Capitalism infects US response to virus
On major US news platforms and networks, with the exception of Fox, there is some unanimity that the Covid-19 virus will be the undoing of the Donald Trump presidency. I am not sure of that. This “decline” has been written about as long as one cares to remember. Naomi Wolf wrote about it in
in 2007, and Oswald Spengler wrote about it 100 years ago, so it’s probably best if we adopt a wait-and-see approach.
However, what I will be bold enough to say is that the pandemic may hasten the decline of the US (and the rise of China), and expose the general weaknesses of “the American model” that was so successfully exported to the rest of the world. There’s an old saying: as goes the US, so goes the world.
Apologies if I sound like a stuck record. The US established, in its image, the institutions that hold together the postwar liberal capitalist order. Ask any of the experts and they will probably look to the US (especially Wall Street) as a lightning rod, or the proverbial canary in a coal mine of global political, economic and global financial matters.
One of the things that defines the political economy of the US is its umbilical relationship with liberalism. As Princeton University’s Paul Starr explained, “historians and social scientists regarded the liberal project and the American civic creed as more or less the same. The proposition that each of us has a right to ‘life, liberty and the pursuit of happiness’ remains as good a definition as anyone has ever come up with of liberalism’s first principle and America’s historic promise.”
This liberal capitalism is now in conflict with a state-led capitalism — a subject eloquently led by the economist Branko Milanovic. This too can be discussed in greater detail at another stage. Enough then, with context.
One of the drivers of Trump’s response to the Covid19 pandemic is his dedication to the pharmaceutical industry, and thorough obeisance to “the market”. Trump appointed Alex Azar, a former drug industry lobbyist, as his health and human services secretary.
In response to the pandemic, Azar — who remains loyal to the US president, free-market capitalism and his “constituency” (the pharmaceutical industry) — made the following statement:
“The private market players, major pharmaceutical players … are engaged in this [Covid -19 pandemic] that we think that this is not like our normal kind of bioterrorism procurement processes, where the government might be the unique purchaser, say, of a smallpox therapy. The market here, we believe, will actually sort that out in terms of demand, purchasing, stocking, etc. But we’ll work on that to make sure that we’re able to accelerate vaccine as well as therapeutic research and development.”
When he was pressed in the US Congress by representative Jan Schakowsky to affirm that a vaccine “would be affordable for anyone who needs it”, Azar insisted it was up to the private sector to set prices, based on demand. If you’re an orthodox economist you might have no problem with that statement. The problem is that the US government will invest in research & development (R&D), and in effect hand it to the private sector, which will set prices based on “the market”.
This is just wrong. The government has to take a lead in R&D, and (then) make vaccines available to people, the way the US did with the first successful polio vaccine in 1953, which was made available to the public at no cost. Let’s be clear. Without people, there are no markets. Without people, there is no economy, not unless broccoli goes into business to drive cauliflower to extinction, and carrots collaborate with turnips to establish competition policies.
The state’s emphasis should, therefore, be on saving the people through purposeful intervention, and not allow “the market” to determine who stays healthy or alive. That’s simply the worst of social Darwinism.
The US can learn from China and South Korea. China chose lockdowns and forced quarantine, coupled with massive stimulus. South Korea offers free testing and treatment. These measures corralled the disease and kept infection rates low.
But the US will not listen to the rest of the world. As the inimitable Madeleine Albright once said: “We are the indispensable nation. We stand tall. We see further into the future.”
When World Health Organisation director-general Tedros Adhanom Ghebreyesus praised China for taking “unprecedented” steps to control the deadly virus, he added: “I have never seen for myself this kind of mobilisation … China is actually setting a new standard for outbreak response.”
ONE OF THE DRIVERS OF TRUMP ’ S RESPONSE TO THE PANDEMIC IS HIS DEDICATION TO THE PHARMACEUTICAL INDUSTRY
LET’S BE CLEAR. WITHOUT PEOPLE, THERE ARE NO MARKETS. WITHOUT PEOPLE, THERE IS NO ECONOMY
Lagardien, a visiting professor at the Wits University School of Governance, has worked in the office of the chief economist of the World Bank, as well as the secretariat of the National Planning Commission.