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The Left Must Seize This Moment, or Others Will

The COVID-19 pandemic will transform our world. Massive state intervention is essential to head off an unprecedented slump. We must come out of this crisis with a better society.

The Teamsters Port Division, in collaboration with Labor Community Services and the Los Angeles Regional Food Bank, hosts a food distribution for port truck drivers impacted by the coronavirus shutdown measures at the Port of Los Angeles on April 22, 2020 in San Pedro, California. Kevin Winter / Getty

Suddenly, we find ourselves in a transformed world. Empty streets, closed shops, unusually clear skies, and climbing death tolls: something unprecedented is unfolding before our eyes. News about the economy is alarming almost everywhere. The COVID-19 pandemic has triggered the sharpest and deepest economic contraction in the history of capitalism.

To paraphrase the Communist Manifesto, all that was solid has melted into air. “Globalization” has gone into reverse; long supply chains that were previously the only “rational” way to organize production have collapsed, and hard borders are back; trade has declined drastically, and international travel has been severely constrained.

In a matter of days, tens of millions of workers became unemployed, and millions of businesses lost their employees, customers, suppliers, and credit lines. Several economies expect contractions of GDP to be measured in double digits, and a long line of economic sectors beg governments for a bailout.

In the UK alone, banks, railways, airlines, airports, the tourism sector, charities, the entertainment sector, and universities are on the verge of bankruptcy, not to speak of the displaced workers and the (nominally) self-employed, who lost everything because of an economic shock that has not yet even been felt in full.

Neoliberalism Bereft

The political implications are uncertain. Ideologically, neoliberal discourses about the imperative of “fiscal austerity” and the limitations of public policy have vanished. Principled Austrians and neoliberals of every hue hastily retreated into a half-baked Keynesianism, as they tend to do when economies tank.

At the time of need, the first to grab the capacious teats of the Treasury wins the big prize, and state intervention is questioned only for what it has not yet done. The private sector and the media beg for government spending, and portentous preachers of the “free market” rush to the TV screens to plead for unlimited public spending in order to save private initiative.

No doubt, they will get back to normal when circumstances change and memories fade. At that point, the state will become “bad” again, and public services will be ready for another round of culling. In the meantime, neoliberalism finds itself bereft of ideologues.

The irate fringe of anti-vaxxers, Flat-Earthers, and religious fanatics has been reduced to denying the pandemic itself — at great personal risk — peddling miracle cures based on unproven remedies, or praying and fasting together with Brazil’s president, Jair Bolsonaro. May the Lord save us from them.

Shockingly, the epidemic itself was not unexpected. For decades, civilian and military strategists have considered a wide variety of scenarios, especially since the experiences with HIV in the 1980s, SARS in 2003, and, more recently, Ebola and other “new” diseases. The likelihood of a flu-type virus emerging in the animal markets in the South of China was well known.

It follows that the crises of public health and the economy were not caused by failures of planning. Instead, they reflected political choices, the dismantling of state capacities, staggering failures of implementation, and a shocking underestimation of the threat — for which, surely, reputations must be destroyed and heads must roll, as part of a systemic reckoning.

Western Fumbling

For several weeks in early 2020, China bought the world time to prepare for the epidemic, and offered an example of how to confront it. Other East Asian governments came up with (more or less intrusive) policy alternatives, especially Singapore, South Korea, Taiwan, and Vietnam, and they were highly successful.

Meanwhile, the West fumbled: faced with a problem that could not be resolved by sanctioning, blockading, or bombing a distant land, the governments of the wealthiest countries in the world did not know what to do. Unsurprisingly, the UK and US governments fared especially badly, while the EU has, once again, disappointed at an hour of need.

Although the magnitude of the implosion of several economies — centred in the advanced Western countries — was unprecedented and is bound to have long-term consequences for the operation of capitalism, COVID-19 did not hit a prosperous global economy. In early 2020, the world was already enmeshed in a “great stagnation” that had followed the 2007–8 global financial crisis. Even the best performing large Western economy, the United States, was noticeably slowing down.

This is not to minimize the magnitude of the hurricane, since any economy would have been overwhelmed. However, since COVID-19 hit fragile countries, it immediately exposed their vulnerabilities.

Hollow States

The pandemic hit after four decades of neoliberalism had depleted state capacities in the name of the “superior efficiency” of the market, fostered deindustrialization through the “globalization” of production, and built fragile financial structures secured only by the state, all in the name of short-term profitability.

The disintegration of the global economy left the most uncompromisingly neoliberal economies, especially the UK and the United States, exposed as being unable to produce enough face masks and personal protective equipment for their health personnel, not to speak of ventilators to keep their hospitalized population alive.

At the same time, service provision has been transformed beyond recognition, with online work becoming the norm in countless areas in a matter of days, rather than the years that this transition would have normally taken. Meanwhile, the neoliberal worship of consumption dissolved into undignified scrambles for hand sanitizer, pasta, and sardines, and fistfights for toilet paper.

Neoliberalism was quickly shown to have hollowed out, fragmented, and partially privatized health systems in several countries. It also created a precarious and impoverished working class that is highly vulnerable both to disruptions in their earning capacity, and to health scares because of their lack of savings, poor housing, inadequate nutrition, and work patterns incompatible with healthy lives. In the meantime, the destruction of the social-democratic left had rendered the working class politically unprotected.

These processes culminated in unseemly commotions for (state-led) Chinese output, in which the United States has increasingly behaved like a crazed bully, stealing the masks and ventilators that it could neither produce nor buy, and insulting weaker countries to boot.

Herd Inanity

Human enroachment upon nature may have created the problem in the first place, but there is no doubt that the destruction of collectivity under neoliberalism exacerbated the impact of the pandemic. Emblematically, neoliberalism has devalued human lives to such an extent that valuable time was wasted in several countries — notably those with more uncompromisingly right-wing neoliberal administrations: the United States, the UK, and Brazil — with government attempts to impose a strategy of “herd immunity.”

That approach would inevitably have eliminated the old, the weak, and those with fragile health (which might alleviate their “burden” on the fiscal budget), as an alternative to imposing a lockdown that, although proven to reduce the loss of life, would hurt profits, as well as — shock, horror! — showing that states can play a constructive role in social life.

Eventually, mass pressure and the evidence of success in China and elsewhere forced even the most reluctant governments to impose lockdowns, but sometimes only partially and hesitantly. Moreover, those decisions always risked being undermined by mixed messages and incompetent implementation. In these countries, testing also tended to be restricted, and health-service staff were often left to cope with unmanageable workloads without adequate protection. This approach to the pandemic will lead to many thousands of unnecessary deaths.

In the UK, the shambolic administration led by the ever unreliable Boris Johnson found itself confronting two evils: on the one hand, mounting estimates of deaths and, on the other hand, ever-worsening estimates of the potential drop in GDP. Pressed early on by the Conservative Party and by some of the most vocal business supporters of Brexit, the UK government wheeled out their “medical experts” to justify the protection of profits and the idea of a “small state” in the name of science.

Faced with an increasingly angry public opinion, the government turned around dramatically in mid-March. By then, it was already too late. Because of the government’s earlier choice to delay action, their lack of preparedness and mind-boggling ineptitude, the UK would inevitably end up in the worst of both worlds: countless dead — literally countless, since there has been a deliberate effort to underreport the loss of life — and economic losses in the hundreds of billions of pounds.

Essential but Exposed

The social implications of the pandemic emerged rapidly, for example, through the differential ability of social groups to protect themselves. In brief, the uber-rich moved into their yachts and the merely rich fled to their second homes, while the middle class struggled to work from home in the company of overexcited children.

But the poor — who already have worse health, on average, than the privileged — either lost their earnings entirely or had to risk their lives on a daily basis to perform much-praised but (needless to say) low-paid “essential work” as bus drivers, care workers, nurses, porters, shopkeepers, builders, sanitation officers, and delivery workers. Their families remained locked up in cramped accommodations. It is not surprising that poor people and people of color are dramatically overrepresented in the death statistics.

In response to the shock, many governments dusted off the economic policies implemented after the 2008 crash, but they rapidly proved to be insufficient. This economic collapse is much more comprehensive, the crisis will be much bigger, and bailouts will be much more costly than ever before. Unprecedentedly, central banks have started to provide direct finance to large companies: essentially, they are handing select capitalists “helicopter money” (which, in some cases, was immediately transferred to shareholders as dividends).

To disguise the unseemly spectacle of billionaires — often tax exiles — begging for subsidies from the same exchequer they had previously evaded, some governments have promised to support the incomes of workers, but usually through their employers rather than directly.

In the United States, the federal government will send a one-off measly check (pointedly signed by Donald Trump himself) to all households in order to disguise the staggering handouts being offered to capital. An unprecedented $2 trillion lifeline is bound to escalate as the shutdown continues to hurt profits and the presidential election approaches.

Thatcher’s Nemesis

If the economic implications of the pandemic are certain to be catastrophic, the political implications cannot be anticipated precisely. In the UK, the pandemic unmasked the Conservative Party — and, at a further remove, the ill-fated Coalition government and its predecessor, New Labour — for having attacked social resilience and systematically ground down the NHS.

Even when money was spent in the health service — as was the case during the New Labour years — the goal was to disorganize and slice up the NHS, introduce competition regardless of cost, hollow out the service, and privatize whatever could be sold off, in order to increase the health system’s reliance on the profit motive.

With the pandemic, Conservative sermonizing about the imperative of “fiscal austerity” was obliterated by the evident capacity of the state to create money from nothing and deliver salvation to selected sectors, as long as they were deemed “essential” (which, consequently, was not the case for housing, health, and employment). At the same time, the ideology of individualism was shown to be a fraud because, although there may be opportunities for individual flight from the virus, there can be no individual solutions to the catastrophe.

One person alone can never be safe from an epidemic, or nursed when they fall sick, and who but the state is going to contain the economic meltdown, secure income flows when the economy seizes up, enforce the lockdown, and resource the health service?

As the Left had always known, and the UK prime minister was forced to recognize, there is, after all, such a thing as society. And the inhumanity of capitalism’s profit imperative was unmasked through the mass rejection of its favored policy of “herd immunity,” with its consequent decimation of the non-workers.

Learning the Right Lessons

We can now focus on what the Left should press for. The first priority is to learn the lessons. The health crisis and the economic collapse in the West, compared to much more efficient responses in the East, have demonstrated that radically neoliberal administrations are unable to perform the most basic functions of governance: to protect lives and secure livelihoods.

The pandemic is also likely to be a marker in the transfer of hegemony from West to East. It is plain to see — and cannot be forgotten — that centralized and capable states and a sophisticated manufacturing base matter for people’s lives. This holds true whether those states are more or less democratic (experience shows that the nature of a political regime has little to do with its policy competence). It’s also now evident that, when the chips are down, borders can be closed, and friends can disappear.

The second priority is the imperative to secure life itself. States must secure jobs, incomes, and basic services, including the rapid expansion of the health system. This is not merely for reasons of  economic policy, but as part of efficient health policies: guaranteed jobs and incomes will make it possible for more people to stay at home, which will ease the load on the health system, speed up the end of the pandemic, and accelerate the recovery.

In order to do this, the banking system should be nationalized to secure the flow of credit and prevent speculation, and central banks should ensure that there is enough liquidity to keep the economy afloat. Key services should be taken over by the state to ensure that basic needs are served. If the central authorities can give tens of billions of dollars to the airlines, the railways, and supermarket chains, the public might as well own them.

The third priority is to consolidate the rediscovery of collectivity and the irreducible sociability of the human species that has emerged through the strains of the crisis. The Left must stress that the economy is a collective system (“we are the economy!”), that we are bound together as humans, and that public services are essential. This could pave the way for a progressive alternative to neoliberalism, which has now clearly assumed a zombie form.

The fourth priority is the allocation of costs. The economic burden of this crisis will be much higher than that of the financial crisis, and there is no way that public services can, or should, bear this burden. The only way out is through progressive taxation, nationalization, default where necessary, and a new “green” growth strategy.

Out of the Crisis

I am cautiously optimistic that capitalism cannot wash this stain. It is now time to imagine what kind of society can serve the majority, and to avoid the repetition of the disgraceful outcomes that we are experiencing. Instead of the crimes and inefficiencies of neoliberalism, we need progressive taxation, the expansion of public services with built-in spare capacity for emergencies, and a society based on solidarity, human values, and respect for nature.

This is easy to say, and it is unquestionably correct, but the Left has been on the defensive almost everywhere, sometimes for decades, and the pandemic may well lead to authoritarian, racist, and reactionary responses.

To sum up, while the COVID-19 pandemic may have happened by chance, it was not unexpected. Its consequences are much more than scandalous: they are criminal, and the Left must say this loudly and clearly.

Neoliberal capitalism has been exposed for its inhumanity and criminality, and COVID-19 has shown that there can be no health policy without solidarity, industrial policy, and state capacity. This is a desperate fight. We must come out of this crisis with a better society. The Left is needed like never before, and it must rise to the challenge.