As economies reel from the meltdown triggered by the novel coronavirus pandemic, governments scramble to build the system back up. But it’s the system that brought about the fall, and if we keep reviving it, will do so again.
The desperate policies of panic-driven governments involve throwing huge amounts of money at collapsed economies in response to the coronavirus threat. Monetary authorities create money and lend it at extremely low interest rates to the major corporations and especially big banks: “to get them through the crisis.”
Government treasuries borrow vast sums to spend the collapsed economy back into what they imagine is “the normal, pre-virus economy.” Capitalism’s leaders are rushing into policy failures because of their ideological blinders.
The problem of policies aimed at returning the economy to what it was before the virus hit is this: global capitalism by 2019 was itself a major cause of the collapse in 2020. Capitalism’s scars from the crashes of 2000 and 2008/09 had not healed.
Years of low interest rates had enabled corporations and governments to “solve” all their problems by borrowing limitlessly at almost zero interest rate cost.
All the new money pumped into economies by central banks had indeed caused the feared inflation but chiefly in stock markets whose prices thus spiraled dangerously far away from underlying economic values and realities. Inequalities of income and wealth reached historic highs.
In short, capitalism had built up vulnerabilities to another crash that any number of possible triggers could unleash. The trigger this time was not the dot.com meltdown of 2000 nor the sub-prime meltdown of 2008/09; it was the virus.
And of course, mainstream ideology requires focusing on the trigger, not the vulnerability. Thus mainstream policies aim to re-establish pre-virus capitalism. Even if they ‘succeed’, that will return us to a capitalist system whose accumulated vulnerabilities will soon collapse again from yet another trigger.
In light of the coronavirus pandemic, I focus criticism at capitalism and the vulnerabilities it has accumulated for several reasons. Viruses are part of nature. They have attacked human beings – sometimes dangerously – in both distant and recent history. In 1918, the so-called ‘Spanish flu’ killed nearly 700,000 in the US and millions elsewhere.
Recent viruses include SARS, MERS, Ebola, etc. What matters to public health is each society’s preparedness: stockpiled tests, masks, ventilators, hospital beds, trained personnel, etc. to manage dangerous viruses.
In the US, such objects are produced by private capitalist enterprises whose goal is profit. It was not profitable to produce and stockpile such products, which was not and still is not being done.
Nor did the US government produce or stockpile those medical products. Top US government personnel privilege private capitalism; it is their primary object to protect and strengthen it.
Result: neither private capitalism nor the US government performed a most basic duty of any economic system: to protect and maintain public health and safety. US capitalism’s response to the coronavirus continues to be what it has been since December 2019: too little, too late. It failed. It is the problem.
The second reason I focus on capitalism is because the responses to today’s economic collapse by Trump, GOP, and most Democrats carefully avoid any criticism of capitalism. They all debate the virus, China, foreigners, other politicians… just never the system they all serve.
When Trump and others press people to return to churches and jobs despite thereby risking their lives and those of others, they place reviving a collapsed capitalism ahead of public health.
The third reason capitalism gets the blame here is because alternative systems – not driven by a profit-first logic – could manage viruses better. While not profitable to produce and stockpile everything needed for a viral pandemic, it is efficient.
The wealth already lost in this pandemic far exceeds the cost to have produced and stockpiled the now missing tests, ventilators, etc. that contribute so much to today’s disaster. Capitalism often pursues profit at the expense of more urgent social needs and values. In this, capitalism is grossly inefficient. This pandemic is now bringing that truth home to people.
A worker-coop based economy – where workers democratically run enterprises, deciding what, how, and where to produce and what to do with any profits – could and likely would put social needs and goals (like proper preparation for pandemics) ahead of profits.
Workers are the majority in all capitalist societies; their interests are those of the majority. Employers are always a small minority; theirs are the ‘special interests’ of that minority. Capitalism gives that minority the position, profits, and power to determine how the society as a whole lives or dies.
That’s why all employees now wonder and worry how long our jobs, incomes, homes, bank accounts, etc. will last if we still have them. A minority (employers) decides all those questions and excludes the majority (employees) from making those decisions even though that majority must live with their results.
Of course, the top priority now is to put public health and safety first. To that end, employees across the country are now thinking about refusing to obey orders to work in unsafe job conditions. US capitalism has thus placed a general strike on today’s social agenda.
A close second priority is to learn from capitalism’s failure in the face of coronavirus. We must not suffer such a dangerous and unnecessary social breakdown again. Thus, system change is now also moving onto today’s social agenda.
Richard D. Wolff, Professor of Economics Emeritus, University of Massachusetts, Amherst, and Visiting Professor in the Graduate Program in International Affairs of the New School University, NYC. Wolff’s weekly show, Economic Update, is syndicated on over 100 radio stations and goes to 55 million TV receivers via Free Speech TV and his two recent books with Democracy at Work are Understanding Marxism and Understanding Socialism both available at democracyatwork.info.
First published by PopularResistance.org
The 21st Century
The views expressed in this article are solely those of the author and do not necessarily reflect the opinions of 21cir.