Covid-19 and the fight for a new society

There have been a number of contributions in Daily Maverick (see here, here and here) advancing various economic measures necessary to deal with the Covid-19 crisis currently besetting the country. I will not rehash these in great detail here. Rather, my major purpose is to argue that the fight against Covid-19 should be one waged for the fundamental transformation of our economy and society.

This needs to involve a movement towards socialised production for need and a significant redistribution of wealth. In short, for the institutionalisation of the social solidarity that offers our only hope to emerge out of the current crisis.

The need to expand the current economic response

The president has announced various measures to support the more acutely vulnerable to the coming social and economic shocks. The government must be praised for the swift and relatively coherent public health response to the current crisis, a model that has not always been followed by ruling parties and world leaders across the globe. Yet while the specific economic proposals are welcome, they are, as Imraan Valodia has noted on this platform, insufficient to meet our short-term and long-term priorities.

The same goes for the earlier SARB repo rate cut, welcome, but surely limited without necessary complementary measures such as capital controls.

A national lockdown is the government attempting to follow international experience and flatten the curve with haste. These are uncertain times where decisions must be made with relatively incomplete (and changing) information while attempting to balance the needs of managing the virus with potential economic and social fallouts. The lockdown needs to be complemented with strong and ambitious economic support in our context where millions of people live in conditions that make physical distancing and the loss of employment and income nearly impossible to bear.

The government now needs to dispense with hesitation and embark on ambitious and radical economic choices. Steps already taken before the president’s recent announcements, like the DTI’s enforcement of price controls, suggest positive hints in this direction and measures such as these need to be followed through and extended.

The progressive community has been swift in proposing measures that would aid in the fight against the immediate impacts of the crisis. These include an enforcement of capital controls, an expansion and extension of the provision of free basic services particularly related to health, direct financial support to households and the protection of workers from unemployment and loss of income, to name but a few.

We should also now consider implementing the much-debated wealth tax and a tax on idle capital and explore, as other countries have already begun to do, including the US, the possibility of engaging in direct production for need.

One of the more difficult areas to address is how to provide support to workers in the informal economy, normally hidden from government accounting, but making up a significant portion of our population and vulnerable to the shocks of the lockdown and the Covid-19 outbreak. 

Morocco is offering support to informal workers in the context of the crisis and the state should look to explore similar such models. Spain, under the leadership of its Spanish Socialist Workers Party and a left-wing coalition government, has nationalised all private healthcare as it suffers from being one of the worst-hit countries and there are calls in South Africa demanding a response in kind. Nationalisation is now a policy seriously considered even by conservative governments and economists. Of course, we should attend to the social character of attempts to realise state management of the private sector. The nationalisation of health or any other industry in the context of the crisis may only succeed in facilitating the socialisation of private losses resulting from the crisis.

No ‘normal’ to which to return

Many among us are surely gripped by a sense of fear and panic as we enter into a defining moment of our history. This anxiety is charged with the knowledge of how vulnerable a society such as ours, rife with unemployment, poverty and victim to obscene levels of inequality, is to Covid-19 and its potential social consequences.

Our physical and social infrastructure is brittle, and we know that we have a population already fatigued with TB, HIV and serious emotional and psychological stresses related to economic and social insecurity. It will take great collective strength to lift us out of the crisis; the president is indeed right to call on the entire population to rise to meet and confront a truly existential threat. And all of us will have to do so.

It is up to us to ensure that whatever reality we return to is not one akin to the one with which the virus has found us today. We need, in short, not only to fight against Covid-19 but to challenge the inequalities that define our society and demand an end to the neglect of public infrastructure that has exacerbated the worst of the crisis. This will require that many of the economic and social reforms suggested for the short-term become part of future policy common-sense.

The deep class, racial and gender divides that characterise modern neoliberal capitalism will now be brought into sharp relief. The potential, always pregnant within capitalism at a time of crisis to engender authoritarianism and fascism, will also rear its ugly head and we should be prepared to resist in whatever manifestation these threats emerge.

The short-termism that governs corporate decision-making and the individualist ethic that consumes modern capitalist societies will need now to be directly challenged. Social solidarity is necessary to fight the virus in this context and such solidarity should be infused within our social and economic institutions thereafter. The coming weeks may just demonstrate what can be achieved through direct collective action, prioritising the needs of the marginalised in our society.

This experience will be shared the world over, as globally we confront the reality of the crisis together — our global interdependence has never been so pointedly exposed in recent memory.

The inertia of a global lockdown should bring a much-needed sense of clarity. Fetishes such as “the market” or “the economy”, often presented as quasi alien-like entities outside human control, will be laid bare as manifestations of concrete human choices made by necessarily morally and politically engaged agents.

Of course, we do not make choices in a vacuum and neither do we have a free range of policy options given the real constraints of global capitalism and the capacity, fiscal and otherwise, of our state and public institutions. However, the crisis opens up a brief window to demystify and humanise, make concrete and clear what is normally hidden from plain sight. When we see, for example, states rush to defend big business, but stall and hesitate over providing support for workers and the poor, the moral and political nature of that choice should be clear and revealing of what characterises the “normal” state of affairs that the virus has disrupted.

It was the state that bailed countries out of the last global crisis — the financial meltdown of 2008. However, that bailout did not fundamentally alter the economic conditions that led to the meltdown and, more pointedly for our purposes today, it involved essentially shifting the burden of economic revival on to ordinary taxpayers, the poor and middle classes: “Socialism for the rich”, as some say.

The Covid-19 crisis cannot afford to be handled in a similar manner, particularly as the IMF has recently intimated, the looming economic crisis may be deeper and more devastating than the previous one. It is important to point out, moreover, that the crisis is not rooted in the coronavirus outbreak itself, although the latter will exacerbate things. Indeed, the drop in stock prices in the past few months was predicted before the emergence of the virus. It is important to keep this in mind: there is no “normal” or a “stable equilibrium” state to return to.

Towards a new society

There will emerge significant obstacles that will stand in the way of breaking out from the Covid-19 crisis and, as stated above, we will now likely be confronted with the threat of authoritarianism, racism, rising narrow nationalism and the normalisation of economic apartheid here and elsewhere across the globe. This is precisely why a progressive agenda needs to be filled and fought for conterminously with the struggle against Covid-19. This agenda must include a demand for the free basic provision of health, housing, food and other forms of basic human security as non-negotiable rights.

We also need to accept that the Covid-19 crisis portends the looming climate crisis threat. And just as the coronavirus impacts on the poorest regions and countries in a disproportionate way, the same will go for the ecological crisis. We need to build long-term resilience through this experience, and we can only do so via a reorganisation of our socioeconomic and political life towards social ownership and control of enterprise, redistribution and the full extension of democracy into economic life. MC

Michael Nassen Smith is a doctoral candidate at York University, Canada.