Driven indoors by a deadly virus, most people, especially in the wealthier, advanced capitalist countries, are facing uncertainties unknown in their entire lives. The virus’s ruthless defiance of borders and all but the most privileged social cleavages has cast a shadow over expectations and prospects, while bringing the global economy to a near-standstill.
What can We Learn?
For those who have money and power, their interests come before the health and welfare of the rest of us. Most bourgeois politicians, top corporate executives, bankers, and billionaire investors are willing to risk the lives of the vulnerable to secure their own status and restart the capital accumulation process. Every day, we see anxious politicians lobbied by the agents of monopoly capital. They are ready to ignore the advice of academics and professionals who are experts in disease control and public health in order to send safely isolated workers back into danger.
In the US, we have private health insurance and market-based health services rather than universal, equitable health care. The fact that the victims of the novel coronavirus could not be promptly diagnosed, triaged, and given care, the fact that response was so uneven, and the fact that health care providers had to compete for the scarce, but essential means to combat the virus demonstrates the tragic inadequacy of an industrial model relying on the market, profit, and the fetish of “efficiency.” Tens of thousands of lost lives expose this failure.
Where politicians in other countries have callously shrunk their national health services for political expediency, they, too, must answer for the unnecessary deaths of thousands.
We should learn that health industry administrators, faced with medical supply shortages and accelerating demand, are prepared to make life-and-death decisions based on protocols devised by so-called “bio-ethicists.” Rather than rallying behind victims’ families and health care workers, rather than seeking emergency powers to ramp up production or purchases, rather than mobilizing volunteers or lobbying for a more rational distribution of national resources, hospital administrations opt to choose which victims deserve to live.
Misnamed “bio-ethicists” compete to find the most “humane” way to select those for death. Some will remember the righteous indignation over “death panels” during the Obama-era healthcare debates. With real life-or-death decisions being taken, the anti-reform zealots are remarkably silent.
The all-too-popular slogan “We are all in this together” has proven to be nonsense. Class and race remain the decisive factors in determining who wins and who loses. It’s not that Black, Latino, and poor people are selected as victims by the primitive infectious agent, but that social neglect, inequality, and discrimination renders them more vulnerable to the virus. The behavioral choices, access to information and prophylaxis, health care, conditions of shelter, transportation options, and general resources available to the disadvantaged determine that they will more likely be victims, suffer, and die. The media feign shock at numbers that reveal the vast overrepresentation of African American cases and deaths, as though racism, urban segregation, and poverty were already conquered.
Similarly, the media are astounded by the miles of backed-up cars clogging highways waiting for relief from food banks, as though food banks came into existence when the virus struck. Before the virus, the needy were expected to stand in line in shame for their modest handouts.
The virus has shown the privilege of celebrities, the ultra-rich, and the political stratum, who have secured tests and expedited, preferred attention to the dangers threatened by the virus. Forbes magazine documents how a “loophole” in the recovery act could allow up to 43,000 of the richest people in the US to enjoy a gift of up to $1.7 million while everyone else tries to pay their bills and live on a $1,200 stipend from the US Treasury.
The bottom feeders-- the scam artists, the predators on the elderly, the price gougers, the hoarders-- have come out in force to take advantage of fear. Despite unleashing these vermin in an era of deregulation and laissez faire, the government that spies on everyone shows no desire to stop the predation of a populace experiencing unprecedented insecurity.
The lessons learned in the last economic disaster go unheeded. Once again, the banks and monopoly capitalist firms are assured that their vulnerabilities and missteps will be publicly covered, even rewarded. The once detested excuse of “Too big to fail” has roared back with a vengeance. Despite the collapse of real economic activity, the equity markets have begun to recover and, shamefully, bounce back when new, unparalleled unemployment numbers are announced. Even The Wall Street Journal is compelled to notice “..a confounding reality: soaring share prices and a floundering economy” (4-17-2020). Investors know that relief for capitalism will always be in the wings, even if there is no bailout for the rest of us.
We should learn to scoff at talk of “recovery.” Since 2000, “recovery” has only meant that global financial institutions will manipulate interest rates, juggle questionable, inflated assets, and create new financial games of chance in order to put lipstick on an ugly capitalist pig. That corpulent pig-- stuffed with near-worthless financial junk-- has threatened to deflate for over twenty years. Only persistent manipulation by central banks has re-inflated the global monster. The “product” that economists and statisticians purport to measure is really bloated equity markets, debt-driven economic activity, and unhinged property values; all connection to reality-grounded value is long broken.
While this fictional “recovery” has been heralded, the circumstances of those who work for a living has stagnated or sunk (median household income in the US has risen by less than 4% since 2000), buoyed only by taking on more and more debt. The “desperation” indicators-- like the inability of 40% of the people to sustain even a $400 unexpected bill-- are well documented. The coronavirus crisis has only brought into the spotlight the desperation that has followed in the wake of low wages, gig jobs, grinding healthcare costs, unaffordable housing, student-loan debt, and declining public services. For the vast majority, talk of a recovery is an insult.
Should we not ask why it is that the People's Republic of China has avoided the worst consequences of the virus, especially since they were the first to face its devastation? Could we learn how it is that the International Monetary Fund expects that the PRC economy is expected to grow this year, while the US is projected to decline by 5.9% and the EU by 7.5%? Could it be that its state-owned enterprises were able to respond quickly and decisively? Should we see the fact that the PRC banking sector is largely publicly owned and able to put the prompt and rational distribution of financial assets above profit-taking? Does it matter that the political leadership of the CPC-- the Chinese Communist Party-- is more responsible to the public than the soulless bourgeois parties of the West? Is it a coincidence that the Democratic Republic of Vietnam has accounted for no coronavirus deaths? These are ideas that never enter the conversation in the West.
What can We Expect?
As with the last major crisis over a decade ago, this crisis spawns numerous analyses and prognostications. Uncertainty breeds speculation and “experts” feel compelled to venture opinions.
The truth is that even the experts remain baffled by the course of the coronavirus. Its behavior and the effectiveness of chaotic Western public policy are uncertainties at this stage, rendering the media blame-game meaningless, if not harmful. The exposure of the systemic weaknesses of capitalism in arresting a pandemic and serving the people is far more significant and immediate than the Trump-Biden horse race.
The state of the US economy is another matter. The nearly universal declining numbers do not lie. Nor does the immediate expectation of further decline. We also know that, in many ways, the economic collapse is unprecedented in the lifetime of almost everyone living today.
In a short span, JPMorgan Chase forecast an annualized GDP drop of 25% and a rise in unemployment to 10%, only to revise their estimates to a 40% decline in GDP accompanied by 20% unemployment. Goldman Sachs projects that the downturn “will likely be four times worse than the financial crisis [of 2007-2009] and the U.S. will see its highest unemployment rate since World War II…” But the forecasts turn more pessimistic almost before the ink dries.
Ahead is a massive restructuring of global capitalism. Where it goes depends, of course, on subjective, political factors. But history teaches that the trajectory of capitalism, when experiencing a severe economic collapse, will generate a process of what Joseph Schumpeter, an apologist for capitalism, euphemistically called “a gale of creative destruction.” What that process produces, of course, could be deflected or shaped somewhat by political forces of right or left, but the prevailing tendency will be for stronger countries to shift their distress to weaker countries. The tendency will be for big capitals to smash or absorb smaller capitals, for concentration. The tendency will be to use unemployment and its accompanying pain to cheapen the cost of labor, to increase the rate of exploitation. The tendency will be to shift the balance of economic and political power further toward elites. In short, capital will attempt to restore its health by shifting its problems to the weak, destroying many and much in the process.
Whether this trajectory is repeated as it was after the 2007-2009 crisis depends upon subjective factors-- today’s politics.
Sterile debates, like the argument between the debt scolds (advocates of minimal government spending, austerity) and the new-age proponents of Modern Monetary Theory (the uncoupling of money expansion from a long-thought rigid relation to negative economic consequences like inflation), are not helpful today, though they are crowding other political options off the stage.
The last 20 years of persistent, deeply rooted global deflationary pressure have left the zealots for balanced budgets and “moderate” debt with no argument. Central banks have injected trillions into economies with barely a hint of inflation resulting. Relatively extreme monetary inflation has barely contained the underlying deflation plaguing world economies. Thus, none of the near-hysterical inflation warnings proved justified.
The Modern Monetary Theory (MMT) proponents took this relatively limited experience of mounting debt and tepid inflation to demonstrate that MMT was more than a policy of limited application to a specific time and place, but a universal theory of money. In fact, it is a conditional theory, conditional upon very specific, historically determined conditions being met.
In practice, MMT disconnects monetary policy from any objective standard of value (like gold, for example) and attaches it to the ultimate subjective standard, a fiat national currency. In as much as subjective confidence persists, MMT can persist. But a subjective standard-- because it is decoupled from objective value-- masks the underlying dynamics of the capitalist system; it distorts, rather than settles the chronic problems that plague the accumulation process. The massive bailouts of the last decade and of today appear to use central bank monetary activity to restore equity markets and financial institutions, but they merely isolate the rot and postpone a day of reckoning. The underlying problem remains unresolved, only to surface again, triggering another deflationary spiral, an unloading of “assets” without real value.
It would appear that bourgeois politics has found no other policy approach than austerity or MMT. Austerity, the prescription of the right and much of the center, has failed again and again, bringing countries like Greece to the brink of collapse.
And MMT-- applying a sling to a broken arm-- is the last gasp of the social democratic left, a panacea that promises to bring the best of all possible worlds: giving more to the needy without taking from the greedy. MMT sells an easy tactic that kicks the can of capitalist failure further down the road.
What is needed today is a radical solution to radical, unrivalled problems.
Standing in the way of an effective approach is a wimpy, Nostalgia Left.
For most of the trade union leadership, the dream is a return to the 1950s when the pesky Reds were subdued, the bosses allowed wages and benefits to track productivity in return for labor's cooperation with imperialism, and Blacks and women were not disrupting labor peace.
The current centerpiece of the US Democratic Party-- financially secure, suburban social liberals-- long for a time before Trump when politics were courteous and the vast, growing economic inequalities were an unsightly, unfortunate, but tolerable blemish on the harmony of US civil society.
Nearly all that remains of the old Democratic coalition, today ignored by the Democratic Party leadership, dreams of the era before Reagan, when Democrats actually gave a tepid voice to economic justice and worshipped at the altar of equal opportunity. Devoted to a fading memory of the New Deal, they place their hopes in a Democratic Party soul transplant. It’s not capitalism, but its ugly stepchild, neoliberalism, that they abhor.
Too many of the aging radicals of the Old New Left were terrorized by McCarthyism, leading them to forage for something distant from Communism, to the left or right of real, existing Communism. Their search dashed, they have settled for a stale, visionless pragmatism. Their old 1960s antagonists would surely be amused at the irony.
Thankfully, there are new generations of the left searching for big answers to the big problems of the moment. The last twenty years have shaped a less-than-promising future for millions of young people. And the spring of 2020 only promises far, far worse. To meet these challenges, one can hope that their journey takes more and more of them to revolutionary socialism, to the socialism of Marx, Engels, and Lenin, to the socialism that animated the working class movements for most of the last century and a half.
Greg Godels
zzsblogml@gmail.com
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