Asia, Covid-19, Economics, Environment, US Politics

Coronavirus, global capitalism, and the state

Sean Cumming explores how governments have responded to the pandemic, explaining how states’ strategies reflect their place in the global capitalist system of production, and argues that keeping people safe from pandemics like Covid-19 can only be prioritized in a system that puts people and our environment before profit.

As the Covid vaccine roll-out begins across the country, many see an end to the pandemic in sight. But the vaccines will not be available to all. The vast majority of the world cannot afford to pay the exorbitant prices of the drug companies and the companies themselves may not be able to produce enough. There is also the question of who will receive the vaccine and in what order. It is likely that many front line workers, especially the most vulnerable, will not be prioritized. It is clear that we will be living with Covid, and the fallout from it, for some time. 

Governments around the world have used a variety of methods in attempts to both control the virus and mitigate its economic effects. Lockdowns have been used sporadically and unevenly across the US, which has seen more deaths than any other country. The term “lockdown” has been used to describe measures from the closure of some businesses, to “shelter in place” orders, to the full restriction of movement between countries, and regions within countries, the latter being evident in Vietnam, China, New Zealand, and Australia. The former is seen in the UK, with its tiered system of individual restrictions, and in the US.  

Some US states have introduced very strict lockdown measures but never going as far as a complete shutdown of all commerce or travel (as we have seen in parts of Australia or China). China, Vietnam, New Zealand, Ireland, and Australia have all been praised for their governments’ ability to contain the virus and many point to the harsh lockdown measures they used as a successful model. 

Lockdowns have played a part in this success—but without strict tracing, quarantine measures for sick people, healthcare, and welfare provisions, they are inadequate. This is evident when we look at the US’s abject failure. How states have responded to the pandemic, their use of the available methods for containment, and willingness to use them, has been determined by their current and historic relationship to the global capitalist system. The high death toll in the US is not only a question of mismanagement (which it is) or denial of science (which it is), it is also due to its historic development and changes within capitalism. 

Capitalism and the natural world

To understand why the US, as the richest country in the world, has failed so massively to protect its citizens we must first go back to before the pandemic.

It is clear that there is a connection between the encroachment on the natural world by human action and increased transmission of diseases from animals to humans. Capital’s continual desire for expansion for profit (eg Palm oil expansion leading to Ebola outbreak in Liberia), the commodification of previously wild animals, the reduction in biodiversity due to deforestation, and factory farming are encouraging viral spread from animals to humans. Modern capitalism has widened what Karl Marx called the metabolic rift: the alienation of ourselves from the natural world.

At the same time, capitalism is entering a period of economic crisis characterised by increasing debt, and searching for profit in nonproductive aspects of the economy. The immediate collapse in employment after coronavirus restrictions needs to be seen in the context of the tendency of the overall rate of profit to fall over time.

There has been stagnant investment, or “innovation” in profitable sectors of the economy for many years. Investors are pouring money into already saturated markets such as rideshare apps (cab companies), or streaming services (there are numerous versions of TikTok in development). Or else they hoard their money in share buy-back schemes, investment in property, art, and “safe” commodities like gold. 

This speculative chase for diminishing returns is a feature of capitalism. We do not see a rush to develop, for instance, green energy because this would require a huge investment and the risk of developing something a rival may profit from. We have seen increasing competition between companies, a reduction in real wages for workers, an increase in individual wealth for the very rich, but a decrease in profitability in the system as a whole.

We see the catastrophe of capitalism clearly in the dire climate chaos and falling living standards, primarily in poorer countries that produce goods for the market or are rich in natural resources (eg in Bangladesh, Indonesia, Democratic Republic of Congo). These countries have felt the brunt of climate change, viral epidemics, and a decline in living standards.

Chinese capitalism vs Covid

States across the globe have responded differently to the ongoing crisis and the current pandemic. This is due to their position in the global market and their relationship within global capital. Nearly every country has seen a lockdown of varying kinds, with varying effects. There is a growing scientific consensus that lockdowns are less effective than other measures like contact tracing, early isolation of infected individuals, treatment, social distancing, effective public health programs, and public buy-in to measures such as mask wearing. A study in the Lancet reveals the unevenness in effectiveness of lockdowns and other measures. The study argues that the factors in determining a containment of the virus have been: income inequality, general population health, robust contact tracing, provisions of care, and rapidity of response to virus.

If we look at the US response to the virus we can see that almost none of this has been done on a federal level. 

China has recovered somewhat economically since the economic crash in the spring of 2020 (although growth will be only around 1%). Initially, local administrators in Wuhan tried to hide the epidemic from the public and central government figures. But when the potential for outbreak became apparent, the Chinese government implemented a draconian lockdown, concentrated in the cities with the earliest outbreaks but also extending to major ports such as Shenzhen. This style of lockdown was mirrored in Vietnam, New Zealand, and to a degree, South Korea. Crucially, the Chinese government focused on contact tracing and isolation. China has about 97% medical coverage for those in cities, although less in rural areas and among those in the unofficial economy, including migrants and the poor. 

The Chinese government did not provide direct stimulus to the individual but utilized its huge holdings in currency to pour money into infrastructure projects, “job creation” through State Owned Enterprises, and funds with strings attached to private companies. It accrued significant debts doing this, but it has kept unemployment and civil disobedience low. This seems to have been as effective as its surveillance and imprisonment of dissenters. 

Most working people in China, however, are no better off than before the virus and the conditions of labor for the poorest workers remain brutal. Poverty has increased. The exploitation of the landscape that partially caused the virus outbreak is also increasing in line with the drive to bigger and bigger infrastructure projects. China is still a major export economy, although the ruling Chinese Communist Party (CCP) hopes to alter this in the wake of the pandemic.

It is also an importer of raw material. As such, China sits at the nexus of global supply chains. It needs large economies like the US to export goods to, but requires captured markets in the global south for extraction of mineral wealth. The investment in “jobs” internally is a strategy that the CCP has followed for over 30 years. The 1% growth and growing debt/inflation suggests this is a failure. 

China still competes in the market as a supplier of goods. Its strategy in public health is shaped by its economic relation to the neoliberal world order. It needs a large, healthy workforce to produce commodities but is impacted by internal demands for a better quality of life from the working class and from the threat of a global slowdown in demand. It was a desire for stability, continued growth, and a fear of a response from the billions of workers in China that drove the CCP’s response—not a concern for the ordinary Chinese worker. 

Finally and importantly, China learned from previous epidemics that a slow response to the virus would be a disaster.

Fractal US capitalist state

The US response has been shaped by its own economic development in the turn away from Keynesian, state sponsored, or the second phase (as Michael Kidron called it) of global capital towards the third phase of neoliberal capital. Kidron and Chris Harman identified this third phase with the capitalist state moving away from a sense that its role was to provide balance between class antagonism, in the form of social security and public works, and towards a privatized global system:

“The weakening adhesive power of health and welfare services would matter less if the state were able to ensure a benign economic climate. But its ability to deliver growth and stability and to temper structural change has been compromised by the openness of the global economy.”

Capital has always seen the state as its organizational force, the place where different capitalists come to solve their differences, litigate, and combine to dominate the working class or disenfranchise the peasantry, Indingenous peoples, etc. This has not been altered but we have seen a change in its form throughout history.

The US has become a fractal state. Capital is still invested in the state as a project of its power, in what Russian revolutionary Lenin called “bodies of armed men.” It is a way to forcibly control the class divisions within its borders and to grab larger shares of global resources, labor goods, mineral wealth, oil, etc. However, as corporations have become global the necessity (from a capitalist perspective) for the US state to manage labor relations, including social security, socialized medicine, and other welfare state services, has diminished. They are leaving it to “the market” to discipline labor. States now compete for an Amazon warehouse in their town and they do this by reducing labor rights to 19th century standards, not by investing in public works or through a guarantee of local market share. Amazon already has the market.

We have seen this fractured nature of the state in this third period in different ways since the 1990s: in the collapse of the USSR into its constituent states, the Yugoslav wars, the ruptures of the Arab Spring, the Brexit referendum, and small “N” nationalist separatism in the global north. 

The crisis of profitability within capitalism led to a change away from state intervention in the economy to drive new industries or provide workers benefits, but instead it is used to bolster failing industries and support the markets, banks, and speculators. Under this pressure states abandoned responsibility for their citizens. This has led to and a disillusionment with the existing state. The project of the state as a unifier, or as Benedict Anderson called it an “imagined community,” has become less and less viable (in the eyes of sections of both the ruling class and the working class) in its current form.

US Covid response

We also see this in the US covid response. Funding for the military and police increased during the Covid crisis at the same time as both presidential candidates called for cutting social security and denying the necessity of universal healthcare. 

Individual US states’ responses have been uneven and ineffective. There has been no economic interest, or social interest, in maintaining public health. The pressure to increase consumption and return the US to the global buyer of last resort has overridden any public health consideration. In fact, we do not have a health care system, but a series of private consumer choices. We have lost manufacturing at home but gained $1 shirts and $1 meals.

It must be noted here that this return to normal employment and consumption has not happened. It seems you cannot force a virus to dance to the tune of the stock market, nor can capitalism manage the chaos of its own making.

The healthcare measures currently in place in the US, like lockdowns, put the blame on the individual and remove it from the responsibilities of the state, or the economic system as a whole. 

The various nonsensical and conflicting regulations are due to the contradictions between a plan for population-wide public health and one based on continuing exploitation and profits. Working class Americans, with no social safety net, are being forced back to work while the rich, used to years of unaccountability and service from the poor, flaunt the meagre restrictions. They live in a dream, we live in a nightmare.We are expected to demand no support, no care, nothing from the government, but we are also expected to not see our families. We are told we must work ourselves to death, in the drive to maintain the profitable supply chains of US Capital, in Amazon warehouses or meatpacking plants. 

According to a Guardian article the Department of Labor is under-reporting the number of deaths due to workplace outbreaks. This is due to a system that allows employers “discretion” when reporting workplace deaths that happen outside of work. This means that the already staggering number of deaths due to workplace exposure to Covid-19 is hugely underestimated. Instead of looking at business, we are told to blame families having meals together. Democrats and Republicans are in the process of passing a bill that will shield businesses from claims of negligence due to Covid deaths or injuries. This will further erode the protections of working people and benefit the rapacious, death cult of capitalism. 

Socialists must raise this idea that the state is abdicating its responsibility to the people of the US. It can afford huge handouts to arms manufacturers, to line the pockets of shareholders, but nothing for the poor and those at most risk. They cannot be allowed to slash workplace protection, and send people to their deaths for the profits of the mega rich.

We know what we need to do to protect people from Covid-19 and other pandemics. Contact tracing, care, paying people to stay away from anything but essential work, and social distancing are effective. We have to demand this and other measures: welfare, green jobs, healthcare for all, in the short term. In the long term we must fight for a world, not just a US, that places people, our environment, and our mental and physical health at the heart of its economic system. 

Sean Cumming