Neo-liberalism and coronavirus: A match made in hell

Before Covid-19 burst on to the scene, the notion that the existing system was in crisis was gaining traction across the political spectrum.

As the virus escalates, early indications are that not only will such assertions strengthen, but the evidence to reinforce them will be inescapable.

China reported its first case to the World Health Organization in December 2019, and since then there have been more than 200,000 cases and more than 2,000 deaths in 149 countries. These numbers are increasing daily at an unrelenting pace.

Stock markets have crashed, flights have been suspended, cruise ships were stranded, sporting events are cancelled and several countries have entered lockdown. Worryingly, it appears this is just the tip of the iceberg.

When a health emergency that is unprecedented and equally destructive manifests, panic is inevitable because naturally there is no readily available solution.

But when the inherent values of the system compound matters, the situation becomes untenable. And countries with a determination to uphold the neo-liberal status quo are staring this bleak realisation in the face.

Mainstream centre-right and centre-left governments have for decades followed a neo-liberal recipe of tax cuts, reduced social welfare and increased deregulation, ergo placing weighty emphasis on the importance of free markets, innovation and hyper individualism.

Thus, the concepts of coordination, responsibility and duty become anathema. When such a predicament is married with a global pandemic, the consequences are harrowing. The system where wealth is concentrated and consequently less than 1% of the words population to own 46% of the world’s wealth does not appear one suited to tackling a health emergency where altruism and collective responsibility are indispensable. This was underscored when it emerged the worlds richest are chartering private jets to set off for holiday homes and private islands, taking with them personal doctors and nurses, as they try to avoid the worst of the virus outbreak.

Perhaps there is a lesson to learn in the fact European countries with greater social democratic institutions and traditions are tackling the coronavirus spread more effectively than the likes of the United Kingdom, one of the world’s largest economies and the embodiment of neo-liberalism.

Indeed, the Nordic countries are setting the tone and illustrating that there is plenty of life left in the values of cohesion and cooperation. They all enjoy universal healthcare, low child poverty, subsidized child care and paid family leave. The main ingredient that consolidates such an approach is significant state involvement, and the respective responses to the virus exhibit the scale of the involvement.

On the 16th of March the Swedish government launched a coronavirus package of measures worth more than 300 billion Swedish crowns, the equivalent of $30.94 billion. The package included efforts such as the central government assuming the full cost of sick leave from companies through the months of April and May, as well as the brunt of the cost for temporary redundancies due to the crisis. Additionally, laid off workers would be guaranteed at least 90% of their income.

They followed the footsteps of Norway and Denmark, with the former promising full pay for those laid off from work for 20 days as well as finances for the carers of Covid-19 patients. Meanwhile, Denmark’s government told private companies struggling with the spread of the virus that they will cover 75% of employees salaries and will simultaneously pick up the bill for employers sick pay.

Such steps are intended to assist the sectors that will see their business decline the longer the plight worsens. The dynamic approach is supposed to reduce the panic, keep people safe and concurrently stabilise the economy.

On the other hand, in Britain, the prime minister Boris Johnson initially took the approach of individualism on steroids. Ignoring the advice and lessons from Europe and Asia, Britain, as it often does now in the continent, went alone. The government’s aim was to delay the spread of the disease so that when peak of the endemic arrives, which is likely to be in the summer, the NHS would have the capacity to cope.

But if the Conservative government of the last decade did not opt for a stern focus on the privatisation of services yet simultaneously unforgiving austerity, the NHS would not be in an inadequate position to deal with the rising demand because of a threat this size.

Since 2010, funding has been among the lowest in percentage terms since the inception of the NHS in 1948. Lengthening waiting lists as well as ambulances and the A&E missing targets should have been alarm bells that prompted the government to react. But they did not, and now the health service will be under extraordinary strain. That is the result of a nonchalant approach to the services that the public so heavily rely upon.

But even when a proactive approach to the outbreak was adopted, many proposals seem economically driven first and foremost. For example, eight thousand private hospital beds are to be used by the NHS to assist with the workload. But they are to come at a cost of £2.4million a day. Likewise, despite Public Health England announcing that people would no longer be tested by the NHS unless symptoms are severe, it has emerged celebrities and many of Britain’s largest business owners have been sidestepping government regulations and paying for private coronavirus tests. Approximately more than 2000 people have paid £375 each for a home kit produced by a Harley Street Clinic.

Contrastingly, the newly elected progressive coalition government in Spain nationalised all of its hospitals and healthcare providers to combat the situation.

When a system is in place like in Britain where unrestrained survival of the fittest is rampant and every endeavour and policy is inspired by competition, profit and the economy, preventive procedures that come so naturally to governments elsewhere, are herculean tasks for the British one. Even when Boris Johnson and his new Chancellor Rishi Sunak proposed an ‘unprecedented package’ of measures worth £330billion, which include a three-month mortgage holiday and the scrapping of business rates (taxes paid on commercial properties), the measures, whilst essential, were somewhat underwhelming as they put business first and everyone else second. There was nothing in the announcement which would support renters, those in need of social care, those on zero-hour contracts and there was also insufficient clarity concerning sick pay and unemployment.

The chancellor stipulated in a press conference after his new announcement that the housing secretary will later provide details about protection for renters. But the government has already illustrated that the priority lies with those on the elevated rungs of the British social ladder.

Across the pond, president Donald Trump’s initial response mirrored the sluggish approach of the UK government. His early comments focussed on the economy and the stock market and even at one point told the US to ‘stay calm’ because the virus would simply ‘go away’. Yet following a report compiled by British researchers from London, which suggested if the US maintains its course of action, up to 2.2million people could die, the White House is now set to tow a more a stringent line.

Ironically, the US is now set for increased state intervention, a concept that is often scoffed at when Senator Bernie Sanders and the progressive wing of the Democratic Party acknowledge it. In fact, Sanders often emphasises that the Nordic economic system is the one he hopes to implement in the US. The US establishment usually dismiss it as radical or farfetched. But they are slowly heading in that trajectory in response to the virus.

Similarly, in the UK, one Conservative minister has already professed that Johnson may have to oversee a government with socialist tendencies. ‘We’ll find ourselves implementing most of Jeremy Corbyn’s programme’ was how he expressed it.

Thus, it is becoming increasingly clear that free market capitalism is unable to deal with the prevalent health emergency. The very alternative economic arrangements that were dismissed and ridiculed as insurmountable are seemingly being pursued because the existing system is ineffective.

The financial crash of 2008 cast the feasibility of neo-liberalism into doubt, but the coronavirus is threatening to condemn it to irrelevance.

























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