The Pandemic’s Lessons About Capitalism

The coronavirus pandemic is teaching us a lesson about capitalism. We know that there was inadequate preparation for, and inadequate coping with, that pandemic. It wasn’t profitable for private enterprises to prepare adequately for, and contain, this crisis. The US government might have compensated for the failures of the private profit system – capitalism – but it did not. I don’t think that’s an accident and I don’t think that’s the particular responsibility of this or that politician. That is a systemic problem.

Governments usually support, reinforce, and share the same ideology as the people in societies who run the economic system, and the United States is no different. In the case of preparedness for COVID-19, the government did not step in to do what the private sector did not find it profitable to do. This was because that would have cost the government much money, and that might have required taxing some people more. The government is also ideologically committed to celebrating the superiority of private enterprise; it does not want to be seen and exposed as compensating for major failures of the private capitalist sector.

So, what is the lesson that the COVID-19 pandemic can teach us? There are all kinds of fundamental, basic things in a society like ours that need not be, and should not be, handled as private-profit enterprise activities. That’s what we learned during the pandemic. Let’s explore what qualifies as a basic social need that we cannot rely on capitalism to meet, because – just as it failed to do with the coronavirus pandemic – it won’t and it can’t. My point here is not that you agree with the specific details of each of the following. The point is to look at how each need is currently being handled and see how we could and should do it better.

1. Health

We know – unless we are really deluded – that there was inadequate preparation and inadequate coping with the pandemic. We didn’t have the tests, the masks, the ventilators, the hospitals, the beds, the gowns, and so on that we needed. We did not produce them, stockpile them or distribute them. Our already broken healthcare system is so costly that avoiding the doctor, even when you are sick, is normal behaviour. All of this helped this virus take hold. The government and private sector weren’t prepared and didn’t cope with the coronavirus well or in a timely manner. The result is an enormous loss of life and permanent health impacts for those who survive. As an economist, I also have to tell you that the wealth lost by the coronavirus pandemic is many times larger than what it would have cost to produce and/or stockpile all of the equipment that might have made us ready.

2. Food

In the United States, we have a two-track food system. One kind of food is carefully produced with no pesticides, insecticides, herbicides, etc., it is arguably better for you. The other kind of food is mass produced, using every kind of chemical fertilizer you can name. I don’t think this two-track food system is acceptable, and I invite you to think about it as well.

If it is healthy to have organic food, that’s the system we ought to have for everybody. Do we care that other people are healthy, not just ourselves? Of course, we do. If not out of decent morality and ethics, then because we don’t want fellow citizens to get sick, because the sickness maybe infectious, mightn’t it?

You know what the reason is that organic food is more expensive? Because of the profits involved, not just the costs. Are we going to let profit determine that the mass of people eat food is not good for you? Food is fundamental, without it we die. Therefore, we ought to have the best food we can as a nation. We know how to make good, healthy food. That ought to be the top priority just like public health. That means we don’t let food be produced only because it’s profitable, because you can make profit by killing off the weeds with one chemical and the insects with another chemical, and artificially stimulate the growth hormone with another chemical, and so on.

Either we put health and healthy food as our highest priority as a nation or we don’t. If we had the commitment across the food industry, we could mass produce good, healthy food. You only have to question profitability and reorient our top priority: proper food or the profit of the food companies.

3. Housing

One of the most basic things a society owes to the people who live in it is shelter that is warm in the winter, that keeps you from the rain, that gives you a place to recoup yourself at the end of your working day, and that gives you a place to raise your children. Housing in this country is held hostage by the housing companies. They only build houses if it is profitable. They tell you that. There is no secret here. Is it really acceptable that we have houses not built, because it isn’t profitable, while we have thousands of homeless people who have no place to call home? We are prioritizing what’s profitable and not what we know to be a moral, ethical, and socially useful thing to do. You don’t build a community, a sound society, if some people have six homes and other people have no home at all. That creates tension and conflict. That’s explosive: if not now, down the road. What kind of legacy we leave to our children?

4. Education

Either we believe our society is better if people are better educated or we don’t. Do you want to leave education to questions of profit: profit-driven colleges, profit-driven high schools, elementary schools, and daycare centers? That’s what we have now: a public sector, squeezed and contracted, and private-profit sector that is unaffordable to most. That is not enough if you are honestly committed to education.

5. Mass transit

As a matter of our national identity, we ought to have a high-quality system of airplane travel, train travel, street railway travel, buses, and even (at the lowest priority) private automobiles to meet our short and long-distance travel needs. We should have a mass system of transport available, staffed by specialized people who make sure that the transport is clean, safe, properly insured, that the drivers are vetted, etc. Instead, we have a transportation system mostly driven by profit.

Let me quote Donald Trump. When he was asked why he wanted workers to go back to work in the middle of the coronavirus pandemic, he said, “you look at automobile accidents, which are far greater than any numbers we’re talking about. That does not mean we are going to tell everybody, ‘No more driving cars.’ So we have to do things to get our country open.” Put aside the grotesque immorality of such a remark for a moment, because it teaches us something. Mr. Trump is right: We don’t, as a society, question, stop, or limit the private automobile even though it is an incredible pollutant and kills thousands of people a year. Why do we not question this? The answer is the private profit of the automobile industry that has dominated the American economy for the last century. We could have a transit system that pollutes and kills less, but profit dominates us and so the public system that of a good transport system keeps eluding us – but it needn’t, and it shouldn’t.

6. Care for the elderly

We have thousands of nursing homes that are run as for-profit enterprises. The stories coming from many of them are so horrific that millions of Americans will not put their elderly in such an institution, because they know what the profit drive does to how they are cared for. If we want elderly people to be treated decently, elegantly as they deserve after a lifetime of work and raising a family, then we cannot leave it in the hands of private profiteers.

7. Energy

Everything depends on energy: oil, gas, sun – all of it. It should be organized to meet our needs for energy without destroying our planet. That task can not be left in the hands of private profiteers who have done everything to cut corners, to postpone anti-pollution activities, to ignore the criticism of fossil fuel dependence, and so on. If we don’t want energy to be a threat to our survival, it has to be handled in a collective, direct way, not held hostage to private profiteering.

8. Military

My last example is chosen to tell you about something which is already handled without allowing the profit motive to govern it. We do not have a military or municipal police force organized as multiple profit-driven enterprises competing for our business. Because we want security and public safety provided without regard to bottom line profitability, the government is the sole buyer of the requisite inputs and delivers the output to us as a “free” public good. We could do likewise with public health, food, and so on.

It is a reasonable demand, but it also applies to our food, our housing, our transport, and all the rest. Public health was the lesson that the coronavirus pandemic shoed us: You can not leave these things in the hands of private profiteers. As the private companies will tell you, “Profit is our bottom line”. That’s what the system rewards them for producing, and the system punishes them for doing what may be socially useful but is not privately profitable. That’s the way the system works.

The lesson is that we have to take the things that are more important to us than private profit like our public health, our housing, our schools, our transport system and so on, and free them from the profit motive. If we learn that lesson, then the pandemic will have left us a positive legacy, not just a memory of how hard and deadly it was.

I want to conclude by asking you to think with me about what an economy might look like if it took this seriously, and how would it be organized if not for private profit? Worker cooperatives should produce all of these things: schools, transport facilities, housing. The worker co-ops would make decisions, but not alone. They’d have to make decisions together with the customers they serve and the communities in which they carry out the production. Three partners make the decision: those who do the work, those who consume the output, and those who live in and around where the production takes place and who, therefore, have to live with the consequences. These three partners all have real, concrete interests that must be represented so that the best decision for all emerges.

In this scenario, there is no place for the private profiteer – the person who comes in serving a tiny number of owners or major shareholders who want profit out of it. Would there be room for capitalists elsewhere? Perhaps they can work on non-basic needs such as restaurants, personal services, luxuries, etc.  

This would give Americans the freedom of choice they don’t have now. We would see how worker co-ops work in the basic industries of our society, and we would watch how capitalist enterprises work in the other less basic areas. We would see how they work differently, how it feels to work in them, and what the quality and quantity of output is. That would make us an informed community that could decide in the future if we want more capitalism or less. If we had an alternative all around us working to meet an informed choice about the different economic systems we want to produce the goods and services that a modern advanced society needs, deserves and can actually produce. That’s a way forward.

Let’s learn from the failures made during the coronavirus pandemic, Let’s handle the basic needs we have as a society in a way that will be successful and will not be interfered with by a capitalist system that puts the priority somewhere else – namely on profit. Profit is not always our absolute number one objective. To believe that is to be a dogmatic economic fundamentalist.

This essay has been adapted from “Economic Update: The Pandemic’s Lesson About Capitalism” which

was published on Democracy at Work’s YouTube channel on June 29, 2020.