Beneath Conspiracy Theories, the Class War

[Illustration by Anastasya Eliseeva]

By Aragorn Eloff

It is unsurprising that, as we confront the black swan event of the global pandemic, there has been an upsurge in the spread of conspiracy theories. Historically, narratives around malevolent, all-powerful forces controlling reality in various ways have often emerged in times of social unrest and uncertainty, where large numbers of people find themselves socially adrift or unable to control fundamental aspects of their lives.

While the typical response to conspiracy theories is to view them as the product of ignorance or delusional thinking, this is complicated by the fact that history is full of many real instances of powerful people colluding in secret at the expense of society. The numerous price-fixing scandals uncovered in South Africa in recent years surely also constitute conspiracies, as do corporate cover-ups around the world, many of which we know about only as a result of people questioning the presentation of reality and correctly connecting the dots to map out underlying truths.

It is clear though that what we more commonly describe as conspiracy theories – exemplified in the current period by the linking of 5G networks to Bill Gates, vaccination and microchip implants, for instance – are markedly different from these real-world examples. As social and psychological research has shown, conspiracy theories of this kind are not amenable to empirical enquiry and subsist for long periods of time in the absence of any reasonable evidence. Those adhering to such theories tend to exhibit little interest in testing their underlying claims and will often simultaneously believe in conspiracy theories that outright contradict each other.

As The Conspiracy Theory Handbook published by George Mason University’s Center for Climate Change Communication observes, this suggests that conspiracy theories function in a similar way to ideology, with belief being more a case of underlying psychological motivators – dealing with feelings of powerlessness, coping with threats or explaining confusing events – than the result of careful research and reflection. If this is true, it becomes important to understand these drives and the social contexts within which they tend to arise. This is especially vital when we acknowledge that many conspiracy theories contain, albeit figuratively, a kernel of intuitive truth.

Indeed, as Marxist group Aufheben writes in an article titled “The rise of conspiracy theories: Reification of defeat as the basis of explanation”, conspiracy theory, like left politics, often has a sense “that the world is structured by unequal power relations, and that the powerful act in their own interests and against the interests of the majority”. Distinct from the kinds of concrete political analyses that are able to explain these unequal power relations in terms of complex dynamics involving myriad social, political, economic and historical forces, however, conspiracy theories operate with a highly simplified understanding of these aspects of social reality, turning social forces into individual Bond villains and systemic conditions into cabals of all-powerful evildoers. This simplified narrative structure, which tellingly reflects dominant modes of subjectivity and the cult of the personality that has arisen under neoliberalism, also partly explains the appeal of conspiracy theories for large numbers of people looking for a stable foothold in an increasingly complex world.

As simplistic as they may be, it is through empathetic and nuanced engagement with conspiratorial narratives that we can perhaps best grapple with, and nurture meaningful collective responses to, the problems conspiracy theories suggestively outline. For instance, while casting Gates as an evil billionaire who wants to control people with 5G networks via microchips implanted in their bodies through mandatory vaccination is clearly absurd, there are many legitimate reasons to be concerned by the technocratic and paternalistic approach of the Gates Foundation towards addressing malnutrition, malaria and viral pandemics in Africa and, more broadly, the lack of control we have over the actions of the plutocrat class.

Anxieties around being controlled by technology may also be based on intuitions about the extent to which states and big technology companies – Google, Microsoft, Amazon and so forth – have infiltrated, influenced and benefitted from our private lives while remaining almost entirely unaccountable, something researcher Shoshana Zuboff explores in her book, The Age of Surveillance Capitalism.

Similarly, the recent fears expressed by people who are convinced that the Covid-19 pandemic is part of a nefarious plot by global leaders acting in unison to push agendas that diminish our freedoms have at least some basis in what Naomi Klein calls disaster capitalism. Here, we would be quite unreasonable if we weren’t acknowledging that numerous states and corporate actors have leveraged the crisis to push forward anti-social agendas, the recent spate of illegal evictions of shack dwellers across South Africa and the loosening of environmental laws around the globe being just two examples.

Covert agendas

More broadly, we can discern the vague stirrings of a genuinely radical politics in some conspiracy theories. As Aufheben observes, these theories often express a genuine sense of estrangement from – and dissatisfaction with – capitalism, the state and other dominant social forces. While the world is not, of course, completely controlled by the Illuminati, the Rothschilds or lizard people, it’s not difficult to see the hints of a class analysis here. And when the staggering inequalities of wealth and power in the contemporary world have allowed the ruling class to live fantasy lives so utterly alien from our own, is it any wonder some of us have come to see them as almost inhuman?

Whatever truths they may loosely allude to, however, it remains the case that conspiracy theories, whatever short-term existential relief they may provide by assuring us that everything is easily understandable and under control, even if not in our interests, are deeply disempowering. If we set out with an incoherent understanding of how the world works, we quickly find ourselves unable to take much effective action to tackle its fundamental injustices or equalise its vast disparities of power, which is why the spreading of conspiracy theories usually results in apathy and fatalistic resignation.

More concerning, the same psychological drivers that make conspiracy theories so appealing also leave people susceptible to the influence of anyone – fascists, sociopaths, corporations and insincere spiritual gurus among them – offering an easy, comforting narrative that explains how things are and what we can do to make them better, usually in ways which, ironically, serve covert agendas.

Our approach to conspiracy theories should therefore be at least twofold. On the one hand, we can gently challenge the fallacious elements of conspiratorial thinking and encourage a more thorough interrogation of those aspects that correctly intuit real problems in the world. In practice, this takes the form of political outreach and radical pedagogy, the creation of collective spaces of learning and teaching through which we can tackle the problems we face at their roots without becoming tangled in them. The more we empower ourselves and each other with knowledge about how science, medicine, technology, politics and so forth function, the more we simultaneously hone our critical thinking skills, in turn cultivating personal agency – the sense that we can be meaningful participants in creating social change.

On the other hand, there is the more difficult task of offering assurance and support to those who find themselves drawn to conspiracy theories to make sense of a reality that seems to be slipping through their fingers. Here, we need to develop frameworks that offer sustainable forms of material, psychological and spiritual care. That the world is increasingly complex and uncertain means that very little is, or ever could be, orchestrated in the contrived ways conspiracy theorists propose, but it also means we have to become better equipped to deal with that complexity and uncertainty. While this may seem like a relatively solitary existential pursuit, a genuine sense of security is grounded in healthy, thriving communities of friends, lovers, families and comrades.

Building such communities is no simple task: they are at odds with the alienated and impoverished forms of social belonging that have become so prevalent in capitalist society and they require patient and careful interpersonal and political work. However, if we commit ourselves to learning more and communing more, we can slowly build herd immunity to the impoverished thinking of the present, whether it takes the form of conspiracy theories or dominant ideologies, and begin to cultivate something stronger than the multiple pandemics we currently face.

Covid-19 is a virus that attacks the lungs and many of those infected with it struggle greatly to breathe. Capitalism is an economic relation that attacks the social body and most of us forced to participate in it struggle greatly to live. The deep sense of existential disempowerment wrought by these conditions, especially when experienced together, renders us highly susceptible, however rational we think we are, to conspiratorial thinking and noxious ideologies.

When those around us fall prey to these insidious but increasingly endemic forms of magical thought we should, instead of ridiculing, judging or chastising them, remind ourselves that the word “conspiracy” comes from the old Latin term conspiraire, which means, simply, to breathe together. Breathing together, conspiring, we can create something far better than what currently passes for life.

This article was originally published at New Frame.

Profitability, Investment, and the Pandemic

[Photo Credit: REUTERS]

By Michael Roberts

Originally published at the author’s blog.

Last week’s speech by US Federal Reserve Chair Jay Powell at the Peterson Institute for International Economics, Washington was truly shocking.  Powell told his audience of economists that “The scope and speed of this downturn are without modern precedent”. One shocking fact that he announced was that, according to a special Fed survey of ‘economic well-being’ among American households, “Among people who were working in February, almost 40% households making less than $40,000 a year had lost a job in March”!!!

Powell went on to warn his well-paid audience sitting at home watching on Zoom that “while the economic response has been both timely and appropriately large, it may not be the final chapter, given that the path ahead is both highly uncertain and subject to significant downside risks”. Indeed, if the continual downgrading of forecasts of global growth are anything to go by, then the number of optimists about a V-shaped recovery are beginning to dwindle to just the leaders of governments and finance.

Another study projects that US GDP will decline by 22% compared to the pre-COVID-19 period and 24% of US jobs are likely to be vulnerable. The adverse effects are further estimated to be strongest for low-wage workers who might face employment reductions of up to 42% while high-wage workers are estimated to experience just a 7% decrease.

And Powell was worried that this collapse could leave lasting damage to the US economy, making any quick or even significant recovery difficult.  “The record shows that deeper and longer recessions can leave behind lasting damage to the productive capacity of the economy.”, said Powell, echoing the arguments presented in my recent post on the ‘scarring’ of the economy.

Powell reckoned the main problem in achieving any recovery once the pandemic was over was that “A prolonged recession and weak recovery could also discourage business investment and expansion, further limiting the resurgence of jobs as well as the growth of capital stock and the pace of technological advancement. The result could be an extended period of low productivity growth and stagnant incomes.”  See here.

And there was a serious risk that the longer the recovery took to emerge, the more likely there would be bankruptcies and the collapse of firms and eve n banks, as “the recovery may take some time to gather momentum, and the passage of time can turn liquidity problems into solvency problems.”

Indeed, last week, the Federal Reserve released its semi-annual Financial Stability Report, in which it concluded that “asset prices remain vulnerable to significant price declines should the pandemic take an unexpected course, the economic fallout prove more adverse, or financial system strains re-emerge.”  The Fed report warned that lenders could face “material losses” from lending to struggling borrowers who are unable to get back on track after the crisis. “The strains on household and business balance sheets from the economic and financial shocks since March will probably create fragilities that last for some time,” the Fed wrote.  “All told, the prospect for losses at financial institutions to create pressures over the medium term appears elevated,” the central bank said.

So the coronavirus slump will be deep and long lasting with a weak recovery to follow and could cause a financial crash.  And working people will suffer severely, especially those at the bottom of the income and skills ladder. That is the message of the head of the world’s most powerful central bank.

But the other message that Jay Powell wanted to emphasise to his economics audience was that this terrifying slump was not the fault of capitalism.  Powell was at pains to claim that the cause of the slump was the virus and lockdowns and not the economy. “The current downturn is unique in that it is attributable to the virus and the steps taken to limit its fallout. This time, high inflation was not a problem. There was no economy-threatening bubble to pop and no unsustainable boom to bust.  The virus is the cause, not the usual suspects—something worth keeping in mind as we respond.”

This statement reminded me of what I said way back in mid-March when the virus was declared a pandemic by the World Health Organisation. “I’m sure when this disaster is over, mainstream economics and the authorities will claim that it was an exogenous crisis nothing to do with any inherent flaws in the capitalist mode of production and the social structure of society.  It was the virus that did it.”  My response then was to remind readers that “Even before the pandemic struck, in most major capitalist economies, whether in the so-called developed world or in the ‘developing’ economies of the ‘Global South’, economic activity was slowing to a stop, with some economies already contracting in national output and investment, and many others on the brink.”

After Powell’s comment, I went back and had a look at the global real GDP growth rate since the end of the Great Recession in 2009.  Based on IMF data, we can see that annual growth was on a downward trend and in 2019 global growth was the slowest since the GR.

And if we compare last year’s 2019 real GDP growth rate with the 10yr average before, then every area of the world showed a significant fall.

The Eurozone growth was 11% below the 10yr average, the G7 and advanced economies even lower, with the emerging markets growth rate 27% lower, so that the overall world growth rate in 2019 was 23% lower than the average since the end of the Great Recession.  I’ve added Latin America to show that this region was right in a slump by 2019.

So the world capitalist economy was already slipping into a recession (long overdue) before the coronavirus pandemic arrived.  Why was this?  Well, as Brian Green explained in the You Tube discussion that I had with him last week, the US economy had been in a credit-fuelled bubble for the last six years that enabled the economy to grow even though profitability has been falling along with investment in the ‘real’ economy.  So, as Brian says, “the underlying health of the global capitalist economy was poor before the plague but was obscured by cheap money driving speculative gains which fed back into the economy”.  (For Brian’s data, see his website here).

In that discussion, I looked at the trajectory of the profitability of capital globally. The Penn World Tables 9.1 provide a new series called the internal rate of return on capital (IRR) for every country in the world starting in 1950 up to 2017. The IRR is a reasonable proxy for a Marxian measure of the rate of profit on capital stock, although of course it is not the same because it excludes variable capital and raw material inventories (circulating capital) from the denominator.  Despite that deficiency, the IRR measure allows us to consider the trends and trajectory of the profitability of capitalist economies and compare them with each other on a similar basis of valuation.

If we look at the IRR for the top seven capitalist economies, the imperialist countries, called the G7, we find that the rate of profit in the major economies peaked at the end of the so-called ‘neoliberal’ era in the late 1990s.  There was a significant decline in profitability after 2005 and then a slump during the Great Recession, matching Brian’s results for the US non-financial sector.  The recovery since the end of the Great Recession has been limited and profitability remains near all-time lows.

The IRR series only goes up to 2017.  It would be possible to extend these results to 2019 using the AMECO database which measures the net return on capital similarly to the Penn IRR.  I have not had time to do this properly, but an eye-ball look suggests that there has been no rise in profitability since 2017 and probably a slight fall up to 2019.  So these results confirm Brian Green’s US data that the major capitalist economies were already significantly weak before the pandemic hit.

Second, we can also gauge this by looking at total corporate profits, not just profitability.  Brian does this too for the US and China.  I have attempted to extend US and China corporate profit movements to a global measure by weighting the corporate profits (released quarterly) for selected major economies: US, UK, China, Canada, Japan and Germany.  These economies constitute more than 50% of world GDP.  What this measure reveals is that global corporate profits had ground to a halt before the pandemic hit.  Marx’s double-edge law of profit was in operation.

The mini-boom for profits that began in early 2016 peaked in mid-2017 and slid back in 2018 to zero by 2019.

That brings me to the causal connection between profits and the health of capitalist economies.  Over the years, I have presented theoretical arguments for what I consider is the Marxian view that profits drive capitalist investment, not ‘confidence’, not sales, not credit, etc.  Moreover, profits lead investment, not vice versa.  It is not only the logic of theory that supports this view; it is also empirical evidence.  And there is a stack of it.

But let me bring to your attention a new paper by Alexiou and Trachanas, Predicting post-war US recessions: a probit modelling approach, April 2020. They investigated the relationship between US recessions and the profitability of capital using multi-variate regression analysis.  They find that the probability of recessions increases with falling profitability and vice versa.  However, changes in private credit, interest rates and Tobin’s Q (stock market values compared with fixed asset values) are not statistically significant and any association with recessions is “rather slim”.

I conclude from this study and the others before it, that, although fictitious capital (credit and stocks) might keep a capitalist economy above water for a while, eventually it will be the profitability of capital in the productive sector that decides the issue. Moreover, cutting interest rates to zero or lower; injecting credit to astronomical levels that boost speculative investment in financial assets (and so raise Tobin’s Q) and more fiscal spending will not enable capitalist economies to recover from this pandemic slump.  That requires a significant rise in the profitability of productive capital.

If we look at investment rates (as measured by total investment to GDP in an economy), we find that in the last ten years, total investment to GDP in the major economies has been weak; indeed in 2019, total investment (government, housing and business) to GDP is still lower than in 2007. In other words, even the low real GDP growth rate in the major economies in the last ten years has not been matched by total investment growth.  And if you strip out government and housing, business investment has performed even worse.

By the way, the argument of the Keynesians that low economic growth in the last ten years is due to ‘secular stagnation’ caused by a ‘savings glut’ is not borne out.  The national savings ratio in the advanced capitalist economies in 2019 is no higher than in 2007, while the investment ratio has fallen 7%.  There has been an investment dearth not a savings glut.  This is the result of low profitability in the major capitalist economies, forcing them to look overseas to invest where profitability is higher (the investment ratio in emerging economies is up 10% – I shall return to this point in a future post).

What matters in restoring economic growth in a capitalist economy is business investment.  And that depends on the profitability of that investment.  And even before the pandemic hit, business investment was falling.  Take Europe. Even before the pandemic hit, business investment in peripheral European countries was still about 20 per cent below pre-crisis levels.

Andrew Kenningham, chief Europe economist at Capital Economics, forecast eurozone business investment would fall 24 per cent year on year in 2020, contributing to an expected 12 per cent contraction in GDP. In the first quarter, France reported its largest contraction in gross fixed capital formation, a measure of private and public investment, on record; Spain’s contraction was also near-record levels, according to preliminary data from their national statistics offices.

In Europe, manufacturers producing investment goods — those used as inputs for the production of other goods and services, such as machinery, lorries and equipment — experienced the biggest hit to activity, according to official data. In Germany, the production of investment goods fell 17 per cent in March compared with the previous month, more than double the fall in the output of consumer goods. France and Spain registered even wider differences

Low profitability and rising debt are the two pillars of the Long Depression (ie low growth in productive investment, real incomes and trade) that the major economies have been locked into for the last decade.  Now in the pandemic, governments and central banks are doubling down on these policies, backed by a chorus of approval from Keynesians of various hues (MMT and all), in the hope and expectation that this will succeed in reviving capitalist economies after the lockdowns are relaxed or ended.

This is unlikely to happen because profitability will remain low and may even be lower, while debts will rise, fuelled by the huge credit expansion.  Capitalist economies will remain depressed, and even eventually be accompanied by rising inflation, so that this new leg of depression will turn into stagflation.  The Keynesian multiplier (government spending) will be found wanting as it was in the 1970s.  The Marxist multiplier (profitability) will prove to be a better guide to the nature of capitalist booms and slumps and show that capitalist crises cannot be ended while preserving the capitalist mode of production.

Capitalism is an Incubator for Pandemics. Socialism is the Solution.

[Image: Antonio Calanni/AP]

By Mike Pappas and Tatiana Cozzarelli

Republished from Left Voice.

A new coronavirus called “SARS-CoV-2” — known colloquially by the name of the disease it causes called “coronavirus disease 2019” or “COVID-19” — is wreaking havoc around the world. In Italy, the death toll has risen to 366 today and the country just extended its quarantine measures nationwide. In China, production has shut down at factories across the country. According to the WHO, over 100,000 cases have been confirmed in over 100 countries and the death toll is now up to 3,809 as of this writing. The stock market in the U.S. fell by 7% today and  we may be headed towards another 2008-like recession.

Reports range from 200-400 (213 per WHO and 434 per NBC News) confirmed cases of COVID-19 in the U.S., but there are likely many many more that have not been detected, as health facilities still do not have a readily available rapid test for diagnosis. The Centers for Disease Control (CDC) botched a first response, sending out faulty testing kits that required a recall. At this point in the U.S. the CDC is refusing to report how many have been tested, but we know the number tested in the US is extremely low largely due to the immense hurdles government officials have put in place. The FDA recently announced over 2 million tests should be shipped to labs by Monday with an additional 4 million by the end of the week. This could lead to a great increase in confirmed cases around the country. We are also seeing reproduction of racist, xenophobic tropes and attacks as fear of the epidemic grows. 

The spread of the coronavirus is exposing all of the contradictions of capitalism. It shows why socialism is urgent.

Coronavirus in Capitalism

It is only going to get worse. The spread of the virus is impossible to stop — and this is due to social reasons more than biological ones. While doctors recommend that people stay home when they are feeling sick in order to reduce the possibility of spreading the virus, working-class people just can’t afford to stay home at the first sight of a cough. 

Contrary to Donald Trump’s recent suggestions that many with COVID-19 should “even go to work,” the CDC recommends that those who are infected by the virus should be quarantined. This poses a problem under capitalism for members of the working class who cannot afford to simply take off work unannounced. New York City Mayor, Bill de Blasio recently suggested avoiding crowded subway cars or working from home if possible, but many rely on public transit. Suggestions from government leaders show their disconnect from the working class. 58% Americans have less than $1,000 in their savings and around 40% of Americans could not afford an unexpected bill of $400. So for many, staying home or not using public transit is simply not an option.

Even more people avoid the doctor when we get sick. With or without insurance, a trip to the hospital means racking up massive medical bills. The Guardian reports that 25% of Americans say they or a family member have delayed medical treatment due to the costs of care. In May 2019, The American Cancer Society found that 56% of adults report having at least one medical financial hardship. Medical debt remains the number one cause of bankruptcy in the country. One third of all donations on the fundraising site GoFundMe go to covering healthcare costs. That is the healthcare system of the wealthiest country in the world: GoFundMe.

Clearly, this is a very dangerous scenario. Already, people are being saddled with massive bills if they seek tests for the coronavirus. The Miami Herald wrote a story about Osmel Martinez Azcue who went to the hospital for flu-like symptoms after a work trip to China. While luckily it was found that he had the flu, the hospital visit cost $3,270, according to a notice from his insurance company. Business Insider made a chart of the possible costs associated with going to the hospital for COVID-19:

Of course, these costs will be no problem for some. The three richest Americans own more wealth than the bottom 50% of Americans. The concentration of wealth in the hands of fewer and fewer capitalists is part of capitalism’s DNA. But as Kate Pickett and Richard Wilkson highlight extensively in their book The Spirit Level: Why Greater Equality Makes Societies Stronger, people in more equal societies are healthier. They live longer, have lower infant mortality, and have high self-ratings of health. Inequality leads to poorer overall health.

So how does this relate to COVID-19? The main theory for these outcomes is that inequality of wealth and power in a society leads to a state of chronic stress. This wreaks havoc on bodily systems such as the cardiovascular system and the immune system, leaving individuals more susceptible to health problems. This means as societies become more and more unequal, we will see individuals more and more susceptible to infection. Capitalism’s inequality puts us all at greater risk as COVID-19 spreads.

Coronavirus (COVID-19) In Socialism

COVID-19 highlights the need for socialism to face epidemics like these. And by socialism, we don’t mean Medicare for All or New Deal liberalism. Medicare for All is not enough to face pandemics like the coronavirus. We mean a society in which human needs govern production, not the drive for profit. It’s a society without capitalists, where production and reproduction is democratically planned by the working class and oppressed. In this kind of society, we would be able to respond to the COVID-19 infinitely better than in capitalism. 

In a socialist society, both prevention and responses to outbreaks of illness would change drastically. Supplies such as hand soap, hand sanitizer, and surface sanitizing wipes or sprays are in extremely high demand at this time. We are already seeing shortages of key supplies around the world. The need for profit maximization under capitalism has led companies to drastically raise their prices in this time of high demand. For example, the Washington Post has reported drastic increases in prices of products such as Purell Hand Sanitizer. Under capitalism, scarcity leads to greater profit.

Capitalism has led to a globalized system of production containing industries at disparate ends of the globe that truly depend on each other to function. This allows for a capitalist’s exploitation of a worker in a factory in China producing iPhones that goes unnoticed by an Apple customer here in the U.S.. It also allows corporations to drive down costs in one area of the world that may have weaker protections for workers. While this is beneficial for capitalists, outbreaks of illnesses such as COVID-19 highlight clear weaknesses in this system. A large portion of the basic materials used to make new medicines come from China. Since industry is so affected by viral spread, production of supplies has been drastically cut. This delays the ability for a rapid response in other countries such as the U.S.. 

A central aspect of socialism is a democratically run planned economy: an economy in which all resources are allocated according to need, instead of ability to pay. Need is decided democratically by both producers and consumersWith the means of production under workers’ control, we would be able to quickly increase production of these products in an emergency. 

Furthermore, with the elimination of the barriers between intellectual and manual labor, increasing numbers of workers would be familiarized with the entire production process and ready to jump in where needed. In worker cooperatives within capitalism like MadyGraf in Argentina and Mondragon in Spain, workers already learn all aspects of production. This allows workers to shift to areas where extra effort is needed. 

Socialism cannot exist in only one country, so a global planned economy would be key in these moments. If one country is experiencing a shortage, others would have to make up for it. This is key for reigning in global epidemics like the coronavirus: it will only be stopped if we stop it everywhere. In a global planned economy, this would be a much easier task. 

Staying Home

If one does get sick, making a decision to protect oneself and others by taking time off should never lead them to have to worry about losing their job, paying their rent, putting food on the table, or being able to provide for their children. Under capitalism services such as housing and healthcare are reduced to commodities. This often presents people with the ultimatum: work while sick and potentially expose others, or stay home and risk losing your job.

Under socialism, the increased mechanization of production and the elimination of unnecessary jobs — goodbye advertising industry! goodbye health insurance industry! — would already drastically reduce the number of hours that we would need to work. We would be spending vast hours of the day making art or hanging out with friends and family. 

During disease outbreaks, we would be able to stay home at the first sign of a cold, in addition to getting tested right away. In a planned economy, we could allocate resources where they are most needed, and take into account a decrease in the workforce due to illness. 

Where Are the Coronavirus Therapies?

Currently, multiple for-profit companies are attempting to test (sometimes new, sometimes previously rejected and now recycled) therapies to see if they can treat or prevent COVID-19. While there are attempts to produce a COVID-19 vaccine, this vaccine would not be ready for testing in human trials for a few months according to Peter Marks, the director of the FDA’s Center for Biologics Evaluation and Research. Yet even last week, Health and Human Services Secretary Alex Azar refused to guarantee a newly developed coronavirus vaccine would be affordable to all stating, “we can’t control that price because we need the private sector to invest.” The statement is ironic to say the least coming from the former top lobbyist to Eli Lilly who served at a time when the company’s drug prices went up significantly.

Companies such as Gilead Sciences, Moderna Therapeutics, and GlaxoSmithKline all have various therapies in development. Each company’s interest in maximizing profits around their particular COVID-19 therapy has kept them from being able to pool their resources and data to develop therapies in the most expeditious manner possible. The state of COVID-19 research exposes the lies about capitalism “stimulating innovation.”

It is also important to note that much of the drug development deemed “corporate innovation” could not have been possible without taxpayer-funded government research. Bills such as the Bayh-Dole Act allow for corporations to purchase patents on molecules or substances that have been developed at publicly funded institutions such as the National Institutes of Health (NIH), then jack up the prices to maximize profits. A study conducted by the Center for Integration of Science and Industry (CISI) analyzed the relationship between government funded research and every new drug approved by the FDA between 2010 and 2016. Researchers found “each of the 210 medicines approved for market came out of research supported by the NIH.”

Expropriation of the capitalists would mean the public would no longer have to subsidize private corporate profits. The nationalization of the pharmaceutical industry would allow for both intellectual and financial resources to be pooled to tackle the globe’s challenges, instead of focussing on blockbuster drugs that benefit only a few. In the case of COVID-19, we would see a mass mobilization and coordination of the world’s greatest minds to pool resources and more quickly develop effective therapies. In fact, there would likely be more doctors and scientists as people who want to study these fields are no longer confronted with insurmountable debt

Health Care in Socialism

Under socialism, the entire healthcare industry would be run democratically by doctors, nurses, employees, and patients. This would be drastically different from the current system in which wealthy capitalists make the major decisions in hospitals, pharmaceutical companies, device manufacturing firms, and insurance companies (the key players that make up the “medical industrial complex”). In the case of the COVID-19, health care would be a human right, and not a means to make money. This would allow for every individual concerned to obtain testing and treatment without fear of economic ruin. If hospitalization or quarantine was needed, a patient and family would be able to focus on what was best for their health instead of worrying whether a hospital bill would destroy them economically.

The purview of what is considered “health care” would also need to expand. An individual’s overall living situation and social environment would be key to addressing their health. This would mean a health system under socialism would address issues such as pending climate collapse. While a connection between COVID-19 and climate change has yet to be established, rising global temperatures — largely driven by 100 largest corporations and the military-industrial complex — will increase the emergence of new disease agents in the future. Shorter winters, changes in water cycles, and migration of wildlife closer to humans all increase the risk of new disease exposure.

Capitalism created the conditions of the epidemic. Capitalist “solutions” are insufficient and exacerbate the crisis, meaning more sickness and more death. Capitalism has been an incubator for the continual spread of the coronavirus. Health care under this system will always be woefully inadequate in addressing epidemics. The coronavirus highlights the fact that we must move to a more social analysis of health and well-being. We are all connected to each other, to nature, and to the environment around us. Socialism will restructure society based on those relationships.

At the same time, socialism is not a utopia. There will likely be epidemics or pandemics in socialism as well. However, a socialist society — one in which all production is organized in a planned economy under workers’ control — would best be able to allocate resources and put the creative and scientific energy of people to the task.