In April 2020, during the early stages of the UK’s lockdown response to the coronavirus pandemic, the Editorial Board of the Financial Times published an op-ed titled “Virus lays bare the frailty of the social contract: Radical reforms are required to forge a society that will work for all”. In it, the editors argue for the creation of a new social contract, overturning the dominant political consensus of the last four decades, in order to create the sense of shared endeavour necessary to overcome the virus and its effects.
The Financial Times (FT) is seen by many as a voice of the neoliberal establishment that has dominated the political agenda of wealthy nations and the international organisations they govern since the 1980s.
Following the end of the Second World War, a new political consensus emerged that saw the prioritisation of full employment, the creation of the welfare state and a belief that government could play a role in promoting equality and social mobility. Work and taxes were negotiated in return for reliable wages, effective public services and a social safety net.
Economic decline and the ‘stagflation’ of the 1970s overturned this consensus, with the Thatcher Government in the UK, and Reagan Administration in the US focussing instead on managing inflation and a belief in globalisation, privatisation, deregulation, competition and consumer choice to raise living standards.
This settlement has led to levels of social, income and wealth inequality not seen since the Gilded Era of the late 19th Century. Prior to COVID-19, there were already signs this social contract was beginning to break down, and the Brexit vote and the election of Donald Trump can be seen as part of a public expression of frustration with this settlement.
The fact that the FT Editorial Board has published such a stark refutation of the neoliberal consensus suggests the pandemic has dramatically shifted the Overton Window, such that policies which were previously deemed politically impossible, such as wealth taxes and a Universal Basic Income, are now credible.