Beaver

Minouche wants to reform the social contract. Let’s start at home.

LSE Director Minouche Shafik chairs the LSE European Institute event by Mário Centeno entitled How Does The Euro Shield Europe From Future Crises? Old Theatre, LSE Old Building on the 13th September 2018. Eurogroup President Mário Centeno spoke about the push to reform the Euro and the politics behind it, and discussed how the single currency could shield the European economy from both internal and external shocks in the future.

LSE Climate Emergency Collective and Justice for LSE Cleaners

For people and planet, Minouche’s social contract doesn’t just fail to meet the moment: it’s filled with policy ideas that go against everything we need to be fighting for at this critical juncture for the climate emergency and workers’ rights. To re-think the social contract, LSE’s Director should focus on what’s happening at LSE, Climate Emergency Collective and Justice for Cleaners say.

LSE Director Baroness Minouche Shafik’s new book, What We Owe Each Other: A New Social Contract, is set to be released on March 4. In a recent opinion piece in The Guardian, she set forth some of its main tenets which cause frustration across the political spectrum: For the right, there’s explicit calls to left-wing ideas and social values. For the left, there are well-intentioned references to the particularity and urgency of the current moment—followed by frustratingly hollow policy prescriptions which are both deeply unpopular and badly targeted. It occupies an awkward middle-ground that fails to satisfy even that moderate adage: if you’re aggravating both sides, you must be doing something right.

While we rarely agree with Minouche, her success and influence on global policymaking and politics mean that we’ve got to engage with her ideas head-on. After all, she’ll be flanked by two Nobel Prize winners at her virtual book launch this week. But academic tunnel-vision appears to be the problem with her new social contract: it attempts a unique political theory from deep in the grass of neoliberal economics, and in the end neither comes out for the better.

Nowhere is this more apparent than in Minouche’s views on the intersection of people and planet. To “reduce their fiscal burden on future generations”, Minouche says, “today’s older people will need to work longer.” We’ve seen the dangers of pushing workers to work longer and harder at our own institution: Many of LSE’s cleaning staff say they’re at a breaking point, with staff reductions meaning that cleaners are working longer, more intense shifts. Many cleaners say that they regularly take sick days because they’re so exhausted. An intense work culture means that in addition to the physical toil, many cleaners suffer from mental health issues like depression. 

LSE’s cleaners, who are disproportionately Black and Latinx migrants, show us the consequences when work is treated as imperative and workers as expendable. We continue to demand that LSE commits to treating its workers fairly. We see the consequences of this callous attitude with the explosion of the gig economy which disproportionately relies on migrant and BAME labour while attempting to strip them of any sort of workers’ rights. Many of LSE’s cleaners, still decades from retirement, tell us that they only have so much work left in them. Many say that workplace injuries are so common that for many shifts, at least one worker calls in sick due to an injury. How much longer does Minouche want them to work, and who stands to benefit from individuals working longer into their well-deserved retirement? Shifting our economic model to expand working years can only lead to more pain.

John Maynard Keynes—the economist who underpinned much of post-war social-economic theory—famously predicted in 1930 that by now, we’d be working 15 hour work weeks, with far more time in our lives for leisure, hobbies, and our loved ones. Efficiency gains and automation mean that, today, that state of affairs is entirely within grasp. As the late anthropologist and LSE Professor David Graeber taught us and the world, most work today is ‘bullshit’, serving no economic purpose other than meeting bureaucratic demands and letting powerful people feel more powerful by growing a crop of underlings. Minouche thinks that, today, retirement is coming too early in people’s lives; that they’re spending too much time post-work, so we need to “link retirement ages explicitly to life expectancy.” But expanding work won’t make people’s lives better, even if those elderly wages are making marginal contributions to state coffers. It would just mean that more people are leading unfulfilling lives for longer. That’s not a way we should live.

It might be true that we need to reduce the fiscal burden for future generations (although this is no longer a strict economic consensus, and that ‘fiscal burden’ would make a lot more sense if Minouche recognised the human and economic costs of climate change). But we are, today, living in the richest societies in the history of the world. There’s more than enough money to meet these fiscal demands without putting older people back into the meat grinder. Thus, it is unclear why the solution to the failure of global economic governance is to blame individuals and demand that they contribute more to a system that they have no say in and benefit little from. At no point does Minouche discuss, for example, an easy alternative that’s been gaining traction even in moderate circles: taxing the rich – even just a tiny bit more. Perhaps that is a difficult sell for someone whose compensation totaled £507,000 last year—the second-highest Vice-Chancellor salary in the UK.

Discussing the climate strikes that we helped organise over the last two years, Minouche says that Generation Z “are not convinced that older generations are doing enough to leave them with an inhabitable planet or viable livelihoods.” Minouche, as it turns out, doesn’t sound convinced: at no point in the article does she mention the word climate change, beyond a patronising description of a young climate striker’s sign. To rebalance the generational social contract to account for the extraordinary debt of climate inaction, she identifies her miracle cure: education, which she says can “equalise opportunity for all young people.”

Education is important—we wouldn’t be at LSE if we didn’t agree on that. But in the face of climate catastrophe, Minouche doesn’t just reject the nature of the emergency, as she has done it repeatedly when we’ve pushed LSE to do better. She appears to ignore it altogether. We know that the climate emergency won’t affect everyone equally. Presently, communities in the Global South are bearing the brunt of the Earth’s tortured changes. When these changes hit the Global North, our most disadvantaged communities are quite literally being sacrificed. Last month in Texas, for example, millions lost electricity and water in disproportionately poor neighborhoods amidst a historic freeze, while the glitzy skylines of empty downtown office buildings stayed alight in a cruel reminder that inequality isn’t a fact of modern life—it’s a feature.

The climate emergency will worsen inequalities in ways that strike not only at people’s capacity to earn, but also at their ability to live fulfilling lives—or even live at all. Therefore, it’s hard to avoid the conclusion that education has become a performative stopgap to avoid addressing the necessity of wealth redistribution and radical social-political reorganisation in the fight for climate justice. Later on, Minouche runs through her laundry list of fiscal solutions to “redress environmental damage”: ending government subsidies for environmental bads, investing in tree planting, finding ways to quantify environmental costs, and “using fiscal policy to change incentives.”

We’re past the point of incentives. The climate emergency requires massive public intervention in order to decarbonise and fundamentally re-shape our economy. Capitalism,  being organised at its core by continual growth and resource extraction, is incompatible with a safe climate future, but we see no attempt to even consider this issue. Rather, Minouche’s environmental policies feel ripped from a 20th century economics textbook, and don’t reflect the energetic policy space today. Unfortunately, that doesn’t surprise us: LSE under Minouche’s leadership has consistently rejected our calls to listen to science and decarbonise by 2030, to divest from fossil fuels and arms, or to declare a climate emergency as hundreds of universities, municipalities, and countries have, including the UK’s Conservative-majority Parliament.

So, it doesn’t particularly surprise us that her Guardian article doesn’t explicitly mention ‘climate change’. But it is extremely disappointing: Minouche is, as the back of her book says, “one of the world’s leading economists.” She leads a university that hosts the world’s pre-eminent climate policy group, the Grantham Institute. Climate change is among the most intractable political and economic issues of our time, and even moderate economists are growing increasingly comfortable speaking, writing, and winning Nobel Prizes for their work on climate. We certainly could have benefitted from Minouche’s contribution. 

Last year, we spoke at LSE’s sustainability consultation to make the moral and economic case for LSE to divest from fossil fuels and arms. It would be a small change financially but would make a strong moral statement from a supposed leader in higher education. Almost immediately, we were spoken over by adults who put their credentials before their ideas: an unfortunate side-effect of an institution so singularly obsessed with projecting power and guarding access. That same attitude comes across in this new ‘social contract’.

How do we bring countries together in collective action while respecting their common but differentiated responsibilities? How do we redress the extraordinary inequalities that will result from climate catastrophe and how can we rapidly transition to a world that might be able to avoid its worst effects? How can we ensure future prosperity and safety while making sure that the working people driving our economy are protected and allowed to lead fulfilling lives? As the head of LSE, Shafik had unique access to some of the most considered and robust answers to these questions, not to mention some of the most informed academics and policymakers on climate and workers’ rights. These defining issues of our generation are at least worth a mention.

Note (3 March): an LSE spokesperson has reached out to note that Baroness Shafik came out in favour of higher taxes in a March 2 Bloomberg interview, following the publication of this piece, as well as in a Financial Times article (paywall) in 2019. A previous version of this article understated the pay-cut that Shafik took in light of COVID-19 but The Beaver was not immediately able to determine the amount of the cut to-date.

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