Tag Archives: coronavirus

Interview on the Greek economy – Press TV News 5-7-2020

 

Today I offered my opinion on the state of the Greek economy in a comment for the News programme of PRESS TV (5-7-2020).

The video of the interview follows together with its transcript.

Η ελληνική μετάφραση του κειμένου ακολουθεί.

 

https://urmedium.com/c/presstv/24265

 

The Greek economy is a failed economy.Since its accession to the EU it has been de-industrialised and became a service economy, heavily dependent upon tourism.

The 2008 global crisis and the subsequent 2010 eurozone crisis shattered this weak economy. The imposed EU-IMF austerity programmes weakened it further, instead of rectifying it.

This failed economy showed already signs of a slowdown in the end of 2019. The coronavirus epidemic aggravated this situation and triggered a severe crisis. Epidemics and the subsequent economic and social lockdowns hit asymmetrically hardly service economies. The Greek data verify this dismal aspect: -16% of GDP during the first quarter of 2020, that is without April and May when the lockdown was in full force.

The prospects of the Greek economy are equally dismal. The right-wing Greek government says that it expects in the worst scenario a -9.7% contraction of GDP. This is pure hypocrisy. The contraction will be much higher than 10% but the government tries to massage the numbers in order to avoid the politically damaging two-digit number.

Equally hypocritical is the scenario of a quick (V-shaped in economic jargon) recovery in 2021. Service economies do not have the agility to stage such recoveries. So, the Greek economy will need much more time in order to recover the damage of the coronavirus crisis.

In front of the coronavirus crisis, the EU was obliged to relax its austerity rules. Thus, Greece does not face the conditionality of a 3.5% primary fiscal surplus. It also expects some aid from the EU emergency program. However, this will be less than aspired, it will carry austerity conditionalities and will trickle down to the Greek economy only in 2021; that is too late.

The Greek right-wing government tries to hide this bleak picture from the public; like its predecessor, the SYRIZA centre-left government. It will fail like its predecessor. The Greek economy and society are entering a new period of pain and social upheaval.

 

Η ελληνική οικονομία είναι μια αποτυχημένη οικονομία

Από την ένταξή της στην ΕΕ, αποβιομηχανοποιήθηκε και έγινε οικονομία υπηρεσιών, εξαρτώμενη σε μεγάλο βαθμό από τον τουρισμό.

Η παγκόσμια κρίση του 2008 και η επακόλουθη κρίση της ευρωζώνης του 2010 κατέστρεψαν αυτήν την αδύναμη οικονομία.

Τα επιβληθέντα προγράμματα λιτότητας των ΕΕ-ΔΝΤ την εξασθένισαν περαιτέρω, αντί να επιδιορθώσουν τα προβλήματα της.

Αυτή η αποτυχημένη οικονομία έδειξε ήδη σημάδια επιβράδυνσης στα τέλη του 2019. Η επιδημία κοραναϊού επιδείνωσε αυτήν την κατάσταση και πυροδότησε μια σοβαρή κρίση. Οι επιδημίες και τα συνακόλουθα κλεισίματα οικονομικών και κοινωνικών δραστηριοτήτων έπληξαν ασύμμετρα τις οικονομίες που βασίζονται στις υπηρεσίες. Τα ελληνικά στοιχεία επιβεβαιώνουν αυτή τη θλιβερή πτυχή: -16% του ΑΕΠ κατά το πρώτο τρίμηνο του 2020, δηλαδή χωρίς τον Απρίλιο και τον Μάιο όταν το κλείσιμο δραστηριοτήτων ήταν σε πλήρη ισχύ.

Οι προοπτικές είναι εξίσου δυσοίωνες. Η δεξιά ελληνική κυβέρνηση λέει ότι αναμένει, στο χειρότερο σενάριο, συρρίκνωση του ΑΕΠ κατά -9,7%. Αυτή είναι καθαρή υποκρισία. Η συρρίκνωση θα είναι πολύ υψηλότερη από το 10%, αλλά η κυβέρνηση προσπαθεί να κάνει μασάζ στους αριθμούς για να αποφύγει τον πολιτικά ζημιογόνο διψήφιο αριθμό.

Εξίσου υποκριτικό είναι το σενάριο μιας γρήγορης ανάκαμψης (σε σχήμα V σε οικονομική ορολογία) το 2021. Οι οικονομίες υπηρεσιών δεν έχουν την ευελιξία να προβούν σε τέτοιες ανακάμψεις. Έτσι, η ελληνική οικονομία θα χρειαστεί πολύ περισσότερο χρόνο για να αποκαταστήσει την ζημιά της κρίσης του κοροναϊού.

Μπροστά στην κρίση του κοροναϊού, η ΕΕ ήταν υποχρεωμένη να χαλαρώσει τους κανόνες λιτότητας. Έτσι, η Ελλάδα δεν αντιμετωπίζει την απαίτηση επίτευξης ενός πρωτογενούς δημοσιονομικού πλεονάσματος 3,5%. Αναμένει επίσης κάποια βοήθεια από το πρόγραμμα έκτακτης ανάγκης της ΕΕ. Ωστόσο, αυτή θα είναι μικρότερη από την αναμενόμενη, θα έχει όρους λιτότητας και θα εκταμιευθεί από το 2021 δηλαδή πολύ αργά.

Η κυβέρνηση της ΝΔ προσπαθεί να κρύψει αυτή τη ζοφερή εικόνα από το κοινό, όπως ο προκάτοχός της, η κεντροαριστερή κυβέρνηση του ΣΥΡΙΖΑ. Θα αποτύχει όπως ο προκάτοχός της. Η ελληνική οικονομία και κοινωνία μπαίνει σε μια νέα περίοδο πόνου και κοινωνικής αναταραχής.

 

The impact of Covid-19, Interview with Stavros Mavroudeas – CASS (Chinese Academy of Social Sciences)

 

Following is an interview for a course conducted by the Chinese Academy of Social Sciences (CASS). It will appear in a chinese publication.

The impact of Covid-19

Prof. Yu Haiqing, CASS

 

Interview with Stavros Mavroudeas (Professor of Political Economy, Panteion University, Athens, Greece)

 

  1. It is said that the COVID-19 epidemic is the most prominent systemic risk test in the field of public health that the world has faced since the Second World War, highlighting the contrast between the capitalist countries and Socialist China in the state capability (in Fukuyama’s words). What do you think of this contrast? What advantages and disadvantages do you think the two systems has in dealing with dangerous accidents breaking out suddenly?

 

The COVID-19 epidemic, and more generally the new ‘emerging epidemics’ that appeared after 1975, bring forth again the need to contrast the ability of capitalism compared to socialism in confronting such public health crises.

The COVID-19 epidemic caused a health crisis for the whole world. At the same time, the global economy was entering a recessionary path that is now characterized as economic crisis. Thus, the COVID-19 epidemic is related to a twin crisis: health and economic. This is recognized by all sides of the spectrum of economic thought (Orthodox, Heterodox and Marxist). Of course, there is a major difference on the causality between the health and the economic crisis. Orthodox and Heterodox views maintain that it is the health crisis that caused the economic crisis; implying that in the absence of the former the latter would not have occurred. Marxist views, on the other hand, argue that the advanced capitalist economies were already entering a recessionary path leading to an economic crisis (Mavroudeas (2020a), Roberts (2020)). The COVID-19 epidemic acted as a trigger that accelerated and aggravated the trend towards the crisis. Several recent reports on the state of different economies give support to the Marxist argument. For example, the recent report by the US NBER (https://www.nber.org/cycles/june2020.html ) declared that the US economy was entering recession in February 2020, before the hit by the COVID-19 epidemic. Similarly, many other reports from other countries – especially for the manufacturing sector (e.g. Germany) but also for the whole economy – point out to the same direction. Hence, Marxism is correct in pointing out that the capitalist economies were already heading towards an economic crisis and that the health crisis brought forward and worsened this tendency.

A health crisis of the type f the COVID-19 epidemic has serious economic repercussions of its own. In order to confront epidemic diseases, it is necessary to suspend social and economic activities (lockdowns, restrictions of factory and other productive activities etc.). These lockdowns are especially necessary when there are no medical tools immediately available (vaccines, medicines etc.) to cure the disease. This restriction of social and economic activities helps to constrain the expansion of the epidemic and gives time to the health system to gather resources for confronting the health crisis. At the same time, this restriction of economic activities depresses the economy. If this happens in times when the economy is already trending towards recession, then the lockdowns accelerate this trend.

This situation poses a critical dilemma for policymakers. When facing a twin crisis (health and economic) and the policy measures required to confront the one crisis aggravate the other, then policymakers must decide to which crisis they will give priority. In Gourinchas’ (2020) pertinent description, ‘policy measures flattening the health crisis curve steepen the economic crisis curve’.

There are fundamental differences on how confronts such a dilemma the capitalist and the socialist economy.

The capitalist economy is based on the private sector and the public sector operates as a support of the former. The private sector works for profit; thus, it engages into activities procuring profits and abstains and/or withdraws from non-profitable activities. Furthermore, the capitalist economy in order to surpass health and economic crises needs to mobilise primarily the private sector (as this is the dominant sector of the economy). This requires using the public sector in order to subsidise the private sector by giving to the latter sufficiently profitable incentives. This is an indirect mechanism that (a) it is not sure that it can work and (b) it wastes time in taking place. Thus, policy measures are slow and fuzzy in a capitalist economy.

On the contrary, the socialist economy operates on the basis of economic planning and its dominant sector is the public sector. Thus, it can have non-surplus producing activities and even loss-making activities if this is decided by social planning. Non-surplus producing activities are viable as socialist enterprises do not operate on the basis of profit-making. Loss-making activities are also viable since they are designated as such by social planning and are structurally subsidized by the other economic activities. Additionally, when faced with an urgent contingency, it can mobilise resources on time and in sufficient numbers as this is a direct mechanism operated by the planning authority. Hence, it is certain that (a) it will take place and (b) be punctual.

For these reasons the socialist economy is better equipped to face contingencies like a health crisis. The capitalist economy can withstand a shorter economic lockdown compared to the socialist economy or even state capitalism. As D.Trump put it for the US economy, ‘it is not built to be shut down’. The fundamental reason is that capitalist enterprises operate for profit; or else they have no reason to exist. Consequently, they cannot operate at a cost of production level and moreover with losses. Unless someone else subsidises them to keep operating, they are going to close. On the contrary, a socialist economy can survive without achieving surplus (profits) by simply covering production costs. For the same reasons it can survive longer even with economic losses. Also, the socialist state can bear much greater burdens than its counterpart in capitalism as the former has much greater economic size and power.

From the previous point follows that socio-economic systems based on a public health sector are better able to cope with the epidemic problem. By analogy, capitalist economies that have a large and efficient public health system face the problem better than those that have a weak public health system and rely mainly on the private health sector (e.g. the US).

 

  1. What kind of impact will the outbreak of this epidemic have on the world configuration?

The COVID-19 epidemic has a profound impact on the world configuration. The world system was already in upheaval before the epidemic. The 2008-9 global capitalist crisis has ended the era of the so-called ‘globalisation’ and ushered a period of increased imperialist rivalries. After the collapse of the Eastern bloc, the main Western imperialist powers inaugurated the ‘globalisation’; that is an era of increased internationalization of capital (for a more detailed analysis see Mavroudeas (2019)). The preachers of ‘globalisation’ argued that it was a completely new era, unforeseen before and that this radical change is here to stay forever. Moreover, they argued that it signified the end of national economies and of national conflicts and wars and the spread of (western) democracy all over the world. Within Marxism, the ‘globalisation’ supporters even declared the end of imperialism. None of these ‘stylised facts’ stand up to empirical scrutiny. First, a similar era of increased internationalization of capital existed at least during the 19th century. And this era collapsed after the first global capitalist crisis of 1873-5 and was replaced by a period of increased ‘nationalisation’ (that is return to the national centres) and economic and military conflicts. Second, national economies (and their policies) never ceased to matter. All the main Western imperialist powers conducted their ‘globalisationist’ policies on the basis of their specific national interests and whenever was required the heavy hand of the national state was applied without scruples. In a nutshell, ‘globalisation’ really meant the weakening of most less developed economies and their opening to their exploitation by the main Western imperialist powers. This internationalisation of capital functioned as a typical counter-acting factor to the falling profitability of the more developed capitalist economies; thus, supporting their profitability and their capital accumulation at the expense of less developed economies.

This era run smoothly for the Western imperialist powers till the beginning of the 21st century. However, soon the fundamental contradictions of capitalism resurfaced as the internationalization of capital’s counteracting ability was exhausted. This was exemplified by the weakening of the main Western imperialist super-power, the US. The US economy, despite the benefits of the ‘globalisation’ policies, started to stagger. Similar trajectories emerged in all other major Western imperialist powers and Japan. The eruption of the 2008-9 global capitalist crisis signified the end of the ‘globalisation’, the return to overtly and explicitly national policies and the aggravation of intra-imperialist rivalries. The US Trump administration is the blatant declaration of this process; which however had begun implicitly before.

The COVID-19 epidemic intensifies the ‘de-globalisation’ process. It has become an ideological, political and economic battleground for US’ attempt to bring the People’s Republic of China to its knees. But, more fundamentally it intensifies the dismantling of the ‘globalisation’s’ international value chains; that it the internationalised structures of production and exchange that were constructed during the ‘globalisation’ era. International productive and commercial chains are disrupted due to the lockdowns and the prohibition of movement of people and products from country to country. This leads to a rearrangement of international economic relations along new alliances and on the basis of more overtly national policies. This tendency had begun before the COVID-19 epidemic (see, for example, the BREXIT) but the latter strengthens it further.

 

  1. From the point of this epidemic, how do we discern the future development of world socialism? what kind of impact and changes will come out ahead? How should we respond to them?

For the Communist Left and the working-class’ movement, the period marked by the COVID-19 epidemic poses serious challenges. The capitalist world is in deep problems, but the alternative of socialism is not obvious as it is still suffering from the 1989 collapse of the Eastern bloc. Moreover, the majority of the Western Left has been lost in cultural wars and political-correctness, neglected class politics and become a fellow-traveler of bourgeois reformism. The latter is trying to make a come-back in the form of anti-neoliberalism; after its total discredit when it wholeheartedly capitulated to neo-conservative policies in the 1990s. However, this new anti-neoliberalism is simply a façade behind which new conservative policies are being hidden.

First, it is nowadays clear that Neoliberalism has failed miserably. In economic policy, the notion that the market is self-equilibrating and the state should withdraw from the economy has succeeded in increasing the degree of labour exploitation (that is, the rate of surplus value in Marxist terms) but it has failed to cope with the over-accumulation of capital. Thus, the profit rate has not recovered sufficiently. Additionally, its dogmatic view that economic crises are exogenous makes Neoliberalism particularly incapable of formulating economic policies for overcoming crises. By analogy, regarding the health sector, its attempt to privatize public health systems (either directly or indirectly by fragmenting them and creating competition between their segments and by reinforcing public-private partnerships) has seriously damaged them.

The obvious failure of Neoliberalism in the wake of the 2008 global economic crisis marked its substitution by the social-liberal New Macroeconomic Consensus. This is a blend of mild neoliberalism with New Keynesianism. More formally, it is an approach that is Keynesian in the short-run and New Classical in the long-run. The current crisis makes this succession even more evident. Since the first signs of the coming crisis governments not only adopted lax monetary policies but also expansive fiscal policies. In the case of the EU, the coronavirus epidemic led to the disengagement of public spending and deficits from the constraints of the Stability and Growth Pact. Even more striking is the relaxation of restrictions on the countries of the eurozone that are bound by austeriterian economic adjustment programs (e.g. Greece).

Indeed, as the long-run use of monetary policy has led to its exhaustion, the center of gravity of economic policy shifts to fiscal policy as extensive fiscal support packages are announced. Moreover, something unthinkable in the neoliberal times is happening: official voices contemplate the nationalization of strategic sectors of the economy (e.g. Alitalia in Italy).

Additionally, industrial policy is returning explicitly, and in a very active and discreet manner. Indicatively, in the context of the epidemic crisis large sums of money are directed to the health sector; and corresponding vertical industrial policy is not only praised but practically implemented. It should be noted that while Neoliberalism abhors industrial policy in general, its successor (the New Macroeconomic Consensus), at least initially preferred only horizontal industrial policies. Now its pendulum is moving towards vertical industrial policies.

Secondly, there are increasing signs of the forthcoming failure of the New Macroeconomic Consensus as well. The policies it promoted – with the return of a bashful state interventionism and the systematic anti-cyclical use of all state policies – may have averted the catastrophe on the eve of the 2008 global crisis but it failed to rectify the very deep contradictions and problems of the capitalist economy. These problems are already evident in the inability of its economic policies to avert the economic crisis that is being triggered by the coronary epidemic.

The Communist Left and the working-class’ movement should not be the fellow-travelers of the new anti-neoliberal bourgeois orthodoxy. Instead, they should reassert the advantages of socialism over capitalism. They must use this crisis to explain that it is capitalism that creates crises, misery and more frequent pandemics and that replacing it with a planned and democratically run economy would alleviate the living standards of the labouring majority of modern societies.

Apart from this strategic goal, the forces of the Communist Left and the workers’ movement must demand that the burden of the twin crises should be paid by capital. Also, the public health system and in general the public welfare system – that again proved to be the only one able to cope with the epidemic – should be strengthened after years of underfunding and privatisations. Social medicine, emphasis on primary health and universal provision of health and welfare benefits should be the guidelines for these systems.

 

  1. Severe infectious diseases are the enemies to all mankind. In your opinion, how did the epidemic highlight the core of a community with a shared future for mankind?

Epidemics are enemies of all mankind but often they are not the product of all mankind but of specific socio-economic systems and the classes that dominate them.

During the last 30 to 40 years, capitalism has become more and more prone to epidemics, in contrast to the prevailing belief that the advances in medicine and the creation of universal and developed health systems had put an end to such phenomena. Especially after 1975 we have the appearance of the ‘emerging epidemics’, i.e. dozens of new diseases, mainly due to viruses, with a frequency that has no analogue in history. These new epidemics are mainly zoonoses, i.e. animal viruses transmitted to humans.

The general explanation of this phenomenon lies in the Marxist thesis on the ‘metabolic rift’, that is, in the realistic argument that capitalism drastically worsens human-nature relations as it blindly promotes the commodification and exploitation of the latter, ignoring natural limitations and social consequences. This thesis does not imply accepting various outrageous ecological views on the return to nature and de-growth, which ignore the fact that (a) all human socio-economic systems intervene and metabolize nature and also that (b) this metabolism is necessary for ensuring even the basic survival of large sections of the human population. But it does mean that capitalism is uncontrollably expanding this metabolism as its central motive is the profitability of capital, which operates with a blind logic (‘après moi la deluge’: I do not care about the system’s survival so long as I get my profit).

But this general explanation does not suffice to explain this increase of epidemics during the last 30-40 years and needs to be supplemented with historical conjunctural determinations. We can reasonably identify the following factors. First, the uncontrolled growth of (otherwise necessary) industrial agriculture has led to the use of problematic hygienic methods that, however, enhance capitalist profitability and has already caused significant problems (e.g. salmonella). Secondly, due to the internationalization of capital (the so-called ‘globalization’), increasing competition internationally imposes the dominance of these production methods as they involve lower costs. Third, the uncontrolled growth of the capitalist agro-industrial complex dramatically limits virgin areas and brings humanity into contact with diseases and viruses that were previously restricted there and concerned small indigenous communities. The latter had either acquired relative immunity to them or the epidemics were limited to these communities and did not spread significantly. Fourth, the internationalization of capital with the proliferation of transport and communication routes between remote areas of the world facilitates the rapid transmission of epidemics throughout the world, while in the past was more limited and therefore more controllable. Fifth, the commodification of the use and consumption of exotic species enhances zoonotic diseases.

Most of these new epidemics (a) do not have strict class barriers but (b) have class asymmetric effects. They do not have strict class barriers because they are transmitted through consumer goods (in the diet) and social gathering and therefore classical methods of class segregation cannot be easily applied (e.g. ‘letting the plebeians die in their ghettos’). However, they have asymmetric effects as workers are more exposed to infections (e.g. ‘front-line workers’), have more unhealthy working and living conditions (e.g. buying cheaper and worse quality consumer products) and of course inferior health care.

This specific character of the new epidemics highlights the necessity to revitalize the socialist movement and struggle to defeat the dominant imperialist powers.

 

REFERENCES

Gourinchas P.O. (2020), ‘Flattening the Pandemic and Recession Curves’ in Baldwin R. & Weder di Mauro B. (eds.), Mitigating the COVID Economic Crisis , London: CEPR Press

Mavroudeas S. (2019), ‘De-globalisation and the Return of the Theory of Imperialism’, σε Kaoru Natsuda K. et al (eds.), Globalisation and Public Policy, London: IJOPEC http://www.ijopec.co.uk/wp-content/uploads/2019/10/2019_13.pdf .

Mavroudeas S. (2020a), ‘The coronavirus pandemic and the health and economic crisis’, https://stavrosmavroudeas.wordpress.com/2020/03/25/4383/

Mavroudeas S. (2020b), ‘Working Hypotheses for the Political Economy of Modern Epidemics’, https://stavrosmavroudeas.wordpress.com/2020/05/27/the-political-economy-of-modern-epidemics-by-s-mavroudeas-marxist-studies-york-university/

Roberts M. (2020), ‘The Virus, Capitalism, and the Long Depression’, interview with Michael Roberts, Spectrezine March 24, https://spectrejournal.com/the-virus-capitalism-and-the-long-depression/

 

https://www.scribd.com/document/466222920/The-Impact-of-Covid-CASS-Interview

https://www.academia.edu/43384075/The_impact_of_Covid_-_CASS_interview

https://www.researchgate.net/publication/342305938_The_impact_of_Covid_-_CASS_interview

The Political Economy of Modern Epidemics by S.Mavroudeas – MARXIST STUDIES, YORK UNIVERSITY

Marxist Studies in a Global and Asian Perspective (MSGAP) is a research initiative within the York Centre for Asian Research: https://ycar.apps01.yorku.ca/msgap/

Working Hypotheses for the Political Economy of Modern Epidemics

Working Hypotheses for the Political Economy of Modern Epidemics

By Stavros Mavroudeas

1. During the last 30 to 40 years, capitalism has become more and more prone to epidemics, in contrast to the prevailing belief that the advances in medicine and the creation of universal and developed health systems had put an end to such phenomena. Especially after 1975, we have the appearance of the ‘emerging epidemics’, i.e. dozens of new diseases, mainly due to viruses, with a frequency that has no analogue in history. These new epidemics are mainly zoonoses, i.e. animal viruses transmitted to humans.

2. The general explanation of this phenomenon lies in the Marxist thesis on the ‘metabolic gap’, that is, in the realistic argument that capitalism drastically worsens human-nature relations as it blindly promotes the commodification and exploitation of the latter, ignoring natural limitations and social consequences. This thesis does not imply accepting various outrageous ecological views on the return to nature and de-growth, which ignore the fact that (a) all human socio-economic systems intervene and metabolize nature and also that (b) this metabolism is necessary for ensuring even the basic survival of large sections of the human population. But it does mean that capitalism is uncontrollably expanding this metabolism as its central motive is the profitability of capital, which operates with a blind logic (‘après moi la deluge’: I do not care about the system’s survival so long as I get my profit).

3. But this general explanation does not suffice to explain this increase of epidemics during the last 30 to 40 years and needs to be supplemented with historical conjunctural determinations. We can reasonably identify the following factors. First, the uncontrolled growth of (otherwise necessary) industrial agriculture has led to the use of problematic hygienic methods that, however, enhance capitalist profitability and has already caused significant problems (e.g. salmonella). Secondly, due to the internationalization of capital (the so-called ‘globalization’), increasing competition internationally imposes the dominance of these production methods as they involve lower costs. Third, the uncontrolled growth of the capitalist agro-industrial complex dramatically limits virgin areas and brings humanity into contact with diseases and viruses that were previously restricted there and concerned small indigenous communities. The latter had either acquired relative immunity to them or the epidemics were limited to these communities and did not spread significantly. Fourth, the internationalization of capital with the proliferation of transport and communication routes between remote areas of the world facilitates the rapid transmission of epidemics throughout the world, while in the past was more limited and therefore more controllable. Fifth, the commodification of the use and consumption of exotic species enhances zoonotic diseases.

4. Most of these new epidemics (a) do not have strict class barriers but (b) have class asymmetric effects. They do not have strict class barriers because they are transmitted through consumer goods (in the diet) and social gathering and therefore classical methods of class segregation cannot be easily applied (e.g. ‘letting the plebeians die in their ghettos’). However, they have asymmetric effects as workers are more exposed to infections (e.g. ‘front-line workers’), have more unhealthy working and living conditions (e.g. buying cheaper and worse quality consumer products) and of course inferior health care.

5. The neoconservative capitalist restructuring of the past four decades weakened the public universal health systems as it has privatized (mostly indirectly) parts of them and their functions, reduced their funding and strengthened the private health sector. But the public universal health systems are only who can bear the large costs of treating the whole population during epidemic waves because this task is too expensive and non-profitable to be undertaken by the private health sector. That is why the latter, in the face of such epidemics, withdraws and remains only in ‘fillets» that promise significant profitability (extra profits), e.g. research in treatments, drugs and vaccines.

6. Dealing with any new epidemic—and until therapies and vaccines are found—requires restrictions on social and especially economic activities. These restrictions cause a recession or even a crisis in economic activity. This poses a crucial dilemma for capital: which curve to flatten? Meaning that it oscillates between dealing with the health crisis (which aggravates the economic crisis) or vice versa.

7. At the same time, however, capital treats this situation not only as a risk but also as an opportunity. In this way, it is experimenting more and more intensely with the creation of a ‘new’ economic and social normality that will strengthen its profitability and dominance.

8. At the social level, the ‘new normality’ means the imposition of ‘social distancing’ literally as a new dystopian way of life. However, it has a significant benefit for the capitalist system as it intensifies individualization and acts as a deterrent to collective popular mobilizations. Epidemic outbreaks produce mass social psychologies of anger and fear. The first leads to rebellion against the system that leaves society helpless. The second leads to submissiveness towards state power. For the Left, it is crucial to rely on the former and turn it from a blind emotion to a logical understanding (consciousness) and a program of struggle. At the same time, it must not underestimate the latter as there are objective health risks; but without accepting the dystopia of ‘social distancing’. This contradiction has a class dimension that is also manifested differently in countries with diverse levels of capitalist development. The working classes, under the threat of unemployment and poverty, often choose to return to work (even under the threat of an epidemic) in the face of ‘social distancing’: the dilemma of ‘dying of hunger or the virus?’. In contrast, middle-class strata with relative reserves of wealth and obsessions with the ‘quality of life’ become fanatical supporters of the most extreme forms of restriction of social and economic activities and even admirers of literally fascist control measures. Correspondingly, in developed capitalist economies, these layers are stronger and strongly influence developments. In contrast, in less developed capitalist economies (or in politically backward countries such as the United States), the working and popular strata are pushing for a return to work—as long as they have no political conscience to articulate their demands more fully and direct them against the capitalist system.

9. At the economic level, the ‘new regularity’ means extensive experiments with teleworking. The latter offers advantages but also poses problems for capital. Among the advantages are ability to limit and streamline production costs (particularly regarding wage and non-wage costs). Regarding wage, telework can lead to many categories of employees. Especially in the service sector and less in manufacturing, some jobs can be done through telework at home. Here two possible cases appear. In the first, tele-workers belong to the company but are paid lower wages. In the second, tele-workers may be formally independent and employed under a piecework pay system (a method of remuneration that increases surplus-value extraction). In both cases, there is a reduction in wage costs and savings in fixed capital costs. A consequence of all this experimentation is the rapid rise in unemployment (the augmentation of the reserve army of labour), resulting in further wage compression. The problems concern the ability to exercise managerial control and exert continuous pressure to increase productivity. Tele-work can cause difficulties in both these intertwined fields. In the case of piecework pay, the pressure to increase productivity can be facilitated by demanding higher production. But the downside is that there should be even a small increase in pay. In the case of typically waged tele-work productivity increases benefit more easily capital. But the exercise of managerial control is more difficult; and, thus, continuous productivity increases are more difficult to be achieved. That’s why management experiments extensively with cameras, recording operations, multiple teleconferences etc. However, all these processes of controlling and intensifying work require significant time loss and are also costly.

10. In contrast to these experiments by capital, the labour movement and the Left must demand the use of computer and telecommunications tools in order to reduce working time and increase work-sharing. Thus, instead of increasing, to reduce unemployment. At the same time, the use of these tools can only be helpful if they enhance human cooperation and interaction and, of course, help (instead of purging) human contact and collective processes.

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This piece will appear as a commentary in the forthcoming issue of the Greek journal Marxism Textbooks.

Stavros Mavroudeas is Professor of Political Economy in the Department of Social Policy at Panteion University, Greece. (s.mavroudeas@panteion.gr)

 

https://www.researchgate.net/publication/341684298_Marxist_Studies_in_a_Global_and_Asian_Perspective_MSGAP_is_a_research_initiative_within_the_York_Centre_for_Asian_Working_Hypotheses_for_the_Political_Economy_of_Modern_Epidemics

 

‘A pandemia de coronavírus e a crise econômica e da saúde’, por Stavros D. Mavroudeas

 Following is the Portuguese translation of the article on the economic and health crisis that has been made by the Laboratory of Interdisciplinary Studies of the Law Faculty of the State University of Rio de Janeiro

 

Laboratório de Estudos Interdisciplinares Crítica e Capitalismo, vinculado à Faculdade de Direito e ao Programa de Pós-Graduação em Direito da Universidade do Estado do Rio de Janeiro (UERJ)

https://leiccuerj.com/2020/04/04/apandemia-de-coronavirus-e-a-crise-economica-e-da-saude/

A pandemia de coronavírus e a crise econômica e da saúde

 4 de abril de 2020

Por Stavros D. Mavroudeas

* Esta é uma tradução do texto originalmente divulgado no site do autor, em 25/03/2020 (você pode acessar o artigo original aqui).

I

magem: Martin Sanchez on Unsplash

Uma dupla crise: saúde e economia

Hoje, a humanidade está em meio a uma pandemia de coronavírus, resultando em uma enorme crise na saúde. Contudo, ao mesmo tempo, a economia global está entrando em um caminho recessivo, caracterizado agora como crise econômica de quase todos os lados. Deste modo, justifica-se falar em crise dupla, na saúde e na economia. Obviamente, a primeira tem prioridade imediata, na medida em que envolve perda de vidas humanas. Mas, além de seu impacto direto sobre as vidas humanas, também tem grandes implicações econômicas. Tais implicações têm importantes consequências para o bem estar-social, o que tem efeitos indiretos na saúde – embora não diretamente fatais.

Uma primeira questão é como as crises econômica e da saúde são ligadas. Essas são, obviamente, entrelaçadas; mas são idênticas ou não? E, mais especificamente, a crise da saúde é a causa ou apenas a desculpa da crise econômica?

Um segundo problema crucial diz respeito a quem paga o custo desta dupla crise. Também é óbvio que, porque as sociedades de hoje são feitas de classes sociais com interesses principalmente conflitantes, os custos econômicos da saúde e as escolhas econômicas são um campo de luta entre as classes. É, ainda, de se esperar, se deixamos de lado as hipócritas análises não-sociais da economia ortodoxa, que a dominante classe capitalista busque passar o fardo desta dupla crise, ao menos sua maior parte, para as costas da vasta maioria trabalhadora da sociedade. Apenas deste modo sua lucratividade – a razão essencial para o funcionamento do sistema capitalista – não será minada.

A terceira questão crucial é qual deveria ser a posição da esquerda e do movimento trabalhista em relação a esta dupla crise e suas consequências.

A pandemia não é a causa, mas o gatilho da crise econômica.

Hoje, o mercado global de ações está colapso e a economia real em retorno à recessão, apesar dos esforços frenéticos da maioria dos governos em apoiá-los. Os primeiros sinais já indicam um declínio na produção e um desemprego cada vez maior.

A ortodoxia econômica de hoje (isto é, o Novo Consenso Macroeconômico[2]) argumenta que este retorno à recessão (e possivelmente à crise, por exemplo El Erian (2020)) é causado por um evento exógeno, qual seja a pandemia do coronavírus. A título de ilustração, todas as principais organizações econômicas internacionais projetaram para 2020 crescimento estável, se não crescente (por exemplo, segundo a previsão de janeiro do FMI, o crescimento da economia mundial de 2,9% em 2019 iria para 3,3% em 2020). Com o surto da pandemia, todas estas previsões estão sendo revisadas para baixo, de sorte que agora são previstas, inclusive, taxas de crescimento negativo. Como mencionado anteriormente, para os economistas ortodoxos, a iminente recessão (ou até crise) não decorre de problemas orgânicos das economias capitalistas, mas de um fator exógeno, isto é, a pandemia. Afinal, a atribuição das crises a fatores externos é o modo básico da economia ortodoxa interpretar as crises econômicas.

Porém, análises mais cuidadosas, tais como aquelas da economia política marxista, indicam que a pandemia de hoje é, basicamente, a fagulha que faltava para provocar a explosão de problemas preexistentes da acumulação capitalista. Em resumo, a crise de 2008 foi causada pelo declínio na lucratividade capitalista e a consequente sobreacumulação de capital, isto é, o excesso de capital que não poderia ser investido de forma suficientemente lucrativa (Carchedi & Roberts (2018)). A crise foi precedida por um período de euforia econômica, que contou fortemente com a operação de capital fictício[3]. O sistema capitalista tentou superar esta crise abandonando o dogma neoliberal, segundo o qual o mercado é auto-equilibrado, e recorrendo ao intervencionismo estatal. Esse último foi expresso através tanto de uma política monetária frouxa (isto é, diminuir as taxas de juros e aumentar a oferta de dinheiro) quanto de uma política fiscal expansionista (ou seja, aumento do gasto e investimento público). Esta foi agudamente restringida depois que a crise acabou e a austeridade fiscal retornou à medida que os déficits orçamentários (a fim de apoiar a lucratividade capitalista) aumentaram. A política monetária frouxa continua até hoje, mas exauriu o seu potencial. Portanto, depois de na prática zerar as taxas de juros, as políticas monetárias não-ortodoxas (quantitative easing[4], etc) começaram e quando essas foram esgotadas, as taxas de juros negativas foram adotadas. O resultado foi uma situação completamente paradoxal, onde a dívida (pública e privada) estava crescendo ao mesmo tempo em que os mercados de ações estavam em constante ascensão (isto é, as expectativas para um melhor retorno econômico futuro ou, em termos marxistas, para uma extração cada vez maior de mais-valia e, portanto, lucros). Contudo, a economia real mostrou que era incapaz de satisfazer tal aposta. No geral, o setor industrial – que é o coração das atividades produtivas – já estava em longa recessão antes da pandemia eclodir.

A pandemia foi a razão para a emergência explosiva de todos estes problemas preexistentes. As razões são óbvias. A massiva e descontrolada perda de vidas humanas tem um impacto negativo sobre a produção e o consumo. Além disso, medidas para enfrentar a pandemia possuem sérias implicações econômicas. Particularmente, o chamado “distanciamento social”, as proibições de tráfego e a consequente paralisação ou operação significativamente abaixo da capacidade de muitas das economias têm óbvias consequências negativas.

A  economia política da coroação: suavizando qual curva?

Para o sistema capitalista há uma relação contraditória entre as medidas necessárias para lidar com a crise na saúde e o impacto econômico destas, especialmente em tempos de instabilidade econômica. Isso foi explicitamente reconhecido por muitos analistas ortodoxos. Tipicamente, tanto o The Economist (2020) quanto El Erian (2020) indicam que medidas para enfrentar a pandemia têm um alto custo econômico que, por sua vez, agrava a recessão. A interpretação é óbvia. Na eventualidade de uma epidemia, é necessário limitar ou mesmo parar completamente muitos processos econômicos, o que resulta em uma redução na produção.

Há uma típica disputa entre economistas ortodoxos quanto a se a prolongada interrupção de muitas atividades econômicas tem um impacto sobre a economia através da oferta ou da demanda. A economia política marxista supera este dilema enganoso, que se assemelha aquele do ovo de Colombo. A interrupção prolongada da economia conduz a uma redução na lucratividade das empresas capitalistas, na medida em que menos produtos são produzidos. Este declínio é ainda mais exacerbado, porque o consumo decresce à medida que a renda disponível encolhe e, consequentemente, mesmo a produção em declínio não encontra compradores suficientes. Ademais, esses problemas da economia real têm múltiplos efeitos negativos sobre o sistema financeiro e as finanças públicas.

Gourinchas (2020) delineia esta relação contrastante de modo muito acurado: “a normalização da curva de contaminação inevitavelmente leva à deterioração da curva de recessão macroeconômica”.

Baldwin e Weder di Mauro combinaram as duas curvas de Gourinchas em um único diagrama, que segue:

O eixo horizontal mede o tempo desde a ocorrência do primeiro caso de infecção de coronavírus. O eixo vertical mede o número de infecções em seu segmento positivo e a severidade da recessão econômica em seu segmento negativo. A parte superior do diagrama mostra que se políticas de contenção não são aplicadas, as incidências serão maiores, mas também o recuo da epidemia será mais rápido. Por contraste, políticas de contenção conduzem a muito menos casos de infecção, embora, ao mesmo tempo, prolonguem a duração da epidemia. No cerne deste estudo está a noção de “imunidade de rebanho”[5]. É claro, tanto Gourinchas quanto Baldwin e Weder di Mauro argumentam que a escolha de implementar as políticas de contenção é obrigatória, uma vez que de outro modo o custo de vidas humanas seria exorbitante. A parte debaixo do diagrama é elaborado com base na premissa de que as políticas de contenção intensificam a recessão econômica, enquanto a ausência daquelas a tornam mais branda.

Há uma série de problemas com a análise acima, que são característicos da concepção unilateral e, socialmente, profundamente conservadora da economia ortodoxa.

Primeiro, não há certeza de que a retração econômica seria mais branda sem as políticas de contenção. Infecções em massa – e, além disso, mortes – têm um sério impacto sobre a força de trabalho disponível e sua habilidade em realizar trabalhos produtivos. Manter os negócios abertos em meio a uma pandemia, com o aparente crescimento de doentes e moribundos, não irá deixar o resto da força de trabalho indiferente. Pelo contrário, é mais provável, por um lado levar à evasão e, por outro, a ações sindicais intensas; no pior cenário possível: um agravamento da epidemia e, ao mesmo tempo, uma paralisação da economia.

Segundo, esta análise ignora as dimensões política e econômica do problema e, em particular, o fato de que diferentes sistemas socioeconômicos têm diferentes capacidades de lidar com tais epidemias. Isso tem um impacto direto sobre a óbvia incapacidade do setor privado de saúde (quando comparado ao setor público de saúde) de lidar com a crise.

Uma economia capitalista pode suportar um período menor de paralisação quando comparada à economia socialista ou mesmo ao capitalismo de Estado. Como Trump colocou, a economia dos EUA “não é construída para ser desligada”. A razão fundamental é que as empresas capitalistas operam para o lucro; ou então não teriam razão de existir. Consequentemente, elas não podem operar no nível do custo de produção e, menos ainda, com perdas. A menos que alguém mais as subsidiem para permanecer em operação, elas vão fechar. Ao contrário, uma economia socialista pode sobreviver sem alcançar excedentes (lucros), ao meramente cobrir os custos de produção. Pelas mesmas razões, pode sobreviver mais tempo mesmo com perdas econômicas. Ademais, o Estado socialista pode suportar ônus muito maiores que o seu equivalente capitalista, posto que aquele tem um tamanho e poder econômico muito maiores. O caso do capitalismo de Estado é intermediário. Esse suporta parte do fardo das empresas capitalistas e, portanto, essencialmente subsidia a sobrevivência dessas sob condições de constrição econômica. Consequentemente, no caso socialista, a distância entre as duas curvas (recessão com ou sem políticas de contenção) é mais curta. O capitalismo de Estado está entre as duas hipóteses acima.

Segue, do ponto anterior, que sistemas socioeconômicos baseados em um setor de saúde público são mais capazes de lidar com o problema da epidemia. Por analogia, as economias capitalistas que têm um amplo e eficiente sistema público de saúde enfrentam o problema melhor que aquelas que possuem um sistema de saúde pública fraca e dependem, principalmente, do setor de saúde privada (como, por exemplo, os EUA).

Custos econômicos e política de saúde: supressão ou mitigação da pandemia?

As análises ortodoxas mencionadas acima estabelecem uma estrutura geral no interior da qual as políticas de saúde para lidar com o coronavírus são discutidas. O contexto da discussão torna-se muito claro a partir do recente estudo da equipe epidemiológica do Imperial College (2020). Este estudo identifica duas políticas de saúde alternativas.

A primeira política, denominada de supressão, visa deter os rastros da pandemia com medidas drásticas. As ferramentas principais de tal política são a interrupção extensiva das atividades econômicas, sociais e políticas (por exemplo, o fechamento de negócios e serviços que não são estritamente necessários, proibição de circulação).

A segunda política, chamada de mitigação, tem por objetivo tornar a pandemia mais branda. A ferramenta básica desta política é orientada ao bloqueio de atividades específicas, ao invés de proibições generalizadas. Em grande medida, esta segunda política é combinada com a hipótese da “imunidade de rebanho”.

Mas o estudo do Imperial College, apesar de seu apoio à primeira política, salienta que, embora possa ser inicialmente suprimida, se não for encontrada nenhuma medicação e ou vacina, a epidemia pode retornar quando as políticas de contenção forem aliviadas. Isso significa que os países deveriam reaplicar as medidas de contenção. Assim, cria-se um ciclo vicioso de imposição e remoção de políticas de contenção. Até agora, diferentes países adotaram distintas políticas de saúde. A China, que primeiro respondeu à epidemia, rapidamente implementou uma política de supressão draconiana. Muitos países ocidentais, inicialmente, subestimaram o problema – apesar do precedente da China – e aplicaram políticas de mitigação. Contudo, a tragédia da Itália logo obrigou a maioria dos países europeus a mudarem de rumo e a adotarem a política de supressão. Apenas os países anglo-saxões (Estados Unidos e Reino Unido) continuaram por um período maior o caminho das políticas de mitigação. Entretanto, o Reino Unido, recentemente, também foi obrigado a mudar de direção. Por sua vez, os Estados Unidos parecem estar arrastando seus pés para o mesmo caminho.

Mas as dúvidas sempre permanecem. De modo típico, o Economist (2020) argumenta que “a política de mitigação custa muitas vidas humanas, enquanto a política de supressão pode ser economicamente insustentável”. Assim se prepara a alternativa: pode agora ser politicamente impossível para os governos seguirem as políticas de mitigação e remover restrições sobre a atividades econômica. Mas se economia correr o risco de colapso, então não haverá outra escolha senão abandonar a supressão e adotar políticas de mitigação.

Portanto, baseado neste argumento, conclui-se que, a menos que uma cura para a epidemia de coronavírus seja encontrada em breve, haverá necessariamente uma mudança em direção à mitigação.

Há uma dimensão menor, mas não insignificante, em relação às discussões acima mencionadas. Trata-se da capacidade do sistema de saúde gerir a epidemia com uma política de supressão ou de mitigação. Gourinchas (2020) a descreve com precisão no diagrama a seguir.

O preparo para efetivamente implementar uma ou outra das duas políticas de saúde supracitadas depende da “capacidade” do sistema de saúde (isto é, na prática, do número de UTI’s e de pessoal de enfermagem). Além disso, outro parâmetro importante é o grau de proteção do pessoal médico (por exemplo, sua proporção que é infectada durante a epidemia e fica, na prática, fora de combate). É óbvio diante do acima exposto, mas também é provado na atual pandemia, que os países com sistemas de saúde públicas mais fortes e amplos são mais preparados do que aqueles com fracos sistemas de saúde privatizados. Curiosamente, esta dimensão pública-privada é quase completamente ausente nos debates econômicos ortodoxos de hoje.

Política econômica e de saúde: o fim do Neoliberalismo e a continuidade do Neoconservadorismo por outros meios.

A atual coordenação da crise econômica e da saúde conduz a algumas conclusões cruciais.

Em primeiro lugar, é claro que o Neoliberalismo falhou miseravelmente. Na política econômica, a noção que o mercado é auto equilibrado e o Estado deveria retirar-se da economia tem conseguido aumentar o grau de exploração do trabalho (em termos marxistas, a taxa de mais-valor), mas falhou em lidar com a sobreacumulação de capital. Desta forma, a taxa de lucro não foi retomada suficientemente. Além disso, sua visão dogmática de que as crises econômicas são exógenas torna o Neoliberalismo particularmente incapaz de formular políticas econômicas para superar as crises. Por analogia, a respeito do setor de saúde, sua tentativa de privatizar os sistemas públicos de saúde (seja direta ou indiretamente, fragmentando-os e criando competição entre seus segmentos, bem como pelo reforço de parcerias público-privadas) tem os deteriorado perigosamente.

A evidente falha do Neoliberalismo na esteira crise econômica global de 2008 marcou sua substituição pelo Novo Consenso Macroeconômico social-liberal. A crise atual torna essa sucessão ainda mais evidente. Desde os primeiros sinais da vinda da crise, os governos não só adotaram uma política monetária frouxa, como também mudaram para políticas fiscais expansionistas. No caso da União Europeia, a epidemia do coronavírus levou a uma desvinculação dos gastos públicos e déficits das limitações do Pacto de Estabilidade e Crescimento. Ainda mais impressionante é o relaxamento das restrições sobre os países da zona do euro que estão em programas de ajuste econômico (tal como a Grécia).

De fato, como o uso prolongado da política monetária levou à sua exaustão, o centro de gravidade da política econômica, à medida que são anunciados extensivos pacotes de apoio fiscal, desloca-se para a política fiscal. Além disso, uma coisa impensável no tempo neoliberal está acontecendo: vozes oficiais contemplam a nacionalização de setores estratégicos da economia[6].

Ademais, a política industrial[7] está retornando explicitamente, e de um modo muito ativo, embora discreto. Ilustrativamente, no contexto da crise epidêmica, amplas somas de dinheiro são dirigidas para o setor de saúde; e correspondente política industrial vertical não é apenas elogiada, mas praticamente implementada. Deve-se notar que enquanto o Neoliberalismo detesta política industrial em geral, seu sucessor (o Novo Consenso Macroeconômico), ao menos inicialmente, preferiu apenas uma política industrial horizontal. Agora seu pêndulo move-se em direção às políticas industriais verticais.

Em segundo lugar, também há crescentes sinais do fracasso iminente do Novo Consenso Macroeconômico. As políticas promovidas – com o retorno de um intervencionismo estatal comedido e o uso sistemática anti-cíclico de todas as políticas estatais – podem ter evitado a catástrofe na véspera da crise global de 2008, mas falhou em retificar as profundas contradições e problemas da economia capitalista. Estes problemas já são evidentes na inabilidade de suas políticas econômicas evitarem a crise econômica que está sendo desencadeada pela epidemia de coronavírus. Além disso, no campo das políticas de saúde, o Novo Consenso Macroeconômico praticamente continuou a política de austeridade e de direta ou indireta privatização do sistema de saúde.

Em terceiro lugar, lidar com crises de saúde e econômica é extremamente custoso. No capitalismo que irá suportar estes custos é um campo de intensa luta de classes. Para a classe dominante capitalista, esta combinação de duas crises é tanto um perigo quanto uma oportunidade. É um perigo porque qualquer combinação desse tipo ameaça as funções fundamentais da economia capitalista. Mas também uma oportunidade, porque o sistema está experimentando novas relações de trabalho e salário. O teletrabalho é um vício recém-descoberto. O capital tenta descobrir quantas categorias de trabalho podem efetivamente ser relegadas a esta modalidade e quais novas ferramentas de controle são necessárias a fim de sustentar (ou mesmo aumentar) a produtividade. Redução dos custos salariais (através de empregos flexíveis, subcontratação, reduções diretas de salários, salário por peça, etc) e uma maior desregulamentação da legislação trabalhista já é um campo para tais testes.

No curto prazo, o sistema coloca o fardo econômico de lidar com a crise na saúde sobre o Estado capitalista. Neste sentido, esse é “socializado”, no sentido de que outras classes sociais, para além dos capitalistas, o compartilham (usualmente de modo desproporcional) através da tributação. Por esta razão, o Estado subsidia os negócios privados que fecham ou operam sobre capacidade severamente limitada. Além disso, cobre a maioria dos custos salariais desses negócios através de vários subsídios trabalhistas. Contudo, ao mesmo tempo, o direito do trabalho, em particular no que diz respeito às demissões, é praticamente reduzido a pedacinhos[8].

No médio prazo, a preocupação do sistema é como enfrentar o crescimento do déficit fiscal e a dívida criada no esforço de enfrentar a combinação das duas crises. No longo prazo, contudo, o centro de gravidade é deslocado é deslocado em direção a mudanças estruturais drásticas, que o sistema busca estabelecer a fim de cobrir suas perdas e restaurar a lucratividade e acumulação capitalista.

É evidente que para o trabalho, que é a grande maioria trabalhadora de nossas sociedades, este “novo novo normal” que o capital está tentando impor representa um futuro ainda mais distópico que a epidemia do coronavírus em si.

A esquerda e o movimento trabalhista diante da dupla crise

Para os comunistas, a esquerda e o movimento trabalhista, a situação de hoje coloca sérios desafios.

Primeiramente, a resposta à crise da saúde pode ser apenas que as medidas mais drásticas devem ser implementadas, independentemente de seus custos econômicos. O capital, quando confrontado com a crise econômica, tem se pronunciado, através de agentes proeminentes, que os governos burgueses devem fazer “o que for preciso”; quer dizer, implementar qualquer medida econômica que seja necessária. Porém, ao enfrentar a crise na saúde, o capital tem dúvidas em comparar o prejuízo humano ao econômico. A esquerda e o movimento trabalhista devem demandar que todas as medidas de contenção requeridas devem ser tomadas quaisquer sejam os seus custos econômicos. Simultaneamente, as atividades econômicas que são necessárias devem estar em conformidade com as mais rigorosas medidas de saúde.

Em segundo lugar, o custo econômico da dupla crise não deve ser suportado pela classe trabalhadora, mas pelo capital. O sistema socioeconômico no qual vivemos pertence a este último. Muitas das doenças e epidemias modernas têm causas sociais provenientes da busca do capitalismo pelo lucro. E, finalmente, a classe dominante acumulou, durante as décadas recentes, enormes estoques de riqueza que, por causa da sobreacumulação, são “apostados” no sistema financeiro. Pelo contrário, a participação do salário no produto agregado decresceu de forma constante e substancial durante todas estas décadas recentes. Consequentemente, a crise é causada e, por esta razão deve ser paga, pela classe dominante.

Terceiro, a esquerda e o movimento trabalhista devem ver claramente quem é o adversário real. O choroso e usual anti neoliberalismo e as súplicas para mais intervencionismo estatal não desafiam as políticas capitalistas. Estas simplesmente apoiam a mudança dos administradores do sistema. O Neoliberalismo morreu e o Estado (burguês) – que nunca abandonou as questões cruciais – já retornou. Mas a ortodoxia social-liberal de hoje simplesmente promete à classe trabalhadora algumas aspirinas como cura para os cânceres socioeconômicos que o sistema cria. Este retorno do intervencionismo estatal apoia generosamente o capital, enquanto busca passar o fardo aos trabalhadores. E são as dominantes políticas e percepções neokeynesianas que são, hoje, o veículo desta mudança. Em face de tudo isso, a esquerda e o movimento trabalhista devem lutar por mudanças estruturais profundas. Em princípio, os custos da dupla crise deveriam ser arcados pelo capital. Além disso, áreas-chave da atividade econômica devem ser descomodificadas e seus produtos e serviços devem ser providos através de sistemas públicos. O problema da saúde é hoje o caso perfeito em questão. A criação de sistemas públicos de saúde (com forte financiamento e pessoal, e sem formas indiretas de privatização) é uma necessidade urgente; especialmente dada a frequência das grandes epidemias contemporâneas. O financiamento destes esquemas deve ser baseado em sistemas robustos de tributação progressiva.

Quarto, a esquerda e o movimento trabalhista devem permanecer firmemente contra a “nova nova normalidade” que o capital está tentando impor. O enfraquecimento das leis de proteção do trabalho não deve ser tolerado, mas, antes, ainda mais reforçadas. Particular atenção deve ser dada à pretendida mudança nas relações de emprego através de teletrabalho e novas formas de controle e intensificação do trabalho que o capital busca impor (ver Manacourt (2020)).

Por fim, mas não menos importante. A epidemia de coronavírus e o “distanciamento social” têm restringido severamente os direitos políticos e sociais. Já é evidente que o sistema está experimentando tais limitações, tanto para aplicação geral quanto para novas formas de manipulação ideológica do povo. A esquerda e o movimento trabalhista devem rechaçar firmemente estes esforços.

Referências

Baldwin R. & Weder di Mauro B. (2020), Introduction to Baldwin R. & Weder di Mauro B. (eds.), Mitigating the COVID Economic Crisis , London: CEPR Press

Carchedi G. & Roberts M. (2018), World in Crisis , Chicago: Haymarket Books.

Economist (2020), ‘Closed by covid-19: Paying to stop the pandemic’, The Economist 19 March

El Erian M. (2020), ‘The Coming Coronavirus Recession and the Uncharted Territory Beyond’, Foreign Affairs 17 March

Gourinchas PO. (2020), ‘Flattening the Pandemic and Recession Curves’ in Baldwin R. & Weder di Mauro B. (eds.), Mitigating the COVID Economic Crisis , London: CEPR Press

Imperial College (2020), COVID-19 Response Team https://www.imperial.ac.uk/news/196234/covid19-imperial-researchers-model-likely-impact/

Manacourt V. (2020), ‘Working from home? Your boss is watching ‘, Politico 3/18/20 https://www.politico.eu/article/working-from-home-your-boss-is-watching/

Mavroudeas S. & Papadatos F. (2018), ‘Is Financialization a Hypothesis Theoretical Blind Alley?’, World Review of Political Economy vol.9 no.4. https://stavrosmavroudeas.wordpress.com/2020/03/11/is-the-financialization-hypothesis-a-theoretical-blind-alley-s-mavroudeas-d-papadatos-world-review-of-political-economy/

Notas:

[1] Texto original publicado em 25 de março de 2020 no link: https://stavrosmavroudeas.wordpress.com/2020/03/25/4383/. Acesso em 04 abr 2020. Tradução: LEICC/UERJ.

[2] O Novo Consenso Macroeconômico sucedeu gradualmente, no final do século 20, o Neoliberalismo, depois desse falhar em abordar os problemas prolongados da acumulação capitalista. Sua dominância tornou-se mais forte depois da crise global de 2008, que, em grande medida, selou a falha do Neoliberalismo. O Novo Consenso Macroeconômico combina Neokeynesianismo (que reconhece a possibilidade de desequilíbrios de curto prazo devido à rigidez em alguns mercados) com elementos do Neoliberalismo (expectativas racionais, equilíbrio de mercado a longo prazo). O Novo Consenso Macroeconômico, em contraste ao Neoliberalismo, acredita que desequilíbrios de curto prazo requerem intervenção econômica estatal. Argumenta que há uma necessidade de uma função econômica mais estratégica para o Estado, oposta tanto ao tradicional intervencionismo estatal keynesiano quanto ao dogma Neoliberal da completa retirada do Estado da economia. Neste sentido, considera que a política monetária é a principal ferramenta econômica no curto prazo, enquanto a política fiscal tem um papel de apoio. Mas, gradualmente, depois da crise de 2008 e com a iminente recessão de hoje, a função da política fiscal passa a ser constantemente  atualizada. Além disso, a necessidade de uma vertical e discreta política industrial é reconhecida.

[3] Capital fictício é, essencialmente, uma aposta sobre lucros futuros que estão sendo deduzidos hoje (para uma análise mais detalhada ver Mavroudeas & Papadatos (2018)). Estas apostas são sujeitas à troca intra-capitalistas e, em conjunto com dinheiro de crédito, pode engendrar períodos de exorbitantes expectativas econômicas e crescente acumulação. Se estas apostas obtêm êxito, a acumulação de capital continua normalmente. Mas, se a economia real não as atende, emergem, então, as crises econômicas.

[4] “O quantitative easing, ou QE, é uma medida onde um Banco Central compra títulos do governo ou outros títulos do mercado para reduzir as taxas de juros e expandir a oferta de moeda na economia”. Conferir em: https://www.sunoresearch.com.br/artigos/quantitative-easing/  <acessado em 02/04/2020> [N.T]

[5] A hipótese da “imunidade de rebanho” argumenta que a disseminação mais rápida de uma epidemia conduz à produção mais rápida de anticorpos pela população humana. Teria um grande custo humano inicial, mas traria um fim mais rápido da epidemia.

[6] O caso da nacionalização da Alitalia na Itália é exemplar.

[7] O termo Política Industrial descreve uma grande variedade de objetivos e ações governamentais para promover o funcionamento e a sustentabilidade econômica de setores específicos da economia. Sua própria natureza é intervencionista. O Neoliberalismo argumenta que tal política é ineficaz e que , na verdade, não deveria existir, uma vez que ‘distorce o livre funcionamento do mercador’. Existem duas grandes categorias de Política Industrial: (a) horizontal (regulamentos e políticas gerais para toda a economia sem afetar o equilíbrio entre sectores individuais da economia) e (b) vertical (foco em setores específicos e aplicação de regulações e políticas discriminatórias (isto é, diferenciadas), que alteram o equilíbrio entre sectores individuais da economia).

[8] É digno de nota que no caso da economia grega já exista uma diminuição do emprego em cerca de 40.000 postos de trabalho. Além disso, há fortes evidências de uma conversão massiva de contratos de trabalho de tempo integral para contratos a tempo parcial.

 

‘The coronavirus pandemic and the health and economic crisis’ by Stavros D. Mavroudeas

The coronavirus pandemic and the health and economic crisis

Stavros D. Mavroudeas

Professor of Political Economy

Panteion University

Department of Social Policy

e-mail: s.mavroudeas@panteion.gr

blog: https://stavrosmavroudeas.wordpress.com

facebook: https://www.facebook.com/stavros.mavroudeas

twitter: @ StavMavroudeas

 

Athens, 25/3/2020

 

A double crisis: health and economic

Today, humanity is in the throes of a coronavirus pandemic resulting in a huge health crisis. At the same time, however, the global economy is entering a recessionary path that is now characterized as economic crisis from almost all sides. So, it is justified to talk about a double crisis, both health and economic. Obviously, the former has immediate priority as it involves massive loss of human lives. But in addition to its direct impact on human lives, it also has major economic implications. These economic implications have important consequences for social well-being, and this also have indirect – though not directly fatal – health effects.

A first question is how the health and economic crisis are linked. They are obviously intertwined; but are they identical or not? And more specifically, is the health crisis the cause or just the excuse of the economic crisis?

A second crucial issue concerns who pays the cost of this double crisis. It is also obvious that because today’s societies are made up of social classes with mainly conflicting interests, the economic costs of health and economic choices are a field of struggle between these classes. It is also to be expected, if one puts aside the hypocritical non-social analyses of Orthodox economics, that the ruling capitalist class seeks to pass at least the greater part of the burden of this double crisis on the backs of the vast working majority of society. Only in this way will not its profitability – that is the essential reason for the functioning of the capitalist system – be undermined.

The third crucial question is what should be the position of the Left and the labor movement towards this double crisis and its aftermath.

The final numbers of the day are displayed above the floor of the New York Stock Exchange (NYSE) stands empty as the building prepares to close indefinitely due to the coronavirus disease (COVID-19) outbreak in New York, U.S., March 20, 2020. REUTERS/Lucas Jackson

The pandemic is not the cause but the trigger of the economic crisis

Nowadays the global stock markets are collapsing and the real economy is already returning to recession despite the frantic efforts of most governments to support them. Already, the first signs point to a decline in production and an increase in unemployment.

Today’s Orthodox economics (i.e. the New Macroeconomic Consensus [1] ) argues that this return to recession (and possibly to the crisis, e.g. El Erian (2020)) is caused by the exogenous event of the coronavirus pandemic. Indicatively, all major international economic organizations projected for 2020 steady if not increasing growth (e.g. the IMF’s January forecast saw the world economy grow from 2.9% in 2019 to 3.3% in 2020). With the outbreak of the pandemic all these forecasts are being revised downwards and negative growth rates are now predicted. As aforementioned, for Orthodox economists this forthcoming recession (or even crisis) does not arise from the organic problems of capitalist economies but from the exogenous factor of the pandemic. After all, the attribution of crises to external factors is the basic way Orthodox economics are interpreting economic crises.

But more careful analyses, such as those of Marxist Political Economy, point out that today’s pandemic is basically the straw that broke the camel’s back: it provoked the eruption of the pre-existing problems of capitalist accumulation. In a nutshell, the 2008 crisis was caused by the declining capitalist profitability and the consequent over-accumulation of capital, i.e. the accumulation of excess capital that could not be sufficiently profitably invested (Carchedi & Roberts (2018)). The crisis had been preceded by a period of economic euphoria that relied heavily on the operation of fictitious capital [2] . The capitalist system has attempted to overcome this crisis by abandoning the neoliberal dogma that the market is self-equilibrating and by resorting to state interventionism. The latter has been manifested through both loose monetary policy (i.e. lowering interest rates and increasing money supply) and expansive fiscal policy (i.e. increasing public spending and investment). The second was sharply curtailed after the crisis was over and fiscal austerity returned as budget deficits (in order to support capitalist profitability) had soared. Loose monetary policy has continued to this day and has exhausted its potential. Thus, after the practical zeroing of interest rates, the unorthodox monetary policies (quantitative easing, etc.) began and when they were exhausted, the negative interest rates were adopted. The result was a completely paradoxical situation where debt (public and private) was rising while stock markets were constantly rising (i.e. expectations for better future economic returns or, in Marxist terms, for increased extraction of surplus-value and hence profits). However, the real economy showed that it was unable to fulfill this bet. Typically, the industrial sector – that is the heart of productive activities – was already in recession long before the pandemic broke out.

The pandemic was the reason for the explosive emergence of all these pre-existing problems. The reasons are obvious. The massive and uncontrolled loss of human lives reduces the workforce and has a negative impact on both production and consumption. In addition, measures to tackle the pandemic have serious economic implications. Particularly the so-called ‘social distancing’, traffic prohibitions and the consequent stoppage or the operation significantly below capacity of much of the economy have obvious negative consequences.

The political economy of the coronation: smoothing out what curve?

For the capitalist system there is a contradictory relationship between the health measures needed to deal with the health crisis and their economic impact; especially in times of economic instability. This has been explicitly recognized by many Orthodox analysts. Characteristically, both the Economist (2020) and El Erian (2020) point out that measures to tackle the pandemic have a high economic cost that aggravates the recession. The interpretation is obvious. In the event of an epidemic it is necessary to limit or even completely shut down many economic processes, which results in a reduction in the product produced.

There is a typical dispute among Orthodox economists as to whether the prolonged halt of many economic activities has an impact on the economy through supply or demand. Marxist political economics overcomes this misleading dilemma that resembles that of the Columbus’ egg. Extended halt in economic activity leads to a reduction in the profitability of capitalist enterprises as fewer products are produced. This decline is further exacerbated because consumption decreases as disposable income shrinks and consequently even declining production does not find sufficient buyers. In addition, these problems of the real economy have multiple negative effects on both the financial system and public finances [3] .

Gurinchas (2020) delineated this contrasting relation very accurately: ‘the normalization of the contamination curve inevitably leads to the deterioration of the macroeconomic recession curve’.

Baldwin & Weder di Mauro (2020) combined Gurinchas’ two curves in the following single diagram:

 

The horizontal axis measures the time since the occurrence of the first case of coronavirus infection. The vertical axis measures the number of infections in its positive segment and the severity of the economic recession in its negative segment. The upper part of the diagram shows that if no containment policies are applied then the incidences will be more but also the retreat of the epidemic will be faster. By contrast, containment policies lead to far fewer cases of infection but at the same time prolong the duration of the epidemic. At the core of this case is the notion of ‘herd immunity’ [4] . Of course, both Gourinchas and & Baldwin Weder di Mauro argue that the choice of implementing containment policies is obligatory as otherwise the cost of human lives would be exorbitant. The lower part of the diagram is drawn on the basis of the assumption that containment policies intensify the economic recession while their absence makes it milder.

There are a number of problems with the above analysis, which are characteristic of the one-sided and deeply socially conservative conception of Orthodox Economics.

First, there is no certainty that the economic downturn would be milder without containment policies. Mass infections – and in addition deaths – have a serious impact on both the available workforce and its ability to perform productive work. Keeping businesses open amid a pandemic with the apparent increase in both sick and dying will not leave the rest of the workforce unaffected. On the contrary, it is more likely to lead to avoidance on the one hand and intense trade unionist actions on the other hand., with the worst-case scenario likely to result: an aggravation of the epidemic and at the same time a halt of the economy.

Second, this analysis ignores the political and economic dimension of the problem, and in particular the fact that different socio-economic systems have different capacities to deal with such epidemics. This has a direct impact on the obvious inability of the private health sector (compared to the public health sector) to cope with the crisis.

A capitalist economy can stand a smaller period of stoppage of the economy comparing to a socialist economy or even state capitalism. As D.Trump put it for the US economy, ‘it is not built to be shut down’. The fundamental reason is that capitalist enterprises operate for profit; or else they have no reason to exist. Consequently, they cannot operate at a cost of production level and moreover with losses. Unless someone else subsidises them to keep operating, they are going to close. On the contrary, a socialist economy can survive without achieving surplus (profits) by simply covering production costs. For the same reasons it can survive longer even with economic losses. Also, the socialist state can bear much greater burdens than its counterpart in capitalism as the former has much greater economic size and power. The case of state capitalism is intermediate. In this case, the capitalist state bears some of the burden of private capitalist enterprises and therefore essentially subsidises their survival under conditions of economic duress. Consequently, in the socialist case the distance between the two curves (economic recession with or without containment policies) is shorter. The case of state capitalism is in between the two above.

From the previous point follows that socio-economic systems based on a public health sector are better able to cope with the epidemic problem. By analogy, capitalist economies that have a large and efficient public health system face the problem better than those that have a weak public health system and rely mainly on the private health sector (e.g. the US).

Economic costs and health policy: suppressing or mitigating the pandemic?

The aforementioned Orthodox analysis sets out the general framework within which health policies to deal with the coronavirus epidemic are discussed. The context of the discussion is very clear from the recent study of the Imperial College (2020) epidemiological research team. This study identifies two alternative health policies.

The first policy is called suppression and aims to halt the epidemic in its tracks with drastic measures. Its main tools are the extensive stoppages of economic, social and political activities (e.g. closing businesses and services other than those strictly necessary, prohibition of movement).

The second policy is called mitigation and aims to make the epidemic milder. Its core tools are targeted stopping of specific activities rather than generalized prohibitions. To a large extent, this second policy is combined with the ‘herd immunity’ hypothesis.

But the Imperial College study, despite its support for the first policy, points out that the epidemic may initially be suppressed but, if no medication and/or vaccine has been found, it may return when the containment policies are lifted. This means that the country should re-apply containment policies. This creates a vicious cycle of imposing and removing containment policies.

So far different countries adopted different health policies. China, which first responded to the epidemic, quickly implemented a draconian suppression policy. Most Western countries initially underestimated the problem – despite China’s precedent – and followed mitigation policies. However, Italy’s tragedy soon obliged most European countries to change course and adopt the suppression policy. Only the Anglo-Saxon countries (USA, UK) continued for a longer period the path of mitigation policies. However, recently the UK was also obliged to change direction. And the US seems to be dragging its feet along the same path.

But second thoughts always remain. Characteristically, the Economist (2020) argues that ‘the policy of mitigation costs many human lives while the policy of supression may be economically unsustainable’. Indeed, the Economist (2020), in the Briefing section, puts it even more emphatically: ‘supression strategies can work for a while’. This is how it prepares for the alternative: it may now be politically impossible for governments to follow mitigation policies and remove restrictions on economic activity. But if the economy risks collapse then there will be no other choice than dropping suppression and adopting mitigation policies.

Thus, on the basis of this argument, it concludes that unless a cure for the coronavirus epidemic is found soon, there will necessarily be a shift towards mitigation.

There is a minor but not insignificant dimension to the above-mentioned discussions. This concerns the ability of the health system to manage the epidemic with either a suppression or a mitigation policy. Gourinchas (2020) describes it accurately in the following diagram.

The ability to effectively implement either of the two above-mentioned health policies depends on the ‘capacity’ of the health system (i.e., practically, the number of ICUs and nursing staff). Also, another important parameter is the degree of protection of the medical staff (i.e. its proportion that gets infected during the epidemic and is practically out of combat). It is obvious from the above but it has also be proven in the current epidemic that countries with stronger and larger public health systems are better off than countries with weak privatized health systems [5] . Interestingly, this public-private dimension is almost completely absent from today’s Orthodox economic debates.

Economic and Health Policy: The End of Neoliberalism and Continuing Neo-Conservatism by Other Means

The current coordination of the economic and health crisis leads to some crucial conclusions.

First, it is clear that Neoliberalism has failed miserably. In economic policy, the notion that the market is self-equilibrating and the state should withdraw from the economy has succeeded in increasing the degree of labour exploitation (that is, the rate of surplus value in Marxist terms) but it has failed to cope with the over-accumulation of capital. Thus, the profit rate has not recovered sufficiently. Additionally, its dogmatic view that economic crises are exogenous makes Neoliberalism particularly incapable of formulating economic policies for overcoming crises. By analogy, regarding the health sector, its attempt to privatize public health systems (either directly or indirectly by fragmenting them and creating competition between their segments and by reinforcing public-private partnerships) has seriously damaged them.

The obvious failure of Neoliberalism in the wake of the 2008 global economic crisis marked its substitution by the social-liberal New Macroeconomic Consensus. The current crisis makes this succession even more evident. Since the first signs of the coming crisis governments are not adopting only loose monetary policies but also shifting to expansive fiscal policies. In the case of the EU, the coronavirus epidemic led to the disengagement of public spending and deficits from the constraints of the Stability and Growth Pact. Even more striking is the relaxation of restrictions on the countries of the eurozone that are in economic adjustment programs (such as Greece).

Indeed, as the long-run use of monetary policy has led to its exhaustion, the center of gravity of economic policy shifts to fiscal policy as extensive fiscal support packages are announced. Moreover, something unthinkable in the neoliberal times is happening: official voices contemplate the nationalization of strategic sectors of the economy [6] .

In addition, industrial policy [7] is returning explicitly, and in a very active and discreet manner. Indicatively, in the context of the epidemic crisis large sums of money are directed to the health sector; and corresponding vertical industrial policy is not only praised but practically implemented. It should be noted that while Neoliberalism abhors industrial policy in general, its successor (the New Macroeconomic Consensus), at least initially preferred only horizontal industrial policies. Now its pendulum is moving towards vertical industrial policies.

Secondly, there are increasing signs of the forthcoming failure of the New Macroeconomic Consensus as well. The policies it promoted – with the return of a measured state interventionism and the systematic anti-cyclical use of all state policies – may have averted the catastrophe on the eve of the 2008 global crisis but it failed to rectify the very deep contradictions and problems of the capitalist economy. These problems are already evident in the inability of its economic policies to avert the economic crisis that is being triggered by the coronary epidemic. In addition, in the field of health policies, the New Macroeconomic Consensus practically continued the policy of austerity and direct and indirect privatization of the health system.

Thirdly, dealing with the health and economic crisis is extremely costly. In capitalism who will bear these costs is a field of intense class struggle. For the ruling capitalist class, this combination of the two crises is both a danger and an opportunity. It is a danger because any such combination threatens the fundamental functions of the capitalist economy. But it is also an opportunity as the system is experimenting with new forms of labour relations and wages. Teleworking is a newly-found vice. Capital tries to discover how many job categories can effectively relegated to this and what new tools of control are required in order to sustain (and even increase) productivity. Reducing wage costs (through flexible employment, subcontracting, direct wage reductions, and reducing wages, pay per piece, etc.).) and further deregulation of labour legislation is already a field for such tests.

In the short-run, the system places the economic burden of dealing with the health crisis on the capitalist state. In this way it is being ‘socialised’ in the sense that other social classes, apart from the capitalists, share it (usually disproportionately) through taxation. Hence, the state subsidizes private businesses that close or work under severely limited capacity. It also covers most of the wage costs of these businesses through various labour allowances. At the same time, however, labour law, in particular as regards redundancies, is practically diminished to smithereens [8].

In the med-run, the system’s concern is how to address the growing fiscal deficits and debt created in the effort to tackle the combination of the two crises. In the long-run, however, the center of gravity is shifted towards the drastic structural changes that it attempts to establish in order to cover its losses and restore capitalist profitability and accumulation.

It is obvious that for labour, that is the great working majority of our societies, this ‘new new normal’ that capital is trying to impose represents an even more dystopian future than the coronavirus epidemic itself.

 

The Left and the Labour Movement in front of the double Crisis

For the Communists, the Left and the labour movement, today’s situation poses serious challenges.

Firstly, the answer to the health crisis can only be that the most drastic measures must be implemented, whatever their economic costs. Capital, when faced with the economic crisis, it has pronounced through prominent officials that bourgeois governments must do ‘whatever it takes’; meaning to implement whatever economic measure is necessary. But facing the health crisis capital has second thoughts comparing the human to the economic damage. The Left and the labour movement must demand that all required containment measures should be taken irrespective of their economic costs. Simultaneously, the economic activities that are necessary should comply with the strictest health measures.

Secondly, the economic cost of the double crisis should not be borne by the working class but by capital. The socio-economic system in which we live belongs to the latter. Much of modern diseases and epidemics has social causes stemming from capitalism’s quest for profits. And finally, the ruling class has accumulated during the recent decades huge stocks of wealth that, because of overaccumulation, it is ‘gambled’ in the financial system. On the contrary, the wage in the aggregate product has steadily and substantially decreased during all these recent decades. Consequently, the crisis is caused and should be paid by the dominant class.

Thirdly, the Left and the labour movement must see clearly who the real adversary is. The usual lachrymose anti-neoliberalism and the pleas for more state interventionism do not challenge the capitalist policies. They simply support the change of the system’s administrators. Neoliberalism has died and the (bourgeois) state – which has never left on crucial issues – has already returned. But today’s social-liberal Orthodoxy simply promises to the working class some aspirins as cure for the socio-economic cancers that the system creates. It is this returning state interventionism that generously supports capital and seeks to pass the burden on workers. And it is the dominant neo-Keynesian policies and perceptions that are the vehicle of this change today. In the face of all this the Left and the labour movement must fight for profound structural changes. In principle, the costs of the double crisis should be borne by capital. In addition, key areas of economic activity must be de-commodified and their products and services be provided through public systems. The case of health case is today the perfect case in point. The establishment of public health systems (with strong funding and staffing and without indirect forms of privatization) is an urgent need; especially given the frequency of contemporary major epidemics. The financing of these schemes must be based on robust progressive taxation systems.

Fourthly, the Left and the labour movement must stand firmly against the ‘new new normality’ that capital is trying to impose. The weakening of labour protection laws must not be tolerated and the latter must be further strengthened. Particular attention must be paid to the intended change in employment relations through telework and the new forms of control and intensification of work that the capital seeks to impose (see Manacourt (2020)).

Last but not least. The coronavirus pandemic and the imposed ‘social distancing’ have severely restricted political and social rights. It is already evident that the system is experimenting with these limitations both for their general application and for new forms of ideological manipulation of the people. The Left and the labour movement must firmly repulse these efforts.

 

REFERENCES

Baldwin R. & Weder di Mauro B. (2020), Introduction to Baldwin R. & Weder di Mauro B. (eds.), Mitigating the COVID Economic Crisis , London: CEPR Press

Carchedi G. & Roberts M. (2018), World in Crisis , Chicago: Haymarket Books.

Economist (2020), ‘Closed by covid-19: Paying to stop the pandemic’, The Economist 19 March

El Erian M. (2020), ‘The Coming Coronavirus Recession and the Uncharted Territory Beyond’, Foreign Affairs 17 March

Gourinchas PO. (2020), ‘Flattening the Pandemic and Recession Curves’ in Baldwin R. & Weder di Mauro B. (eds.), Mitigating the COVID Economic Crisis , London: CEPR Press

Imperial College (2020), COVID-19 Response Team https://www.imperial.ac.uk/news/196234/covid19-imperial-researchers-model-likely-impact/

Manacourt V. (2020), ‘Working from home? Your boss is watching ‘, Politico 3/18/20 https://www.politico.eu/article/working-from-home-your-boss-is-watching/

Mavroudeas S. & Papadatos F. (2018), ‘Is Financialization a Hypothesis Theoretical Blind Alley?’, World Review of Political Economy vol.9 no.4. https://stavrosmavroudeas.wordpress.com/2020/03/11/is-the-financialization-hypothesis-a-theoretical-blind-alley-s-mavroudeas-d-papadatos-world-review-of-political-economy/

[1] The New Macro Consensus has gradually succeeded at the end of the 20th century Neoliberalism after the latter failed to address the long-standing problems of capitalist accumulation. Its dominance became stronger after the global crisis of 2008, which largely sealed the failure of Neoliberalism. The New Macroeconomic Consensus combines New Keynesianism (which recognizes the possibility of short-term imbalances due to rigidities in some markets) with elements of Neoliberalism (rational expectations, long-term market equilibrium). The New Macroeconomic Consensus, in contrast to Neoliberalism, believes that short-term imbalances require state economic intervention. It argues that there is a need for a more strategic economic role for the state as opposed to the traditional Keynesian interventionist state and the Neoliberal dogma of the state’s complete withdrawal from the economy. In this context, it considers that monetary policy is the main economic tool in the short-run, while fiscal policy has a supporting role. But gradually, after the crisis in 2008 and with the coming today’s recession, the role of fiscal policy is constantly being upgraded. In addition, the need for a vertical and discrete industrial policy is recognized.

[2] Fictitious capital is essentially a bet on future profits that it is being discounted today (for a more detailed analysis see Mavroudeas & Papadatos (2018) ). These bets are subject to intra-capitalist trading and, in conjunction with credit money, can engineer periods of exorbitant economic expectations and increased accumulation. If these bets succeed then capital accumulation proceeds normal. But if the real economy does not fulfill them, then economic crises arise.

[3] Weak profitability and/or bankruptcy of productive companies affect adversely both the banking sector (as non-performing loans rise) and the capital market (as stock prices collapse). Simultaneously, the contraction of economic activity entails a reduction in public revenue and, in contemporary times, an increase in fiscal deficits and inability to pay public debt.

[4] The ‘herd immunity’ hypothesis argues that the faster spread of an epidemic will lead to faster production of antibodies by the human population. It will have a great initial human cost but will bring about a faster end of the epidemic.

[5] It is noteworthy that the indirect privatization of the Italian public health system through its fragmentation into separate regions (in competition with each other) has caused serious problems of co-ordination and regional imbalances; especially during the early critical stages of the epidemic.

[6] The case of Alitalia’s nationalization in Italy is exemplary.

[7] The term Industrial Policy describes a wide range of government objectives and actions to promote the economic functioning and sustainability of specific sectors of the economy. It is by its very nature interventionist. Neoliberalism argues that it is ineffective and in fact it should not exist as it ‘distorts the free functioning of the market’. There are two broad categories of Industrial Policy: (a) horizontal (general regulations and policies for the whole economy without affecting the balance between individual sectors of the economy) and (b) vertical (focusing on specific sectors and applying discriminatory (i.e. differentiated) regulations and policies that change the balance between individual sectors of the economy).

[8] It is noteworthy that in the case of the Greek economy there is already a decline in employment by approximately 40,000 jobs. In addition, there is strong evidence of a massive conversion of full-time to part-time contracts.

 

 

https://www.researchgate.net/publication/340163045_The_coronavirus_pandemic_and_the_health_and_economic_crisis

 

https://www.academia.edu/42319128/The_coronavirus_pandemic_and_the_health_and_economic_crisis