The Coronavirus Crisis Could Mean The End of Capitalism As We Know It

Photo by Fusion Medical Animation on Unsplash

by Youssef El-Gingihy @ElGingihy

The great German physician Rudolf Virchow once said that, “Medicine is a social science and politics is nothing else but medicine on a large scale”. The framing of the COVID-19 pandemic, in the context of different ideological approaches, confirms what Virchow meant — medicine is never just clinical, it is political too.

Mass epidemics have historical precedent for huge ramifications. The Black Death of 1348–9 wiped out at least a quarter of England’s population and handed greater bargaining power to serfs enabling them to demand higher wages. These demands were stifled contributing to the 1381 Peasant’s Revolt thirty years later.

The COVID-19 mortality rate may turn out to be 1% or even lower. However its virulence has already led to over half a million cases. This will tragically mean tens if not hundreds of thousands of deaths. Factor in that 4% become critically ill requiring ventilation and intensive care as well as 10–15% hospitalisations. The collapse of healthcare systems — as in Italy — is imminent across many countries. London is presently on the same trajectory as Lombardy. New York and Madrid are on a worse trajectory with the US and Spain set to be the new epicentres. India — with a 1.3 billion population — is in lockdown.

Here in the UK, we are still experiencing the calm before the storm — 2 weeks behind our European neighbours. Despite the humanitarian disaster unfolding in Italy, the UK has only brought in stringent measures over staggered intervals following a massive U-turn. It appears that economic cost has been prioritised over human cost.

Unfortunately, as I have outlined in the new edition of my book How to Dismantle the NHS in 10 Easy Steps, market-based reforms, including cuts, closures, outsourcing, PFI and accelerating privatisation have left the NHS struggling to cope with winter crises let alone a global pandemic. Our bed and physician to population ratios are amongst the lowest of advanced economies. However, the opening of a makeshift NHS Nightingale Hospital with 4,000 beds is a welcome development. In Wuhan, the construction of two new hospitals in a matter of weeks expanded Intensive Care capacity by over 1000 beds.

What is in the process of being unleashed has not been experienced since WWII as Germany’s Chancellor Merkel pointed out. This is quite a statement considering the momentous events of recent years, such as the 2008 crisis, austerity and the rise of populism. This gravest of crises is tragically likely to be orders of magnitude greater. Your grandchildren may well ask about what it was like to live through.

The seismic political, economic and social implications are already evident. Whole sectors of the economy are frozen for the medium term. Aviation, leisure and retail industries are in freefall. Oil demand will plummet hand in hand with emissions. Notably nitrogen dioxide emissions are already rising in China as restrictions are lifted.

We are witnessing the arrest of free movement of goods and people, free markets and economic activity; in other words the essence of global capitalism. At least until effective drugs and later vaccines are developed but this will take time.

As a result, we are seeing massive state interventionism on an unprecedented scale; extraordinary measures that could be described as socialist. The Trump $2 trillion stimulus package is nearly treble the TARP bank bailout following the 2008 financial crash. This will apparently include helicoptering $1,200 into every U.S. citizen’s bank account. Similarly, European government packages demonstrate that the neoliberal economic rulebook has been thrown out of the window.

Universal Basic Income is being openly countenanced by many. The British government has pledged to pay 80% of workers’ wages. Italy is in the process of suspending mortgages, rent and bills. France will suspend bills for small business. Spain has requisitioned private hospitals and facilities. Unprecedented government firepower is being utilised to prevent the meltdown of the global economy. The entire construct of finance capital (the emperor’s new clothes if you like) has been exposed and, as with the aftermath of WWII, there may be no going back to the old order. Alternatively the primacy of financialised capitalism may reassert itself as the crisis subsides. Well there’s always hoping.

At the same time, as much as emergency strategies are required for public health reasons, the shock doctrine dictates that unpalatable measures will often be pushed through (as Naomi Klein has already pointed out). The securitisation response of lockdowns, quarantine and surveillance could be used to amass greater authoritarian power and clamp down on civil liberties. Gatherings and protest will be temporarily banned conveniently for governments confronting mass social unrest ranging from Hong Kong to France.

Whilst Trump’s announcement on restricting travel from Europe dovetails with a populist agenda to restrict open borders. Yet other European countries have followed suit. The shutdown of the EU external border means that COVID-19 has achieved what Nigel Farage could only dream of. In other words, the coronavirus crisis is dialectical. It will catalyse inherent political, economic, social and ecological instability with the potential for either transformative, progressive change or reactionary authoritarianism.

The financial sector has been reportedly reassuring investors that there is no systemic risk. This sounds complacent to say the least. The coronavirus pandemic is likely to trigger a global crash and appears to be the latest milestone in the backlash against neoliberal globalisation. The cataclysmic scale of the crisis is comparable to a war and an economic depression all rolled into one. The response of governments and societies must be equally vigorous.

Any idle economic activity must be channelled into producing ventilators, Personal Protective Equipment (PPE), drugs, vaccines and other essentials. The time could be ripe for governments to set up publicly owned pharmaceuticals. The reality is that deregulated free markets cannot solve this crisis alone. A planned, coordinated approach will be needed to keep the system alive on life support. The collective spirit of a war effort is required. The ingenuity of mankind, confronted with a world historical challenge, could be for all to see when we collaborate rather than compete. Whatever it takes. By any means necessary.

THE NEW EDITION OF How to Dismantle the NHS in 10 Easy Steps IS OUT NOW:-

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