Capitalism and the Pandemic
Updated: Sep 1, 2020
Survival of the fittest or survival of the privileged?
A series of disconcerting events have engulfed countries and cities. There has been a seismic shift in the organizational, structural, and economic fabric of the world. Life, as we know it, ceases to be normal. The ongoing pandemic has wreaked havoc and rampant destruction in the form of loss of life and livelihood. In the shadow of this health emergency, the shortcomings of capitalism have emerged to the forefront.
People are tested for the coronavirus on Thursday at a drive-through clinic in Denver. In some places, there aren’t enough tests available. Chet Strange for The New York Times.
A storm in waiting
While this untamed virus has exposed the lethal tendencies of our current socio-economic system, it has in actuality, only served as a final blow to an already browbeaten set up. With numerous general strikes across the UK, parts of Europe, the US, India, etc, and publicly organized movements, the fate of the capitalist mindset was already sealed. As the climate crisis further garnered the spotlight, it became difficult to handle issues that needed proactive measures and systematic reorganization as opposed to monetary solutions. The SARS outbreak, epidemics like Ebola or pandemics of the magnitude of the Spanish flu have time and again exposed the bitter truth. As a barrel of oil becomes cheaper than a roll of toilet paper, we see how our economy was overproducing for gains and not for need. In the face of unavoidable chaos, populist leaders and profit-driven economies have failed to stay afloat.
The buffer economy
China is at the heart of both the coronavirus as well as the world economy. For several years it has acted as a buffer for the global economic setup. It has managed to keep together different parts of the system from falling and has instilled a seemingly effervescent sense of stability. However, in the process, China has been living with contradictions. Over time, the effects of the same have been showcased as episodes of Chinese-propelled instability.
Kevin Frayer/Getty Images
When things change in the Chinese way of life, it disrupts supply chains and causes shortages all around the world. The inability of many countries, including India and the US to produce intermediary goods for their industries has given China an absolute power in operations. Since the capitalistic mindset has been driven by profit, the need for globalization and foreign investors is profound.
An unjust war
US President Donald Trump has compared the current health emergency to a war. The war is being fought at the cost of the ordinary working class. A war, that in any possible outcome only brings more sadness for the ordinary taxpayer. Thanks to the capitalistic outlook, this is not a war of humanity against a foreign virus invasion. It is a war between the haves and the have-nots. The people in the topmost strata of society have been affected the least. In May itself, 40 million people in the US and counting were reported unemployed. Those in the gig economy and the self-employed bear the brunt of the current crisis even though they did nothing to bring it about. Fuelling disparity and capitalizing on economic privilege has long been the idea of the capitalist sense. It does come with the promise of increased collective wealth and creates jobs and brings prosperity but it sadly fails to do so for everyone.
A boy from the Educandos riverside community wears a face mask during the COVID-19 coronavirus pandemic in Manaus, the Amazon on May 26, 2020. (Photo by MICHAEL DANTAS / AFP)
Unfiltered backlash might pave the way forward
Events of the enormity of the one we are dealing with have the power to disrupt pre-established systems. This global financial crisis has triggered the consciousness of people and has exacerbated long standing problems. The working class and the laborers recognize that they cannot bear the burden of a dwindling economy on their shoulders. The backlash over the migrant labour relocation fiasco in India is a striking example. The ongoing strike of garbage collectors in New Orleans is an indication of the simmering unrest. There has been mass polarization of wealth up till now, as evident from the fact that stopping production has been such a difficult stand to take for our disorganized economy. The need of the hour is to combat this virus unified, cooperation among nation-states and protection of the afflicted. Production needs to be reorganized. Scientists predict viruses stronger than the one we are dealing with; how can you expect the world to cope if it still does not strive to change?
Is this the beginning of the end of the system?
During the 2008 financial crisis, governments around the world resorted to rapid liquidity injection without locating financial sectors for fruitful investment. Whenever faced with a catastrophic fate, governments tend to aim for public debt over private debt. This is why disease prevention and control and other organizations of the like were heavily de-funded. What is sauce for the goose cannot be sauce for the gander anymore. Any move to solve problems immediately tends to become a deferred debt burden on the future generation. While the US has invested more than 700$ million of taxpayer money for research on coronavirus, since the 2003 SARS outbreak, the possibility of an affordable vaccine is distant. This is a glaring illustration of the parasitic nature of public-private relationships.
Every setback is a setup for a comeback
While most segments of the society did not fall short of condemning the present capitalistic arrangement for the gruesome scenarios we face today, we cannot ignore the fact that we have seen periods of boom and prosperity where capitalism was encouraged and supported. While the gap between the rich and the poor has widened over time we cannot overlook the fact that the poorer have also grown less poor. The overall wealth of nations has considerably increased but has not been put to the best of use. This is as much a doing of the leaders as it is of the capitalists. Free markets function to ensure most economic progress but leaders and governments have failed to fan it in the right direction. This moment in history is a blessing in disguise. Capitalism can and must learn if it wants to sustain itself any further. Economies cannot function as they did before. Now that the government has the power vested in it yet again, it is time to ‘capitalize’ on it.
This is not the time for capitalists to make more money. This is not the time when Adam Smith’s invisible hand can be allowed to work unrestricted. However, governments assuming economic responsibilities suffocate the creation of wealth. Hence, what we need is for the government to restructure and project itself in a position where it can come up with condition-laden bailouts and long-term solutions to shift from value exploitation to value creation; to regain power over strategic sectors and to ensure that public-funded projects convert into substantial gains for the public.
If the capitalist countries choose to take the path of reformation and build sustainable and considerate economies, only then can we avert or endure the next possible challenge, and with the fast-paced environmental degradation that we face today, it might come sooner than we expect.
By Arushi Arora - Guest Writer
She's pursuing Economics Honours, but you'll find her reading more about economic fallacies & trends rather than her subject matter. Apart from being passionate about mythologies, she happens to be a classical literature and Shakespearean plays aficionado. Journals frequently and writes poetic pieces sporadically. She has a new found love for webinars and makes imaginary travel plans whenever she isn't writing something. Swears by the most potent expression of self: writing.