Covid and capitalism’s unnecessary dilemma
The crisis provoked by the coronavirus pandemic has brought out clearly the nature of capitalism as a system where most people depend on the income they get as wages from employment. They are in this position because they are excluded from ownership and control of the places where they work and where wealth is produced. These are in the hands of a minority, generally through joint-stock companies, who use them, in fact only allow them to be used, to produce goods and services for sale with a view to profit.
To obtain the money to buy what they need, the excluded majority has to go out on to the labour market and successfully sell their ability to work in return for a money wage (sometimes called a salary). Some, who have a long-term job and so a regular income, are able to convince a bank or a building society to grant them a long-term loan to buy a house or flat, which will be theirs if they keep up repayments and interest for 25 years or so. Others work in precarious, low-paid jobs and have to rely between jobs on state hand-outs or the informal economy to survive. Those who are unemployable, through long-term sickness or disability, have to rely entirely on meagre hand-outs from the state.
When wages stop
One of the measures taken by the government to try to slow down and limit the spread of the virus has been to close down all but ‘essential’ businesses, defined mainly as those engaged in producing, transporting or selling food and other everyday household essentials. Over ten million workers – some 35 percent of the employed workforce – have been affected. If the government had not stepped in, all these would have been without resources within a few months, if not before. Such is the precarity in the end of all those dependent on working for a wage. They can’t stop working for much more than a month or so without having to beg for a handout from the state to survive.
A fall in living standards affecting so many people was something that the government could not let happen, if only to maintain public order and avoid widespread civil unrest. The scheme it came up with to avoid this was ‘furlough’ – enabling employers to keep workers on their books without them working but with the government paying 80 percent of their previous earnings. On 8 May, 8.9 million workers were furloughed. Some 1.6 million more were not so lucky. They lost their job and had to rely on means-tested Universal Credit, the number claiming this surging from 2.6 million in February to 4.2 million in May. Since Universal Credit only brings your income up to the official poverty line these suffered a drop in income of considerably more than 20 percent.
The government was prepared to fork out the money – obtained by borrowing it – but only on a temporary basis on the assumption that the business closures would only need to last a few months. Since a government has no resources of its own, it can get money to spend only by borrowing it from capitalists or from taxes that will ultimately fall on capitalists. No government can go on compensating workers for any lengthy period for being deprived of their usual source of income – the wages paid by their employers for the use of their working skills to produce some good or provide some service for profit. It’s just not sustainable.
The government has to aim to get the economy – production for profit – going again as soon as possible, with workers producing sufficient amounts of new value to provide a profit for their employer and to cover their own consumption. The government did try to do this after a few months but this proved to be too soon and the virus began to spread again, threatening once more to overwhelm the health service, though epidemiologists had been warning that this was likely to happen anyway.
Hence the government’s dilemma – which to give priority to: profit-making or public health? Hence, too, a particular problem for the present Tory government under pressure to prioritise the economy from the small businesses, which mainly cater for workers’ consumption and many of which risk going under, whose owners are an important support base for that party. In the end, as long as no effective vaccine is widely available and if the virus continues to spread, that is what the government will have to do.
They won’t have a choice. Despite the inevitable public outcry and political consequences, the government would be forced to sacrifice the health of the old who, in any event from a capitalist point of view, are a burden as they no longer work to produce the profits that capitalism is all about. It might not come to this –vaccination might become widespread or else the virus might peter out – but if neither of these happen within a year or so this is what would have to happen.
As it might be
In a socialist society a pandemic like the present one could be dealt with rationally without the complications that occur under capitalism due to its production for profit and working for wages. Where the means of wealth production are the common property of society these will be used to produce solely and directly to satisfy people’s needs and not for sale with a view to profit.
Even in such a society a pandemic of the kind we are currently experiencing could occur and the measures to be taken to contain it – basically, social distancing while a vaccine is developed – would be the same. However, these measures would be being implemented within a quite different framework. Everybody would already have access to what they need simply by virtue of being a member of society, without having to pay for it out of money wages obtained by working for an employer. Those able to contribute in terms of work would cooperate to produce what was needed, while everyone would have free access to what they required to meet their needs. In short, the principle of ‘from each according to their ability, to each according to their needs’ would apply.
This would be a much better framework within which to deal with any pandemic. To reduce contact between people, some production units and distribution centres might have to be closed and most people expected to stay at home except to collect food and other essentials as now. However, this would not be accompanied by the problems that result from doing this under capitalism. No production unit would ‘go out of business’ and not re-open; productive units would simply be temporarily closed. No-one would suffer a reduction in what they needed; free access for all, whether at work or not, to food and everyday essentials would continue. It would be inconceivable, indeed incomprehensible, that some children would have to go without a meal outside of term time.
If there was a longish delay in finding an effective vaccine or if the virus continued to spread for a couple of years or more, this would amount to a ‘natural disaster’ situation and some temporary rationing of non-essentials might have to be introduced. Once again, this would be done rationally, without the complications of maintaining production for profit and workers’ incomes, as the context would be a world of common ownership and production directly to satisfy everybody’s needs.
ADAM BUICK