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The Role of Capitalism as it Pertains to the Pandemic

Introduction

The Covid-19 pandemic is a health crisis that has put the global economic, social, and

political systems on the verge of collapse. Its characteristics are sudden onset, rapid transmission,

potential to cause mortality magnified by current lack of a working vaccine. The pandemic has

global ramifications in the social, political, environmental, and economic dimensions. The

unemployment rates have risen to unprecedented levels. Businesses have closed with unlikely to

ever recover. While public and private debts have escalated as borrowings increase to sustain the

economies in recession. The current review explains the role capitalism before and during the

Covid-19 pandemic. It further looks at likely scenarios as countries seek to emerge post-

pandemic.

Role Played Before the Pandemic

Capitalism is political and economic system where most of the capital and control of

trade and industry falls in hands of private players rather than the state. Indeed, capitalism played

a role in making the coronavirus outbreak a pandemic as restrictions were minimal early on to

avoid hurting the economies (Pennington and Stanford 165). The lessons learnt have made

governments less worried currently about reviving the economy and more about taming the

pandemic. Unions, charities, and community groups have had to play a greater role in ensuring
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human health is the priority and alleviating the suffering through simple acts as providing a meal

to those in self-isolation.

After the 2008 Global Financial Crisis (GFC), there were increased calls for the states to

de-regulate the economies. However, what resulted was increased austerity and intensification of

institutionalized financing (Primrose 18). The pandemic is unlikely to shift away from

neoliberalism, whose characteristics include lowering trade barriers, capital markets de-

regulation, and eliminating price controls. The reforms implemented by the Western

governments since the outbreak of the pandemic cannot address the impacts of more than four

decades of embedded capitalism.

The detrimental form of capitalism that led to the GFC in 2008 resulted in many

countries struggling with austerity and increasing economic inequalities. The outbreak of the

pandemic saw many countries unable to deal with the outbreak as it exposed their socio-cultural

weaknesses. The rapid spread exposed the healthcare economizing characteristics inherent in

many countries today. Because of the social austerity characteristics brought about by escalating

public and private debts, the healthcare systems exhibited diminished capacity (Rosenwarne 32).

The healthcare systems struggled to deal with the spiraling numbers of hospitalizations and

mortality characteristic of an epidemiological outbreak such as Covid-19.

From its onset, the pandemic threatened to overwhelm the capacity of healthcare systems

as they struggled to provide the in-patient care urgently needed (Council of the EU). The

overloaded care systems could not cope with the surging numbers resulting in unnecessary and

preventable deaths. The lack of preparedness is attributable to national policy failures over a long

period of time. The need by healthcare and response systems to improve on profitability has

impacted on the service delivery and capacity levels. A good example is the austerity measures
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implemented in Italy and Spain over the last decade. The European Union has been urging the

countries to cut back on public spending and privatize most of its institutions. On the other hand,

cost cutting measures by care systems in the United States over many decades have seen many

become profit-seeking entities rather than providing holistic care.

Other countries are faring any better with cutbacks being an ensuing scenario. Even

countries such as Canada that should not suffer from the problem because of its single-player

healthcare system have been subject of cost cutting measures since the 1990s. Currently, 1,000

citizens have only 2.5 hospital beds from a high of 7 to share, according to statistics by the

OECD (Primrose 18). The countries with least amount of hospital beds shared among its citizens

exhibit worse scenarios of preventing unnecessary deaths from the pandemic. Countries such as

Germany that have resisted pressure to downsize their healthcare systems has seen fewer deaths

compared to Spain and Italy.

However, healthcare shortfalls alone cannot take all the blame for the global crisis

brought about by spreading of the pandemic. Before the crisis became a pandemic and more

information about it was known, seniors and people of advanced age were established to be

affected disproportionately. Nevertheless, most public policies have long segmented the

population as “unproductive” to society (Jones 99). Most of the care systems seeking to

maximize profitability have targeted long-term care for seniors for cuts. The accommodation

systems for the population have become social amenities subject to privatization and aggressive

cost controls. The outcome has increased outbreaks in the privatized institutions increasing

mortality rates among seniors. Over half of the deaths have occurred in long-term care homes

with most of them being commercial entities. Cost controls means most of the healthcare

workers in the facilities are lowly paid and do not have access to the necessary protective
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equipment. The healthcare and personal care providers have been unable to contain the virus

with most becoming agents of spreading the illness.

The pandemic has affected certain races, poor and working classes adversely (Leigh 58).

The disproportionate impact further shows the outcomes of the capitalistic public policies. The

groups do have the luxury of minimizing interactions or social distancing effectively. They

exhibit elevated risks due to their inability to discontinue low paid work. Most have underlying

medical issues that makes them susceptible to contracting and succumbing to the illness. The

statistics indicates that the pandemic clearly affects races and classes disproportionately. The

inequality is rampant in urban areas where there is downward pressure on incomes. The areas are

characterized by crippled social support leaving the population in elevated risk. The responses to

eliminating the inequalities in the societies cannot be tackled amidst a health emergency. The

pandemic has exposed the inequalities and other social problems inherent in our capitalistic

societies, which must be addressed going forward.

Role Played During the Pandemic

The reaction of Western countries towards Covid-19 has not been sufficient. They have

mainly turned to techno-managerial policies to mitigate the effects. They have ignored the social

antagonisms brought about by social struggles and ideological differences in capitalistic

economic policies. The response has focused on techno-managerial planning, expert

administration, and consensual governance. The pandemic might will be responsible for shining

light on the economic problem in the capitalist society. It has brought with it several problems of

capitalism and how they must be solved while solving the immediate health problem and

avoiding a financial crisis (Broadey, 221). Capitalism is facing serious threats that include a

pandemic induced health crisis which will have grave consequences for financial stability
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(Broadey, et al., 236). In the months that have passed the pandemic has continued to expose

more flaws in our economic system such as the increasing precarity of workers that is attributed

to by the ever deteriorating worker’s bargaining power. Worse, the government is now

extending loans to business at a time when private debt is extremely high. Lest the government

in the United States forgets that it is was the high private debt that caused the previous financial

crisis. The current pandemic exacerbates the problems that exists in capitalism, however,

business ought to leverage the current state of emergency to start building an economy that is

more sustainable and inclusive.

They pacify the contentious public issues resulting from institutionalized foundations of

capitalism and neoliberalism. They ignore the issues as not falling in the domain of political

consideration (Tham 79). The responses to the pandemic by many governments indicate the logic

of framing the outbreak as matter relating to national security rather than a global health crisis.

They have equated the global crisis to other outbreaks such as Ebola and Swine Flu. They view

the pandemic as threatening the existence of political economic order. The logic is that the

pandemic is an unforeseen problem that could not have been predicted. Therefore, to secure the

political economic order, it must be contained by all means possible through emergency

measures.

The framing of the responses has been mostly in metaphorical war terms to contain the

crisis. The new cultural politics of capitalism utilizes imaginary apocalyptic threats as a central

theme. The positions paint the pandemic as an existential threat that the current systems can

manage. The framing as a securitized threat allows the political leaders to neglect the political

economy and focus on immediate imperatives to contain the outbreak. The result is managing the

symptoms rather than solving structural underpinnings.

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The view reduces the pandemic to unforeseeable one-time event disrupting an otherwise

healthy, rational economic system. It ignores pre-pandemic research showing how social strife

and unequal health applications resulting from capitalism exacerbate the problem. The political

class creates an imaginary enemy to maintain the fear, uncertainty, and danger among the

masses, while reassuring them that the socio-economic elites and techno-scientists possess the

necessary mechanisms to tackle the crisis (Ranald 112). The aim is to maintain the status quo.

Through the solution, political transformations become unnecessary.

The crisis brings into focus the social regeneration required to ensure survival of

capitalism (Berry 44). Implementing social distancing effectively requires suspending social

interaction integral to employment and consumption. Yet the responses have not been up to par

exemplified in economies such as those in the U.K. and U.S. The focus is on reviving the

economy while risking extensive loss of lives. The example is case of valuing capitalism over

human life by shoring up economic processes until containment of the outbreak.

The response by experts has mostly focused on modifying individual behavior. They

have focused on nudging people to adopt responsible heal behavior. The aim is to avoid

regulation by utilizing behavioral economics to steer people towards rational tendencies. The

notion by the experts that quarantining people early on could have led to discipline issues when it

finally reached peak levels. The governments adopted awareness campaigns such as television

advertisements to encourage good personal hygiene, wearing masks, and observe social

distancing. The responses are similar to those adopted in other pandemics such as Ebola and

HIV/AIDS.

Focusing on individual modification ignores the public issues such as reforming the

economic reality that the health care systems are weak. The result is governments ignoring the
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extensive social reforms that go beyond self-quarantining. The initial responses by the World

Health Organization and the government to contain the outbreak should have been implementing

large-scale testing, training more healthcare personnel, and building more health institutions. The

reality is that capitalism and neoliberalism is central to politics of rendering public health.

What is Likely to Emerge Post-Pandemic?

The economic recovery is likely to be slow as many countries fall into recession. The

labor unions are likely to play a greater role as disputes over return to work formulas increase

and business owners negotiate wage freezes (Quiggin 41). There is need for flexibility and

simplification of processes in the economy to allow for successful rebuilding. Simplification of

the enterprise bargaining system is likely to result in more benefits for the workers.

The likely scenario post-pandemic is the government implementing tax cuts, pursuing

deregulation aggressively, and initiating industrial relations reforms. The government’s view is

similar to that of employers. The governments are likely to pursue the path though it has failed to

yield the expected results in the past. Stimulating demand and overall productivity were reforms

that were needed even before the crisis. Therefore, the reforms that are likely to yield expected

results is correcting the negative distributions effects worsened by the crisis such as wage

inequalities and securing the positions of casual and gig workers.

The nature of work will likely see significant changes. Employees have had to undergo

retraining such as specialized doctors re-purposing to work in the Emergency Room. A

significant number of employees globally are currently working from home, a trend that is likely

to continue post-pandemic. Working remotely is likely to improve productivity by allowing

regaining costs and time by reducing commuting to work. The trend is also likely to reduce

congestions on the transport systems. However, the trend is also likely to have negative effects
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such as exploitation of the workers because of the lack of clear demarcation between leisure and

work.

Moreover the economic recession after COVID-19 might take a turn for the worst. The

second wave of the pandemic threats to reshape the production cycle, paralyze logistical chain

and the dominance of the U.S. dollar, thus foretelling the end of unfettered capitalism. The

pandemic is also likely to open a doorway for price gouging (Centeno, 39). Capitalism is

responsible for stipulating profit seeking and it does so while placing a huge burden on the

public. Price gouging entrepreneurs are not breaking any rules, gouging is consistent with

capitalistic logic. While recovering from a natural disaster opportunists utilize an extractive

window that lead to the exploitation of buyers that ultimately creates a disaster that intensifies

the existing disasters.

Conclusion

Underemployment and unemployment are likely to persist for some time even post-

pandemic. The unions are likely to be weaker as they have had to accept significant regulatory

changes. Although some work changes are positive, there are a myriad of challenges that will

need navigating in the medium and long-term for employers, workers, and government.

Capitalism’s reliance on lowly-paid and marginalized groups has prevalence this period. The

norms and patterns are likely to persist when the wartime spirit of coming together fades. The

attempt to alter industrial relations and deep wage cuts to fuel the capitalistic enterprises is likely

to lead to social strive. The pandemic has brought in new norms some likely to stay while others

like addressing inequalities due to capitalism will lead to increased calls for reforms.
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Works Cited

Berry, Michael. “The Strange Death of Neoliberalism.” Journal of Australian Political Economy,

no. 85, 2020, pp. 44-51. Accessed 28 Nov. 2020.

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Jones, Evans. “Covid-19 Hits the French Health System.” Journal of Australian Political

Economy, no.85, 2020, pp.94-101. Accessed 28 Nov. 2020.

Leigh, Andrew. “We Can’t Coronavirus Worsen Inequality.” Journal of Australian Political

Economy, no. 85, 2020, pp.57-62. Accessed 28 Nov. 2020.

Pennington, Alison and Stanford, Jim. “Rebuilding After Covid-19 will Need a Sustained

National Reconstruction Plan.” Journal of Australian Political Economy, no. 85, 2020,

pp. 164-175. Accessed 28 Nov. 2020.

Primrose, David, Chang, Robin and Loeppky, Rodney. “Pandemic Unplugged: Covid-19, Public

Health and the Persistence of Neoliberalism.” Journal of Australian Political Economy,

no. 85, pp 17-29. Accessed 28 Nov. 2020.

Quiggin, John. “Crises and Recession as the Norm.” Journal of Australian Political Economy,

no. 85, 2020, pp. 39-44. Accessed 28 Nov. 2020.

Ranald, Patricia. “Covid-19 Pandemic Slows Global Trade and Exposes Flaws in Neoliberal

Trade Policy.” Journal of Australian Political Economy, no. 85, 2020, pp. 108-115.

Accessed 28 Nov. 2020.

Rosenwarne, Stuart. “From One Crisis to Another the Underlying Malaise in the Australian

Economy.” Journal of Australian Political Economy, no. 85, 2020, pp. 29-39. Accessed

28 Nov. 2020.

Tham, Joo-Cheong. “The Covid-19 Crisis, Labour Rights and the Role of the State.” Journal of

Australian Political Economy, no. 85, 2020, pp. 71-84. Accessed 28 Nov. 2020.

Broadey, Andy. Rosen, Felix. Hudson-Miles, Richard. “Pandemic and the Crisis of Capitalism:

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Madra Yahya. “Pandemic and the Crisis of Capitalism: Critique of Political Economy —

Pandemic Edition: An Interview with David F. Ruccio.” N.d.

Centeno Ramón. “Pandemic and the Crisis of Capitalism: Pandemonium: The International

Situation after COVID-19”. N.d