FOR 40 years they hurled their neoliberal dogmas at us. The financial crisis seriously shook the belief in those beliefs, but eventually the system survived. This time things are different. The coronavirus crisis and the socio-economic measures for saving the system have killed the neoliberal dogmas one by one. High time for something new.

“We are living above our means. Sorry, but there is no money.” They have taught us that for years. Healthcare was too expensive, unemployment benefits were too generous, wages were too high and there was simply no money for social or cultural matters. The government deficit and debts had to be kept as low as possible, which is why spending had to be reduced on everything.

Overnight there seems to be money indeed. Today they spend billions of euros as if they were handing out candy. A government deficit that is 18 per cent of national income, all of a sudden is possible.

“The free market solves everything; the state is inefficient.” Privatise and deregulate everything as much as possible was the mantra. Government must be downsized as much as possible and allowed to interfere as little as possible.

The market completely failed during the coronavirus crisis. That was most clearly and dramatically visible in issue of the mouth masks and personal protective equipment.

Conversely, we saw both a dramatic return and rehabilitation of public government. It became visible to everyone that only the state can manage and overcome a crisis of this magnitude. Major sectors of the economy were fully or partially nationalised without any problems. According to the Wall Street Journal, the economic stimulus in the US is “the biggest step towards a centrally planned economy America has ever taken.”

“Capital and entrepreneurship create prosperity.” It is the entrepreneurs who create wealth. Thanks to their capital, daring and innovation, they create employment and increase the wealth of a country, they claimed.

The lockdowns in the different countries have revealed the opposite everywhere, namely that it is the labour of the working population that produces wealth. When part of the active population had to stop working, economic growth plummeted. It is labour that creates capital and not the other way around. The lockdown also showed that it is often the most essential jobs that get paid the lowest wages.

“What’s good for the rich is good for everyone.” Precisely because wealth is created by capital and entrepreneurs, we must surely pamper them. Measures that favour entrepreneurs and high incomes (tax gifts, wage subsidies, state aid…) increase investment and create jobs. Their advantage eventually trickles down. This so-called trickle-down effect was the excuse for justifying the policy tailored to the richest 1 per cent.

Covid-19 exposes the fallacy of this reasoning. Indeed, thanks to the support measures, the super-rich have made significant progress. Since March 18, billionaires in the US have seen their wealth increase by a fifth, or $565 billion. JP Morgan, the largest bank in the US, reported its highest quarterly turnover ever. Of the trickle- down effect however, there is little evidence. Hundreds of millions of people worldwide are pushed into extreme poverty. British food banks face record demand.

“We are all egoists. Man is capable of good, but by nature he is bad. He is primarily driven by self-interest.” Neoliberal gurus have been teaching us that for decades. Ultimately, they believe, this is beneficial because self-interest leads to competition, which is what drives our economy forward.

The spontaneous and massive solidarity that spread across the globe during the coronavirus crisis completely belied this cynical view of humanity. Young people made grocery runs for their elderly neighbours, thousands of volunteers made mouth masks or volunteered at food banks.

When there was no protective material yet, nurses started taking care of their patients jeopardising their own health — in other words: risking their lives. Certainly, there were groups that did not care about the security measures, but those were the exceptions that confirm the rule. The coronavirus crisis shows more than ever that humans are essentially super co-operators.

All traditional parties, including Greens and Social Democrats, have been involved in, or at least supported, neoliberal policies over the past 40 years. The consequences of this anti-social policy have become painfully clear in recent months. Cuts and privatisation have taken a toll on human lives in healthcare and residential care centres. In addition, the neoliberal recipes appear to be completely unsuitable to provide a solid answer to the economic crash.

In any case, a similar approach to that of the post 2008 period — pumping extra money into the economy combined with austerity — is out of the question. A new financial doping could completely destroy the already weakened economy. New spending cuts would further erode purchasing power, causing a profound social and political crisis.

The Financial Times’s warning is unambiguous: “But if we want capitalism and liberal democracy to survive Covid-19, we cannot afford to repeat the mistaken ‘socialise the losses, privatise the gains’ approach a decade ago... A return to austerity would be madness — an invitation to widespread social unrest, if not revolution and a godsend for the populists.”

The widespread call for a paradigm shift is clear. Neoliberalism has come to an end, it is time for something new. Except for a few diehards, no one wants to return to the world before coronavirus. The crisis and the responses to it has led to many frustrations and has radicalised an important part of the active population.

In the US, 57 per cent of the population believe their political system works only for insiders with money and power. Polls show that a majority of young people under the age of 30 support socialism.

In Britain, barely 6 per cent want to return to the same type of economy as before the pandemic. Only 17 per cent believe that stimulus measures should be financed through new savings.

The academic and cultural world is also on that wavelength. Three thousand scientists from 600 universities believe that society should radically change its course and put employees back at the centre of decision-making.

Two hundred artists, including Robert de Niro and Madonna, launched an appeal to “the world” not to return to “the old normal” of the time before coronavirus, but to profoundly change our lifestyles, consumption and economies.

This realisation has also got through to the business world.

Klaus Schwab, founder and chairman of the World Economic Forum (Davos), speaks of a “great reset of capitalism.” In his view, the pandemic exposed the shortcomings of an “old system” that had neglected infrastructure, healthcare and social security systems. “If we continue as we do now … I could foresee that we will have a revolt on our hands.” And even the super-rich beg in an open letter for “higher taxes on the wealthy to pay for Covid-19 recovery.”

According to the Financial Times “radical reforms” will need to be put on the table:

“Governments will have to accept a more active role in the economy. They must see public services as investment rather than as liabilities and look for ways to make the labour market less insecure. Redistribution will again be on the agenda…

“Policies until recently considered eccentric such as basic income and wealth taxes will have to be in the mix... [Liberal democracy] will survive this second great economic shock only if the adjustments are made within the context of a new social contract that recognises the welfare of the majority over the interests of the privileged.”

What was, until recently, considered as extreme leftist ideology has now become mainstream.

Translation by Dirk Nimmegeers