The immune deficiencies of capitalism

As the irony in social sciences goes, a social fact is much easier to predict when it has already occurred.  The coronavirus pandemic is a fact actually occurring and we could say almost, taking into account the spreading potential of the virus, which is just beginning to occur.  What can be predicted then about it?  To begin with, we lack the empirical and conceptual tools in the face of a type of epidemic that has a low rate of mortality in relation to the number of infected, but that number of infected, if the expansion is not contained timely and with adequate measures, can reach in  some cases to 90 percent of the population of a country, so that although the mortality rate is low, the number of deaths, in itself, may become very high and rise even more due to the collapse of the health system  concerned.  For example, in a country like India, if measures like those adopted by China were not taken, the dead could be counted in hundreds of thousands, and the infected in tens of millions or more, which, for the more than one billion  inhabitants of that country, will be a low average, but as a health impact it is staggering.  It is usually said regarding statistics, also ironically, that whoever has to suffer the fact does not care about being part of the zero point percent probability, since that does not prevent him from dying all the same. But if there is an "empirical" element that in this case helps to make forecasts, if not sanitary then economic, social and political on the matter, it's the markets, that is to say, the behavior of speculative financial capital, the well-known paradigmatic form of capital  in our days.  The famous markets are totally altered, with a clear and persistent downward trend. What does that mean? That capital is afraid of a health catastrophe? Or perhaps it is concerned with the health of humanity? Or concerned with human pain and suffering?  Those killed by this or any other virus do not affect capital in any way, what is more, even with regard to pharmaceutical capital or certain chemical industries this may become an opportunity for great profits.  No, capital does not care about the dead toll or the spread of infection.  Capital is affected by the socio-political measures imposed by emergency health protocols.  Protocols that China observed to the letter, and now many other countries –although somewhat late– seem to be obeying as well.  Because regardless of the huge or low number of deaths, something that will not influence at all the hyper-growth of the world population in which we are immersed, the strategies necessary to face the virus in each country, isolation and dwindling production, among other things , is a tremendous decrease in the demand for goods.  And what is capitalism without demand (particularly without aggregate demand) for goods?

Capitalism as we know it today needs the irrational, artificial and unnecessary demand for products, luxury or fashion, or the propagandistically induced demand to acquire articles (that without artificial induction we would never have bought). This is the fuel of the monumental fiction of Financial Capitalism (stage of the decline of capitalism as a system that we have the dubious privilege to suffer) whose sustainability is based on unrestrained loan taking for the over-acquisition of assets in "comfortable" installments.  The current “roulette” capitalism desperately needs that crazy consumer demand, those bingos and casinos where workers are going to leave the last pennies of their meager wages, if not their entire wages.  The reality of a pandemic with the characteristics of the coronavirus hits fictional capitalism on the waterline, because, as said before, it is sustained by prevailing consumerism and the illusion of credit, mainly in the countries of developed capitalism such as the United States,  Western Europe and Japan.  The isolation prescribed in the protocols for dealing with the coronavirus have the effect, among others, of maximizing the demand for staple goods and little else.  And this will be so for several months.  A frightful situation for a capitalist economy suffering from overproduction and sliding into recession.  It is true that after the pandemic, the preceding conditions will once again prevail, but by then the “bubble burst” will have already taken place, a huge bubble, much larger than in 2008, with no possibility now of any bank bailout with “quantitative easing” (at the risk of a monetary meltdown), that is to say, the backbone of financial capitalism will break and with it, that of all possible capitalism, at least in the ways we have known it.

Regarding China, the very same could be said since the authorities, that is to say, the Communist Party and the Chinese government, have privileged the immediate containment of the epidemic at great economic cost, possibly because they have the economic muscle to do so, but mainly because the  Chinese government is not dominated by any social economic sector, call it bourgeoisie or proprietary aristocracy or capitalist financial oligarchy,  or international financial groups, but is (and has clearly demonstrated it with the reaction to the coronavirus pandemic) a state and partisan bureaucracy whose main objective is the defense of China's sovereignty, the growth of its economy and (what makes it different from the rest of developed countries) the improvement of the standard of living of the Chinese without exclusions. 800 million people left poverty behind in the last 30 years, something that in the truly capitalist developed world not  only does not exist but cannot exist, since it would be a contradiction to their logic of development. There are neoliberal capitalist countries that are an exception to this rule and have good living standards for almost all and good health systems for almost all, but they are countries with smaller geographic, demographic and economic dimensions, and they are few –the necessary exceptions that confirm the rule– (and they have been and are the models that the system uses in the ideological struggle).  

* This issue of the final stage of capitalism in the short term that we are witnessing is analyzed in depth in Third and  last stage of capitalism, Ed Luxemburg,  Buenos Aires 2011

China will manage to overcome this epidemic, as it already seems to be doing, in a resoundingly effective way and, above all, without sacrifices from any particular sector of the population at the expense of another.  The coronavirus is not a problem precisely for China, although it has been the place where the virus "originated", but for the countries dominated by the financial groups of current capitalism; i.e., almost the whole world except countries like Cuba, Vietnam, North Korea or, perhaps, Venezuela and Nicaragua that also have governments with a great popular consensus precisely because they do not rule favoring a privileged sector of the population. Beyond their successes or failures in their efforts and their achievements in the midst of a capitalist world that rejects, isolates and boycotts them, they seem to be doing much better.  It remains to be seen what happens in Russia, which, although not a country self-proclaimed socialist or in the process of building socialism, comes from a deeply ingrained socialist culture that on many occasions has made itself felt both in its foreign and internal policies, with  practically total support of its population for certain policies of Putin's government.  The consensus that prevails in socialist countries or striving towards socialism (as the Chinese define themselves) are largely due to the fact that the bureaucracies that conform State and government are subject –regardless of the crisis in question– to the same vicissitudes suffered by the rest of the population, at least in general terms.  In other words, they do not behave as a privileged group of CEOs of large national and international bourgeoisies who seek to save themselves and those they represent at any cost.  This may not be the case in all the individual cases of these socialist countries, but it is true for most of their leaders, even the most exalted.  If this were not the case, it would be inexplicable that they have been able to maintain the single party system for so long and throughout such massive crises such as the Cuban “Special Period”, the great Chinese famines or the terrible war of liberation of Vietnam and its  aftermath, events that would have swept away any government of the so-called capitalist liberal "democracies".  The stock markets fall because they know this;  they know that this epidemic is a litmus test that will make it increasingly clear that capitalism as a system is no longer useful, it is exhausted, in crisis and in deep decline, and that the whole system is, as an Argentine saying goes "Tied up with wire". An alternative is emerging from the very heart of the capitalist economy that is headed on  another way which finally appears as the path of the future.  The choice of this path is what infuriates the capitalist world power so much in the cases of Venezuela and Nicaragua, not of course the pretended "lack of democracy", which has not mattered one iota in the case of the coups in Brazil and Bolivia they themselves promoted. 

History seems to play with humankind.  Just as the mass media of the world's major financial groups celebrated the triumph of capitalism, the end of history, the last man and the death of ideologies, capitalism begins to fall in the least expected way.  Paradoxically (or not so much) the capitalist system that endured in its beginnings one of the largest epidemics suffered by the human species, the 1300 Black Plague which it overcame with an enormous cost of lives, risks now a breakdown with another pandemic that, at least in terms of the globally infected, promises to be just as dreadful, accompanied by a withering economic crash never seen before and in just a few weeks.  This is a sort of prediction without the event having yet fully occurred.  But as the saying goes, there's no smoke without a fire.

Mariano Ciafardini Doctor in Political Science Researcher at the Center for Marxist Studies Agosti (CEFMA) and the Cultural Center for Cooperation (Area AEN) Member of the Argentine Institute of Geopolitics (IADEG)