Neoliberalism and the pandemic

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By ALFREDO SAAD-FILHO*

The impositions of neoliberalism were directly responsible for hundreds of thousands of deaths

The Covid-19 pandemic is the worst global public health emergency since the “Spanish” flu that gripped the world after World War I: a catastrophe after a nightmare. Compared to the 50 million flu victims in a world with a population of less than 2 billion people, the number of deaths directly and indirectly caused by Covid-19 remains small; however, the pandemic produced countless tragedies, traumatized survivors, and triggered the sharpest economic contraction in the history of capitalism.

The pandemic hit a world that was already suffering from growing economic imbalances, worsening financial crises, political unrest, and the corrosive impact of the “great stagnation” that followed the global financial crisis that began in 2007. Furthermore, global neoliberalism has become increasingly reliant on overt coercion and violence since the global financial crisis, leading to a growing crisis of democracy and the rise of authoritarian forms of government. In recent times, these governments have tended to be led by “spectacular” leaders, often supported by mass movements that combine modern forms of personality cults with more or less close relationships with traditional far-right currents and groups. Brazil, India, Hungary, Turkey and the US under Donald Trump offer clear examples of these processes.

These political and policy developments were closely related to the erosion of non-market protections introduced in earlier years and phases of capitalism (most obviously during the so-called welfare state), and the deployment of “fiscal austerity” supported by punitive measures. against the poor, underprivileged, neglected, and those who are hard to reach, serve, and provide for; attacks against any form of collective representation; repression against most expressions of dissent, ranging from lynching by the media to victimization, intercepting communications and harassment by police, security services or the military, as well as the emergence of a myriad of groups openly linked to the Fascism or even Nazism.

At the same time, and somewhat paradoxically, post-global financial crisis neoliberalism has led to new forms of embrace of state economic intervention, even in strongly neoliberal Western economies, often centered around state provision of expensive infrastructure. Unlike its predecessors, this presumably “public” form of provision invariably takes the form of (heavily financialized) support for private enterprise at public expense, and with socialized risk. Not even talking about “state provision”, however incorrectly, has changed the political environment, especially in the US and UK.

However, this is far from symbolic of a revival of Keynesianism, let alone a return to it; rather, it is part of a desperate attempt to create demand and skilled jobs, shore up economic growth after many years of stagnation, and shore up western economies in order to contain China's rise. So far, this approach has not been significant or transformative enough to demarcate a distance from neoliberalism, or even herald new forms of global economic competition. It remains to be seen whether it will change after Covid-19, especially through the so-called Biden plan in the US.

 

Roots of crises

The processes described above are rooted in multiple factors, including cracks in the ideological hegemony of neoliberalism since the global financial crisis. The notion of “free markets” has been undermined by the growing realization that neoliberalism has distributive and other distinctly negative consequences and that it creates undesirable patterns of employment and social reproduction, with implications for social welfare and beyond. The global financial crisis has highlighted these adverse implications, as it has revealed the costs and consequences of perpetuating a parasitic system of accumulation that cycles relentlessly between stagnation and destabilizing speculative bubbles, while, in the meantime, producing a way of life that it is widely considered undesirable from most people's point of view, and unsustainable given the imperative to protect known life forms on Earth.

The long-term picture was equally worrying. The economic restructuring that took place under neoliberalism was perceived as generating large fractions of economic “losers”: new technologies, financialization and the “globalization” of production led to the elimination of entire professions and countless careers, many of which until then stable and relatively well paid; they were often replaced by unskilled, precarious and poorly paid jobs, without dignity, stability, pensions, benefits, prospects for promotions, etc. These profound transformations in economic life had adverse implications for tens of millions of people, most dramatically in advanced capitalist economies.

The legitimate concerns that arose from them could not be clearly articulated and, by and large, the expressions of dissatisfaction from the “losers” were ignored, if not ridiculed, by state institutions, established politicians and the mainstream media. These attitudes were facilitated by the destruction of the left in earlier phases of neoliberalism: leftist political parties, trade unions, social movements, community organizations and other forms of political mobilization and social life were invariably the first victims of attacks in transitions to neoliberalism. .

The strangulation of traditional forms of expression of dissatisfaction fueled political alienation and fostered a political vacuum in which the opposition tended to be dissolved into “anomie”, absorbed by the extreme right, or swept up by “spectacular” authoritarian neoliberal leaders promising to solve the problems they faced. the “losers” couldn't cope. The rise to prominence of authoritarian leaders, often propagating disparate interpretations of neoliberalism and its consequences, promoting absurd claims of competence, and advancing easy policy options in terms of their own (self-proclaimed) “strength of character,” was facilitated by a bizarre process of “individualization of truth” under neoliberalism: the cult of “consumer choice”, self-improvement and the erosion of respect for expertise – a loss that was consolidated as economists, financiers and other “experts” denied the experiences of the losers, despite the perceived pervasiveness of dysfunctionalities and perversities in the world of neoliberalism – fueled a growing disrespect for science, evidence, and established truths.

Previously, marginal, extreme or ridiculous views have found fertile ground in the media's sounding boards, and have led to superficial but increasingly radical accounts of neoliberalism and its consequences (with "flat Earth", QAnon, anti-vax and theories of related conspiracies, becoming especially prominent in recent times). These cults coalesced into the idolatry of neoliberal authoritarian political leaders who propagated comforting claims that every transgression would be forgiven for appearing “genuine” and magically “in touch” with the concerns of the broad masses of people.

It follows that the political crisis of democracy and the drift towards an increasingly authoritarian form of neoliberalism cannot be reduced to epiphenomena or electoral errors that will be corrected when voters eventually realize that the self-centered, thieving, megalomaniac politicians who reject the neoliberal “expertise” will invariably fail, and that their projects must be replaced by a (temporarily lost) “third way” normality. This will not happen, despite the wishes of experts and the whims of centrist politicians. Rather, the rise of authoritarian modes of government stems from the economic and social damage inflicted by neoliberalism, followed by the breakdown of its ideological legitimacy and the consolidation of a repressive policy of crisis management after the global financial crisis.

This form of politics focuses on the manipulation of sectoral (exclusionary) grievances in order to support the system of accumulation through ongoing conflict, increasing repression, high rates of exploitation within and between countries, and the plundering of countries' resources. poor people, even poorer countries and nature. Underlying social divisions have been contained, channeled and deflected by nationalism, racism and violence, often encapsulated in right-wing, authoritarian and populist political forms.

 

entering the pandemic

The degenerative economic, social and political dynamics outlined above have been supplanted by the Covid-19 pandemic. The spread of the pandemic triggered the deepest and sharpest economic collapse in the history of capitalism, with a tendency to hit the advanced economies that were most weakened after several decades of “political reforms” under neoliberalism especially severely. This economic shock could only be contained by unprecedented levels of public sector intervention aimed at supporting production, demand and employment, offsetting the contractionary impact of the inevitable lockdowns, and address the health and other costs of the pandemic. These desperate interventions will have long-term consequences for the functioning of capitalism.

In particular, in addition to disrupting the global processes of surplus value extraction and circulation, the pandemic also had profound implications for social reproduction and everyday life. They range from unprecedented forms of state intervention to ensure capitalism's basic economic relations, protect public health and maintain order, to changes in urban spaces due to the decline of shopping streets, the rise of online shopping and service sector transformations. in general, with much more in between.

At the global level, countries, states and provinces have faced the pandemic in very different ways, with impressively disparate results. A motley crew has had great success in eliminating the coronavirus, including China, Cuba, Ghana, the state of Kerala in India, New Zealand, Senegal, Singapore, Taiwan and Vietnam. Others have witnessed extraordinary policy failures that have resulted in tens of thousands of preventable deaths, for example Brazil, Ecuador, Hungary, India, Italy, Sweden, Turkey, the UK and the US.

In very general terms, the most adamantly neoliberal economies have been unable to mount coherent policy responses to the pandemic. Instead, their governments tended to adhere to (more or less explicit) “herd immunity” policies, an approach fraught with social Darwinist overtones. These states also tended to be more heavily restructured by neoliberal “reforms” – that is, they tended to be institutionally disjointed, heavily privatized and colonized by pirate unions bent on looting rather than managing. Not surprisingly, these governments have had difficulty assessing the threat, making decisions in the interests of the majority, mobilizing state capacities in the interest of public health, or implementing coordinated policies to confront the pandemic.

In contrast, where neoliberal ideology was less influential and state, industry, and health care “reforms” were less advanced, notions of common citizenship tended to be more salient, welfare states more stronger and health systems were generally more comprehensive and resilient. These states also tended to have more political space to implement better coordinated policies. They could often suppress the coronavirus and resume “normal” life more quickly and with far fewer casualties; however, failures elsewhere have forced “successful” states to remain isolated from the world in order to avoid importing new cases of Covid-19.

 

political lessons

The experiences of success and failure of policies to combat the pandemic suggest six significant lessons.

First; neoliberal states can be highly efficient in protecting the profits and interests of the privileged, and they have learned the art of saving finances from their self-inflicted catastrophes. However, these states have great difficulty in performing other government functions, especially protecting the population from the misfortunes of misfortune and guaranteeing jobs, income and basic services for the vast majority. The pandemic shows that this must be done not only for reasons of justice and distributive economic policy; this is also important for effective health policies, as job security and income security will make the population healthier and, in the event of a pandemic, allow more people to stay at home, easing the burden on the health system and accelerating the economic recovery. Costs shouldn't be an obstacle: since the authorities have been able to provide hundreds of billions to banks, hedge funds and big business over and over again, they can certainly support the vulnerable and fund a resilient and universal health care system, if any. political will to do this.

Second; the more neoliberal ideologues and formulators reconstructed the state along neoliberal lines, and the more they imposed the commodification of social reproduction, the less these states were able to mobilize resources and expertise to respond to emergencies. This limitation was notoriously evident in what might be called the “Calamity Quartet” (US, UK, Brazil and India).

Third; there is no balance between health and economy. That is, the claim that countries must choose a position along a supposed continuum between lockdown (ensuring minimal loss of life in the short term but at high economic costs) and “herd immunity” (with the opposite balance of costs and benefits) is a misleading guide to public policy. What has been proven, on the contrary, is that the economy cannot function if the population is not safe or healthy. Experience also shows that countries that resisted lockdowns and flirted with “herd immunity” tended to suffer the greatest human catastrophes as well as the deepest economic meltdowns. These results reinforce the importance of integrated public policy, state capacity and a strong productive base, in contrast to the systematic depredation of the economy and the public sector under neoliberalism.

Room; it was possible to eliminate the coronavirus in many different ways. In particular, the supposed balance between democracy and the effective fight against the virus was false, because countries performed more or less appropriately depending on their state capacity and public policies, not their political regimes. Given that it was possible to successfully combat the pandemic in a democratic context (e.g. Australia, Denmark, Finland, Iceland and New Zealand), the widespread escalation of authoritarianism in the wake of Covid-19 was a farce: the main objective of surveillance, localization , repression and the command policy has not been the implementation of adequate health policies.

Rather, the goals were to disguise policy failures in the short term and validate social control in the long term. In contrast, successful experiences did not depend mainly on repression, but on different combinations of state capacity, intentional, centralized and coordinated action, economic resources, technology, tests, screening, capillarity of health systems and social control. These are the characteristics of a successful industrial policy, applied to the field of public health. In contrast, “failed” states tended to be disorganized, disjointed, and more radically restructured by neoliberal “reforms,” as they drastically deindustrialized, fragmented their own supply chains in the name of “globalization,” incorporated “competition” into their health systems, acted belatedly and grudgingly against Covid-19, failed to test or trace the virus, imposed lockdowns late and reluctantly, and lacked PPE, ICU beds and lung ventilators. It is, therefore, a pandemic with neoliberal characteristics, in which the impositions of neoliberalism were directly responsible for hundreds of thousands of deaths.

Fifth; the pandemic blatantly revealed how the neoliberal cult of competition and individual maximization had fueled nationalism and racism, demeaned science, and closely interacted with the individualization of truth. This is especially corrosive because if the truth is open to “choice”, there will be no possibility of dialogue between people with different points of view – this is the collapse of the possibility of democracy, due to an excess of neoliberal individualism.

Sixth; the economic burden of Covid-19 will be much higher than that of the global financial crisis. Most governments, especially in advanced Western economies, have spent huge sums during the pandemic, in addition to lowering interest rates wherever possible (given the exceptionally low rates already prevailing a decade ago). Many governments have expressed their intention to cover these costs by moving to a “new fiscal austerity” as soon as possible, but this would be unsustainable.

Fiscal austerity is unjustifiable in economic terms, and will be widely seen as illegitimate given the boost to wealth conferred by government support of stock markets. It is also impossible for the poor and other public services to shoulder the burden of another round of “adjustment”. Austerity policies could only be imposed by force, and these policies, their regressive implications and the accompanying repression will undermine the legitimacy of the state and damage the mass base of any government. These limitations suggest the possibility of a long period of political crises with unpredictable implications.

 

Conclusion

From the perspective of the left, the tensions of the pandemic have shown that the economy is a social system characterized by strong interdependencies (“we are the economy”), that we are connected as human beings and that the universal provision of basic services is much more efficient than the private, for-profit and fragmented offer. Therefore, it is up to the state to ensure access to universal basic services, jobs and income, paving the way for the transformation of dysfunctional (but highly profitable) sectors into public services. This can make a decisive contribution to the democratization and definancialization of the economy and to the transformation of “crises in neoliberalism” into a “crisis of neoliberalism”.

It has also been demonstrated that responses to the current economic, political and health crises of neoliberalism (not to mention the crises of the environment, water, food production, and so on, which also have neoliberal characteristics) must be based on internationalist values. , since only global solutions can be effective in an integrated world: we are truly “in it together”.

This approach can pave the way for a politics of humanity and hope, organized around the left's defining concerns with equality, collectivity, and economic and political democracy, against (a form, so far, clearly zombified) of neoliberalism. Our future is at stake, and only left-wing activity can ensure a life worth living.

*Alfredo Saad Filho is a professor in the Department of International Development at King's College London. Author, among other books, of Marx's value (Unicamp).

Translation: Fernando Lima das Neves.

 

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