by Colin Todhunter, Global Research:
Covid, Capitalism, Friedrich Engels and Boris Johnson
“And thus it renders more and more evident the great central fact that the cause of the miserable condition of the working class is to be sought, not in these minor grievances, but in the capitalistic system itself.” Friedrich Engels, The Condition of the Working Class in England (1845) (preface to the English Edition, p.36)
The IMF and World Bank have for decades pushed a policy agenda based on cuts to public services, increases in taxes paid by the poorest and moves to undermine labour rights and protections.
TRUTH LIVES on at https://sgtreport.tv/
IMF ‘structural adjustment’ policies have resulted in 52% of Africans lacking access to healthcare and 83% having no safety nets to fall back on if they lose their job or become sick. Even the IMF has shown that neoliberal policies fuel poverty and inequality.
In 2021, an Oxfam review of IMF COVID-19 loans showed that 33 African countries were encouraged to pursue austerity policies. The world’s poorest countries are due to pay $43 billion in debt repayments in 2022, which could otherwise cover the costs of their food imports.
Oxfam and Development Finance International (DFI) have also revealed that 43 out of 55 African Union member states face public expenditure cuts totalling $183 billion over the next five years.
According to Prof Michel Chossudovsky of the Centre for Research on Globalization, the closure of the world economy (March 11, 2020 Lockdown imposed on more than 190 countries) has triggered an unprecedented process of global indebtedness. Governments are now under the control of global creditors in the post-COVID era.
What we are seeing is a de facto privatisation of the state as governments capitulate to the needs of Western financial institutions.
Moreover, these debts are largely dollar-denominated, helping to strengthen the US dollar and US leverage over countries.
It raises the question: what was COVID really about?
Millions have been asking that question since lockdowns and restrictions began in early 2020. If it was indeed about public health, why close down the bulk of health services and the global economy knowing full well what the massive health, economic and debt implications would be?
Why mount a military-style propaganda campaign to censor world-renowned scientists and terrorise entire populations and use the full force and brutality of the police to ensure compliance?
These actions were wholly disproportionate to any risk posed to public health, especially when considering the way ‘COVID death’ definitions and data were often massaged and how PCR tests were misused to scare populations into submission.
Prof Fabio Vighi of Cardiff University implies we should have been suspicious from the start when the usually “unscrupulous ruling elites” froze the global economy in the face of a pathogen that targets almost exclusively the unproductive (the over 80s).
COVID was a crisis of capitalism masquerading as a public health emergency.
Capitalism
Capitalism needs to keep expanding into or creating new markets to ensure the accumulation of capital to offset the tendency for the general rate of profit to fall. The capitalist needs to accumulate capital (wealth) to be able to reinvest it and make further profits. By placing downward pressure on workers’ wages, the capitalist extracts sufficient surplus value to be able to do this.
But when the capitalist is unable to sufficiently reinvest (due to declining demand for commodities, a lack of investment opportunities and markets, etc), wealth (capital) over accumulates, devalues and the system goes into crisis. To avoid crisis, capitalism requires constant growth, markets and sufficient demand.
According to writer Ted Reese, the capitalist rate of profit has trended downwards from an estimated 43% in the 1870s to 17% in the 2000s. Although wages and corporate taxes have been slashed, the exploitability of labour was increasingly insufficient to meet the demands of capital accumulation.
By late 2019, many companies could not generate sufficient profit. Falling turnover, limited cashflows and highly leveraged balance sheets were prevalent.
Economic growth was weakening in the run up to the massive stock market crash in February 2020, which saw trillions more pumped into the system in the guise of ‘COVID relief’.
To stave off crisis up until that point, various tactics had been employed.
Credit markets were expanded and personal debt increased to maintain consumer demand as workers’ wages were squeezed. Financial deregulation occurred and speculative capital was allowed to exploit new areas and investment opportunities. At the same time, stock buy backs, the student debt economy, quantitative easing and massive bail outs and subsidies and an expansion of militarism helped to maintain economic growth.
There was also a ramping up of an imperialist strategy that has seen indigenous systems of production abroad being displaced by global corporations and states pressurised to withdraw from areas of economic activity, leaving transnational players to occupy the space left open.
While these strategies produced speculative bubbles and led to an overevaluation of assets and increased both personal and government debt, they helped to continue to secure viable profits and returns on investment.
But come 2019, former governor of the Bank of England Mervyn King warned that the world was sleepwalking towards a fresh economic and financial crisis that would have devastating consequences. He argued that the global economy was stuck in a low growth trap and recovery from the crisis of 2008 was weaker than that after the Great Depression.
