Capitalism and Coronavirus

A collection of thoughts on capitalist society during the 2020 COVID-19 outbreak:

On Necessity

The coronavirus makes clear more than ever why America needs socialism.

  • Many people don’t have paid sick leave and can’t go without a paycheck, so they go to work sick with the virus, spreading it. Workers should own their workplaces so they can decide for themselves whether they get paid sick leave.
  • Businesses are closing, leaving workers to rot, with no income but plenty of bills to pay. People forced to go into work have to figure out how to pay for childcare, since schools are closed. Kids are hungry because they rely on school for meals. We need a Universal Basic Income.
  • Without health insurance, lots of people won’t get tested or treated because they can’t afford it. There will be more people infected. There will be many senseless, avoidable deaths. We need universal healthcare, medical care for all people.
  • The bold steps needed to address this crisis won’t be taken, even if the majority of Americans want it to be so, because our representatives serve the interests of wealthy and corporate funders. We need participatory democracy, where the people have decision-making power.

This virus shines a glaring, painful light at the stupidities of free market capitalism, which is at this very moment encouraging the spread of a deadly disease and spelling financial ruin for ordinary people.

The current crisis screams for the need to build a new world.

On Purity

Imagine a deadly virus (this one or far worse) in a truly free market society:

  • Many businesses (and perhaps schools, all private) choosing to stay open to make profits, spreading the contagion. No closure orders.
  • As other businesses choose to close, and workers everywhere refuse to work, paychecks and jobs vanish, with no government unemployment or stimulus checks to help. Aid from nonprofits and foundations, donations from individuals and businesses, is all a hopeless drop in the ocean relative to the need.
  • No bailouts and stimulus funds for businesses. Small and large companies alike collapsing — worsening unemployment. Monopolization increases faster.
  • Infected persons dying because they can’t afford testing, treatment, or healthcare coverage (think the U.S.) in general. Healthcare providers have to profit, there are no free lunches — there’s no government aid on its way. Restricted access to healthcare for citizens, through low income or job (benefit) loss, means a faster spread of the virus.
  • Would a government devoted to a fully free market society issue stay-at-home orders? If not, more people out and about, a wider spread.

A truly free market would make any pandemic a thousand times worse. A higher body count, a worse economic disaster.

On Distribution

Grocery stores are currently reminding us how slowly the law of supply-and-demand can function.

On Redistribution

In theory, seizing all wealth from the rich and redistributing it to the masses may be the only way to prevent societal collapse during a pandemic (whether this one or a far deadlier one).

80% of Americans possess less than 15% of the wealth in this country, just drastic inequality. If a pandemic leads to mass closings of workplaces and the eradication of jobs, the State must step in to support the people and subsidize incomes. Without this, people lose access to food, water, housing, everything, and disaster ensues. However, in such a situation, government revenues will fall — less individual and corporate income to tax, sales tax revenue dwindling as people buy less, and so on. It is conceivable that the State, during a plague lasting years, would eventually lack the funds it needs. Solutions like borrowing from other nations might prove impossible, if the pandemic is global and other nations are experiencing the same shortfalls. The only solution may be to tax the rich (and wealthy, non-essential corporations) out of existence, allowing the State to continue supporting people.

(This may only stave off disaster, however. There will be diminishing returns if taxes on essential companies and landlords are too low. State money would be given to people, who would give it to a businesses, which would only give small portions back to the State. The situation would likely then require appropriating most or even all of the revenue received from businesses that are still operating, and sending it back to the consumers.)

On Insanity

A pandemic causing people to lose their healthcare (via job or income loss)… Insane.

On Collapse

During the COVID-19 crisis, we’ve seen jokes about how prosperous corporations suddenly on the verge of bankruptcy really should have been more careful with their money — buying less avocado toast, for instance. Having funds set aside for emergencies, taking on less debt, etc. Then they wouldn’t have gone from prosperous to desperate after mere weeks of fewer customers.

But businesses keeping next to nothing in the bank is inherent to capitalism. This is not exclusively the case, as some firms do see the wisdom of keeping cash reserves for hard times and large corporations do grow rich enough and monopolize markets enough to focus on stockpiling cash, but it is a general trend of the system. In the frenzied competition of the market, keeping money stored away is generally a competitive disadvantage. Every extra dime must be poured back into the business to keep growing, keep gaining market share, keep displacing competitors. If you’re not injecting everything back into the business, you risk falling behind and being crushed by the firms that are.

“It can’t wait,” John Steinbeck wrote in The Grapes of Wrath. “It’ll die… When the monster stops growing, it dies. It can’t stay one size.”

The competition that pushes firms forward in ordinary times can be their downfall in times of economic crisis.