Capitalism's Response to Coronavirus Makes a Strong Case for Socialism

Like any crisis, the novel coronavirus—which has taken more than 11,000 lives in the U.S. as of Tuesday—has been clarifying and revelatory. One of the most obvious problems it has shined a light on is the scope of rot in the Trump administration. Even after three years of Trump’s misdeeds in the White House, it has been breathtaking to learn of how he dismantled the administrative tools needed to prepare for this moment, and then watch him barrage the public with lies and misinformation, refuse to aid beleaguered governors because they’re not being nice to him, and boast about how the viewer numbers for his coronavirus briefings rival Monday Night Football.

But this pandemic has also functioned like an MRI scan, revealing in stunning detail the disfigured organs and systemic afflictions of our political economy—the underlying conditions that preceded today’s disgraceful leadership. As financial markets crash and unemployment surges at a historically unprecedented pace, it’s evident that it’s not just humans, but also our economic system, that is acutely susceptible to the virus.

Stillness is lethal for a capitalist economy. That vulnerability of our economic engine is why the GOP has dropped its odes to rugged individualism and self-reliance and emerged as a champion of big government in a matter of weeks. Republicans have been happy to dispense government handouts, spearheaded the largest stimulus measure in modern American history, and signed off on free medical testing. Trump panned the Defense Production Act, which requires private companies to prioritize any federal government orders for products, as a socialist policy—and then went ahead and used it.

For evangelists of laissez faire capitalism, the jig is up. The $6 trillion package of loans and grants for corporations, businesses and individuals has shown that the issue has never been whether the government can afford to spend a great deal of money to deal with the shortcomings of a market economy, but rather whether those in power wanted to spend it. If Sen. Mitt Romney (R-Utah), a former private equity executive who famously characterized 47 percent of Americans as self-victimizing parasites on government, is leading an effort to distribute no-strings-attached checks to Americans, then Republicans have confessed that their argument that it’s bad for the economy to assist ordinary Americans was a ruse.

It took a crisis that cuts mercilessly across class, race and geography—and frightens many people on a visceral level—to unveil how much of the way we think about money and services and who deserves them is not just a technical economic calculation, but also a moral and political one. The American politician who has demonstrated the best grasp of this reality is Sen. Bernie Sanders, who now faces almost impossible odds of becoming the Democratic presidential nominee, but whose case for pursuing democratic socialism is more compelling than it’s ever been.

Currently Republicans and Democrats are providing some aid to ordinary people. But their focus is on propping up corporations, and their measures are entirely inadequate for dealing with how bad things are getting and how much worse they’ll become. The social democratic ideas that Sanders champions—the government coordinating production of crucial supplies, Medicare-for-all, and a bailout for the people that’s as generous as the one for major corporations—is what’s necessary for dealing with the underlying problems that are making this crisis so dire. Skeptics of Sanders’ calls for revolution should take note that this agenda wouldn’t just be more fair for the have-nots—it would benefit all people more evenly, while more effectively protecting the market economy.

Shortages of personal protective equipment and sanitizing supplies have demonstrated the limitations of the oft-mythologized power of “supply and demand” to meet the needs of an urgent crisis. Doctors across the nation are working without appropriate masks and eye protection, nurses are being forced to don trash bags, and hospitals are firing medical professionals for complaining about it. Hospitals, which reduced their supply of beds by 40 percent in the 1980s and 90s to increase profitability, lack the capacity to deal with a surge of patients. For ordinary people, hand sanitizer and cleaning supplies are near-impossible to find, a problem exacerbated by hoarding and price-gouging.

Instead of waiting for the invisible hand to sort out this mess, these problems can be mitigated by government-directed supply production, something the U.S. has undertaken in times of war. Curiously, while the Trump administration has used the Defense Production Act hundreds of thousands of times for military purposes, it has only made use of the powerful law reluctantly and belatedly. Even worse, Trump is focusing only on ventilators and masks so far, and it appears he’s not commissioned enough companies to meet rapidly growing demand.

“The Defense Production Act gives the president a wide range of authorities he has not yet chosen to fully deploy,” Todd Tucker, the director of governance studies at the Roosevelt Institute, told me. “For example, he could be deputizing the heads of Ford, General Motors, and General Electric to directly manage public sector manufacturing as government employees. Or, significantly, he could be using the DPA's allocation powers to convert the whole of the manufacturing sector towards the crisis response.”

Trump could be using the law for things like gowns, gloves, cleaning supplies, coronavirus test kits, crucial medications that are rapidly disappearing, and more. The federal government could also help fund and swiftly coordinate efforts to build make-shift hospitals and testing centers in hot spots; China built a couple hospitals in Wuhan in just over a week. The effect of this temporary intervention would not be to abolish the private sector but rather protect the bulk of it by ensuring that the virus is controlled more quickly.

Coronavirus has also underscored how our barbaric private health insurance system, which ties income to quality of care and profits off of minimizing coverage, is an impediment to dealing with this crisis. Getting tested for coronavirus is free for everyone, but being treated for severe symptoms is not: an analysis from the Peterson-Kaiser Family Foundation Health System Tracker found that getting treated for the respiratory illness it causes could cost up to $20,000, a terrifying statistic for the roughly 75 million Americans who are uninsured or underinsured and the millions more who are now losing their insurance as they lose their jobs. The report also found that people with employer-based healthcare could pay $1,300 in out-of-pocket costs for treatment of pneumonia, and about one in five patients could receive a surprise bill from an out-of-network provider.

This isn’t just unconscionable—it will also exacerbate our crisis. A health insurance system that punishes lower-income people will ultimately encourage them to ignore their symptoms and scare them off from approaching the medical system to get tested (many likely won’t know testing is free) or treated for severe symptoms with proper isolation. This means that people screwed over by the health care system are more likely to end up both suffering and spreading the virus. A properly funded Medicare-for-all system that provides universal free coverage and encourages people to see medical professionals promptly would decrease risk for society as a whole.

As the economy comes to a standstill to accommodate social distancing, potentially for many months, the big question is: who is getting the most help? So far, the answer is corporate America. In the CARES Act, there was real aid offered to workers and small businesses, secured largely by Democrats: a significant increase to unemployment benefits, one-time cash payments to non-rich households, and forgivable small business loans for companies that keep employees on payroll, among other things. But that relief pales in comparison to what big corporations won. While individuals and small businesses received around $1 trillion in support, the bill has a $4.5 trillion corporate bailout fund with very favorable terms, limited restrictions on layoffs and stock buybacks, and almost no oversight.

A government less beholden to shareholder profits would have invested far more aggressively in workers and small businesses as they face an unfathomable period of volatility. We’re in uncharted territory: at least 10 million people lost jobs in the past two weeks, and the Federal Reserve Bank of St. Louis estimates unemployment could reach a jaw-dropping 32 percent — significantly higher than the peak of the Great Depression. Just weeks into the crisis, landlords and people in the real estate industry estimated that almost 40 percent of New Yorkers wouldn’t be able to make rent in April — and soon much of the US could potentially get as bad as New York.

What’s needed are solutions that are commensurate with this crisis, unrestrained by misguided misgivings over spending a lot of money: a sweeping rent and mortgage payment moratorium; dramatically increasing direct pay to businesses to keep workers on their payrolls; larger cash payments to individuals and families that are recurring and last until the crisis is over; more robust paid sick leave packages; and hundreds of billions in direct aid to states, which are constrained by stringent budget requirements, to ensure they can expand their social safety net and employ frontline workers in fighting the pandemic like paramedics as things worsen. While some Republicans like Sen. Lindsey Graham are worried about being too generous to the unemployed, they’d be wise to remember that preventing people from drowning in debt, spending money in our consumer-dependent economy, and keeping their jobs in the first place is the best way to protect the market economy that they love to fetishize.

Socialists like Sen. Bernie Sanders and New York Rep. Alexandria Ocasio-Cortez have been key figures in agitating for reforms that would merely be pushing for the US to be as generous with ordinary citizens as it is with large corporations. It’s a testament to how retrograde the status quo is that ideas like advocating for workers to have enough money to eat and receive medical care and take off of work to prevent the spread of a deadly virus is considered a radical idea. One silver lining of this crisis could be that more people could begin to view it as common sense.

Zeeshan Aleem is a columnist for VICE. Follow him on Twitter and join his politics newsletter .