Capitalism may not survive 2020 global crisis, which will cut deeper and last longer than many predict

The current global crisis triggered by Covid-19 is the third capitalist crash in this century. And governments’ incapacity to consider non-capitalist solutions threatens to keep deepening this crisis into capitalism’s worst.

by Richard D. Wolff

Part 3 - What would have been logical response

The five converging crises persuade me that today’s global crisis will cut deeper and last longer than most are currently predicting.

The logical response to the 2020 crisis would have been to keep all workers employed doing all that was necessary to contain the pandemic. This means, for example, government rehiring those fired by private employers, massively training them to test entire populations, to take care of the sick, and to otherwise build what the society needs (infrastructure, education, housing, etc) under pandemic conditions of social distancing, masks, gloves, etc.

This is not the policy adopted in the US where, instead, massive unemployment of tens of millions was allowed. That quarter of the labor force has suffered massive economic losses, is now agonized over whether their former jobs will be available and under what wages and conditions. Massive unemployment invites every employer to recoup losses by cutting wages, benefits, job security, etc. That has already gotten well underway across the US. The suffering is greatest for the poorest, exacerbating already extreme inequality and aggravating racist tendencies to socially explosive levels.

In many countries mass poverty for a long time has undermined the health, diets, housing, education, and related conditions of huge populations. They consequently suffer more than the average from both viral pandemics and economic crashes. Even large emergency stimulus packages cannot offset or overcome historically accumulated social deficiencies and exclusions. It would take both much more money and a willingness to undertake major structural changes if today’s response to the crisis is to better protect societies from repeated crises in the future.

As happens in most capitalist societies, the bigger the enterprise, the greater its resources to cultivate political friends. The current crisis finds small and medium businesses more vulnerable and with fewer resources to enable survival than large corporations usually possess. That is why, despite the World Economic Forum’s and many governments’ statements on the importance of maintaining and supporting small and medium enterprises, and despite stimulus programs aimed at them, the systemically unequal competition between big business and other businesses will dominate the situation. Thus the bailouts and stimulus programs benefit larger corporations at the expense of medium and small businesses everywhere. Concentration and centralization of capital increase. Rising failures of small and medium business thus worsen unemployment and inequality. The various converging crises aggravate one another.

The major governmental weapon has been massive increases in monetary stimulus. This has utterly failed to revive economies in terms of employment and production. Instead it has fueled stock market/asset inflation that both worsens the already extreme inequality and also confronts mass suffering with rapid wealth accumulation of the already extremely wealthy. Almost no one believes in the long-term sustainability of this gross divergence between the stock market and the underlying economy.

Source:

https://www.rt.com/op-ed/495410-richard-wolff-capitalism-crisis/

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