What does the Covid-19 pandemic reveal about the deficiencies of our economic system? Could this tragedy be the catalyst for a deep systemic change? Richard D. Wolff, Professor Emeritus of Economics at the University of Massachusetts, Amherst, tries to answer these questions in his latest book, The Sickness is the System: When Capitalism Fails to Save Us from Pandemics or Itself.
In this collection of short essays, he argues that many of the problems of our time are rooted in the economic system in which we live, namely capitalism.
This system, which has now become dominant across the globe, has always been plagued by various problems — inherent instability being one of the most important. Professor Wolff reminds us that capitalism regularly crashes, more or less violently, a phenomenon that is usually euphemized as the ‘business cycle’. Such crises happen every four to seven years on average. In the 21st century alone, the system has already been through three major downturns: the 2000-2001 dot-com bubble, the 2007-2008 great financial crisis, and now the Covid crisis. It is interesting to note that those events are usually named after the factors that triggered them, and are never presented as crashes of capitalism itself, even though their very recurrence shows that they are an intrinsic characteristic of the system. In particular, while it is true that Covid triggered and worsened the present downturn, several economic indicators show that capitalism was already due for a crisis before the pandemic; were it not for the virus, another trigger would have precipitated a crash.
Of course, those recurring crises are not abstract events: they have very tangible and often tragic consequences for the lives of millions of people, especially those at the bottom of the social scale. Incomes and jobs are lost, personal and professional projects are crushed, family and social ties are broken, physical and mental illnesses develop. Given the huge human and social cost of this systemic instability, various solutions have been tried over the decades (Keynesian-type government spending plans, neoliberal austerity and structural reforms, active monetary policy), but all have failed at suppressing capitalist booms and busts.
After showing that the system is more to blame than Covid for our present economic and social crisis, Wolff exposes how capitalism failed at both preparing for and containing the virus.
Throughout history, humanity has repeatedly been exposed to emerging diseases, which have sometimes taken huge death tolls. More specifically, in the last few decades new respiratory viruses (SARS, MERS) appeared, and scientists had warned that it was only a matter of time until another respiratory virus, possibly of the coronavirus family, would cause a major pandemic and disrupt our social life. Since we had been warned, why were we so little prepared when Covid hit? The reason is again to be found in our socio-economic structures. The logic of capitalism is that firms only produce when they expect a profit. Preparing for the emergence of a new respiratory virus would have meant stockpiling masks and ventilators, and pre-emptively researching vaccines and treatments for the family of coronaviruses. But such activities are economically too risky. One cannot know in advance when and how a pandemic will hit, and therefore private health companies are not willing to take on the risk associated with preparing for such an event; they instead prefer to focus on alternative, more profitable opportunities. …
Capitalism is therefore crash-prone and inadequate; it fails to protect us against health emergencies. But, as shown by Professor Wolff, it also bears a responsibility for many of our social illnesses, such as inequalities, unemployment, the crisis of democracy, racism and sexism. …
One of the lessons of the pandemic is that capitalism is unable to respond adequately to basic health needs because of the profit motive. The same is actually true of all other basic needs: food, housing, education, energy, care for the elderly. Firms in those sectors should therefore be transformed into worker co-operatives. Consumers and communities should also be involved in economic decision-making, along with workers, so that the outcome which is in the best interest of all emerges. In the other, non-essential economic sectors, however, capitalist firms could continue to exist. In this way, society could observe how both types of firms behave, and then make an informed decision about the desired balance between capitalism and co-op socialism.
Wolff has given us in this book a very useful tool for understanding the system in which we currently live, while at the same time offering us the vision of an alternative that is both practical and attractive. And he does so in a very clear, direct and accessible style, that should appeal to a wide audience.
Richard D. Wolff, The Sickness is the System: When Capitalism Fails to Save Us from Pandemics or Itself. Democracy at Work, September 2020.