May 1, 2021

Pandemic capitalism

Christoph Butterwegge

COVID-19 and the social consequences

While the economic effects (global recession) and the political upheavals (protest against strong infection control measures such as a lockdown) received great public attention, the social consequences of the Covid-19 pandemic have remained somewhat unexposed. It was not just that the problem of inequality in the exceptional pandemic situation become visible as if under a magnifying glass. In fact, the pandemic itself, the economic crisis it triggered and the imbalance in the distribution of state financial aid for companies in most countries made it even worse. Despite all the assurances that these were “classless” societies with assured prosperity for all their members, a growing proportion of the population, even in countries with relatively high living and social standards, could not even cope with the loss of regular income for a few weeks.

The nursing staff of the APHP Robert Debre hospital in Paris, hospital staff from other hospitals, trade unionists, workers and yellow waistcoats demonstrate in front of the entrance of the hospital, for more financial and human resources and better working conditions in public hospitals. Banner: “Capitalism is the virus, solidarity is the antidote”..Photo : Simon LAMBERT/HAYTHAM-REA/laif

From “Rhenish” to swinish capitalism

Shortly after the unification of the FRG (Federal Republic of Germany) and the GDR (German Democratic Republic), the French economist Michel Albert referred to Germany, together with the Netherlands, Switzerland, the Scandinavian countries and Japan, as “Rhenish capitalism” and contrasted it ideally with the Anglo-Saxon or US-American economic model. In his 1991 book Capitalisme contre Capitalisme, Albert wrote that the ultimate collapse of communism made the difference between the two models really clear: “The neo-American model is based on individual success and quick financial gain. The Rhenish has its centre in Germany and is very similar to the Japanese model. Like the Japanese model, it favours collective success, consensus and long-term forward thinking.”

Although the Rhenish model was fairer and more efficient, the ultra-liberal, less egalitarian model of US capitalism would spread all over the world due to the development of modern information and communication technologies as well as the neoliberal globalisation of the financial sector, Albert predicted at the time. In fact, in the past decades – to express it in a feuilletonistic way – a change from “Rhenish” to “swinish” capitalism has taken place. The latter is an economic and social system that tolerates brutal exploitation, drastic disenfranchisement of workers, systematic wage and social dumping, unscrupulous drudgery and mass cruelty to animals, as well as the profit maximisation of a small group of multimillionaires and billionaires. These work closely with exponents of the political and state system, which tolerates them and sets practically no limits.

This has never been more evident than during the COVID-19 pandemic: More than 1,400 workers at Europe’s largest meat factory, in which tens of thousands of pigs are slaughtered, butchered and processed every day, tested positive for SARS-CoV-2 in June 2020. This included a particularly large number of Polish, Romanian and Bulgarian contract workers who suffered from scandalous working and living conditions. All the people who worked at the headquarters of the Tönnies meat company in Rheda-Wiedenbrück at the time had to go into quarantine with their families because it was feared that the virus would spread to the entire population.

Epidemics as social equalisers?

In the past, epidemics have often contributed to reducing inequality, even if only for a period of time. This was the case, for example, with the medieval plague, which killed countless people of all classes in Europe from 1347 onwards. The main reason for this was the decline in food, land and property prices (due to a lack of buyers) on the one hand, and the rise in wages (due to a lack of workers and a strengthened negotiating position of those who remained vis-à-vis employers) on the other.

Like the bacterial epidemics that struck Europe in the 19th century – cholera, tuberculosis and typhoid fever – COVID-19 has in common, that it hits the immune and lowest income earners the hardest. The main victims of such pandemics are the poor in society. Studies from the USA show that the African-American minority is particularly affected by COVID-19. In Brazil, too, the virus has taken root mainly in the favelas, where those who facilitate and embellish the lives of the rich and wealthy through their mostly low-paid service work live.

At first glance, it looks like all people are equal before a virus. This is true with regard to the infectivity of coronaviruses, but not with regard to the vulnerability and infection risks of different population groups. The COVID-19 pandemic, for example, affected all inhabitants of the earth, but by no means all equally. Rather, they were affected quite differently depending on their working conditions, housing conditions and state of health. Because of the lower life expectancy of the poor, even in wealthy, if not rich, societies, the cynical basic rule applies: those who are poor must die earlier. The following applied during the corona pandemic: those who are poor, are more likely to die. This is because socially induced pre-existing conditions such as obesity, asthma or diabetes mellitus, catastrophic working conditions as well as cramped and hygienically unsafe living conditions all increase the risk of infection with SARS-CoV-2 and a more severe course of COVID-19 disease.

It is not the virus itself that is unjust, but a class society whose members are unequally affected. There can be no more talk of a social equaliser than of an “inequality virus”. Because SARS-CoV-2 did not cause the gap between rich and poor, nor was the new type of coronavirus responsible for the social conditions it encountered. Covid-19 only made existing clashes of interests stand out more clearly, while every lockdown and almost all government “rescue packages” for the economy made them more acute. It is not the virus that is anti-social, but a rich society that does too little to protect its poor members enough from infection and the economic distortions of the pandemic. Neoliberalism – an economic theory, social philosophy and political civil religion that believes inequality is productive and increases prosperity – acts as a social divider.

Social polarisation intensifies: corona, poverty and wealth

Globally as well as nationally, it is true that the rich have become richer and the poor have become more numerous in this exceptional pandemic situation. The financially weakest population groups, including homeless and houseless people, but also other residents of communal accommodation such as prisoners, refugees, contract and seasonal workers, migrants without a secure residence status, people with disabilities, people in need of care, addicts, prostitutes, unemployed people, low-income earners, those on minimum pension and people receiving transfer payments, are also the most immunocompromised.

The disruption of supply chains and distribution structures caused by the coronavirus, the loss of sales markets and the closure of shops, restaurants, hotels, clubs, cinemas, theatres and other facilities ordered by the authorities in response to the COVID-19 pandemic resulted in considerable economic losses for those working there, but also in a wave of bankruptcies and large-scale layoffs. On the one hand, short-time work and mass lay-offs (e.g. in the gastronomy, tourism and aviation industries) were not omitted, on the other hand, large corporations in crisis-resistant sectors even realised extra profits in the corona crisis: pharmacies, drugstores, food discounters, online mail-order business, parcel and delivery services, the digital economy and the pharmaceutical industry.

Contact bans, curfews and lockdowns destroyed the already fragile livelihoods of the poorest people (beggars, bottle deposit collectors and street newspaper vendors), as lack of passers-by and fear of infection sometimes led to a total loss of income. The financial burden on transfer recipients, those on minimum pension and refugees increased further due to the closure of charitable institutions, soup kitchens and social department stores.

Although share prices temporarily collapsed on all stock exchanges around the world after the outbreak of the COVID-19 pandemic, mainly small shareholders suffered dramatic losses, as they are generally prone to panic reactions and hasty selling. Hedge funds and financial conglomerates such as BlackRock, on the other hand, even successfully bet on falling share prices by means of short selling and earned money from the losses of small investors. Large investors also took advantage of the favourable situation to buy additional shares at relatively low prices and profited from the fact that the price trend was soon pointing upwards again in anticipation of government economic stimulus programmes.

Justine Debrie, a 29-year-old nurse, poses in front of the Robert Debre hospital during a protest by French health workers in Paris as part of a nationwide day of actions to urge the government to improve wages and invest in public hospitals, in the wake of the coronavirus disease (COVID-19) crisis in France June 16, 2020. Photo: REUTERS/Charles Platiau

Summary and conclusions

Before the coronavirus known as SARS-CoV-2, all humans are the same in terms of infectivity. It is only because the state of health, the living conditions as well as the income, wealth and housing conditions are in part very different, the risks of infection are also very unequally distributed between the social classes and strata.

While more work is likely to be done on the expansion of digital infrastructure following the positive experiences of many companies with home offices, video conferences and online workshops in the lockdown, the lobby for the expansion of social, education and care infrastructure as well as the expansion of public services in the care sector and health care is less politically influential. However, in the event that the pandemic, the lockdown and the corona-induced recession leave deep traces in the collective memory, as often predicted, they would have to trigger a sustained public debate on socio-economic inequality and ways to reduce it, especially as the problem is exacerbated in the wake of these events.

If the risk of infection, disease and mortality in and after the COVID-19 pandemic is no longer to depend decisively on material resources, the capitalist economic and social system must be overcome. The corona crisis has taught us that the production, consumption and lifestyle of pandemic capitalism is neither sustainable nor suitable for preventing the impending climate catastrophe caused by greenhouse gas emissions.

Prof. Dr. Christoph Butterwegge taught political science at the University of Cologne from 1998 to 2016 and most recently published the book “Ungleichheit in der Klassengesellschaft” (“Inequality in Class Society”, Cologne: PapyRossa publisher).