Democratic Theory and Economic Institutions

The COVID-19 pandemic sheds new light on the question of the properties and requirements of economic justice in society. The extension in recent decades of a global competition paradigm, one which invades lives through both the organization of the economy and the state, demands that we reconceptualize what democracy and the democratic state demand in terms of justice within everyday institutions. The challenge can be interpreted in terms of a form of humanist justice prevailing—linked with being able to lead lives under institutions that respect freedom to enjoy control within core developmental processes and social relations that affect opportunity for well-being and standing as equal to others (Haagh 2019a, 2020a).

Relatedly, a perspective on humanist justice and governance in terms of conditions for well-being actually prevailing provides an avenue to explore problems highlighted by Republican democracy theorists recently, to do with the limits of both participation and formal rights theories. As Pateman (Pateman and Smith 2019: 112) insightfully acknowledges, Republican concern with direct participation in the late 1960s and early 1970s was predicated on the existence of more stable economic institutions. Relatedly, Wampler and Avritzer's (2004) research has revealed that inclusiveness in participatory budgeting is affected by underlying differences in social inclusion. Adding to this, I highlight the need to recognize democratic capacities of states linked with their embedding in society.

In this context, theories of democratic deepening, such as through formal extensions of procedural rights through bargaining processes (O'Donnell 2001; Whitehead 2002; Haagh 2002, 2012), also get us only part of the way. For humanist justice to prevail, there must instead be opportunity for silent freedom states, defined as not needing to be actioned or bargained for. In turn, said opportunity depends on embedding ex ante through regulatory and other means individual and collective forms of control over developmental processes within institutions—such as of education, work, and economic security—that frame everyday patterns of human time and relations in society. Being able to enjoy well-being and cooperation implicitly and permanently through the form shared institutions take is a basis not only for equal freedom—a freedom not in reality confined to the more resourceful or powerful—but also for the political resilience of institutions of rights.

A democratic state is in this view necessarily a human development egalitarian one, defined as promoting stability of and equality within “developmental institutions”—being those that affect every-day well-being and cooperation directly. Anticipating conditions for everyday freedom in the formation of institutions and policies is both a property of humanist governance and of a stable and effective democratic state (Haagh 2019a). Relatedly, comparative research has shown that where through regulation and tripartite governance states have privileged developmental trajectories of individuals in the constitution of economic security and education and work in and outside the home, higher levels of well-being and greater control of time have followed (Haagh 2011a; 2012, 2019a). Further to this, I will argue in light of how state democratic and humanist governance capacity have been corroded, the question of the substantive normative basis of everyday institutions has become inescapable, in ways we can examine by engaging with contradictions in governance revealed by COVID-19, and risks that our response will be to merely adapt to the conditions causing our governance crises. As Pateman puts it, the idea that by simply engaging “in talk” we have influence is superficial; a blind-spot she identifies in theories of deliberative democracy, one which affects women especially (Pateman and Smith 2019: 116–117). I would add that when public institutions and norms that protect corrode, proposing either redistribution or participation as a response risks becoming complicit in the very destabilization of our common foundations that has occurred.

Humanist Justice and Governance

The COVID-19 crisis has highlighted barriers to imagining and acting to defend humanist governance linked with Anglo-liberal anti-perfectionism—the idea that collectively we ought not to define substantive conceptions of the good. The best-known exposition of public neutrality in egalitarian thought is Rawls’ concern with a too “comprehensive liberalism” (Rawls 1971: 264; Arneson 2013), and relatedly the way Rawls relied on what feminist critics called a “distributive perspective” as the means to expand liberty and abate inequality (Young 1990). In this context I argue focusing on institutional sources of well-being in society avoids the problem of information “negating” that comes into play in procedural paradigms primarily concerned with equality in or through resources, as Sen (2002) observed concerning justice in health.

Further to how liberal theorists have also acknowledged our interest in stable activities (Rawls 1971: 369, 375–378; Macpherson 1973) and have highlighted the value of our agency over time, I want to bring into view what developmental dimensions of freedom demand in terms of the shape of institutions and systems of governance.

Where in extension the Human Development School, to preserve plurality of policy options, has focused on human actions (Alkire 2002) or basic functions and choices (eat or fast, Sen 1999, 75), I highlight underlying patterned developmental capacities arising from the human life cycle that affect our mental integrity (Haagh 2011a, b, 2019a, 2020a). Surveys of sources of intrinsic motivation as an aspect of mental well-being find that “being in the present,” and identifying with activities for their own sake, is linked with stability of employment, especially for women, and that opportunities for control of care responsibilities, external housing, and income security sources, upscale this effect (Haagh 2011b, 2019a). Accordingly, in policy assessment we need a different standard for adequacy that encompasses conditions that regulate permanence of place, income streams, core activities, and social relations of care. The COVID-19 crisis has revealed the problems of state capacity at stake in myriad ways. States that govern through distributive policies primarily tend to have weak roots in society, and to be more reactive, without elites acknowledging this as a problem.

The crisis put us in a bind: save lives or the economy? To exemplify, the UK government acted swiftly to economically insure its health-protecting interventions through income-sustaining measures. After an initial rescue package of £330 billion to business was criticized for relying mainly on loans (Pratley 2020), the Chancellor supplemented with furlough schemes that subsidize wages to an estimated cost of £100 billion (Wallace et al. 2020). Yet the abrupt moves between strategies revealed underlying problems of state capacity linked with relatedly limited conceptions of the state's role in terms of neutrality, and with how states are embedded in society. Neutralist conceptions of governance linked with the procedural paradigm contributed to COVID-19 crisis hubris, as indicated in the rejection of test advice of the World Health Organization by Western laissez faire states and governments on grounds said advice was meant for low income countries (Buranyi 2020). This belies how some of the same countries—e.g. the US—saw a marked rise in civil disobedience to government restrictions in desperate bids to access employment (Sevastopulo and Shubber 2020) whereas more plan-rational and equal economies with developed protection systems featured a high level of public trust in government measures. A global COVIDiSTRESS survey conducted in the first three weeks of April 2020, saw Denmark and Finland top the chart at over and approaching 80 percent, with Holland and Sweden in the high 70s (European Parliament 2020: 7–8).

COVID-19 and the Structures of Well-being in Economy, State, and Society

Behind these variations are deeper differences in capacity for humanist governance that can only be revealed through a methodology that is more explicitly informative about conditions for humanist justice.

In 1978, a group led by a Danish physicist, anticipating the corrosive effects of a competition-driven society, lamented how “the core task of the medical profession is to maintain the unhealthy life of medicine-dependent individuals in unhealthy environments (Meyer at al. 1978: 28). This can be said to have aptly described and anticipated how the commercial paradigm corrodes health at all levels of society, as well as reduces state action to ad hoc reactions. In this context I argue that neutralism at an ideational level exaggerates the power individuals have to affect their good and diminishes our interest in discovering the extent to which what is good for us is shared, and thus we rely on conditions we receive (Haagh 2020a). When liberal theories of justice and democracy leave the good life up for grabs to privilege difference and public neutrality, they deprivilege the question of substantive rights against constraints imposed by the human life cycle and the facts behind our human development dis-embedded states.

In reality, states that are less plan-rational also tend to involve society and the private sector less, leading to more hierarchical systems and ad hoc interventions (Haagh 2012, 2015). Past reluctance in countries with laissez faire regimes like the US and the UK to restrict commercial products that compound obesity and diabetes (Ramesh 2010), can be set against the declaration of war on obesity by the UK prime minister after his own near-death meeting with COVID-19 was related to his weight (Swinford 2020). Lack of investment in health capacity and planning, and aversion to broad coordination across the public and private sectors, played at least a part in Anglo-liberal economies’ late health response compared with more plan-rational countries like Germany, South Korea, or Denmark (Dickens 2020). Lock-down implemented in Nordic states with low death tolls (on May 14, 551, 233, and 301 in Denmark, Norway, and Finland respectively compared with 3,743 in Sweden with no lock-down, Illustreret Videnskab 2020), was less draconian, more brief and pragmatic, less contested, and contributed less economic hard-ship long-term (Murray 2020).

Relatedly, a key contributing cause to mental health conditions, which, according to the UK Office of National Statistics is “[t]he largest category of spending in England in terms of condition,” at “11 percent of spend” (Will 2018) is economically induced stress, enabled by the precarious employment economy. This can be defined as one in which people have to work under duress to avoid or ward against fear of redundancy, financial insecurity, or debt. According to one study, in 2016/17, uncontrollable workload was the largest contributor to workplace stress, at 44 percent of cases, a phenomenon estimated to cost between £33 and £43 billion to the economy (Arnold 2018), or a quarter of the NHS budget of £122 billion in the same year (Full Fact 2017).

Impacts of post-COVID-19 unemployment on mental health in Britain is predicted to be by far the most significant contributor to a rise in long-lasting mental ill health (Janke et al. 2020). Yet government responses have been—perhaps inevitably—largely powerless against forces of instability endemic in the economy. The UK chancellor's Herculean effort to swing public finance to secure businesses and jobs belies how large companies most plugged into global supply chains and competition for customers and most reliant on expansions, are stressed (Jackson 2020: 52–53), more likely to use precarious contracts (Pyper and McGuinness 2014), and to cut staff in a crisis (Lai et al. 2016). In designing employment support schemes, the UK government appeared to be instinctively guided by outdated principles of assistance that are dysfunctionally tied to supporting passive states. Requiring passivity in exchange for public support may ironically end up defeating the object of the UK's furlough schemes (to save employment) as business had to choose between assistance (the furlough scheme) and relying on the work of (home-bound) staff they badly needed to continue to function (Haagh 2020b).

State Democratic Capacity and Punitive Governance

The fall-out of COVID-19 exposed just how far the global commercial paradigm has changed especially but not only more laissez-faire states’ character. The crisis unearthed how the way economic security systems are designed is part of a structure of elitism that drives lack of knowledge about the poor, as illustrated when UK ministers came face to face with the fact that statutory sick pay is not sufficient to live on (Cockburn 2020). The likelihood that the new unemployed from COVID-19 will face the brunt of punitive systems in income support is heightened by new government debt, as the most fiscally exposed governments post-COVID-19 comprise the US and the Euro-area (Jackson 2020: 3). The punitive systems involved are directly linked to the expansion of a commercial paradigm that squeezes public finance and jobs. Policy frameworks emerging in the 2000s in the Organisation of Economic Cooperation and Development (OECD 2012) countries linked with sanctions on income claimants—that reduce or cancel payments on behavioral grounds—affect up to one-quarter of claimants in many states (Haagh 2019c; Adler 2016). These regimes were linked with demands on states to maintain yearly fiscal credibility in global markets—and were stepped up under austerity imposed by the need to support the global financial sector. Those transparently relying on public benefits became the target of hostile policies even when these could be justified less and less in terms of the exercise of responsibility, given the growing predominance of precarious and poorly paid job opportunities. Failure rates of over 40 percent of appealed sanctions cases, shows the endemic character of new “small injustices” perpetrated by market-reactive states. The growing prevalence of hostile systems to get people off reliance on public income benefits has pushed people into informality and ill health on a significant scale especially in Britain where scrutiny of sanctions is less embedded (Haagh and Rohregger 2019, Haagh 2019b). Sanctions regimes reinforce use of new technology that exacerbates mechanisms of exclusion, as detailed by the UN Commissioner for Human Rights in his characterization of a new “digital welfare state” (Alston 2019: 3). A related issue at stake is whether in fact we believe in the equal value and potential of every human being. When Prime Minister Boris Johnson in the UK claimed differences in IQ makes economic equality undesirable (Colson and Bienkov 2019), he is in company with 20th century egalitarian liberal sympathizers of eugenics like Gunnar and Alva Myrdal (1934), John Maynard Keynes (Director of the Eugenics Society between 1937–1944), and James Meade (1964: 63–65) who thought people with less desirable qualities needed to be phased out to make economic equality possible.

Existing capacity for humanist governance linked with the state's prior embedding in the society comes into play. A case in point is the lower sanctions rate within unemployment insurance systems governed by organized labor and supported by state subsidy in Nordic states like Denmark and Finland. Unemployment insurance systems comprise earmarked funds that cover individuals faced with unemployment at a relatively high level relative to their previous wage (Haagh 2019c: 166). Financial and institutional capacities linked with this embedding, and the supportive tier of income assistance, enabled resilience in the COVID-19 crisis. Citizens’ registers and a more scrutinous culture with regards to avoiding sanctions of health-vulnerable groups (Haagh 2019b) contributed to the way behavior conditions on income support were suspended in conjunction with lock-down in Denmark on March 11 (Danish Labour Ministry 2020).

Humanist Governance, Health and Democratic Control

Changes to income support access is only one way in which especially laissez faire states have changed. It may appear that states can do very little to abate sources of ill health arising from uncertainty in job markets. Yet, as exemplified in Britain, a growing reliance on precarious contracts in public services (Pyper and McGuiness 2014) means that the same services set up to protect citizens create sources of stress that they are not organized to meet. The unit cost model in national health is as one study notes a hierarchical one without a center of accountability (Flood 2000: 188–189). The cost of this approach includes the indirect costs of postponed interventions and reduced capacity to deliver preventative services that depend on more stable staffing (Robertson et al. 2017: 75). Spending by local councils on mental health services for youth in the UK is estimated to have fallen by 62 percent during the 2010 decade of austerity, while waiting times for mental health services entailed that 75 percent of young persons waiting for services deteriorated (YoungMinds 2018: 4–6). It is said that the NHS in the UK is one of the most financially efficient services, yet this is a measure of how a low-wage and flexible contract model makes unit costs and productivity appear higher even when in fact services may not be available when needed (Maguire 2019). One is reminded of the joke about the bus driver who is so efficient he never stops to take on any passengers.

The connection between economic injustice and care injustice today is also revealed by the way we live in countries in which the most vulnerable care risks are attended to by the most vulnerable workers (Haagh 2019: 21–23). COVID-19 death rates reflect existing health injustices. Figures from the Office of National Statistic in the UK suggest that “men in low-skilled jobs are four times more likely to die from the virus than men in professional occupations, while women working as carers are twice as likely to die as those in professional and technical roles” (Barr and Inman 2020). In today's economy, however, it is not just the unemployed or those on low incomes who suffer mental insecurity. A 2020 Mental Health Foundation survey found those in full time work are more concerned about losing their job (34.01 percent against a 20.55 percent average).

We can surmise that post-COVID-19 planning ought to feature not just stimulus but a new appreciation of stability in core institutions—those which frame our sense of autonomy and permanence in work, care, education, and basic economic security—to enable humanist justice and effective government. Here we must be careful to not repeat the polemics over competing short-term fiscal priorities that austerity budgeting helped cement. A “third-order” paradigm shift—linked with the goals the public ought to pursue—must comprise not only our aims—such as humanist justice—but our means—the structures that shape our governance.

To illustrate, the threat of a second surge of COVID in the UK in the Summer of 2020 showed how a core developmental institution—education, serving a vulnerable group—children, came second to the leisure industry, as entertainment sectors were re-opened but schools remained shut. The British Prime Minister to support economic recovery rushed to open pubs in July to defend what he had described a few months earlier as ‘the ancient, inalienable right of freeborn people of the United Kingdom to go to the pub’ (Landler and Castle 2020). Lack of track and testing underpinned Britain's dilemma, as the central government's late and centralised approach left the country reliant on an ineffective distant technology, with local councils most affected resorting to more tried and tested ‘boots on the ground’ approaches to tracking (Wright and Whipple 2020) in isolated attempts to beat the trade-off between health and economy. A recent OECD (2020) report singled out by contrast the requirement in Nordic states—where schools opened early—for public crisis management plans as a key factor in their effective balancing of health and economy. But it is not the only factor. Ultimately, Nordic states’ approaches are born of relatedly constitutional principles to protect developmental interests of citizens, and state democratic capacities for vertically integrated governance. Prior to school re-openings in April, parliaments in Finland and Denmark affirmed children's constitutional rights, followed by guidelines around which through local councils schools could adapt (Vegas 2020). Municipalities thus take their cue from central government but in practice have considerable resources and operational autonomy and capacity. Where UK municipalities are locked in to survive alone by yearly budget balance requirements (OECD 2020), municipalities in Denmark, led by Aarhus council—also an innovator in experiments in reducing the use of punitive sanctions (Haagh 2019c), acted federally to joint-purchase protective equipment very early on in the crisis (Aarhus Kommune 2020).

Conclusion – Hopes and Illusions of COVID-19

Revelations produced by the COVID-19 pandemic generates hope for systemic change that, however, needs to be tempered by the underlying problems embedded in the crisis. The connection we can establish between humanist governance of everyday institutions and senses of individual control, indicate an egalitarian human development constitution as a democratic ideal. Conceiving of COVID-19 crisis responses against this ideal cautions against over-optimism linked in particular with the ad hoc redistributive measures that have understandably predominated. The proposal to implement a universal basic income (UBI)—an unconditional universal cash grant—as a crisis measure illustrates dilemmas we face. A UBI represents in theory a permanent shared institution of money and is a fundamental democratic innovation in that sense. As a form of institutionalized stability of income with the potential to secure both individuals and the macro-economy UBI is an important antidote to the selective, punitive assistance systems we have and the conceptions that in general associate social support with passivity—the contradictions of which were—as noted—starkly revealed in the COVID-19 crisis. Crisis UBI proposals however run into the risk of being caught up in redistributive polemics in place of attention to the permanent institutional innovation at stake. The hope that a so-called Emergency UBI devised to alleviate unemployment in the short-term (Scott 2020) would turn into a permanent scheme seems unstable if people who became convinced a short-term measure was justified then have to be persuaded of a long-term scheme on quite different grounds.

Single-domain proposals such as UBI have to be set in the context of a wider governance and ideational shift to be effective and should not be off-set against reforms to stabilise employment and services. A tendency in terms of the liberal paradigm to view UBI as a sufficient condition for participation or choice, or as a distributive response, falls into line with a post-modern paradigm of direct democracy and neo-liberal ideas of simplified governance that may sidestep the wider structural problems laid bare by the Corona crisis. Downward pressures on public finance inherent in neo-liberal globalization threaten the security and permanence of a UBI, and fragmentation of employment and public services systems will undermine its effects. The way a prominent neutralist defense of UBI or basic services in terms of distribution of our inheritance and individual choice of lifestyle (van Parijs 1995, Vanderborght and van Parijs 2017) makes a link between basic distribution and choice may thus be too passive in a world in which stability has eroded, and the constitutionality of developmental freedoms needs to be defended. With harm to children and women estimated to have increased markedly as a result of being confined to the home during the pandemic (Taub 2020), we gain an insight into the dangers of thinking activities like work or education are best arranged informally. On the other hand, fears that even short absences from school will deepen the divides that test-led learning creates (Sweeney 2020) tells us something about the depth of the governance challenges we face in terms of contesting the competition paradigm as it affects social relations. The same economic reasons and failures of governance that make a basic income urgent also make it less effective (Haagh 2019b). What needs to be explained are the reasons we need stability and publicness of justice across levels of government and in support of developmental institutions as a way to build and make a democratic state more effective for freedom in society.