Disclaimer: The situation related to the coronavirus pandemic is changing very rapidly. These are my thoughts at a given moment in time (or a few hours). If things look different when you read this (if you read this), blame it on the virus, and not me.😊
It’s a cliché to say that are we living through a kind of a pandemic that happens only about once in a century. Surely, the last time such a pandemic broke out was the Spanish Flu during 1918-20 in which approximately 50 million people died the world over. When the H1N1 flu started in 2009 many people expressed concern that that is perhaps going to the once-in-a-century flu pandemic of the 21st century. Thankfully, H1N1 did not run very long. The virus still exists, for sure, and people get infected. But it did not break out in a scale that is anywhere close to the Spanish Flu.
But COVID-19 has turned out to be that once-in-a-century pandemic we had been apprehending for more than a decade now. Already 100,000 people have died in its outbreak. The actual number could be higher because of under-reporting (not necessarily deliberate) from different countries. Apart from testing and isolation, social distancing has been touted as the most effective measure for containing the virus in addition to personal hygiene like washing one’s hands often with soap and water, and not sneezing or coughing without covering one’s month. It is already quite astonishing that many societies, including in India, have not reached a stage of mass education and awareness that people in general practice regular washing of hand as a basic hygiene practice.
Be that as it may, social distancing (physical distancing would have been a more appropriate term) has been taken to a whole new aggressive level during the present coronavirus pandemic. Many western countries are enforcing stay-at-home orders aggressively, to the extent that people are complaining of police high-handedness (in the UK, for example) incompatible with liberal democracy that lays great emphasis on individual freedom. In India this has led to complete stoppage of all economic activities for three weeks, most likely to be extended for at least two more weeks at the time I am writing this. Economic activities in other countries have also taken a huge beating, even if not completely halted everywhere. In many countries, including the US, cafe’s and restaurants are closed, factories were shut in Hubei province in China. Commercial shipments are stuck at ports and airports at many places, disrupting supply chains. Needless to say, this has already led to huge number of jobs lost. Number of people seeking unemployment benefit in the US shot up sharply this week. People have been fired in China. Migrant workers and daily wage earners are facing a nightmarish situation in India. The organized sectors will begin to understand the full impact of the economic crisis once we try to come out of the lockdown.
When the economy is stalled, jobs are lost, hirings stop, salaries freeze or are cut. It is a no-brainer to see that people will have less to spend on non-essential items. So discretionary spending will decrease globally. This will lead to decrease in demand leading to further job losses or less job openings for new entrants to the job market.
WTO has warned that global trade could decrease by as much as 30% from the pre-COVID levels [a]. The unemployment figures in the US is already over 10%. The number was somewhere around 23% during the great depression of 1928-30. The number of jobs lost in India has already crossed the number of jobs lost in the US during the 1928-30 depression. The summary of all this is that the global economic situation is rather grim. Faced with such grim reality, it takes bold steps by the government for a society/country to come out of it. That is what happened during the great depression. The US federal government pumped in huge amounts of money in infrastructure building that led to job creation in the short term, and to capacity building for the future, which ultimately helped the US come out of the rut they were in. The fact that the Communist Party of the US played a significant, though indirect, role in the whole process is a story for another day.
Unfortunately, we are living in a different world where there is no US Communist Party, the old Communist movement is dead world over. There is no USSR holding the red flag. The only country worth mentioning is Cuba, and they have truly been a shining example of what social spending can achieve in times of crisis. The western countries, most notably the UK and the US, have followed Neo-liberal policies since the Tatcher-Regan years. Public spending has been cut over the years, particularly after the 2008 financial crisis. Other European countries have followed similar policies, but perhaps not so aggressively. Italy, for example, had 10.6 hospital beds per 1000 population during the 1970’s. This came down steadily to 3.4 in 2012 according to data on the World Bank website [b]. The US, the ‘most prosperous’ country on earth, has 2.7 beds in comparison. Moreover, all developed countries have universal healthcare coverage provided by the sate, except the US.
What is the relevance of these to the COVID crisis? For one thing, it is true that governments are having to spend a lot of money in fighting the crisis. Some of it is direct in the form of actual spending for the healthcare services, procuring additional equipments, building temporary capacity etc. Some of it is indirect in the form of lost revenue, extra financial support being given to citizens etc. Even the US government has approved a $2 tn financial package to fight the COVID crisis and has made testing of corona virus free.
It can only be expected that the same governments which have followed Neo-liberal policies and policies of austerity in the name of fiscal discipline, will use this spending as further excuse to cut future spending. They will also use the same stick to beat the opponents. Any opposition to such extreme austerity measures will be termed as ‘anti-national’ or whatever other epithets they are given. In simple words, such opposition will be termed as irresponsible, and even greedy, in times of a grave crisis.
People, battered by the virus, and then further battered by a broken economy, will jump into the laps of the demagogues who peddle the image of a strong, decisive leader bordering on, or openly flaunting, depending on the social context, a toxic masculinity. More austerity will follow. More areas will be opened up for brazen profit-making at a further cost to public well-being.
All this is almost a given. What is not so obvious about a post-covid world?
Well, there are experts and then there are more experts to opine on this. Open any newspaper or magazine, and you are sure to encounter one of these opinion pieces. Some are worth the time, most are not. I am no expert on this. So this is a non-expert’s guess of what may unfold in the coming years. Caveat: If you have read up to this point, you should decide whether you want to spend any more time on this based on my disclosure in the previous sentence.
The new Cold War over Covid has already started. Instead of a global response, what is on display is a every country on its own attitude. Trump trying to buy out a potential vaccine from the German company CureVac for a ‘billion dollars’ exclusively for the US [c], reports of the US snatching away masks on way to other countries [d], Trump trying to brand the virus the ‘Chinese virus’, Trump threatening India of retaliation if it did not relax export restrictions on hydroxychloroquine, are examples of open bullying in the international arena, a macho manifestation of Trump’s ‘America first’ policy. (By the time of posting this, the USA has withheld its payment to The WHO). China, on the other hand has launched its soft power, power nonetheless. Being the ascending power, it does not measure success in terms of months or even a few years. Like a true aspiring global power, it thinks in terms of decades. Therefore, rather than behaving like a bully, it has acted like a true big brother. It has sent PPE and medical help to Italy, to India. A bunch of young Chinese diplomats have taken up the responsibility to propagate the Chinese model as the best one suited to face a pandemic [e], particularly in contrast to how countries like Italy, Spain and France have fared in their fights against the virus.
In short, a competition is on between authoritarian (ostensibly benevolent) vs. ‘liberal’ forms of politics and governance. How are the two sides likely to react in the immediate aftermath of the crisis? China, in a reasonable guess, will invest heavily in capacity building for the future. This will be in areas of education, research, healthcare system, whatever you can think of. It will project itself as an authoritarian state that takes the welfare of its citizens seriously. A vision to build capacity for the future, in terms of creating and propagating knowledge, taking care of healthcare needs at times of crisis are some of the measures that set apart societies, not just their politics. As an interesting move, China has made it a policy that vetting by the government is a must before publishing research on the novel coronavirus [f].
What the West does will be an interesting thing to watch. Will they continue in the path of Neo-liberal capitalism that has already caused so much of misery? Or will there be a re-think, and they will start re-investing in public welfare, public education, healthcare for citizens etc. What the US and UK, the two poster boys of Neo-liberal economic policies, do is going to be most important and interesting. Once they come out of this crisis, will the governments have the financial capacity to re-invest in public welfare? Or will they use the financial constraints to further go down the path of privatization and profit-making?
What will we see in India? Since the early 1990’s Neo-liberal economic policies have played havoc with the lives of millions. Expenditure in education and healthcare has been privatized to a huge extent. Rarely a middle-class and never an upper-class person goes to a government health facility. Middle-class parents, many of whom are products of government schools, do not send their kids to government schools any more.
Here is my guess on these questions.
The countries where Neo-liberal capitalism has taken roots will continue to follow that route. The economic elite (let us call the 1%) will not give up their power so easily. The governments, being controlled by the 1%, will enact measures that will advance their interests. So expect more cuts in education, healthcare, public services etc.
In order to understand what I am talking about, let us take the example of the US. Through the 1960’s and 70’s, the federal government contributed more than 70% of the budget for basic research in science. Even in 2004, the figure was 61%. But it fell below 50% in 2013, and stood at 44% in 2015. This was a result of (i) flattening of the contribution from the federal government, and (ii) increasing investment by corporations in basic research. Among the corporations, Pharma companies made the most contributions. These companies’ investment in basic research increased from $3 billion in 2008 to $8.1 billion in 2014. Spending on basic research, all 46,000 companies combined that participated in the BRDIS survey of the National Science Foundation (NSF), increased from $13.9 billion to $24.5 billion during the same period [g].
So what is the point here? First, the gap left by the government(s) will be filled by the corporations. But, it will come at a cost. Corporations are, by definition, for-profit entities. They are answerable only to their share-holders. Generating profit for the share-holders is the only motive for corporations, anything else is expendable. Therefore, it is not for no reason that the Pharma companies in the US spend so much on basic research. First, they get tax break for investments in basic research. They get to keep intellectual property rights over drugs they design for 20 years during which they generate huge profits. Then they have devised ways of extending those property rights beyond 20 years, tactics known as evergreening and thicketing [h].
Let us look at some hard numbers to understand the situation. CEO’s of three major Pharma companies—Allergan, Johnson & Johnson and Pfizer earned a total total of $90 billion in 2018. Americans spent a mind boggling $535 billion in prescription medicines in the same year, up 50% from 2010. Even with that, many Americans have to ration their medications to keep their expenses within limits. This simply means they take less medicine than what their doctors prescribe. To understand how drugs are priced, a new hepatitis C drug Sovaldi, launched in 2013, costs $1,000 a pill, or $84,000 for each treatment [h]. That should give you an idea where that $3 billion (or $8 billion) investment in basic research stand in the bigger scheme of things.
While the Pharma companies have been spending money on research, both basic and applied, other companies are also doing so, and in a bigger way lately. Take the examples of Tesla and Google. From technology to AI, they are the leaders. Sum total of all this will be that research will be done more and more in the private labs of the corporations with the sole motive of generating profit for them. Understanding the implications of such a scenario in the present perspective, some British MPs, cutting across party lines, have written a letter to the government that any vaccine for covid-19 developed from public funded research is made available on an open-access basis so that the developing countries can afford it [i]. They write: Any pharmaceutical monopoly could see developing countries left behind. What if the vaccine is developed from private research? Of course, the corporations are not obliged to share their knowledge, and they won’t. They will try to maximize their profit. Whether that comes from keeping the price high and letting only those who can afford to have it, or from keeping the price low so that they have bigger sales volume will be a purely business decision. Saving lives will not be one of the considerations in the decision-making process.
This will be the scenario in other areas also if research is increasingly done in private labs. This is not to deny that in the past private corporations have made significant contributions to basic research. Take the examples Xerox, or the Bell Labs. But as statistics show, more basic research was funded by public money, and private companies benefited from public funded basic research more than what they themselves generated.
Increasing private research has the potential to qualitatively change the nature of academic profession as we know it. Professors in the universities and colleges, even today, are seen as people holding expert knowledge in their areas who can be relied upon to give unbiased advice and opinion when required. They are the generators, and keepers of knowledge of the society. If the process of knowledge generation is handed over to private employees of for-profit corporations, who may have no reason or opportunity to openly share their knowledge, we are going to enter a different era altogether. How as a society we access and disseminate useful knowledge, or whether we can build a society where decisions are taken based on publicly shared knowledge, is going to be a big question.
Finally, will we need teachers? What the current global lockdown has shown us is that much of what we do face-to-face can be done (not at the same qualitative level, for sure) over the internet. Classes can be taught over zoom, or Google class room, meetings can be held over Skype or Webex. Or recorded videos of lectures can be uploaded on secure sites for the students to access at their convenience. Once 5G technology is launched globally, these will become even easier. Why do we need teachers then, or why do we need so may of them anyway? One marker of quality of an educational institution has been the student/teacher ratio. The smaller it is the better. Then teachers can pay attention to and take care of the needs of individual students. But in a corporatized teaching model, where the eventual goal of ‘teaching’ is to (a) generate profit for the private entity running the institution, and (b) impart just enough skill to the students so that by the end of their degree courses they can fit nicely as spokes in the giant corporate wheel, such close personal care is a thing of the past that has outlived its utility. Who wants critically thinking individuals who can raise questions about the grotesque depravity the corporate culture has brought upon humanity? This is not to suggest that there have not been, or there aren’t any private institutions that impart quality education. But my point here is not about ‘private’ entities per se, but the 'corporate' entities. There are no dearth of them, as we all know so well.
To sum up after this long, mindless musing, future of liberal social democracy seems rather bleak in a post-covid world. The real ideological battle will be between an ostensibly ‘benevolent’ authoritarianism and Neo-liberal capitalism. It will be interesting to see how much life the latter has left. But for a vast majority of humanity, the relevant question will be: Where do we stand in this? Do we even have a choice?
[i] https://www.theguardian.com/uk-news/live/2020/apr/12/coronavirus-live-news-nhs-staff-deaths-boris-johnson-latest-updates?page=with:block-5e9305738f082dfd549d500e#liveblog-navigation