Introduction: Socopolitical Polarization and Capital Concentration amid Pandemics
Shortly after the World Health Organization declared COVID-19 a pandemic erupted on 11 March 2020, there were optimistic scenarios that there would be global solidarity, and society could become more human-centered instead of capital-centered. Whereas some feared greater tendency toward authoritarianism and a public reaction against it, the mainstream politicians, media and the financial elites focused on maintaining market strength. The mass media, corporate-funded think tanks, mainstream politicians and most analysts rarely questions the historical and contemporary context in which the pandemic erupted, accepting as God-given facts that beings and nature were to remain in the service of capital, no matter the consequences, such as pandemics.
Looking at pandemics from ancient times to the 20th century, we can rest assured that the results of COVID-19 will be similar to those of the past, in so far as greater authoritarianism and a less socially just society will manifest themselves amid growing socioeconomic and political polarization. Already deteriorating under neoliberalism in the past four decades, conditions will be worse after the pandemic for the working class, minorities and women; something on which even neoliberal analysts and institutions like the IMF agree, though they do not blame neoliberalism.
The neoliberal phase of capitalism that prevails in much of the world, either under the political umbrella of a rightwing populist government, as in the US, or pluralist system, as in France, even greater capital concentration is inevitable using the pretext of the pandemic to inject more government subsidies and tax breaks to big capital, as smaller businesses fail and competition dwindles. In the USA, India, Brazil, Hungary, Poland, Austria, to name a few, led by neoliberal rightwing populists, the prospects of downward social mobility, repression of minorities and workers, and decline of human rights is a guarantee, as it has already taken place amid the outbreak of the pandemic.
While pluralist neoliberal regimes most prominent in Western Europe, Canada, Australia and Japan, will be a bit more generous to the middle and working class, capital concentration is a common goal, despite the absence of consensus between neoliberal political factions vying for power.
Unique in our time, the shift of the global economic power from the Western World to East Asia, presents challenges to Western capitalists and Western governments trying to maintain their status in the core of the capitalist system. This is the main reason that the US has launched an era of economic nationalism mainly targeting China and questioning the role of international organizations like the World Trade Organization (WTO) overseeing terms of trade. Precisely because of this added dimension, especially considering that the COVID-19 pandemic started in China that has demonstrated remarkable ability to deal with it and with its economy, the Western World will lapse toward more desperate measures trying to strengthen national capitalists, while averting social upheaval arising from the dire consequences of the pandemic.
Operating on the assumption that pandemics are dynamics for systemic social change, some journalists, academics, and variety of analysts rushed to conclude that COVID-19 would alter the value system from rugged individualism to communitarianism, if not collectivism. The pandemic would place greater focus on health care, the environment, and the forgotten masses who must be free of the virus for they pose a threat to the whole of society. These unrealistic predictions quickly turned pessimism, once the reality of authoritarian policies set in in a number of countries around the world, and the mass anti-establishment, anti-racist demonstrations in the US took hold, permitting the neoliberal pluralists to claim them and try to coopt them by proposing reforms within the neoliberal matrix. Though focused on white supremacy and institutional racism, the US “Black Lives Matter” movement was at its core against the neoliberal system that promises equality of opportunity for all, while marginalizing minorities and the working class owing to structural impediments, not just cultural. The pandemic had finally manifested the schism in society not only along racial lines, but class lines as well, given that the elites were divided about how to co-opt the masses in order to lend legitimacy to the neoliberal social contract.
From the plague in ancient Athens coinciding with the Peloponnesian War (431-404 B.C.) to the Black Death of Europe that coincided with the Renaissance and the nascent stage of capitalism (mid-14th to mid-16th century), society has invariably witnessed worsening conditions for the majority of the population. The most recent pandemic after the First World War, the Spanish Flu (1918-1920), contributed to worsening conditions for the masses, exploding into the Great Depression and the rise of Fascism in Italy, Nazism in Germany, and authoritarianism across Eastern Europe and in the Iberian Peninsula. Despite an estimated one-third of the world’s population infected by the Spanish flu, there was no trend toward democratization, and social justice that would provide a health/social safety net for the vast majority.
During all pandemics throughout history, regimes become more authoritarian as a means of disciplining the population which tends to suffer living standards erosion owing to pandemic-induced economic contraction. Rising poverty and lower living standards divides people politically, as they struggle to find which political faction has the best solution, not realizing this that all of them operate within the same social contract. As a result of pandemics, wealth becomes more concentrated and socioeconomic gaps widen. Socioeconomic polarization exacerbated, people are divided between conformity and dissent in the struggle to survive while expressing anger at existing conditions. A segment of the population becomes more fanatical toward minorities, dissenters, foreigners, and any social group they deem non-conformist, or out of the mainstream in ideology and/or cultural lifestyle.
Conformists welcome authoritarian rule, as they see no other way to stability and survival, thus setting the stage for ruthless leaders to pursue their ambitions, invariably for the benefit of the elites they serve. Amid such a climate, conspiracy theories flourish about the causes, nature and public policy surrounding the origin of the virus, its nature, possible cures and public health policy. Meanwhile, dissenters demand social justice that includes public health policy to safeguard the masses, a tolerant regime, and sweeping reforms to end authoritarian policies impacting minorities, women and workers. Human beings finding themselves at odds with each other amid pandemics provides fertile soil not only for opportunistic politicians, but also the financial elites who finance politicians’ campaign, own the corporate media, finance everything from think tanks to universities, thus enjoying preeminent influence in molding public opinion.
The irony of the neoliberal system is that it pursues global integration when it pertains to the economy, but not to public health and the environment which are the context of the pandemic. The neoliberal assumption of rugged individualism and each nation left to its own devices to deal with the pandemic only fuels the spread of the virus and backfires, as we have seen especially in the case of the US. With 4% of the world’s population, the US suffers 25% of all the coronavirus cases and deaths. Yet, it has been reluctant to support the World Health Organization and adopt preparedness and preventive measures in coordination with other countries, choosing instead to apportion blame to China where the pandemic originated. This is a reflection not only of nationalist unilateralism as core ideology of rightwing neoliberal populism, but also a policy choice not to divert state funds from the corporate welfare state to invest in social, environmental and public health.
The COVID-19 pandemic is merely another illustration that the neoliberal system contains the seeds of its own demise within it. Amid the struggle for the road to regain market losses in the years ahead, capitalism in its neoliberal phase will create much worse problems, including the manner it deals with pandemics. Whether neoliberal populists like Trump, Modi, Bolsonaro, Orban among others, or neoliberal pluralists like Macron, Trudeau, Merkel will be at the helm of managing the state, all roads lead to more disasters in the absence of dealing with the realities of environmental and human needs as an integral part of the social contract. Even neoliberal advocates recognize that COVID-19 simply brought into light for all to see that the structural flaws of the institutional system intended to maintain the hierarchical social order.
Neoliberal Values and Pandemics
Ushering in the neoliberal world order in the 1980s, the political and financial elites in the US under Reagan and UK under Thatcher influenced not only other governments, regardless of the “conservative”, liberal or even socialist part label, but all institutions from the International Monetary Fund (IMF) and World Bank to media and educational systems. Continuing to weaken the social welfare state, neoliberal governments transferred public funds through the elaborate system of corporate welfare subsidies, loan guarantees, deregulating businesses, weakening environmental regulation, and crippling trade unions, while hailing the corporate model for the public sector, which the private sector dominated and determined public policy.
The neoliberal status quo entailed a value system of extreme individualism, demonizing social welfare and communitarian values, human rights and civil rights, all of which manifested themselves in every sector of society, including public health. In the US, more than any other developed nation, the result was to make health care expensive, as pharmaceutical companies and corporate health facilities became rich and powerful catering to those who could afford health care, thus marginalizing those who could least afford it. This is the context of the pandemic where the US leads the world in COVID-19 cases and deaths.
The pandemic of 2020 exposed the contradictions of commercializing everything in society, especially workers who are catalysts to the functioning of capitalism. The assumptions that public health as a commodity and financial value as the only things that matters in the neoliberal society came crashing down when the pandemic erupted, especially in Western countries where collectivist values are alien and identified with Communism and Socialism. By contrast, East Asia, especially China with an economy based on free enterprise and statism, has a history of collectivism as a core value. This is partly because of Confucianism, but mostly because the Mao regime promoted collectivism in all aspects of life. In part because of its value system at the root of public policy and public reaction, China did not have nearly as difficult a challenge dealing with the pandemic as the US and the West. Clearly, Chinese values are hardly as cohesive today as under Mao. However, collectivism is deeply ingrained into the culture and people accept social responsibility as individuals. By contrast, the US and the Western World immersed in the value system of individualism, especially as conducive to the neoliberal regime, struggled to deal effectively with the pandemic.
Led by US President Trump, a quintessential rightwing populist neoliberal, many in the West criticized China for its lack of transparency. The same people were also critical of the WHO for urging a collectivist response to the pandemic, rather than a narrow nationalist, based on who can afford health care. The tragic reality of the pandemic forced a number of neoliberal pluralist politicians and advocates of neoliberalism to admit that a public health crisis of this global magnitude required a different strategy than what the neoliberal model permitted.
That the one-party state Chinese regime handled the pandemic more effectively, placing priority on public health for all, illustrates the realism and efficacy of the quasi-statist model when compared with bourgeois democracies either under neoliberal rightwing populists like Trump, or pluralists like Macron. Interestingly, the Chinese people for the most part have the greatest trust in their government, partly because the public sees the value system implement in public health policy during the pandemic. The same is not at all true for Western neoliberal societies where about only one-third of Americans and Italians, for example, trust their respective governments for medical advice and to handle public health crises. This lack of trust raises the issue of whether people believe their government is genuinely interest in public health as a core value of the social contract.
Corporate Welfare, Public Health Policy and the Pandemic
From the outbreak of the pandemic until mid-April 2020, countries had spent more than $8 trillion to “stimulate” the economy. More was to come, but where did the money go? Contrary to the way the corporate-owned media portrayed public spending and near-zero central bank interest rates, taxpayer money did not go to support the hard-hit working class, the over-burdened public health sector and derivative services hard hit by the pandemic. Because there is a neoliberal institutional structure in place, a large share of the $8 trillion went to varieties of corporate welfare subsidies. By the end of April, global public debt had risen 3 points, to 96% of GDP. The question remains whether the pandemic was merely a pretext for corporate welfare or did governments spend the money to combat the pandemic’s impact the general population and to strengthen the health care system to deal effectively with the crisis.
Everyone from mainstream neoliberal institutions to progressive academics agree that the pandemic will worsen the rich-poor gap, impact the working class much worse than the rich, and devastate the poor in developing nations. Among other organizations, the IMF has warned that global growth will slow, impacting mostly the working class and the poor across the world, but especially the Southern Hemisphere. The UN Development Program reached similar conclusions as the IMF. Although the poor are impacted worse than the affluent by the pandemic, minorities more so than the majority white population in the US and Europe, the neoliberal structure does nothing to address this problem, as though these marginalized people live on another planet that cannot infect earth. While some portion of public funds have gone to subsidize workers’ lost wages, most of the money in nations from Brazil to the US, from Germany to Japan has gone to subsidize corporations, especially those in the travel-related sector in the form of business loans, fiscal relief such as tax credit and subsidies, and loosened rules on interest deductions.
From the UN to the World Bank, IMF, and governments operating under the neoliberal model, the focus is to strengthen businesses. This does not exclude addressing underlying structural problems that lead to pandemics, but the goal is to sustain the status quo, rather than to examine whether the existing regime was at the core for the failure to deal with pandemic effectively. There has been no mainstream media discussion, no mainstream politicians, no think tank analyst focused on the neoliberal system that gave rise to the pandemic. They all operate under the assumption of addressing pandemics within the neoliberal social contract, as though CIOVID-19 will be the last pandemic to hit the world and a vaccine will take care of everything.
In an essay entitled: “The COVID-19 pandemic: securitization, neoliberal crisis, and global vulnerabilization:” Joao Nunes argues that: “The COVID-19 pandemic means not only a crisis of neoliberalism as an economic model; the pandemic itself is a neoliberal crisis.” It is common sense, as Dr. Anthony Fauci among countless others has argued, that a pandemic by definition means a collective responsibility, as each person’s health depends on the other. If we accept that obvious reality, public funds amid a pandemic would not distributed to strengthen corporations, but the public health care system globally and those people impacted economically by the ensuing crisis.
COVID-19 will be remembered for the manner that governments responded to this crisis and the degree to which the elites will be anxious to push to measures that better prepare society to face the next such outbreak. There have been many articles written about the lessons to be learned and much more thorough analysis will be coming in the next few years. Advocates of neoliberal rightwing populism as practiced in the US, Brazil, India, Poland and Hungary argue that the lessons must include more authoritarian measures, harsher policy toward immigrants and refugees, harsher punishment for dissidents, fewer pluralist measures that cater to minorities, and more discipline by the recalcitrant working class. Rightwing populists also advocate a weaker WHO and less dependence on multilateral institutions, while each nation must try to make it on its own amid the pandemic. Therefore, authoritarianism and unilateralism is the proper response, especially considering that dissidents took to the streets to demand human rights for minorities and the working class, thus challenging the social order.
Advocates of neoliberal multilateralism argue that the world will change and become more integrated, with the US and EU using the opportunity to reassert their roles in the world economy by demanding readjustment of international organizations such as WHO, WTO, World Bank, etc. Unified response, at least on the part of the G-20, will be part of the mix next time there is an outbreak for the sake of global solidarity, as long as the Western World is at the helm of such efforts. The main concern of neoliberal pluralists is to address the pandemic within the existing system, while coopting the masses that might otherwise become radicalized as they are marginalized amid a rise in authoritarianism and socioeconomic polarization.
Critics of neoliberalism have been arguing that the response to the pandemic has ranged from chaotic and socially irresponsible to criminal. Among others, Noam Chomsky is in this camp who singles out Trump for lacking moral fiber and stability in carving out a coherent public policy. Others place in the same camp as Trump Brazil’s Bolsonaro, India’s Modi, Turkey’s Erdogan, and Hungary’s Orban, who are far less influential in the world arena than Trump. Because neoliberalism wants people to believe that people and nature must serve capital, a pandemic entails that people are sacrificed in a cynical ‘social Darwinist’ sense. This is what mostly bothers critics of neoliberalism who are asking for much more than perfunctory reforms.
Scientists have long argued that it is not possible to separate human history from natural history, just as it is not possible to eradicate pandemics by insulating the rich from the poor who are most vulnerable. Have the neoliberal political and financial elites learned such a lesson, or are they so narrowly focused on making sure that government preserves the status quo and provides greater perks for capital?
Under the neoliberal regime, all remedies from medical to social during the pandemic impacts disproprortionally the poor and working class, and within that social class even more the minority populations. Precisely because of this reality, many workers from the US to India and Brazil protested the lockdown that impacted their lives, allowing populist rightwing leaders like Trump, Modi and Bolsonaro to use such protests as proof that their policies enjoyed public support, thus claiming legitimacy for disastrous policies. Neoliberal politicians and the elites they represent of various political wings have learned the lesson of relying even more on corporate welfare to sustain the private sector, continuing to weaken the public sector as funds are transferred from social, health and educational programs, and seek solutions to the pandemic within the existing system in which the pandemic took place. The next pandemic may turn out to be as catalytic in social discontinuity as the Black Death that hastened the end of the feudal-manorial social order.
Jon V. Kofas, Ph.D. – Retired university professor of history – author of ten academic books and two dozens scholarly articles. Specializing in International Political economy, Kofas has taught courses and written on US diplomatic history, and the roles of the World Bank and IMF in the world.