Virus lays bare the frailty of the social contract

This is a remarkable editorial from the Financial Times which argues that the coronavirus is exacerbating existing inequalities and hitting those in the most precarious jobs and industries hardest.

The FT argues that significant structural changes are needed in how the tax and welfare transfer system works and they moot the likelihood that some form of universal basic income and higher wealth taxes will be required as the active role of the state broadens to make countries more resilient to shocks in the future.

One section stands out in particular: "Governments will have to accept a more active role in the economy. They must see public services as investments rather than liabilities, and look for ways to make labour markets less insecure." "As western leaders learnt in the Great Depression, and after the second world war, to demand collective sacrifice you must offer a social contract that benefits everyone.”

It bears repeating that these views are being expressed formally in a Financial Times editorial.

We live in turbulent and difficult times, but hopefully we can revive the idea of an active developmental state that supports the private sector rather than one cut to the bone through years of austerity and laissez-faire neo-liberal economics.

Please read: Virus lays bare the frailty of the social contract. https://www.ft.com/content/7eff769a-74dd-11ea-95fe-fcd274e920ca