By José Luís Fiori*

Unlike wars, epidemics do not destroy physical equipment, nor do they have a visible opponent capable of producing a collective, emotional identity, and national solidarity that imposes itself above social classes.

“Beyond the events, there is an unconscious history – or more or less conscious – that escapes the lucidity of the actors, those responsible or the victims: they make history, but history drags them along” (F. Braudel, History and Social Sciences).

The great epidemics are repeated throughout history, but there is no explanation for their periodicity. In the case of the current epidemic, the origin, the variations of the virus, nor the probable development of the pandemic itself have yet to be deciphered, because it is not known whether there may be national relapses until the development of efficient drugs and vaccines.

For this very reason, in these moments of great fear and unpredictability, it is common for people to use comparisons and analogies that seem useful at first, but which are partial and sometimes do more harm than help, as in the case of the reference to the two economic crises of 1929 and 2008. Or also the comparison with some plagues that would have caused great “historical ruptures”, as was the case of the Plague of Justinian, in the XNUMXth century, or even more, the Black Death, in the XNUMXth century, which killed half of the European population and seems to have contributed decisively to the end of the feudal system.

It is important to bear in mind that the 1929 and 2008 crises were economic crises inherent to capitalism, while the current one is being caused by a factor that does not obey the “laws” of the capitalist economy, even when it can cause economic and social damage equivalent to the of the two economic and financial crises that are always remembered when talking about the coronavirus epidemic. Likewise, with regard to the Black Death, the English historian Mark Harrison even supports the thesis that it played a decisive role in the birth of European territorial states. It is indisputable that the Black Death forced a centralization of power and a territorial delimitation, necessary to control the contagion and impose new hygienic practices on the populations that still lived under the feudal system.

In addition, Harrison's thesis helps to understand the “selfish” response of national States, through the ages, every time they faced infectious epidemics that expanded beyond their territorial borders. But even if one can agree with this thesis about the impact of the Black Death, it is very difficult to say the same about other major more recent epidemics, such as yellow fever, measles, smallpox, malaria, tuberculosis , or even HIV that has already reached and killed millions of people around the world. All of them were extremely lethal, but they didn't provoke any type of great rupture or historical inflection.

Another very common analogy is between epidemics and wars. It's a very strong comparison and can be useful for mobilizing relevant social actors, but there are some big differences between them. Unlike wars, epidemics do not usually destroy physical equipment and do not have a visible opponent capable of producing a collective, emotional identity and national solidarity that imposes itself above social classes. On the contrary, contagious epidemics infect individuals, classes and countries with different intensities, and provoke defensive reactions of the “every man for himself” type, exactly the opposite of wars.

In addition, wars have winners who impose their “hegemonic peace” on the defeated, unlike epidemics, in which there are no absolute winners or losers, and there is no material force that induces any kind of agreement or collective reconstruction plan after the war. epidemic typhoon. Today, many speak of a new world that could be born from this traumatic experience, and even bet on humanitarian changes in capitalism, but the possibility of this happening is very small.

In any case, the Covid-19 epidemic will have an immediate economic impact, as is the case with wars. What distinguishes the “new coronavirus” is not its lethality, it is the speed of its expansion and its immediate impact on unemployment rates that explode in a few days. The virus was identified in China at the end of December 2019, and in just three months it reached 200 countries and has infected more than one and a half million people. Some infectologists predict the duration of the epidemic from 6 to 7 months, and some economists speak of a recessive impact that could last for 2 to 3 years. Everything will depend on the extent and duration of the epidemic in the United States and Europe, and on the existence or not of relapses in the countries that have already controlled the first epidemic outbreak.

It is likely that the drop in US GDP will be greater than that of the 2008/09 crisis, but no one should be mistaken about the American future itself. The epicenter of the 2008 crisis was in the USA and, however, during the second decade of the 23st century, the USA increased its participation in the world GDP, from 25% to 250%, while its capital market grew 56%, leaving 90 % of global financial capitalization, with around XNUMX% of global financial transactions being done in dollars. That is, there is nothing to prevent the US from overcoming this new crisis and quickly recovering its economic power, ahead of all other developed countries, with the exception perhaps of China.

In any case, the other major dimension of this global crisis must be included at this point, the crisis in the oil industry, caused by the fall in world demand as a result of the epidemic itself, starting with the slowdown of the Chinese economy, and then spreading to the entire world economy, with an immediate impact on the price of a barrel of oil, which dropped from US$ 70 to US$ 23 b/p/d, fluctuating afterwards around US$ 30 b/p/d. It is not yet known how long the epidemic will last, nor the recession of the world economy, nor is it possible to predict the time of economic recovery after the pandemic. But even if the new negotiations between OPEC+ and the G20 reach an agreement on new levels of production and the apportionment of the cut among the producing countries, it is very unlikely that the new price will exceed US$ 35 b/p/d .

This new value should have a huge impact on the geoeconomics of world oil production. At this price level, it is very likely that the US shale oil have to be protected by the government in order not to go bankrupt, and even so, the most likely thing is that the US will lose its current position as the world's largest oil producer. There could be a great loss of market by the producing countries with the highest costs, with the immediate perspective of a new sovereign external debt crisis in countries like Ecuador, Mexico, Iraq, Nigeria, etc. These prices would also affect the fiscal capacity of Russia and Saudi Arabia, and would hit countries that are already suffering sanctions from the United States, as is the case of Venezuela and Iran, not to mention Russia itself. Be that as it may, the prospects ahead are very bad for the world oil market and, as a consequence, for the globalized financial market.

At first, as in all major catastrophes and wars, the State is being forced to centralize decisions and health and economic planning in the country, and is being forced to carry out “heterodox” economic interventions, through increased spending. in health, and also through pure and simple multiplication of the money available to people and companies. But none of this guarantees that, after the crisis, the governments of these countries will maintain the same economic policy, and the same “state voluntarism” that is against the prevailing neoliberalism in recent decades, in western capitalism.

It is very likely that, after the storm, the great powers will review their participation in global production chains, especially in the case of strategic goods. It is also quite likely that China and Russia, and a few other European countries, will seek to increase their degree of freedom in relation to the US financial system, and increase the degree of mercantilist protection of their economies. However, in the case of peripheral countries, it is most likely that, despite everything, they will decide to face their “epidemic debts” by negotiating with the IMF and returning to their previous policies of fiscal austerity, with the accelerated sale of their public assets in the “ basin of souls”, to be able to “pay the bills” left by the coronavirus.

Despite the immediate economic devastation wrought by the epidemic, it is unlikely that major geopolitical disruptions will occur within the world system. What it will do is accelerate the speed of the transformations that were already underway and that will continue to deepen. Someone has already said that it is at the time of the great plagues that the true nature of societies is known, and the same can be said of this pandemic that is only revealing what was already in front of us and that many could not see, including the removal of the last veil of hypocrisy of the “liberal order” and “American hegemony” of the XNUMXth century.

The epicenter of the epidemic has already moved to Europe, and now to the United States, and it is not known how long it will last, but in fact the great unknown and the great fear is what can happen when it expands to the poorest countries from Africa, the Middle East and Latin America. Also because, as always happens in major crises, it will be the great powers that will recover first, starting with China and the United States.

Therefore, it is most likely that this epidemic will increase inequality and polarization in the world, which had already been growing at an accelerated rate since the 2008 financial crisis. beginning of the XNUMXst century, and took on high gear after the election of Donald Trump. Russia is likely to suffer a new economic blow with the epidemic and the crisis in the oil industry, but this should not affect the new position it has regained as a great military power within the world system.

In the case of the European Union, however, the pandemic should accelerate its disintegration process, which entered into high gear after Brexit. China, in turn, should not alter the course of its expansive project scheduled for the middle of the 2020st century; on the contrary, it must accelerate it, taking advantage of the opportunities and gaps opened by European decomposition, and by the North American distance from its former European allies. Finally, after the pandemic, competition and conflicts between China and the United States are expected to increase exponentially, especially if Donald Trump is re-elected in November XNUMX, and if he goes ahead with his decision to strangle the economy and Venezuelan society, through trade and financial sanctions, and now through a naval blockade that may soon become the backbone of a military invasion, or an aerial bombardment carried out from its own ships that have already are mobilized in the Caribbean. It would be the first war in South America involving the world's great military powers. And it would perhaps be the first great tragedy in the history of South America in the XNUMXst century.

*Jose Luis Fiori He is a professor at the Graduate Program in International Political Economy at UFRJ. Auror, among other books, by about the war (Voices).