over-consumption” is avoided only by victimising, or even killing, the poorest. Demand management by pricing out poorer consumers is a key failure of the market mechanism.
Similarly, we should consider the morality of the profits that can be made in such a shortage. Because they know that they will be able to sell all their stock, in a supply shortage situation suppliers no longer compete with each other on the basis of cost, allowing them to make “super-normal” profits, that are no longer rewards for effort, investment or risk, and therefore arguably morally justifiable, but are purely “windfalls”. These super-normal profits are price gouging. To claim that these profits are in any way sacrosanct is nonsensical.
There is a further devastating irony here too: often we hear that the fossil fuel companies should be left with their super-normal profits so that they can invest in expanding energy production. However, and even ignoring the proportion of those profits that will just be paid to shareholders, they are hardly likely to invest in renewables, given both their core business and the current profitability of fossil fuels. So that would mean expanding fossil fuel production, such as opening new oil and gas fields. Something that will take years, so not address the immediate crisis, and then contribute further to catastrophic climate change, including more droughts, and other extreme weather events, that will push up food prices still further. This is therefore one specific situation where, ironically, an expansion of supply driven by massively inflated prices is actually something we must absolutely avoid.
What should we do?
What does this all mean? Neither energy nor food prices should be allowed to raise to a point where any of us struggle to survive. If anything essential to life transpires to genuinely be in critically short supply, then it must be rationed according to need, not according to ability to pay. “Ability to pay” means the richest are largely unaffected while the poorest are left to perish. (By the way, exactly the same argument applies to healthcare).
Now rationing energy supplies is difficult, but possible. It happened in the UK during the “Three Day Week” in 1973, with many homes and businesses without power for up to 9 hours at preplanned times (Three day week), although in those days we had less critical machinery and fewer devices dependent on power supplies, so it must be done extremely carefully. In 2020 35.7% of UK electricity generation was from burning gas (UK energy in brief) so, although it is our gas supplies that are most constricted, rationing electricity can also save gas, as it would allow gas-fired power stations to be shutdown for some of the time. Gas can also be rationed directly, by turning off one or more of the of the interconnectors that bring in the gas from the North Sea and abroad and feed it into the local distribution system, and informing their customers that they’ll be without gas during these periods (Britain faces the prospect of gas rationing for the first time). These are drastic measures, and we have to hope that they won’t be necessary: but they are better than allowing people to freeze or starve, by ensuring that everyone is able to receive at least a “bare essential” energy supply. The EU is already attempting to try and reduce it’s gas consumption by 15% over the second half of 2022 (Europe and Russian natural gas) , and the UK government is supposedly putting contingency plans in place (UK power sector to ‘wargame’ energy rationing amid threat of days-long blackouts).
Rationing would itself suppress prices by curtailing demand but, given that we hope to avoid actual energy rationing and that, even if it happens, it is unlikely on its own to curb prices sufficiently to ensure that everyone can afford those essential supplies, we should cap prices directly and, where necessary, subsidise. When it comes to subsidies we must understand that it is the energy producers who are making the super-normal profits; by contrast many energy suppliers, the companies that take the energy produced and supply it to homes and businesses, and have to buy those supplies on the open market at currently hugely inflated prices, have gone bankrupt. Though the situation is complicated somewhat by companies, such as Centrica, that not only owns British Gas but also has its own gas-fields, so that it is engaged in both energy production and supply.
Another confounding factor, and something that must be stopped immediately, is that all UK energy prices are currently based on the gas price. Not only does that mean that any energy producer is currently in receipt of those super-normal profits, but, even more importantly, that markets are not acting to encourage a switch to cheaper forms of electricity generation, such as from renewables, and away from more expensive, and, as it happens more polluting energy sources, such as gas. On an individual level it also means that any of us terrified about our gas bills this winter can’t really save money by turning on an electrical heater or two instead. Gas and electrical prices must be decoupled now.
How to solve half the problem with the gas prices immediately, indefinitely, for everyone and at no cost to the public purse
Returning to considering the predicament of energy suppliers forced to buy their supplies at inflated market prices, that means that, to stop those companies simply running of money, we have two things we can do: reduce the prices they have to pay, and breaking the link between electricity and gas prices would help with that, or provide them with subsidies, i.e. essentially help them pay for their energy supplies. Note also that these considerations apply whether the energy suppliers are privately owned or nationalised, though in the latter case we would be able to have more confidence that a portion of the subsidies wouldn’t simply end up in shareholders’ pockets.
In terms of reducing the prices energy suppliers have to pay, one suggestion, made by the boss of the company Ecotricity (Daily Mail: Energy boss’s plan to save YOU £1,000 off your bills), is that we cap the prices charged by our North Sea energy producers at their pre-crisis levels, allowing them still to make profits, but not “super-normal” profits. To make this work we would also have to prevent those companies from being able to sell those supplies on the open, international markets: basically they would only be able to sell their product to the UK at the price set by the UK government.
Now, the UK currently derives roughly half its gas supply from North Sea reserves in UK waters, so, assuming this plan is workable, it could solve half of our problem with gas prices at a stroke. The alternative is to extend windfall taxes on the energy producers to recycle all the super-normal profits they are making from the elevated prices back into subsidies for the energy supply companies. Assuming all of that money was extracted in the first place, and none of that money was lost on the way, such as diverted to shareholders, then that would also solve roughly half of our problem with our gas price. Either approach can drastically mitigate our crisis immediately, and do so for everyone and every organisation, private or public, across our entire economy, and without any further strains on the public purse.
Basically, simply because the UK itself produces half of the gas it needs, there is no excuse whatsoever in the UK Government not solving half the problem with the gas price straight away using a plan based on one or even both the approaches explained above.
Solving the rest of the immediate problem
That would leave us, in terms of our immediate problem, with half of the issue with elevated energy prices still to resolve. Some of the things we have already covered could help with that, such as decoupling electricity from gas prices or, if it comes to it, implementing rationing. Alternatively, we could choose to subsidise away all or at least some of the price increase still arising from the gas supplies we have to buy on the open market. If such subsidies do not totally suppress the price increases, leaving the most vulnerable still unable to afford essential energy, then we could supplement the subsidies with targetted financial help.
The money for these subsidies, and any still needed targetted help, would, however, have to come from somewhere. The options for governments to raise funds in a crisis are discussed here (How should governments raise money in a crisis), but basically amount to creating new money, though mechanisms such as Quantitative Easing, borrowing or taxation. Now creating new money increases the government’s spending power, but reduces everyone else’s, by causing inflation. It is sensible tactic when a situation is deflationary, where prices may be about to fall and the whole economy then stall as many will not purchase today what they could buy for less money tomorrow, but it would be a disastrous thing to do in a period of inflation. Indeed, the Quantitative Easing that was implemented during the COVID pandemic is likely to have gone on too long, contributing to the current crisis: there has been nearly a trillion pounds worth of QE since the Financial Crisis, and it didn’t stop until December 2021 (Bank of England: Quantitative easing). Plus, because the specific way QE is done, it benefited the asset rich and speculators rather than broader society, by pushing up property and share prices. Borrowing is normally cheaper for governments than for individuals or the private sector, as, being considered more credit-worthy, governments are charged a lower rate of interest, but borrowing tends to become more expensive during a period of inflation when interest rates rise. That leaves taxation as the currently preferred option for raising funds. Also, given all that we said above about the problems of income and wealth distribution, a situation that is associated with stagnant real wages since the Financial Crash and has therefore also contributed to the current “cost of living” crisis for the many, it is essential that any such taxation is “progressive”, meaning that it bears heaviest on the broadest shoulders, and is therefore redistributive.
There is also something else to bear in mind when thinking about borrowing. For every loan, there has to be a lender, for every borrower a creditor. Borrowing doesn’t transfer resources from the future to the present, only Dr Who could do that, rather it also redistributes already existing resources, but does so temporarily and with interest added on top so that, once the loans are repaid, it can often result in a net transfer of wealth from borrowers to creditors. Do not be surprised, therefore, for the wealthiest and most influential people and organisations, in an economic crisis, to suddenly switch to urging borrowing as the best way forward: it makes it easier for them to resist demands for genuine redistribution while also creating another money making opportunity.
We are therefore back to considering redistributive taxation. Firstly, we should consider other windfall taxes on any other businesses making super-normal profits out of the crisis. It’s not that there is anything wrong with businesses making a profit as a reward for hard work, investment and sensible risk taking. Rather, as with the energy suppliers, there is no justification to extra profits being made simply because a global crisis has forced up prices. For example, the arms industries are possibly such windfall recipients. Note that if we do not do this we set up a “perverse incentive” so extreme it is potentially lethal: for businesses that profit from war and chaos to lobby for war and chaos.
Then there are many proposals for wealth taxes such as these: (A wealth tax could create an emergency fund to get people through this crisis), not inherently unreasonable measures in a country where the top 1% of households each have 230 times more wealth than those in the bottom 10% (FT: Wealth inequality rises in Britain) and even a Conservative government felt it necessary to commit, in its 2019 manifesto, to a levelling up agenda. Even merely aligning capital gains and income tax would, according to Office of Tax Simplification proposals, raise an extra £14bn a year (FT: Government ignores recommendation to align CGT with income tax). Doing that plus similarly aligning dividend tax rates is estimated to raise £24bn a year (also: A wealth tax could create an emergency fund to get people through this crisis). Then there is the possible “Robin Hood” tax on speculative financial transactions (Robin Hood Tax campaign), in 2020 estimated to raise £4.7bn a year for the UK, and that would likely, at least in the longer term, have beneficial economic side-effects (see: Is speculation theft). We could start to raise the higher rates of income tax back towards where they were in the past (LSE: The-top-rate-of-income-tax) , and similarly begin reversing a decade’s worth of cuts to corporation tax (UK corporate tax rate), which fell from 30% in 2000 to 19% now.
Importantly, we also have to face up to the fact that we can’t just guarantee essential supplies, and keep prices down, purely for domestic consumers: our entire economy is being destroyed by the crisis. If vital industries like steel production collapse, due to high energy costs, then the size of our real economy really does actually start to shrink. Jobs and tax income disappears, and inflation increases still further, both as the energy price rises affecting businesses are at least partially passed onto consumers, and because of still further contraction in supply. There are further knock-on effects too, amplifying our other crises. For example, if the social care sector folds because it can’t afford to heat care homes this winter, not only are huge numbers of vulnerable elderly people at critical risk, but bed-blocking in the NHS will increase still further. That backs up the patients in hospitals until Accident and Emergency Departments become increasingly clogged, leaving paramedic crews queuing even longer as they wait to check in their patients. That means extended ambulance response times, and even more people dying before they can receive emergency medical care. It’s falling dominoes everywhere.
Another self-defeating behaviour derived from our blind obsession with market fundamentalism is the way that energy suppliers from allied countries bid up the price of gas on international markets as they compete to obtain supplies. That is no way to win an economic war. Instead we should force down prices by forming a buyers’ club. All the NATO powers acting in concert would have considerable economic clout, all the more so if net exporters of gas, such as the USA, insisted that, once domestic demand was met, any excess gas was sold to allied nations at pre crisis prices. Markets serve people, not people serve markets.
Addressing the problems at source
Generally, the easiest, most efficient, way to solve a complex problem is as close to the source of the issue as possible. Otherwise it is necessary to try and apply an extensive patchwork of measures addressing all the symptoms of the problem, something that is more likely to cause unintended side effects, that may miss some symptoms altogether and that is difficult to sustain in the longer term. Therefore, to address the immediate cost of living crisis, the first thing we have to do, as we have seen, is to intervene in markets to suppress the rising prices, and, if there is real, unavoidable, shortage, ration on the basis of need. The very next thing we have to do is to move even closer to the sources of the problem, by addressing the specific shortages of supply that are driving up prices in the first place.
We need to use some of the funds raised through redistributive taxes to better insulate UK homes: a long overdue “green” measure that could quickly help many while curbing upward pressures on energy prices by reducing demand. At the same time, we should relax the restrictions on building on-shore wind farms. The current situation, where the tighter planning rules introduced specifically for on-shore wind farms in 2015 mean that a single dogged and uncompromising local objection can stop such a development completely (Giving local people the final say over onshore wind farms), is dangerously absurd. In the UK on shore wind provides both the cheapest form of renewable energy and is also the fastest form of supply to expand. The average time to build a wind farm capable of generating 50 MW of electricity is only 6 months (EDF: All you need to know about windpower). We should restore subsidies for solar power installations. Plus, of course, we should continue to expand off-shore wind farms too.
In the longer term, to address the issue of what to do when the sun isn’t shining or the wind isn’t blowing, finish already started nuclear projects, build tidal barrages (including reversing the 2010 scrapping of the Severn barrage) and invest in some geothermal (which seems poised on a major breakthrough: New Scientist: Millimetre wave beams could give us access to deep geothermal energy).
All of this will allow us to address the climate crisis too, and where markets are failing, we should be prepared as a society to do these things directly, by taking over energy companies or launching one of our own, creating another lever for market intervention such as driving down prices or rapidly greening energy supplies. Climate change is not only pushing up prices, especially as harvests fail, but it will also set other dominoes falling. All social systems are intricate and highly interconnected: that why it’s best to deal with any problems as close to cause as possible, because the ripple effects quickly become impossibly complex to manage. Forty plus degrees Celsius heatwaves in the UK means that many regions closer to the equator may soon become uninhabitable for at least part of the year. If the Syrian refugee crisis contributed to Brexit, then imagine what hundreds of millions or a billion having to find somewhere else to live would mean. Then the dominoes would fall with a crash so loud it would be nuclear. Then we would be radioactive dust.
Don’t forget food
This raises another important point: we should not forget food production. Above we have dealt extensively with the energy crisis, but annual food inflation was also 12.7% by July 2022 (see ONS: inflation bulletin for July 2022) . Food inflation is also partly down to increases in energy prices, as fertiliser production is very energy intensive, but also due to climate change induced droughts and Russia’s invasion disrupting grain exports from the Ukraine. As issues around fertilisers might not feed through entirely until next year’s harvests, food inflation could be an even more serious issue in 2023.
The tools to bring to bear here are similar to those for energy price inflation, including redistribution to ensure everyone can afford the essentials, and World War Two style rationing should shortages ever become acute. Again, though, we also need to address this problem at source. In ever more uncertain times we need, as a nation, to aim for food as well as energy self sufficiency. The current way we produce food also contributes significantly to climate change. We have little choice but to dramatically improve the efficiency of our food production by using the latest scientific and industrial techniques. In particular, that means a rapid expansion of factory produced precision fermented food, such as the British invented Quorn (see Artificial meat or Lab grown food could save the planet), in order to lower prices, improve our food security and decrease greenhouse emissions. The greenhouse gas impact of the mycoprotein in products such as Quorn is 90% lower than meat (How sustainable is Quorn). Rapid uptakes of these foods needs to be encouraged by direct market interventions, such as subsidies or public investment. We need to ferment our way to victory.
Divided we fall
With guarantees that we are not facing crippling costs, that we will all look after each other as we struggle against common crises and external enemies, we, the people of this country, would no longer be forced into payment strikes and industrial action. People are taking those actions because we are being left with no alternative, especially as many have already suffered more than a decade of real term pay cuts since the Financial Crisis (for example, see this: Pay falls in real terms or this: Real terms pay cuts, for the latest situation across the whole economy). More real term cuts in income and many will starve or freeze this winter, some even in ruined homes with disconnected water supplies, because their frozen pipes have burst. At the same time the collapse in demand, because ordinary people have to spend a far higher share of the money they make than the rich, will devastate whole swathes of business not already crippled by inflation, meaning a contraction in our productive capacity, a fall in tax returns, higher welfare costs and job losses (in fact, unemployment of this type: Paradoxical unemployment). The long term consequences in terms of blighted lives and prospects could last a generation. The prospect we face is apocalyptic.
If individuals and classes and nations, who are meant to be neighbours and allies. continue to fall upon each other like wolves, rather than assist each other to face down shared threats, tyrants such as Putin will only draw comfort, and possibly even amusement. After all, even the analogy with wolves is slightly unfair, because wolves are social animals.
The 1% abandoning the 99%, price gougers lobbying to keep their inflated profits, big business monopolistically relishing the bankrupting of small and medium sized companies, supposedly allied nations competing for gas supplies: that is no way to win an economic war. This is not a time to use a crisis to seek narrow individual, sectional or national advantage. Divided we fall. Should such obvious and historically precedented measures as those outlined not be taken, should our government not be able to draw upon that same well of common decency and sensible social solidarity that it discovered in World War Two, then we can conclude two things: Putin’s victory is likely and the UK’s social contract is terminally broken.
gezwinstanley 