The crisis of capitalism and the coronavirus
Marco A. Gandásegui (h)[1]
The world's stock markets have collapsed and Wall Street is in its worst crisis since the 'Black Monday'of 1987. The financial world had been signaling its fragility and probable collapse for a couple of years. Those who associate the stock market problems with the coronavirus epidemic are confusing two distinct phenomena. To make matters worse, at the same time, the global oil market also collapsed as a result of conflicts among oil exporters.
The stock market crash, the coronavirus, and the oil conflict are all occurring amidst a US political campaign that will determine the next occupant of the White House at the end of the year. The health of the stock markets depends on investor confidence. Although there are millions of investors, only about fifty—give or take—control the trillions of dollars that are traded on the stock exchanges every day.
Analysts describe how the shares of major companies associated with the banking, insurance, and real estate industries plummeted. Obviously, the crisis on Wall Street and in stock markets worldwide is not the fault of the coronavirus. Whether in the financial centers of capitalism, in forums on climate change, or in spaces where geopolitical advantages are contested, the debates are not leading to solutions. Ultimately, to understand the crisis, the discussion must be directed toward the functioning of the capitalist system on a global scale.
Some argue that there are three key actors in the debate: large corporate capital, powerful non-governmental organizations, and popular forces. Corporate capital proposes improving the administration of the system (the globalization proposed by the establishmentor return to an idyllic past (on Trump's agenda). Global NGOs insist on reducing the catastrophic threat posed by global warming. Popular forces are divided between those who propose transforming the system (socialism or another option) and those who maintain that it can be reformed (capitalism). and, too).
Corporate capital, which dominates all speculative transactions and productive investments worldwide, was frightened by the 2015 publication of Thomas Piketty's book on Capital in the XNUMXst centuryThe Frenchman's work indicates—with empirical data—that capital accumulation has a limit and that the end is approaching. Which would be the bigger shock, Piketty's book or Capital by Karl Marx, published a century and a half ago?
The war among capitalists for ever-increasing profits has reached such a point that margins are drying up. Capitalist production (based on wage labor) in the US ceased to be profitable several decades ago. China, with its inexhaustible labor force, became the global manufacturing center, displacing the US. New York believes it can become the world's financial capital and control industrial production through the banking system. A century ago, Great Britain thought it could do so through the City From London. The British had to surrender body and soul to American power when they discovered they were bankrupt. Will the same happen with the alliance between Washington and Beijing?
The coronavirus epidemic is hitting hard. There are more than 120 confirmed cases and nearly 5 deaths worldwide. Much of the damage has been contained in one province of China. Beijing announced that the number of cases is decreasing and that hospitals built to handle the emergency are being closed. This is good news, to a certain extent, for China. The trend, however, continues to rise in Europe and the US.
The crisis of capitalism—with or without the coronavirus—will continue to batter the global economy and the countries of the international community. Will the stock markets be able to recover? Will the "real" economies be able to continue producing for a broken market? Since the 1970s, the American economy has become a casino where everything is gambled on a giant roulette table. The working class has been trapped, spinning around. The coronavirus has shown us just how fragile the capitalist economy is. Everything indicates that we must prepare to initiate radical transformations on a global scale to sustain production levels and create a new system of wealth distribution.
[1] Professor of Sociology at the University of Panama and associate researcher at CELA. Co-coordinator of the CLACSO Working Group on Studies of the United States. https://marcoagandasegui2020.blogspot.com/
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