The global crisis of the capitalist economy and the coronavirus

By Miguel Sorans, 9 March 2020

On Monday, 9 March, the world’s stock markets collapsed. A new “Black Monday” for the world capitalist economy. Wall Street stopped trading for 15 minutes. The price of oil fell to $33 a barrel. In January, it was at $63. The price cut is an emergency move that Wall Street set up during the 2008 crisis to avoid panic selling. But the panic between the capitalists, finance capital and the multinationals is installed. And it’s not just because of the coronavirus.

Wall Street suffered the worst crash since 2008. All the stock markets in the world fell. In Mexico and Brazil, governments devalued currencies.

Many economists and business analysts are trying to attribute the new explosion and collapse of the capitalist economy to the effects of the coronavirus epidemic. The consequences of the coronavirus undoubtedly have an influence. But the coronavirus is not the central cause of the new global economic crash. The coronavirus epidemic is very important. Already over 110,000 people are infected worldwide and it affected about 100 countries.

The coronavirus deepens the existing acute crisis of the world capitalist economy. The capitalist-imperialist system still cannot overcome the acute economic crisis opened in 2007/8. This is demonstrated by reality.

“The world capitalist economy had already slowed down to a ‘rate of fall’ close to 2.5% per year. The United States is growing at only 2 percent a year, Europe and Japan at only 1 percent; and the main emerging economies of Brazil, Mexico, Turkey, Argentina, South Africa and Russia are stagnating. The huge economies of India and China have also slowed significantly in the last year. And now the COVID-19 quarantine has pushed the Chinese economy into an abyss”.

The Organisation for Economic Co-operation and Development (OECD), which represents the 36 most advanced economies in the world, warns that the impact of COVID-19 could halve global economic growth this year compared to its previous forecast. The OECD reduced its central growth forecast from 2.9 percent to 2.4 percent but warns that a “longer and more intense coronavirus outbreak could reduce growth to 1.5 percent by 2020″ (Michel Roberts, British economist, in Sin Permiso, 7 March 2020).

The coronavirus added, “more fuel to the fire” of the capitalist economic crisis. The coronavirus emerged in China (see “China: Coronavirus and Dictatorship.” www.uit-ci.org/fb: iwu-fi uk). China is the world’s largest exporter, and the record fall in industrial production because of the closure of companies is already having a negative impact on the whole capitalist world. It already transcends China’s frameworks. Everything related to the tourism industry, for example, is affected. Oil production and prices are falling. The crisis of the capitalist economy that has been going on since 2007/08 will deepen. Multinationals are worried about their huge profit losses in China and the world. The speculative games of the stock markets and oil prices only express the quest to save the wealth of the world’s billionaires. The big problem for humanity is that imperialism and its governments will deepen their austerity plans and plunder of the working class and the people.

The sudden appearance of the coronavirus epidemic is also an expression of the decline of capitalism. The growth of poverty, overcrowding, environmental changes and the collapse of the world’s public health systems are the breeding grounds for the emergence and development of old and new diseases.

Capitalists must pay the economic and coronavirus crisis

To make matters worse, the coronavirus epidemic is not stopping around the world, although they say that in China the cases have dropped. At the time of writing, there are already over 110,000 infected people in the world, 3,800 dead and over 100 countries affected. Italy has declared the country under quarantine.

The capitalist-imperialist system and its governments do not guarantee an adequate response to this humanitarian crisis that is affecting millions (see “Coronaviruses and the Rise of Dengue Fever. El Socialista No. 451 www. izquierdasocialista.org ). They take measures such as suspending massive sporting or artistic events. They encourage panic to cover up a major disaster without going to the root causes.

The people of the world have to go out and demand real measures from their governments in the emergency face. Let those at the top, the capitalists, take charge. We demand that urgent funds be turned over to increase health budgets to attend to the health emergency. Funds to, among other measures, expand and improve health facilities, give salary increases to all health professionals, make new hires and provide free medicines for all. That these funds come out of high progressive taxes on business groups, financial capital and that foreign debts are not paid. For a single, state-run national health system, with free consultations, treatments and medicines paid for by the state and administered by users, doctors, workers and professionals in the sector. For the nationalisation of the laboratories of medical specialities and that they function under the control of the workers and scientists of health and medicine.

As we said above, imperialism and its multinationals will want to use the coronavirus to launch new attempts to further exploit the people. There is already talk of hundreds of thousands of redundancies and suspensions in the companies. They will seek to lower wages with greater devaluations of the currency in the semi-colonies and greater plundering with the mechanism of the foreign debt.

The workers and the people cannot pay the capitalist crisis and the coronavirus. No layoffs or suspensions. No to the payment of the foreign debt. Money for health and jobs. Let the companies and those above take charge of the crisis.

The rebellions in Chile, France, Lebanon, Iraq, Palestine and other social protests, which are growing in the world, show that the fight against the austerity plans and for the defence of the life of the people continues.