Coronavirus and the UK’s Neoliberalized Left

By: William Lewallen

As we entered into the new year, vaccine roll-outs across the world served as a source of hope for many, a light at the end of a very long tunnel. So how is it then, that Britain, despite having one of the most successful vaccination programs, finds the world looking at it so despairingly? 

With the highest death toll in Europe, having recently surpassed the grim milestone of 100,000 deaths, one can be under no illusions about the United Kingdom’s failings during this pandemic. It’s failure is stark and beyond tragic. While the current British Government has made a slew of errors, such as its late decisions to implement a lockdown or restrict travel, the cause of many failings are systemic and arise from its neoliberal policies. 

These policies, which Stephanie Mudge, a specialist in political and economic analysis of the west, describes as the “embrace of 3 things: economic privatization, deregulation and liberalization as the means of government,” have proved to be the UK’s Achilles’ heel during the handling of the crisis.

While the term neoliberalism was first coined in 1938 in Paris, it wasn’t until 1947, when Friedrich Hayek formed the Mount Pelerin society, that the neoliberal ideology began in earnest. Mount Pelerin was a small cohort of philosophers, economists and journalists who were tasked with spreading the doctrine of neoliberalism. However, it was only in the late 70’s and early 80’s that Ronald Reagan and Margert Thatcher in the UK, began to implement such policies. And so, the neoliberal era was born.

The pandemic, as well as serving to illuminate pre-existing inequalities, has acted as a controlled experiment by exposing different systems of governance and politics to the same multi-facetted difficulties simultaneously. The group of countries that have effectively managed the pandemic possess an eclectic mix of political systems ranging from poor countries like Vietnam to developed western democracies such as Germany. The common factor here is that all these countries rejected their respective economic ideologies in favour of the pragmatism that a public health crisis of this magnitude demands.

The UK, however, in a naïve attempt to mitigate unnecessary economic damage chose to stick to its economic ideology when on February 3, British Prime Minister Boris Johnson announced the UK would act “powerfully” against “a desire for market segregation” caused by the new disease. A key failing in the UK’s response was the government’s inability to outsource tasks to private companies effectively, a move only necessitated by the neoliberal trend towards privatization. The New York Times recently reported that out of 1,200 government contracts that were made public “about half went to companies with political connections, no prior experience, or histories of controversy.” In choosing “speed over due diligence ministers squandered millions,” this undoubtedly cost lives.

A similar problem occurred with the UK’s ill-fated Test and Trace program, an initiative designed to alert people who have been exposed to the virus. Many of its tasks were handed over to outsourcing giants Serco and Sitel where reportedly staff only reached less than half of contacts of people who had recently tested positive for COVID-19, greatly reducing the programme’s efficiency at limiting the spread of the virus. Another key hindrance was the state of the UK’s healthcare system following the financial crisis. As a result of the neoliberal austerity that was ushered in following 2008, 17,000 hospital beds were lost and there were more than 40,000 vacant nurse positions across the NHS. Whereas in Germany, they have 29.2 ICU beds per 100,000 people — the highest ratio in Europe — in the UK the same figure is 6.6. In Germany, they were able to instigate a rapid health response and keep mortality rates low. In the UK, they could do neither.

It’s also well documented that a wider macroeconomic loyalty to markets —- a hallmark of neoliberalism —-  incurs such financial risks that it effectively blocks pharmaceutical companies from taking preventative action. Since the SARS outbreak in 2003, scientists around the world have been warning that a global pandemic of this magnitude was inevitable. Many of the vaccines for COVID-19 are similar to those developed for SARS which is also a Coronavirus. However private pharmaceutical companies are not incentivised by the market, due to a lack of profit, to produce potentially useful vaccines. While we have not seen adaptability in the vaccine market, I should note that the pandemic has demonstrated market dynamism with many British companies, such as the clothing manufacturer Burberry, successfully altering their production lines to successfully procure vital personal protective equipment. Yet, on balance, it seems the UK’s adoption of neoliberalism, at least to some extent, prevents an effective crisis response.

With the World Health Organization’s recent warning of more pandemics to come, something must change to ensure the UK, a country fighting for global status, is better prepared. Despite the recent Democratic victory in the United States there is an acquiescence that the Democratic party is committed to neoliberal and free market ideals. In the UK however, there is still a hope for change. If the Labour Party (the UK’s centre-left political party) were to win a majority in their 2024 general election, they could conceivably begin to undo some of the UK’s neoliberal tendencies. In addition, it would bring a 15 year spell in office to an end for the Conservatives (the UK’s centre-right political party), who have held office since 2010. While it seems likely that the Government’s myopic handling of the pandemic will form the bedrock for a Labour victory, Stephanie Mudge, in her 2018 book Leftism Reinvented: Western Parties from Socialism to Neoliberalism, makes a worryingly compelling case that even a Labour landslide would not spell the end for neoliberalism. To understand why, we must take a look at just how neoliberalism came to be the UK’s status quo.

During the sixties, the rhetoric of the Labour party was of management of the economy and full employment. The Government, following Keynesian principles, unashamedly sought social goals and the welfare state continued to grow. Yet as ‘stagflation’ began to take hold in the seventies this began to change. Stagflation, a mixture of rising inflation and unemployment, directly contradicted Keynesian principles. This was the so-called ‘scientific’ critique. There was also the ‘political’ critique. This view, which was promoted by a rebellious cohort of economists, Mudge writes, was “that mainstream economics [Keynesianism] was implicitly an economics of the left.” Actors such as Milton Friedman argued that Keynesian economists, and by proxy their economics, were too politically involved and therefore not scientific enough.

This latter critique won and fundamentally changed the dogma within economics, giving rise to a new breed of economist. This new breed of economists saw their responsibilities in terms of expanding and sustaining markets. As neoliberal economics became the mainstream during the Thatcher years, economists-in-politics sought not to manage the economy, but to insulate the markets from political interference, even if this worked directly against the interests of voters. However, when Labour came into office in 1997, under Tony Blair and the label of ‘New Labour’, they too adopted the neoliberal view of the economy cultivated years earlier. As a result the party moved towards representing markets more than the working class people they claimed to represent.

So while the recent decade of neoliberal rule in the UK has been at the hands of the Conservatives, this neoliberalization of the left parties, seen also in the Democratic party, gives UK citizens reason to be pessimistic, even about a 2024 Labour landslide. Until contemporary economists in the Labour party revert to being voter-, instead of market-centric the UK is bound to follow the U.S. on its path to implosion. Realigning left leaning parties with their constituencies is without a doubt a hard task, but as George Washington once said, the harder the task the greater the triumph; and what a triumph it would be.

This article was written by Glimpse from the Globe’s guest contributing author.

Will Lewallen, who grew up in London, is in his second year at the University of Edinburgh, Scotland. Whilst majoring in philosophy he has used his first two years to broaden his studies, minoring in economics and politics. His are of interest lies in seeking ways to radically re-think existing structures to improve people’s lives. He is particularly interested in cooperatives and how these can further democracy in the political and economic realms. In his spare time Will is an avid skier, alpinist and a general lover of mountains.