COVID-19 and Capitalism

Bloomberg

‘Depressions are when the monopolies see their profits increased, and when they consolidate their economic empire, absorbing all the small ones, all the sardines in this ocean of economic struggle.’

— Ernesto Guevara

1. Capitalising on the Coronavirus Crisis

Capitalism, in basic terms, means that capital is more valuable to a society than the workers who produce the wealth in which it trades. This means that, during the periodic crises that capitalism faces, government resources will be spent on shoring up investments by shareholders, bailing out banks from their speculations, subsidising failing corporations with public funds, introducing laws that maintain the value of commodities above their fallen market value, artificially holding up the strength of a given currency, and all the other measures taken to try to protect capital investments and financial markets from collapse, while workers, in contrast, will be abandoned to unemployment, poverty and homelessness.

This can only be done following the formal declaration by the government of a national or even an international ‘emergency’. At this point, the state interference in markets from which champions of so-called free-market capitalism otherwise demand to be freed is equally loudly demanded by them to avoid ‘disaster’. This means that the state — which is to say, the various means by which the wealth produced by the labour of the workers is extracted as both surplus value in production and in a myriad of taxes on consumption — writes out a blank cheque to capitalists, to be cashed until such time as their losses are fully recuperated and more, and at whatever the cost to the workers who will pay for it.

We saw all this in the financial crisis of 2007-08, since when banks in the UK alone have been bailed out by the state to the sum of £124 billion, while the workers have been subjected to an ongoing policy of fiscal austerity paid for by the poorest and most vulnerable members of our society over the past 12 years. And the same thing is happening again with the coronavirus crisis, which is every bit as financial as the crisis of 2007-08.

Last week the stock markets suffered the worst losses since the crash of 1987. Current worse-case scenarios are that the coronavirus disease could cost the global economy $2.7 trillion, equivalent to the entire GDP of the UK. So that we’re clear, the total losses across the globe of workers to death from coronavirus disease 2019 (COVID-19), currently numbering around 8,000, will have a non-existent effect on global productivity. In China, the first and worst effected of the countries thus far, and where the virus now appears to have been contained, there have been just over 3,200 deaths in a population of 1.435 billion. To put that in perspective, since 2012, up to 130,000 people may have died in the UK, with a population of just 65 million, as a result of the government’s austerity cuts. Death of its workforce is not the Government’s concern, in the UK or in China. What governments are concerned about — what they are taking drastic measures to ameliorate — is not the threat to the health of their working populations, but how to recuperate the financial losses of capitalists from the anticipated losses in workdays and trade.

As an example of which, this week the billionaire and tax-exile Richard Branson, following UK Government advice, has announced that the 8,500 workers in his company Virgin Atlantic will take enforced and unpaid leave for 8 weeks. At the same time, he has applied to the UK Government for financial relief of £7.5 billion — not in order to pay his suspended workers, but to cover his capital losses from the suspension of commerce forced upon capitalism by the spread of the virus.

Branson — despite threatening to sue the NHS for not being awarded the contract to privatise healthcare to children in Surrey and receiving an undisclosed settlement in return — is neither the richest nor the most venal of the world’s capitalists. Indeed, he is a small fish in the global economic ocean. There are currently 2,816 billionaires in the world, with a total wealth of $11.2 trillion. That’s more than the wealth of the poorest 4.6 billion people in the world, and four times the anticipated losses from the coronavirus pandemic. We must assume that every one of these billionaires is instigating similar layoffs of thousands of workers, and making similar requests to our governments for millions of dollars of compensation for loss of capital. However, that’s not all they’ll be doing.

Capitalism always capitalises on crises, whether of housing, the environment or war, and this one will be no different. The banks and the billionaires of the world emerged from the global financial crisis richer and more powerful than they were before it, and the workers — who are yet to emerge from that crisis — continue to be further impoverished by government policies implemented to ensure the increased accumulation of wealth in fewer and fewer hands. Through different government policies directed towards the same ends, capitalists such as Richard Branson will emerge from the coronavirus crisis richer than they are now, with the losses to their empires recuperated in promissory notes written out to them, on our behalf, by our governments. However much of the estimated $2.7 million or more that will be lost from global GDP, it is the workers of the world who will pay it.

Focusing just on the UK as an example of such policies, the Government of Prime Minister Boris Johnson has instructed workers to self-isolate for 8 weeks; yet he has implemented no laws to protect them from dismissal from the agency, casual and seasonal work, zero-hour contracts and low-paid self-employment that defines the employment conditions of so many UK workers labouring under Neo-liberal employment legislation. In London alone there are 585,000 such workers, with 3.7 million in insecure employment across the whole of the UK, 1 in 9 of the total workforce. They cannot afford to take 8 weeks unpaid leave.

As for the COVID-19 legislation proposed last week by the Secretary of State for Work and Pensions to extend statutory sick pay and benefit measures, it cannot be implemented under our already malfunctioning benefits system. Anyone who seriously believes that the Government that within the past decade has been unable to oversee the transition to Universal Credit sufficient to stop millions of applicants having to live without payments for between 6 and 13 weeks — a system that has forced those dependent upon it into penury on hugely reduced benefits, left hundreds of thousands homeless and millions living from food banks — will now miraculously transform into hyper-efficiency and, without any re-assessment process, medical records or job-seeker requirements, pay out billions of pounds in statutory sick pay, as this legislation claims, ‘from day one’, really will believe absolutely anything. It can’t happen under the existing benefits system, and it won’t happen. This new legislation is damage limitation to a darkening public perception, designed to keep millions of laid-off workers fixed in front of their laptops trying to navigate incomprehensible procedures to fill out forms that will be lost in the ether of the benefits system.

To this same end, while advising businesses to suspend trading and send their workers home, Johnson has issued no legislation compelling insurance companies to compensate their owners for loss of earnings. Indeed, the Association of British Insurers has already clarified that only a tiny minority of the very largest companies have the policies to cover against losses due to infectious diseases. Instead, the new Chancellor of the Exchequer, the former Goldman Sachs analyst and hedge-fund manager Rishi Sunak, has announced a £350 billion package of loans and grants to support businesses through the crisis, plus the abolition of business rates for all retailers, leisure outlets and hospitality firms. Despite this state subsidised protection of private employers, many of these businesses will fail financially from the loss of trade and be swallowed up by the bigger fish like Branson, who have the capital to wait out the crisis and the ears of the Government Ministers that set legislation determining who gets compensated.

In contrast to this package, the Prime Minister has promised nothing to support workers who follow his advice to self-isolate but who cannot ‘work from home’ — as he ludicrously proposed last week — to cover their food and housing costs for eight weeks. While home-buyers have been extended a 3-month moratorium on mortgage payments in order to shore up the UK housing market, no such largesse has been forthcoming for renters; even though 20 per cent of the population of the UK has to find a home on the private rental market, and 17 per cent lives in social rented housing. Just as they were during the financial crisis, it is the workers and poorest members of UK society that will be compelled to cover the losses of the wealthiest by the Government they elected to represent them, but whose actions — now as they have been since 2008 — are directed towards recovering those losses, whatever the cost to the mass of the population.

2. Socialising the Coronavirus Crisis 

So, what’s the answer? How can we respond to this latest crisis of capitalism — not in order to shore it up and come out the other side more impoverished and under even more draconian legislation than we are now? There is only one answer, and that is to turn this virus to our own ends. That doesn’t mean capitalising on it, as Branson and his fellow vulture capitalists are doing, but rather by socialising it.

The UK government’s latest estimates of how many people will be infected by coronavirus — with a leaked government briefing to NHS staff this week estimating a ridiculous 7.9 million could be hospitalised — are wildly exaggerated from the figures in China, where 81,000 have caught the virus and 3,200 have died, or 1 in 450,000 of the population. Even in Italy, which has by far the highest percentage of infection and the worst rate of recovery of any country, 1 in 24,000 have died from COVID-19. And with the second oldest population in the world after Japan, Italy has a median age of 47 — seven years older than in the UK — with 23 per cent of Italians are over 65, which in China accounted for 80 per cent of all fatalities. Even if UK deaths from COVID-19 reach those in Italy, proportionately that’s the equivalent of 1 person dying of the flu in the Somerset town of Burnham-on-Sea. That’s one death too many, but hardly a cause for panic. This fearmongering serves two purposes.

First, by allowing the largest businesses and corporations to send their workers home without pay, it contributes to reducing, as far as possible, their financial losses from the suspension of commerce. Second, it keeps the workers who should be protesting at this lack of job security and financial compensation at home, terrified of a flu virus that will in all likelihood be contracted by a tiny proportion of the population (1 in 17,750 in China), and so far appears fatal mostly — although not exclusively — to those over 60 with pre-existing health problems. By grossly exaggerating the threat of coronavirus and COVID-19 to the health of the population, the Government and its state apparatuses are laying the groundwork to pass on the financial burden of lost revenue to the same people who paid for the financial crisis of 2007-08.

To put the 8,000 deaths from COVID-19 in context, at the time of writing, 103,000 people around the world have died from seasonal flu so far in the less than three months of 2020; 179,000 have died from water-related diseases; 208,000 from malaria; 287,000 from road traffic accidents; 357,000 have died from HIV/AIDS; and 1.745 million from cancer. What makes these vast numbers of deaths different from the relatively few victims of COVID-19 is that most of them occurred in so-called developing countries in sub-Saharan Africa, India and South-east Asia, about whose populations capitalist governments care little. Even in the UK, there are around 165,000 deaths every year from cancer. That’s around 470 every day who die, not on the front pages of our national press or in our leading news bulletins, but hidden away in hospitals, care homes and slum bedsits, waiting for their sickness benefit cheque to come through from the Government. Our perception of death, in other words, is determined according to its uses to capitalism.

While we should take protective measures not to overburden our health services whose budgets and staff have been cut to the bone by successive UK Governments — another reason for the present one to order us all home — and do everything we can to protect those who, because of their age or existing health problems, are most vulnerable to this virus, it’s important that we don’t emerge from this crisis in two months’ time with hundreds of thousands of workers in greater debt or without a job or home, and with new legislation further reducing what’s left of our employment rights, freedom of movement and rights of assembly and privacy. This week, through the Coronavirus Bill, Johnson is seeking to pass legislation that, for the next two years, makes the Government’s instructions to stay at home enforceable by the police. Once passed by Parliament, as such a quickly-drafted bill undoubtedly will be, without adequate scrutiny, it is rare that such emergency powers for the State to investigate, search, detain, restrict, prohibit, close, shut down, fine, postpone, enforce, arrest and otherwise bypass existing legislation are repealed. The Government, too, is capitalising on this crisis.

But more than simply organising to prevent further erosion of what’s left of our human rights, we should seek to use this crisis for our own ends. The financial crisis of 2007-08 came close to bringing global capitalism to its knees. Instead, it was turned into an opportunity for the State to be further integrated into its defence, with the resulting rise of extra-legal police states in the USA, UK, France and across Western capitalist economies. We must not miss this opportunity again. At this moment of weakness and uncertainty in global capitalism, we must turn our self-imposed isolation into collective action. If, in the absence of protective measures from our Neo-liberal governments, we are to bear not only the health impact but also the financial brunt of this crisis, let us use it to advance a socialisation of the common wealth.

This will mean sufficient funding for the National Health Service and the immediate reversal of its privatisation, so that everyone — and not only during this crisis — has equal access to an equal and sufficient level of service. This will mean the implementation of a universal basic income to protect workers — and not only during this crisis — from both the whims of the market and the exploitation of capitalists. This will mean an end to offshore and other tax avoidance schemes by the most powerful corporations and individuals in the world, and the implementation of government-enforced taxes on the rich sufficient to ensure that, by the end of this decade, there is not a billionaire left in the world. This will mean the removal of all the financial incentives put in place by successive UK Governments to attract the global speculation in UK property that has produced the current housing crisis. This will mean the socialisation of all new housing and the implementation of rent caps equivalent to existing social rents on all existing housing. This will mean the socialisation of all land, health services, education and utilities. This will mean all these changes and many more we have outlined in For a Socialist Architecture: Under Capitalism.

We are already seeing the immediate benefits to our environment of the temporary halt to the exponential growth of capitalist productivity enforced by this pandemic, with carbon emissions in China, the highest producer in the world, down by 25 per cent last month, and the canals of Venice almost miraculously returned to clear water. In the same way, it is crucial that the reduction in the global economy — which at $2.7 trillion is approximately $350 for every man, woman and child on the planet — is borne by the 2,816 billionaires whose numbers have doubled over the past decade of austerity, and not by those who are still picking up the bill — economically and politically — for the last financial crisis.

Although we appear to have forgotten the lesson, the HIV virus should have taught us that our reactions to pandemics are always political, that they are always capitalised on by the rich, and that they are always borne by the poor. The coronavirus doesn’t appear, yet, to have taken hold in Africa, where the greatest percentage of the 650,000 victims of seasonal influenza live and die every year unnoticed by the rest off the world. But already it is the poorest and most vulnerable who are suffering the effects of COVID-19, and the rich who are taking measures to isolate themselves, both financially and medicinally, from those effects. Our response must be to socialise our response to the virus, and that means its economic effects as well as its effects on our health.

Capitalism is never as strong, entrenched or as invulnerable as its advocates and apologists would like us all to believe, for the simple reason that it is built on the labour of the workers that produce the wealth on which the capitalist parasites feed. Money doesn’t exist. It is just a legally enforceable right to the fruits of other people’s labour. And just as stock markets crash when the perception of enforcing that right wavers, so capitalism can be brought down if the workers realise it is they, and not the thieves in suits who steal their labour, that produce the wealth of the world. The coronavirus, therefore, has huge revolutionary potential, which is why the governments of the world are taking such drastic measures to contain it.

We are not — as the leaders of the capitalist governments are telling us in a sad rehash of the lie they asked us to swallow after the financial crisis — ‘all in this together’. But if, on the back of the temporary halt to commerce necessitated by the spread of coronavirus, we call a general strike in the UK, we will give ourselves the leverage to ensure that the austerity cuts forced upon us after the financial crisis are not compounded by the inequality produced and reproduced by that pandemic called capitalism. For however bad it turns out to be, the coronavirus is just the symptom of our time. Capitalism is the disease we must defeat.

In my next article on the pandemic I’ll be looking at the sociology of the disease, and how the age of the population, the class of the individual and the investment by Government in public health services determine the mortality rate from COVID-19.

Simon Elmer
Architects for Social Housing

Further reading:

Lockdown: Collateral Damage in the War on COVID-19

The State of Emergency as Paradigm of Government: Coronavirus Legislation, Implementation and Enforcement

Manufacturing Consensus: The Registering of COVID-19 Deaths in the UK

Giorgio Agamben and the Bio-Politics of COVID-19

Good Morning, Coronazombies! Diary of a Bio-political Crisis Event

Coronazombies! Infection and Denial in the United Kingdom

Language is a Virus: SARs-CoV-2 and the Science of Political Control

Sociology of a Disease: Age, Class and Mortality in the Coronavirus Pandemic

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2 thoughts on “COVID-19 and Capitalism

  1. Today – on this very day 149 years ago; we must give a red salute to the Communards of Paris (1871) – the virus of the French bourgeoisie. Today ASH’s in the vanguard comrade. You may not want to be but you are. Please remember that in the immediate wake of the worlds first workers revolution (the Paris Commune) inaugurated on 18th March 1871, two key generals of the French ruling class were executed as documented here: https://www.marxists.org/archive/marx/works/1871/civil-war-france/ch04.htm. “General Lecomte, had four times ordered the 81st line regiment to fire at an unarmed gathering in the Place Pigalle.” The people of Paris passed judgement. Today the rich under imperialism, continue to pass judgment, condemn and execute millions of poor. Our time is fast approaching. Two months of revolution in France is more than a match of two months of imperialist lock-down today.

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