All around the world, anti-capitalists are currently united in the hope that the crisis unleashed by the coronavirus could finally herald the long-awaited end of capitalism. Whether in the United States, Great Britain, France or Germany, anti-capitalist intellectuals everywhere trot out the same arguments: they previously hoped that the global financial crisis of 2008 would trigger the collapse of the capitalist system. But back then, at least according to their line of reasoning, capitalism and neoliberalism managed to rescue themselves once again. This time, they claim, it could – and should – be different.

‘Social ownership’ and the ‘democratisation’ of economic power

The left-wing American historian and sociologist Mike Davis has identified the current crisis as the perfect opportunity to single out large pharmaceutical companies as scapegoats for the pandemic. Their power, he claims, must finally be broken. And he goes further: More is needed than just a second “New Deal,” this is the moment for “social ownership and the democratisation of economic power.” In socialist terminology, these are merely somewhat nicer sounding words for nationalisation. “The current pandemic expands the argument: capitalist globalization now appears biologically unsustainable in the absence of a truly international public health infrastructure. But such an infrastructure will never exist until peoples’ movements break the power of Big Pharma and for-profit healthcare. This requires an independent socialist design for human survival that includes – but goes beyond – a Second New Deal. Since the days of Occupy, progressives have successfully placed the struggle against income and wealth inequality on page one – a great achievement. But now socialists must take the next step and, with the healthcare and pharmaceutical industries as immediate targets, advocate social ownership and the democratisation of economic power.”

At the launch of his new book, which calls for a radical redistribution of wealth, the French economist Thomas Piketty explained that drastic state-led interventions in the economy during the corona crisis could show governments how much they can regulate the economy.

Green New Deal

The Canadian anti-globalisation activist Naomi Klein says the corona crisis could be the catalyst for a kind of “evolutionary leap.” Just as the Great Depression led to Roosevelt’s New Deal, she explains, so could the coronavirus pandemic present the opportunity for the Green New Deal: “In fact, it’s possible for crisis to catalyse a kind of evolutionary leap. Think of the 1930s, when the Great Depression led to the New Deal…. It’s called the Green New Deal. Instead of rescuing the dirty industries of the last century, we should be boosting the clean ones that will lead us into safety in the coming century. If there is one thing history teaches us, it’s that moments of shock are profoundly volatile. We either lose a whole lot of ground, get fleeced by elites and pay the price for decades, or we win progressive victories that seemed impossible just a few weeks earlier. This is no time to lose our nerve. The future will be determined by whoever is willing to fight harder for the ideas they have lying around.”

“Until the fundamentals of social and economic life have been remade”

Left-wing intellectuals everywhere expect the coronacrisis to deliver on their dashed hopes from the 2008 financial crisis, namely a fundamental reorganisation of society and the abolition of capitalism. William Davies, a British sociologist and political economist, writes:

“We can already identify a few ways that 2020 and its aftermath will differ from the crisis of the 1970s. First, while its transmission has followed the flightpaths of global capitalism – business travel, tourism, trade – its root cause is external to the economy. The degree of devastation it will spread is due to very basic features of global capitalism that almost no economist questions – high levels of international connectivity and the reliance of most people on the labour market. These are not features of a particular economic policy paradigm, in the way that fixed exchange rates and collective bargaining were fundamental to Keynesianism. They are features of capitalism as such. It will take years or decades for the significance of 2020 to be fully understood. But we can be sure that, as an authentically global crisis, it is also a global turning point. There is a great deal of emotional, physical and financial pain in the immediate future. But a crisis of this scale will never be truly resolved until many of the fundamentals of our social and economic life have been remade.”

The end of neoliberalism

Ulrike Herrmann is a well-known German anti-capitalist and has written several books criticizing capitalism. She has also started praising the opportunities presented by the corona crisis. Her article appears under the headline “Corona sees the sun go down on neoliberalism. End of a theory” and continues: “The corona crisis is not without advantages.” She hopes that the coronavirus will bury the “neoliberal ideology” that she claims has allegedly dominated the Western world since the early 1980s. “Two leading politicians once vividly summed up how ruthlessly market radicals think: British Prime Minister Margaret Thatcher said that there is no such thing as society. According to her view of the world, we are all just individuals who supposedly just look after ourselves. In his inaugural address, U.S. President Ronald Reagan also perfectly encapsulated neoliberal thinking: ‘Government is not the solution to our problem, government is the problem.’ He shrunk the state to create room for the free market to take over. He privatised pension funds, deregulated the financial markets, sold off state assets and reduced taxes for the rich. These very same concepts were copied and rolled out in Germany. The ‘markets’ are now failing because they were only able to function as long as the future could be reliably calculated. Stock markets price in tomorrow’s profits.”

But, according to Hermann, the corona crisis now shows that there is “no alternative to solidarity…that is, to the state.” It is as strange as it is characteristic that for anti-capitalists the terms “solidarity” and “state” are used as synonyms. “This lesson,” Herrmann continues, “could have been drawn as early as the wake of the financial crisis of 2008. But, at that time, neoliberals once again managed to rescue their over-simplistic theory. In a breathtaking sleight of hand, they simply pretended that it was governments who had unscrupulously over-indebted themselves – although in reality it was the banks that granted bad loans. It was only once banking institutions needed to be bailed out that this debt ended up with the state. But this chain of cause and effect was soon lost – only the result counted: states’ indebtedness increased, thus the crisis had to be a ‘sovereign debt crisis.’ Neoliberals sketched out their fairy tale because the financial crisis was complicated. This is not the case with the coronavirus. It’s obvious to everyone that the ‘market’ cannot ward off the economic consequences of a viral pandemic. That’s why everyone is now crying for the state to step in.” So much from capitalism critic Ulrike Herrmann.

Do not underestimate the dangers

These analyses from left-wing intellectuals in the United States, Canada, Great Britain, France and Germany are not convincing. In reality, of course, the corona crisis exposes the failure not of the market, but of the state. Where the state should be strong, for example in disaster protection and pandemic preparedness, it has proved to be incompetent, unprepared and weak in most countries. And yet there were clear warning signs: Bill Gates, for example, has been predicting a catastrophic epidemic for years now, but politicians chose instead to focus on other issues.

That is the fundamental problem right now: the state is extremely weak where it should be strong – and very strong where it should be weak. It is a fairy tale to claim that policy agendas in Europe or the USA are set by neoliberals. The times of Reagan and Thatcher are – unfortunately – long gone. For decades we have seen the state and central banks become increasingly involved in the economy, while failing miserably in their core tasks (for example, infrastructure).

But now is the time to be extra vigilant: 12 years ago, anti-capitalists succeeded in reframing the financial crisis – wrongly – as a crisis of capitalism. The false narrative that the financial crisis is a result of market failure and deregulation has since become firmly established in the minds of the population at large. And now left-wing intellectuals are again doing their utmost to reframe the corona crisis to justify their calls for the all-powerful state. Unfortunately, the chances that they could succeed are very high indeed.

 

Dr Rainer Zitelmann is a historian and sociologist. He is the author of the books The Power of Capitalism, Dare to be Different and Grow Rich and The Wealth Elite, among others.

This article was first published in Forbes.