Capitalism failed the war on Covid after early blunders
On May 19, 2020, a motion to the Health Assembly of the World Health Organisation to initiate an independent inquiry into the origins of coronavirus was passed.
What followed was a declaration of a global pandemic. Faced by three related unknowns: the path and virulence of the virus, its effects on movement and on economic activity and the response to take, governments, local authorities and businesses took actions, the most drastic one being the restriction of movements, which put a strain on cross-border supply chains, financial and transport networks and this consequently stifled corporate risk taking and spending as business confidence was depressed, corporate cash flow reduced and financial conditions tightened.
Like protectionism, the pandemic epitomised a threat that saw businesses shelve expansion plans and only focus on strengthening their balance sheets.
The International Monetary Fund (IMF) had profiled that the global economy was headed for a disruption much worse than the 2008 financial crisis, with over 81 countries either requested or inquired about emergency funding from the IMF.
That included 50 low-income countries like Kenya, which faced and continue to grapple with serious challenges like capital outflows, reduced demand for their exports and a steep drop in commodity prices.
In developed countries like the United States, we heard the reports of unprecedented sell-offs.
Critics of capitalism have argued that the pandemic exposed not only its weaknesses as an economy and polity, but also the underlying vulnerability to new strains of infectious diseases.
From the responses, it’s hard to imagine that any capitalist government adequately prepared for such dangers.
To be clear, if the widely held theory that the virus emerged in a (“wet”) Chinese market that’s characterized by large-scale industrial agriculture is true, then it confirms the deeply held fears that the entirety of the production line – from standard breeds in crowded conditions to global production and supply chains – is organised around practices that accelerate the evolution of pathogen virulence and subsequent transmission.
Be it as it may, the initial response was overly clouded with accusations and counter-accusations — mostly directed to a “Communist” China, a country that was generous enough to sequence the virus and share the genomic data with the rest of the world for free.
Capitalism puts premium on science as central to the development of economic production, but uses its own tool — the Intellectual Property (IP) — to privatise and monetise knowledge.
This doesn’t only impede scientific genius but often times delays the deployment of scientific solutions.
And even if innovations are made, the capitalist trickle-down model mandates that the global health solutions take a decade or two to trickle down to the global south, where they have the most impacts.
That kind of inequality impedes a level of planning and global cooperation necessary to safeguard the human civilisation against the threat of global pandemics.
Perhaps no one is more troubled by this capitalism than his holiness, the Vatican Pontiff, Francis .
In his 2020 encyclical titled “Fratelli Tutti’’ (Brothers All), slammed the “magic theories” of market capitalism of “as the only solution to societal problems.”
The fragility of world systems in the face of the pandemic, he said, has demonstrated that not everything can be resolved by market freedom.
But what the pope and the newfound critics of capitalism maybe unaware of is that this is not the first time in history that a great crisis has demonstrated that human progress is inseparable from the struggle against inequality. — The writer is Global Impact Fellow at MWI