Political Economy

COVID-19 Pandemic: An Opportunity to Restructure India and the World's Political Economy?

The crisis has created an opportunity to rewrite the structure of the production-consumption systems that shape the world.

COVID-19 has sent pollution levels plummeting in cities and regions across the world. This must count as mischievous relief, given the fact that before this pandemic, the World Health Organization (WHO) estimated that 4.2 million people died every year from exposure to outdoor polluted air. This is a revealing and humbling reality. It tells us that even today, in the twenty-first century, a pandemic induced, catastrophic economic recession that is decimating the lives of thousands and the livelihoods of hundreds of millions living on the margins, is a more effective check on pollution, than normal, business-as-usual economic and environmental policy.

Business-as-usual economic and environmental policy have no doubt alleviated some environmental harms, but these have been marginal and incremental.

Air pollution related mortality is not evenly distributed. Relatively poorer industrialising countries in Asia like India and China fare worse than wealthier, industrialised or “post-industrial” economies in Europe and North America. This tells us that marginal improvements do add up. But they add up only so far. While India and China had about 80 deaths (per 100,000 population) attributable to air pollution in 2016, the corresponding number for Germany and Japan, two of the most economically, technologically and institutionally mature societies hovered around 45. This suggests that even the wealthiest countries, with their advantages of wealth, technology and more sophisticated environmental bureaucracies, have not eliminated the scourge of mortality due to outdoor air pollution.

Unsurprisingly then, even as air pollution levels in India and China have fallen due to the pandemic induced economic recession, the European Environmental Agency also reported significant reductions in air pollution in Europe for the same reason. Environmental regulations that depend on technology and wealth are helpful, but we need to look beyond them as well. Ultimately air pollution, and environmental degradation more broadly, is a function of the scale and speed of the production-consumption system that has now been globalized. In other words, environmental degradation is integral and essential to the structure – the political economy – of today’s economic system. This is a hard and inconvenient lesson to stomach. Our immediate reaction is to assert that no, the economic system is fine as it is! It’s just that our technologies are not efficient enough or that regulations are not smart enough or that behaviour patterns are less than ideal. This is alas, a half-truth.

The other half is the structure of the contemporary production-consumption system. Structure here captures the mechanics of how production of goods and services are arranged and how benefits and costs are distributed in society. Questions such as how to produce? What to produce? For whom to produce? What wages to pay labour? What profits to pay capital? Whose land to mine? Which species’ habitat to pollute? What level of exposure to pollution to normalise? Where to invest? Who can invest? At a more abstract level, it also asks how the norms shaping these decisions are ethically and morally justified? How are they made politically resonant and thus ultimately, institutionalized as tax, labour, land or environmental legislation? These questions and their answers often remain hidden from popular political discourse. However, these questions are all around us. They are squarely within the purview of political economy, a holistic approach that takes power and justice seriously.

Even prior to any formal analysis we can plainly see that the structure of our production-consumption system produces income and wealth inequality of an unimaginable, indefensible and vulgar, level. Consider just one example of the many trends that can more formally validate this point. The World Inequality Lab reports cumulative real income growth per adult between 1980 and 2016. The cumulative real (i.e. adjusted for inflation) income of an Indian adult in the bottom 50% of the income deciles increased 107% in these 36 years. For an Indian adult in the top 10% the increase was 469%. If this adult was in the top 1% the growth was 857%. But if this adult was in the top 0.1% (about 1.3 million Indians fall in this bracket), 0.01% or 0.001%, his or her real income growth was 1295%, 2078% and 3083%, respectively. Such differences in individual outcomes do not emerge simply from personal virtues or individual behaviour, but from the structure – the political economy – of the contemporary production-consumption system.

Even while unimaginable levels of real income inequality were produced, the contemporary production-consumption system has degraded the biosphere. This essay started with a reference to outdoor air pollution, which is just one facet of this degradation. Earth system science, a relatively new field, now reveals conclusively that the demand for natural resources (e.g. minerals, wood, fibre, fish and fuel) and the generation of waste material (e.g. pollution of numerous types) by the production-consumption system undermines the ability of the Earth system to support life as we have known it over many millennia. This is not a future possibility. This is now. Climate change, that is finally and very belatedly gaining popular media attention, is one example.

Simultaneously, the impact of degraded environments are experienced more immediately and drastically by the poor. It is the poor whose forests and lands are taken away for “development” and it is the poor who are exposed to higher levels of pollution. It is the poor whose livelihoods and health is undermined. Scientists have started mapping what are called environmental justice conflicts, where people challenge decisions by governments, corporations or oligarchs to deprive them of their lands and livelihoods. But far too often when these processes driving deprivation are questioned, i.e. when the existing structure is challenged, murderous violence is unleashed. The civil society organization Global Witness maintains a database of land and environmental defenders assassinated for the work they do.

This is our normal world. This is the world into which COVID-19 emerged as a pandemic. The pandemic, with the suffering and shock it has unleashed, has inadvertently helped by pressing the pause button on that normal. It is creating an opportunity to rewrite the structure of the production-consumption systems that shape the world and to reclaim, quite simply, our humanity. Simply returning to business-as-usual with more money thrown at technological improvements alone, without challenging the ways in which production-consumption is arranged and organized will be a wasted opportunity. During this crisis and a pause on our hectic, unrelenting normal that it has engendered, we must keep our eyes on the stimulus packages being unrolled by governments across the world. It is these stimulus packages that are writing into reality our future after COVID-19.

We know already that that corporate lobbyists and Wall Streeters or Dalal Streeters are already in on this game. Ordinary citizens must ask what answers these packages are writing into law to structure the production-consumption system: What will the economy after COVID-19 prioritise? Will it depend on consumerism or foster human well-being? Will it produce homes, healthy food, health care, education and livelihoods for the needy or will it continue to depend on corporate controlled aspirational and hyper-consumption – fast food, fast fashion, fast (air) travel, and exotic vacations – for wealth creation? Will it prioritize walking, cycling and public transport or will it prioritize private cars? Will it decentralize production-consumption as already advocated for and practiced by a number of reform efforts? Will it limit the role of markets in the provisioning of basic services and legislate ideas like Universal Basic Services into law? Will it allow for reasonable profits to capital and enterprising and empathetic risk takers, but preclude the vulgar inequality normalised over four decades? Will it understand the meaning of consent while seeking lands to mine or build infrastructure on? Will it respect the rights of not just human beings but of all species to their habitats and health and stop the murder of environmental defenders? Will it respect the planets ecological boundaries? The answers to these questions, and others like these, are being written into law today, often behind closed doors. This process needs to be opened up and the answers scrutinised.

COVID-19 can be an opportunity to restructure our normal economy if citizens globally, engage and mobilise for the common good. Citizens have to ask, specifically, are the responses by governments also changing the destructive political economy of our normal world, or are they, like the policies after the Great Recession, simply aiming at managing the crisis with short-term measures and marginal changes?

Manu V. Mathai is an assistant professor in the School of Development at Azim Premji University. He serves on the Steering Committee of the Future Earth Knowledge and Action Network on Systems of Sustainable Consumption and Production.