“The world is at a crossroads involving a pandemic, a deep economic recession, catastrophic climate change, extreme inequality, and movements challenging the prevalence of racism in many countries.”
The opening sentence above will be the main topic of this summary review from Covid-19 and Crises of Capitalism: Intensifying inequalities and global responses journal article by Sara Stevano and colleague. The reality felt during the Covid-19 pandemic has contributed to academics in reviewing the failures after failures of contemporary capitalism. Covid-19 has opened our eyes to the urgency of the public health crisis, also known as the socio-economic crisis. This crisis has devoured and tore apart the local and global wheels of production, reproduction and consumption all at once. Yesterday’s pandemic also served as a reminder that the essence of human activity is material in nature and is firmly entrenched in a socio-economic basis. Furthermore, the plague that claimed millions of lives in almost all parts of the world teaches the importance of producing ‘needs’ and caring for one another. The explanation above once again confirms the position of capitalism as a failed system because it was built with material exploitation of laborers and the environment.
Radical policies and political actions that opened up new opportunities and enlightenment on the role of the state in terms of fiscal and market intervention—capitalism—were also widely opened during the recent Covid-19 pandemic. However, different handling in each country has again created a gap between the northern and southern worlds. To summarize the introduction, the author gives meaning to the “Global Capitalism Crisis” in two forms, namely the intensification of inequality and the response to the pandemic.
Through The Covid-19 Magnifying Glass
In this section, the reader will be brought to a number of major themes that lay bare the Crisis of Global Capitalism. First, countries with advanced economies—despite having good health management and security capabilities according to Global Health Security—tend to be unable to protect their citizens during a pandemic. For example, the United States became one of the countries with the highest death rates in the first three months since the pandemic was declared to have entered the recesses of the country. Other data also shows that the majority of northern countries have contributed to nearly half of the deaths from the Covid-19 pandemic in the world. Furthermore, the countries of the southern world tend to be more effective in suppressing the spread of the virus, say Vietnam. Sri Lanka, Cambodia and Laos.
Second, class, racial and gender inequality were exacerbated by the lockdown policy. This policy that limited the mobilization of people in a country was also proven to have contributed to disrupting the global economy at that time. However, behind these worries, gap after gap is increasingly wide open. Suggestions during the lockdown, such as staying at home, keeping your distance, and seeing a doctor when you have a fever only target certain groups. So, what about those who do not have access to shelter, clean water, and health? In this case, vulnerable parties become even more vulnerable and at risk. For example, informal sector workers. They have to live under the shadow of two big scourges, namely the Covid-19 virus and termination of work contracts (PHK). Through this, we can both see the formation of a pattern of exclusion, marginalization, and expulsion from what we know as “global capitalism”. Apart from the informal sector workers, women are also the most vulnerable when it comes to pandemics. Even though women have a lower risk of death than men, women have to deal with unemployment and domestic violence.
Third, the crisis of global capitalism perpetuates the world gap between the north and the south. Basically, Covid-19 reminds us of the game of capitalism which is not evenly distributed in its production, reproduction and financial mechanisms. To understand the condition of the northern and southern parts of the world as a result of Covid-19, we can look at it as follows:
- Demand shocks and price volatility cast a shadow over the export-oriented growth model. These exports focus on primary commodity extraction and labor-intensive manufacturing.
- Unequal distribution of power in global supply chains. While the north is able to transfer costs and risks, the global south is faced with labor vulnerabilities.
- Position of the global south in terms of finance are in subordinate.
After understanding the big picture shown above, the author provides a case example that further clarifies the differences in the abilities of the northern and southern worlds. For example, in the case of vaccine distribution and intellectual property rights. The growing demand for a waiver of intellectual property rights by India and South Africa is testament to the glaring rift between the global north and the south.
Protecting Status Quo?
The lockdown policy triggered a series of connected demand and supply shocks. This reinforced the massive decline in consumption and private investment in many countries. Therefore, there is a need for intervention by the central bank government. However, in carrying out these interventions, there are differences in the capacity to carry out these fiscal policies—differences between high, medium and low financial countries. High-income countries have the flexibility to borrow money at low interest rates, middle-income countries have lower state spending capacity, and low-income countries have very minimal state spending capacity. Measures to reduce inequality in fiscal space are also very limited. This is because grants from several countries and IMF assistance cannot cover everything. Apart from that, government has not been used The Magic Money Tree according to protect the most vulnerable.
Covid-19 clarifies the line of relationship between humanity and events that occur in nature. We seem to be reminded again of the “climate emergency”. International organizations emphasize the need to establish good economic policies for environmental recovery and sustainability. Then, yesterday’s pandemic also gave a signal to highlight political actions that can prevent the financial crisis from repeating like in 2007. The actions that can be taken, namely creating jobs, redistributing income, improving public services, intensifying clean energy, and providing public funds for new technologies for inclusive sustainable development.
Contributions to The Special Issue – Old and New Imperatives
The covid-19 pandemic prompted governments to intervene—such as cash assistance and food distribution interventions in Africa. The position of the countries of the south strengthens their dependence on income through commodity exports. On the other hand, workers in the global south occupy a vulnerable position and are said to be the main absorbers of the burden created by the pandemic.
Geographical inequalities and the specific challenges facing the countries of the global south make it necessary to study contemporary capitalism to focus on the global south. This is based on reasons including, overcoming individualism and nationalism methodologies in analyzing the interdependence relationship between humans and countries in the world and focusing analysis on the southern world is a form of contribution to the decolonization of production processes and knowledge.
The pandemic and crisis that formed opened our eyes that the development process is no longer driven by capital accumulation, technological advances, state intervention, and dependency relationships without looking at the most basic thing, namely about “How human life is maintained”.
Conclusion
The structural weaknesses of global capitalism have been exposed by the Covid-19 pandemic. It is generated through massive inequality and reinforced through inadequate policy responses. The existence of that makes inequalities with dynamics of class, race, and gender in the world’s north and south. In addition, the presence of the last pandemic has also become a lesson that human life cannot be separated from its relationship with nature.
