Covid-19 and Capitalism

The COVID-19 pandemic   started as a public health crisis, but it has quickly morphed into an unprecedented economic disaster. As ever, the impact has fallen unevenly across gender, race and class. The virus itself may not discriminate, but the economic model people live under does.

Throughout the pandemic 'key workers' such as nurses, teachers, food and warehouse workers, head loaders have been celebrated as national heroes. But they are often low-paid and endure discrimination, poor conditions, underpayment and even modern slavery.

This raises many questions for economists, who have long equated value with price. "Identifying key workers in this way has been anathema to conventional economic theory, where any activity is deemed valuable or productive if it is remunerated, whatever its social value or disvalue". COVID-19 has shown that the link between social value and financial reward in the economy across the world is fundamentally broken.

At the same time, the news that Donald Trump has tested positive for the virus shows that ordinary people are only as safe as the most vulnerable members of society. This applies globally. The United Nations estimates that African countries will need at least $200 billion to cope with the socioeconomic costs of the pandemic, in addition to emergency health spending. But capital flight, spiralling borrowing costs and collapsing commodity prices have pushed many countries to the brink of economic ' catastrophe.

In Nigeria, where 60% of the state budget goes towards servicing foreign debts, the government is preparing to slash national healthcare spending by over 40%. 'Formerly colonised people can't breathe."

Without further assistance, a string of pandemic-related debt defaults could plunge economies in the Global South into economic chaos. As Richard Kozul-Wright, the director of the United Nations Conference on Trade and Development, reminds the world: "International solidarity needs actions as well as words.

The pandemic is not the only event that is leading many to question the ways societies are organised. The Black Lives Matter protests have laid bare deep racial inequalities, leading many to question whether economic system–capitalism–is itself racist.


Vol. 53, No. 20, Nov 15 - 21, 2020