The Economy Of The New Normal

By Mark Montegriffo

This week began with the Workers’ Memorial Day and it will end with May Day. Our current pandemic reality has cost the lives of so many essential workers. While nobody is immune to the virus, it has had an outweighed effect on the poorest neighbourhoods and on frontline workers, as well as the global south. In the UK, we know that many healthcare workers, in a National Health Service already stripped bare, have faced their death. When one’s labour is costing one’s life, it is time to sound the alarm bells. The new reality that emerges after the pandemic must come to terms with this relationship. The first place to start is re-thinking the economy, and therefore politics, at a foundational level.

It is not just in the finance centre of Gibraltar that you will hear boasts of high GDP as a metric of economic success. Since the post-war world, capitalist nations, governed by parties across the neo-liberal spectrum, have all framed their economic status in relation to GDP figures. The media and lawmakers use it as a proxy for measuring prosperity, but they don’t always explain it, much less provide the ideological context and narrative consequences of using it as an economic indicator.

The Gross Domestic Product is the total market value of everything made and sold within the borders of a country (regardless of the nationality of who is making money from the sale). We see GDP in headlines all the time, even in our current global health and economic crisis. The orthodoxy of the GDP framing has been criticised, and continues to be criticised, by environmentalists, labour activists, and indigenous rights groups. This critique, however, rarely reaches mainstream discourse, which speaks to the hegemonic and ideological nature of the framing.

Jason Hickel provides a historical context and critique of GDP in his book The Divide: A Brief Guide to Global Inequality and its Solutions. He writes, “the Gross Domestic Product was intended to be a wartime measure [in the USA], which is why it is so single-minded and almost even violent. It tallies up all money-based activity but doesn’t account for whether that activity is useful or destructive. If you cut down a forest of all its timber, GDP goes up. If you strip a mountain range to mine for coal, GDP goes up. If you extend the workday and push back the retirement age, GDP goes up. But GDP includes no cost-accounting. It does not measure the cost of losing the forest as a sinkhole for carbon dioxide, or the loss of the mountain range as a home for an endangered species, or the toll that too much work takes on people’s bodies and minds and relationships…

“Not only does it leave out what is bad, it leaves out much of what is good, for it does not count useful activities that aren’t monetised. If you grow your own food, clean your own house, or take care of your aging parents, GDP says nothing”. The last point is particularly prescient when it comes to caregiving. Most caregiving roles are still shouldered by women. GDP says nothing about the mother who is raising a child or the women who is caring for an elderly parent, thus not directly contributing to economic growth. Economic metrics are as much a feminist issue as it is a class or race issue (in modern Gibraltar specifically, the racial element of the economy has usually been weighed against, though not exclusively, the Moroccan community). These roles can often mean the difference between life and death. They are invaluable roles, yet GDP does not recognise it. 

While products can depreciate, bringing GDP down, there is no corresponding measurement for people working themselves to death. The longer hours one works or the more one spends on elderly care – all that is seen as a gain for GDP, not as a loss. The resources we extract from the ground, the water, the air – all that is seen as a gain for GDP, even though it harms nature, us, and eventually, our economy. GDP is an inherently incomplete analysis. It tells us nothing about who has what wealth and who spends that wealth. There is no space for a true reflection of economic health or equity in this metric. It is a framing borne of a time of capitalist expansion and hyper productivity. It is not fit for the time of crisis, climate catastrophe, and for a time where we begin to think of a dignified economy for workers. It is not fit for the new normal.

The head of Gibraltar’s Civil Service recently warned that workers in his sector would have to “work more for less”. This would not achieve anything except disputes with labour unions. There is no evidence that increasing hours or workload for civil service workers will increase productivity. Perhaps unwittingly, there’s something in the point that the Chief Secretary made, though it would take a little bit of mental gymnastics (but readers will be aware that journalists are among the best gymnasts). It isn’t that we should be working more for less to compensate for the crisis, but that we should all be working towards an economy of less: less inexorable growth, less benefits to the richest who comparatively pay the least into a public services – in short, less GDP worship. If a jurisdiction boasts high GDP but also fairly redistributes wealth, it is still insufficient. Redistribution, of course, is necessary for economic wellbeing. But putting money in people’s pockets, as good as that is, means very little if public services are not fairly funded or if living costs are higher than a person with a minimum wage can afford. GDP does not account for this.

A recognition of material realities, now more than ever, calls for an end to this narrow framing of economics. It calls for an acceptance that our minimum wage does not match up to our housing market, or indeed, that our housing market does not match up to the need of working-class families. It calls for the cost of public services to be largely funded by those with the broadest shoulders who benefit from significantly favourable tax cuts and benefits. For an economy to work for the Moroccan worker living in cramped conditions in the upper town, the cross-border worker who is living month to month, or the care worker who gives their daily labour to looking after the elderly, it must operate on a logic that does not put growth indicators and capital accumulation over safety and welfare indicators.

The GDP discourse was a product of its time, and those times were headlined by the post-war boom and neo-liberal capitalism. Our time requires a new framing, or else the new normal will just be the old normal that puts capital over labour and growth over dignity. Clapping on balconies is a beautiful gesture of solidarity, but it is not enough. It must be followed by genuine material change and fundamental demands for a workers’ place in an economy that celebrates the labour that they put into it. It begins with re-thinking the limitations of our political economy.