On Capitalism, Socialism and Coronavirus

The COVID-19 epidemic has found many governments and business leaders unprepared to meet the emergency. For socialists who take the capitalist economic system seriously, however, COVID-19 shouldn’t be a surprise. Almost forty years ago, during a global recession, conservative policy analyst Herman Kahn published a strikingly optimistic account about capitalism’s future, predicting in his 1982 book The Coming Boom that the crisis of the early 1980s would soon give way to an “emerging, problem-prone, super-industry world economy.”

This new economy would emerge from a mix of several factors, Kahn believed, including Ronald Reagan’s huge new tax cuts for business, a new buildup in US military spending, the rise of the religious right as a conservative political force in alliance with big business, which would help facilitate new investment, and a host of new computer and communications technologies that would revolutionize much of the US and world economies. Humanity would gain enormous benefits from this, Kahn predicted, although obviously some groups would lose by it. Yet there was a downside, Kahn warned: “We are dealing with new technologies and products and other innovations on a scale and with a variety of possible effects that is genuinely frightening.”

Because of the unprecedented nature and scope of the changes in store, and because many of the risks that would be undertaken were still badly understood, Kahn said that super-industrial growth might possibly generate such problems as the appearance of new drug-resistant diseases caused by excessive antibiotic use, “an ecological catastrophe from large-scale interference in the biosphere,” and a buildup of atmospheric CO2 that might cause global warming (although Kahn, in 1982, thought this unlikely). In addition, Kahn predicted, there might be “worldwide epidemics or ‘pandemics’ owing to increased travel.”

In the last four decades, the world in fact has experienced several actual and potential epidemics facilitated by increased international travel – and, some environmentalists note, by “large-scale interference in the biosphere.” One global outbreak especially worth mentioning was HIV-AIDS, a disease originating in monkeys and transferred to the United States by tourists, which most medical authorities were only beginning to notice when Kahn’s book appeared in 1982.

Other outbreaks that have occurred since include the 1997 avian flu epidemic, the 2002 SARS epidemic, the Middle East Respiratory Syndrome or MERS outbreak of 2012, the 2014-2016 Ebola fever crisis, and now the COVID-19 pandemic of this year. Kahn’s 1982 warnings, unfortunately, have proven correct.

Throughout history, epidemics have often been transported from place to place by war: the 1918-1919 Spanish Influenza epidemic (which probably originated in the US) is a spectacular example. But one of the most devastating epidemics of all time, the Bubonic Plague of the Middle Ages, was carried to Europe by international trade. A Mongol army travelling along the Silk Road from China apparently contracted the Plague bacillus from infected marmots in Central Asia and carried it to the Crimea on the Black Sea. There the Mongols transferred the disease to defenders of a besieged fortress that Italian trading interests had established. Merchant ships from Venice and Genoa, leading trading cities of the day, then transmitted the disease to major ports in North Africa and Western Europe, where the Plague in a few years killed an estimated one-third to one-half of the population.

The international trade that was essential to raising European living standards during the 1200s, in short, was killing people on a catastrophic scale by the 1350s. Yet international trade, as it happens, is essential to economic prosperity under capitalism. Adam Smith stated as much in 1776 in The Wealth of Nations, and in 1848 a youthful Karl Marx and Friedrich Engels echoed and amplified Smith’s point in The Communist Manifesto.

As the Manifesto put it:

The need for a constantly expanded market for its products chases the [capitalist] bourgeoisie over the whole surface of the globe … All old-established national industries have been destroyed or are daily being destroyed. They are dislodged by new industries, whose introduction becomes a life and death question for all civilized nations, by industries that no longer work up indigenous raw material, but raw material drawn from the remotest zones, industries whose products are consumed, not only at home, but in every quarter of the globe.

The “cosmopolitan” character of economic production and exchange that resulted from this process, Marx and Engels thought, promised to bring many cultural and political benefits. But at the same time, economic globalization of the kind that has been a feature of capitalist life since Columbus’s first voyage to the Americas also is a recipe for the transfer of epidemic diseases from society to society. COVID-19 is the latest illustration of this.

The amazing development of high-speed transportation technologies over the past 250 years, primarily under capitalist auspices, meanwhile guarantees that plagues and epidemics can be transferred from place to place rapidly – by railroads and fast clipper ships back in Victorian times, and by trucks and passenger cars, freight and passenger airplanes, luxury cruise ships and ocean-going oil tankers and container ships today. High-speed transportation technologies are generally good for capitalism, for they increase the speed at which capital investments in overseas trade can pay off – raising annual profits. But they also enable newly discovered diseases like COVID-19 to spread almost instantly, overwhelming the ability of affected societies to prepare for them.

A further point that Marx and Engels mentioned in the Manifesto, and that many historians have confirmed, is that capitalism has also been a major factor in accelerating the growth of large, densely populated cities over the recent several centuries. This is at least partly because capitalist “progress” in agriculture has long involved displacing peasants and other rural workers from the countryside and driving them toward newly expanding cities, where capitalist factory owners have traditionally found ways to put some of them to work at a profit.

As a result of this ongoing process of land enclosures and peasant displacement, which has spread worldwide over the past five centuries, a record 55 percent of the world population now lives in urban areas. In the biggest of these, the difficulties of establishing social distancing, and in many cases the inability of poor and malnourished people to avoid grossly overcrowded housing, are big factors in spreading epidemics.

Thus as The New York Times recently reported, metropolitan New York City – our society’s most densely populated city– is now the epicenter of coronavirus cases in the U.S. With some 28,000 residents per square mile, it has roughly the same population density as Wuhan, China, and in both cities overcrowding has helped the virus to spread so quickly as to be virtually uncontrollable.

“Density is really an enemy in a situation like this,” Stanford epidemiology professor Dr. Stephen Goodman told the Times.. And the problem likely won’t be confined to New York City and Wuhan.

Marxist historian Mike Davis, in Planet of Slums, has examined the ways in which capitalist and state-led dispossession of poor villagers from agricultural areas has contributed to the growth of enormous, overcrowded and unhealthy megacities in the Third World over the past several decades. In the March 20 Jacobin, Davis suggests that coronavirus cases and death rates may grow explosively when the virus begins to spread to the megacities of Asia and Africa. The existence of large populations of poor slum dwellers suffering from bad drinking water, malnutrition and exposure to already existing endemic diseases could make them unusually vulnerable to this virus, Davis predicts.

The past 30 to 50 years of capitalist expansion into tropical rainforests and other natural areas, (along with population growth), meanwhile has increased human penetration into previously inaccessible, or at least sparsely populated, frontiers of the Third World. The result is a growing chance of infected animals-- such as the African monkeys that originally harbored HIV-AIDS and the bats that spread COVID-19 to food markets in Wuhan -- passing previously unknown diseases to humans.

As David Quammen, author of Spillover: Animal Infections and the Next Human Pandemic, wrote on Jan. 28, "We invade tropical forests and other wild landscapes, which harbor so many species of animals and plants — and within those creatures, so many unknown viruses … We disrupt ecosystems, and we shake viruses loose from their natural hosts. When that happens, they need a new host. Often, we are it.”

Quammen emphasizes the expanding human numbers as a driver of this process. Yet four disease and epidemiology experts writing for Monthly Review note the major ways in which capitalist investment decisions are contributing to the expansion of the human/wildland frontier:

The capital interests backing development- and production-induced changes in land use … in underdeveloped parts of the globe reward efforts that pin responsibility for outbreaks on indigenous populations and their so-deemed ‘dirty’ cultural practices,” they write. But “(p) lotting relational geographies, in contrast, suddenly turns New York, London, and Hong Kong, key sources of global capital, into three of the world’s worst hotspots instead.

As the authors state,

Unequal ecological exchange—redirecting the worst damage from industrial agriculture to the Global South—has moved out of solely stripping localities of resources by state-led imperialism and into new complexes across scale and commodity. Agribusiness is reconfiguring [its] extractivist operations into spatially discontinuous networks across territories of differing scales.

Such networks have generated a new economic geography involving “changes in company management structure, capitalization, subcontracting, supply chain substitutions, leasing, and transnational land pooling,” the authors write. Unfortunately, this is "producing new epidemiologies along the way."

In Jacobin, Davis outlines ways in which the particular structure of US capitalism under neoliberal economic policies has increased the risks of COVID-19 to workers. Our absurd and inefficient health care system is one primary culprit, as Bernie Sanders has repeatedly emphasized. In addition, Davis reports, private U.S. hospitals over the past decades have been steadily reducing, not increasing, the supply of emergency hospital beds, to boost the economic efficiency with which beds are occupied. The result is a nationwide shortage of beds for potential epidemic victims.

Davis further notes that private nursing homes in Washington State – the epicenter of the first significant coronavirus outbreak in the US – have long offered low wages to their staff while in many cases skimping on compliance with existing public health regulations, putting both nursing aides and patients at increased risk. Because of the nursing home industry’s low pay, Davis states, many nurses and other attendants in such homes are forced to work multiple jobs, in multiple facilities, to earn adequate incomes. This enhances the dangers of nursing home workers picking up the virus at one facility and transmitting it to others.

Meanwhile, as a lecturer at the Yale School of Public Health, James Hamblin, points out in a recent Atlantic article, large pharmaceutical companies (at least until recently) have avoided spending research dollars on developing anti-virus vaccines.

Hamblin points out that making vaccines is difficult, costly, and legally risky: in the past, drug companies have been sued for damages allegedly caused by some vaccines. Accordingly, many large pharmaceutical companies simply stopped making them until the US government agreed to pay the costs of indemnifying anyone harmed by a vaccine. Yet despite the government indemnification program now in place, “drug companies have found it more profitable to invest in the daily–use drugs for chronic conditions.”

Hamblin notes that “long-term government investments matter because creating vaccines, antiviral medications, and other vital tools requires decades of serious investment, even when demand is low. Market-based economies often struggle to develop a product for which there is no immediate demand.”

Low wages for contract workers are another factor contributing to COVID-19 risks in the US retail sector, Sarah Lazere reports in In These Times. Lacking adequate savings, most contract workers feel compelled to turn up for their jobs even when sick, posing severe health risks for both workers and customers. There’s a clear need for paid sick leave for all workers, Lazere concludes – something that bipartisan legislation in Congress is now apparently providing on a temporary basis. Yet it’s far from clear that this sensible public health safeguard will become long-term practice in our society.

It’s tempting for progressives who are primarily motivated by moral and humanitarian concerns to focus on the many ways in which capitalism’s flaws, and the real or imagined misdeeds of political leaders, contribute to COVID-19 risks for people. But from a Marxist socialist perspective, it’s important not to lose sight of the ways in which the structure of US capitalism and the global system in which it’s embedded make bad health care policies predictable – and beyond that, some ways in which capitalist economic laws are causing COVID-19 to threaten capitalism itself. As David Harvey, Marxist geographer at CUNY New York, points out in Jacobin, capitalism is a system in which capital itself needs to keep circulating to avert large-scale economic breakdown. Harvey’s point is worth the consideration of DSA members.

US corporate investments in Chinese factories in Wuhan, for example, need to result in the production of economic commodities that can be sold somewhere at a profit. To reach markets in the US, the products need to be transported via ocean vessel to the West Coast, and the shipping companies need to profit from this. Then the Chinese goods need to be marketed and sold, either on Amazon or in Walmart or in other retail outlets in the US, and the retailers need to earn profits on this. Banks and wealthy stockholders who have money tied up in Wuhan, the shipping lines and the retail stores need to be paid, as do ordinary workers involved in the process. The workers then need to keep capital circulating to – say, grocery stores, landlords, utility companies, banks, and various purveyors of consumer goods. The federal government and the states need to get their cut of the capital flowing through these moments in the circulation of capital, or they will run up disastrous debts.

When any major link in this chain breaks down and the flow of capital is interrupted for very long, a major economic crisis can result. That’s one reason that both the Trump administration and most US businesses really do not want to see major jumps in unemployment from COVID-19, for some 70 percent of the US economy is now supported by consumer spending. Regardless of the poverty and despair that widespread unemployment can cause for individual workers and their families, it’s also bad for business. Mass evictions of contract workers, in addition to hurting the precariat, also might ruin landlords and holders of mortgage-backed securities, which would be destructive for banks and possibly Wall Street hedge funds.

It may be partly for this reason that Trump, besides wanting a prosperous economy so he can get reelected, is pushing for “shelter in place” and social distancing policies to end as soon as possible, to head off a catastrophic depression. And it’s no doubt a major reason why congressional Democrats, Republicans, the Trump White House and many state and local political leaders are currently embracing a $2.2 trillion rescue plan for the economy that seeks – at least temporarily – to prop up the incomes of laid off and unemployed workers and enable them to get tested for COVID-19 at public expense. The federal government’s housing finance agencies also are promising to suspend evictions and home mortgage foreclosures on housing units financed by government loans, and California governor Gavin Newsom has just announced a temporary ban on evictions in the Golden State. Politicians of many different ideological stripes also are racing to provide some help to small businesses to get them through the next few months.

As The New York Times stated in startling headline on March 12, “Everyone’s a Socialist in a Pandemic.” Farhood Manjoo, who originally posted his opinion under a less attention-grabbing head on March 11, stated sardonically in the piece, “All it took was a pandemic of potentially unprecedented scale and severity and suddenly it’s like we’re turning into Denmark over here." Even large, union-hostile corporations that have fought against such classic social democratic policies as paid sick leave, he observed, now are extending benefits to workers for the duration of this emergency. However, Manjoo wrote, it’s far from clear that these changes will be permanent; instead, even the Republicans are now supporting “Medicare for all” for just this one time.

In response to Manjoo’s headline and statements made by a number of progressive intellectuals about the arguably “socialist” nature of the economic rescue and public health measures that even the conservatives are apparently endorsing, there’s beginning to be a political backlash by defenders of the status quo.

In a recent opinion piece, for example, Politico contributing editor Bill Scher states that epidemic doesn’t prove the need for democratic socialism: instead, “We are … seeing a bipartisan consensus for a robust Keynesian stimulus in response to a sudden economic crisis.”

In the conservative flagship National Review, which hasn’t generally favored Keynesian economics much, Dan McLaughlin argues that the $2 trillion coronavirus rescue package “isn’t socialism,” and “isn’t a bailout or a stimulus either.” The measures that Congress and the White House have now agreed on are instead “a relief package to keep people and businesses afloat in a natural disaster until they can resume doing what they were doing before,” McLaughlin insists. They’re comparable to the actions of a fire department in putting out a dangerous blaze, for the proper role of government is best thought of as being modeled on that of a fire department.

On the other hand, Andre Damon and David North on the World Socialist Web Site state that the COVID-19 crisis, coming on top of other ways the economy is failing humanity, is proof that capitalism is bankrupt. They conclude: “However the crisis unfolds in the next period, it has already delivered a powerful global message: Capitalism must go. Society must be organized on a scientific and rational basis. The crisis, in other words, raises as an urgent necessity the socialist transformation of society.”

Many progressive observers agree that the government’s $2.2 trillion economic rescue package, while needed and welcome, won’t be nearly enough to address the unfolding economic meltdown of the next several months, when some economists are forecasting a major world depression and the possible skyrocketing of US unemployment rates to 30 percent. Whatever happens over the summer, DSA members will face unprecedented challenges and perhaps unprecedented opportunities. Keeping up with the changes, and forging strategies and organizing campaigns to deal with them will be an historic challenge for our organization and our members. Let’s hope we collectively show the courage, wisdom and creativity to weather the storm.

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