The pandemic, a dying dream, and the return to the welfare state

Didimo Castillo Fernández^[1]

The pandemic crisis generated by the rapid spread of COVID-19 has not only exposed the foundations of Western modernity and the almost providential trust placed in human reason and the development of science, but also the enormous contradictions of the prevailing globalized economic model. The social consequences in the short, medium, and long term could be very significant in terms of the erosion inflicted on neoliberal globalization as a long-standing "class model" in crisis. Catastrophes, such as wars, tend to instill and accelerate changes in decadent social structures. The Black Death, which occurred in 14th-century Europe and spread to Africa, Asia, and the Middle East, had evident consequences for the transformations in the already weakened social structures of feudalism and for the opening of a new environment that enabled the Renaissance, the emergence and rise of a new bourgeois middle class with which the appearance of the new economic model was predicted, and, above all, the strengthening of the role of the State. World War II gave way to a new bipolar world order, with the dispute for global hegemony between the United States and the former Soviet Union during the Cold War; it established the predominance of the national bourgeoisie and placed the State at the center of the industrial development process, and promoted the welfare state.

What implications will this pandemic have on the neoliberal model? The final toll of the crisis and its social, economic, and political consequences are still unknown, but it will be very difficult for the current global societal model to survive in the same way it has. The crisis has exposed its fundamental contradictions and the latent illegitimacy of the model from the very heart of the system. The United States, against all predictions, became the epicenter of the tragedy with the highest number of infections and deaths, occurring in a relatively short record time, accounting for more than half of the continent's infections and deaths. Many factors have contributed to this. During the long period of neoliberal hegemony, it has fared quite poorly. Its crisis of hegemony became evident precisely at the end of the Cold War, with the collapse of the Soviet bloc. Strange as it may seem, it is a superpower ill-suited to globalization. Returning to Jeremy Rifkin, author of The European dream, There are structural and foundational reasons to argue that the United States, as a nation built on “essentialist” principles of identity and difference, is incompatible with globalization. “According to Rifkin, Americans find it very difficult to adapt to a world of flows and borderless relationships, where everyone is connected through networks and depends on each other to ensure their individual and collective well-being.” The exclusivity or eccentricity of the American Dream “makes it increasingly suspect and inappropriate for a world in which a global consciousness is beginning to take shape.”

Neoliberalism has been successful in its original objectives of reversing the declining trend in the rate of capitalist profits that began in the mid-1970s; however, it has failed in terms of its social consequences, with an unprecedented increase in exclusion, social inequality, and poverty. In a sense, the neoliberal model has led to the United States becoming "Third Worldized," by transferring aspects of the dependency and labor exploitation characteristic of peripheral countries within its own borders. It has made the accumulation process less dependent on its productive capacity and more dependent on the relative or intensified overexploitation of its workforce. The recurring decline in productivity, coupled with the flexibilization and deregulation of production, has increased job insecurity. It has ceased to be the job-creating machine characteristic of the industrialization and welfare state model. The United States maintains human development indicators below those of some developed OECD member countries, with one of the highest rates of inequality and poverty. a structurally inefficient health system, with limited social security coverage for the working population, and with more than 16 percent of the population over 65 years of age, vulnerable due to the high prevalence of chronic-degenerative diseases.

The pandemic exposed, from the very center that promoted the model, the structural and intrinsic contradictions of neoliberal globalization; a model for which the country was unprepared, even in terms of its idiosyncrasies and conception of itself. What comes next? The scenario opened up by the crisis offers elements for rethinking long-term alternatives. In the midst of the catastrophe, the State became fundamental. It is no coincidence that China and South Korea, which regulate their integration into the globalized economy through the State, or Denmark and Norway, with their recognized forms of welfare states, were able to react and confront the impact of the pandemic with relative success. The State regains its singular importance. Could we consider a return to a welfare state model similar to that of the post-war period? No. That model, characteristic of the import substitution industrialization phase, rested on a social pact between three sectors: capital, the State, and the working class. The rupture inflicted on this triad in the mid-1970s, and the consequent dismantling and loss of organizational capacity of the working class, make the re-establishment of an “authentic” welfare state model, in those terms, unfeasible. However, other forms of it could be promoted and supported by relatively strong states.

The pandemic crisis, like other catastrophes in history, revealed the intrinsic contradictions of a decadent social and economic model, which is dying but allows the outlines of a new social order to emerge, in which the State will necessarily regain centrality and, from this, the possibility of rethinking particular but legitimate schemes of welfare states.

^[1] Sociologist and demographer. Research professor at the Faculty of Political and Social Sciences of the Autonomous University of the State of Mexico. Member of the CLACSO Working Group: “Studies on the United States”. Member of the National System of Researchers (SNI), Level 2. Regular member of the Mexican Academy of Sciences.