Capitalism
Has Failed in Fighting Coronavirus
By Richard D.
Wolff
April 10,
2020 "Information
Clearing House"
- 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.
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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.
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