Eamonn Kelly: The Coronavirus Rehearsal

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From top: the entrance to St. Michael’s Hospital, Dun Laoghaire, County Dublin where Covid-19 testing is taking place; Eamonn Kelly

The coronavirus impact on the economy is having the effect of achieving something that was only theoretical a few short weeks ago: the necessity to halt capitalism’s perpetual demand for spending, consumption and growth.

The coronavirus has offered an opportunity to radically change the capitalist paradigm.

Cash is the lifeblood of an economy. But if it can’t come from free market trade, as is happening now, where will it come from? Will the economy just bleed out and die?

David McWilliams, in the Irish Times, writes that this problem is exacerbated by panic, leading to cash hoarding, much like shopping hoarding.

He offers a radical solution, sourced to Milton Friedman, for such situations, writing:

“The Central Bank of Ireland should print money and deposit free cash into every citizen’s account and every business account.”

This of course would be a short-term measure, but even the concept opens everyone’s eyes to new economic possibilities, particularly in his analysis of the meaning and worth of cash in a deflating economy.

McWilliams points out that the “normal” way to inject cash into an ailing economy is to inject it into the banks, saving the banks, as in 2008, who then dispense it back out into the economy. Notice that banks get “free money” and no one flinches.

This other method, proposed by Friedman, involves cutting out the bank middle-men and putting cash straight into people’s accounts, to offset panic and a cash hoarding wave that would lead to a runaway self-perpetuating loop, bleeding out the economy.

Obstacles to Growth

What is also becoming apparent through the coronavirus crisis is that the global system of capital has two main problems, identified by Prof Pierluigi Viale, the director of infectious diseases at Sant’Orsola-Malpighi Polyclinic in Bologna, in a different context.

In a warning to other countries to act immediately against the virus he identified the two main obstacles to radical action.

“The problem is politics and economy,” he says.

These are also, coincidentally, (or maybe not) the two main obstacles to action on climate change.

Professor Viale said:

“It is not easy to convince a nation to sacrifice. I am sure that in a few days they too will start moving, they have no choice. Sooner is better than later”.

The exact same conundrum faces the world in terms of climate change, the only difference being that the time frame for action with climate change is longer, offering space for denial and inaction. But the core obstacles of economy and politics are precisely the same ones.

We saw it here and in Britain and the US in the early days of the virus (ten days ago?!) when the politicians were still prioritising the economy over people’s health by seeking to minimise the deadly nature of the virus.

This again is a mirror of the political classes’ reaction to climate change, putting the economy first, when it is patently clear that you can’t have an economy without a world to run one in.

In this respect, politics and economy, as they are currently shaped by neo-liberals, are actually obstacles to growth in terms of fresh thinking, the very thing required to tackle climate change.

The differences between neo-liberal core beliefs and practical common sense have been thrown into stark relief by the pandemic, with neo-liberals initially revealing their natural ideological preference for the health of the economy over the health of the public.

But this ethical miscalculation was corrected by the nature of the virus itself, which immediately began to demonstrate that public health must precede economic health.

That a virus doesn’t observe borders or class preferences. That you can’t have business as usual if public health is under threat. That the economy too will eventually bleed out unless the political class act to protect public health.

The exact same rules apply to action on climate change. Public health and climate health must be prioritised over short term economic measures.

We saw this anomaly here, in its micro form, when the Fine Gael government were pointing to “healthy” growth figures in the economy, yet homelessness was at crisis point and steadily rising and children in hotels were experiencing measurable stunted growth.

That stat-driven type of economic approach has now been revealed as just a clean bureaucratic way of eating your young.

Personal Financial Security

When it finally became clear, even to neo-liberals, that mass closures of businesses for a long period of time – maybe even months – would be necessary to contain the virus, the first realisation was; what are people going to do for money? If capitalism can’t create cash, if only temporarily, how are people supposed to live?

The answer came hot on the heels of the question: State intervention, the very thing that neo-liberals and late stage capitalists had been opposing and rolling back and undermining for so long.

Fringe ideas, like basic income, which had gradually been becoming more mainstream with the realisation of capitalism’s adverse contribution to climate change, now took centre stage as one of the more practical ideas to deal with the necessary closures to contain the coronavirus.

Long-time proponents of universal basic income such as Andrew Yang called for a change of thinking around the concept of economy; identifying, as David McWilliams has done, “personal financial security” as a key measure to deal with the crisis.

Said Yang:

“Treating this as a pandemic is one thing. Treating this as an imminent economic depression and societal catastrophe spurred by a pandemic is another. You should flood the zone with buying power and a sense of personal financial security as fast as possible.”

This concept of personal financial security for all is the exact opposite to the concept of engineered scarcity that the neo-liberal agenda promotes in order to encourage continued and unnecessary consumption and corresponding political weakening of adversaries.

Again, the virus invites, almost as an afterthought, an interrogation of neo-liberal politics that finds its basic concepts desperately wanting when it comes to considerations of the public good.

Once neo-liberalism is disarmed in this way, as it has been in recent weeks, alternative thinking leads inevitably towards solutions based on the concept of social security, which is also a necessary re-think in the inevitable winding down of capitalism to allow for climate recovery.

The coronavirus and the restrictions imposed by the pandemic, offer an opportunity for real change.

A New Paradigm

The virus, with its short time frame demanding immediate action, is a slap in the face to capitalist complacency, in comparison to climate change’s slow deterioration, which can be put on the long finger, seemingly indefinitely, until a restriction is imposed by the elements.

When a disease is slow moving – and late-stage capitalism’s contribution to climate change has been described as a disease by some commentators – it is more amenable to denial.

The virus doesn’t leave any space for denial. Even the drinkers and race-goers who attempted to continue as normal were quickly corrected by the speed of the viral spread.

Every measure employed to combat the virus will be needed to combat climate change, but in a less drastic form. The virus has provided a revelation really as to how capitalism might be amended and curtailed to give the climate some breathing space for recovery.

Old Dangerous Ways

The only problem now, as Naomi Klein has noted, is that the old right-wing orders will be tempted by the virus crisis to behave primitively, by using the opportunity to restrict democratic freedoms and consolidate their economic power.

The old strategies designed to perpetuate the late capitalist business model of endless consumption in a finite system may continue to be pursued; ignoring the valuable lessons demonstrated by the virus crisis and condemning the world to climate catastrophe.

Already in the United States the old corporate models that always result in bailouts for corporations, coupled with opportunistic attacks on social security, are underway in what Naomi Klein refers to as old ideas lying around waiting for the right social conditions to allow them to be enacted.

It could be that the coronavirus is the wake-up call that late-stage capitalism needs to radically amend global financial systems in the interests of climate repair.

A last gasp opportunity to change the capitalist paradigm and to question the twin obstacles of neo-liberal politics and economic prioritising that prop up the old destructive system.

But the danger of being duped by wily neo-liberal politicians into exchanging freedoms for a sense of security will likely continue. That’s the game after all.

Eamonn Kelly is a freelance Writer and Playwright.

Previously: Eamonn Kelly on Broadsheet

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17 thoughts on “Eamonn Kelly: The Coronavirus Rehearsal

  1. Formerly Known As @ireland.com

    I watched RTÉ news. They seemed excited at the prospect of Irl only having 10k infections at the end of the month. Ffs – why not lockdown now? Why wait till ireland is Italy/Spain? This kind of fatalism is crazy. It can be stopped.

    1. EK

      Joe Small, There is no mention of over-throwing the capitalist system in that piece, The article, if you bothered to read it, is concerned with amending the capitalist system in order to leave space for climate repair. Everyone knows that capitalism needs amending. Even capitalists. You’d be doing the world a favour by not reducing a complex argument to Trumpian simplicities. I notice too you end your simplistic comment with a question? Answer it yourself you lazy git. How should it end? Wonder away. Say something remarkable. Why do people like me have to do all the thinking work for people like you? You sponge.

      1. A Person

        But your whole article is equating “neo-liberal core beliefs” (define that I dare you) and capitalism with the virus for some strange reason. What has the capitalist system got to do with climate repair? For example, China, a communist state, the world’s biggest polluter. Also to criticise someone who disagrees with you as incapable of thinking and a sponge is inexcusable. “Hey look at me, I write an article and if you critic it then your are thick”.

        1. f_lawless

          Where have you been? China moved its economic system over to a consumer capitalist type model decades ago! Also, given that it has the largest population in the world, it’s hardly a surprise that it’s collectively the biggest polluter. Per capita, it ranks 47th in the world (the US ranking No.1 polluter per capita)

    2. :-Joe

      Congratulations, private globalised, financial corporate financial market and specifically oligarchical US foreign policy propaganda has been living rent free in your head for so long it’s actually blurting out of your mind and through your fingers out into the public forum…

      If you don’t know that poverty and all the economic problems in Venezuela have been ecalated and excaserbated solely by economic sanctions in an attempt of anothe US regime change for pseudo-capatilst economic robbery of a soverign nation… then frankly you are ignorant of fact and reality.

      I suggest you reconsider where you ar getting your daily news and information from… plenty of people outside the brainwash cycle of CNN and FOX in the US and BBC and SKY in the UK have been reporting on this story in the past decade in extensive and exhaustive detail with reference to the history of pseudo-capitalism’s effect in the region going back over five decades.

      The information is there, it’s plain to see but you have to be willing to ask enough questions and go looking for corroborating evidence for everything you think you can believe in.

      Like doing most things in life, it gets better, faster and stronger the more you do it.
      -However, one way or another, nothing worthwhile is ever easy..

      :-J

  2. White Dove

    Fascinating article, Eamonn.

    This allows us a great opportunity to apply plain old fashioned common sense to a lot of things. The masks are off and we see what the people who talked down to, lectured and hectored us are really like – and it’s not pretty!

    The only thing I disagree with you on is Trump. I believe that the current White House is far more nuanced than it is portrayed in Irish and mainstream US media, and may in fact be the way to the result you hope for! Time will tell :-)

  3. EK

    Thanks White Dove. I hope you’re right about the Trump White House, but I have to say I would be very surprised if agent orange turned up trumps.

  4. EK

    A Person. You made two points. You mistakenly assume that the article equates the virus with climate change. I’m certain I made it clear that I was referring to the reaction to the virus as being the same as the reaction required to tackle climate change. Your second point, that I was insulting towards someone because I wrote an article is conveniently missing the point that I was responding to a person who was lazily demeaning my work. There is not a parity between a reasoned argument and a glib put-down that clearly didn’t even bother to engage with the argument. The guy must expect a response, even if it’s an irritated response that describes him as a sponge. It’s not an inaccurate description either. He is sponging off my work to turn out glib insults that he believes will not be responded to. And now you have him painted as a victim. It’s all very convenient. But the way I see it, I responded to someone who was denigrating my work.

    1. A Person

      Ek, I made more than 2 points.

      1: “The old strategies designed to perpetuate the late capitalist business model of endless consumption in a finite system may continue to be pursued; ignoring the valuable lessons demonstrated by the virus crisis and condemning the world to climate catastrophe.” What has the capitalist system got to do with climate repair or the virus capital?
      2. you never defined “neo-liberal core beliefs”, I don’t get what that is and why is has anything to do with climate change, thus the repair point I made about China being one of the biggest polluters in the world.
      3. As a journo, why can you not accept a critic without suggesting they are a sponge or not thinking just because you cannot agree with them.. Also to suggest they are a victim because I agreed with their critic is rather childish.

      1. EK

        A Person. 1. You’re quoting me again and asking questions. If you read the article with a fair mind it will make perfect sense. In terms of connections you really have to do more reading. This is why I provided footnotes for people to follow. The answers are there if you do a little digging. 2. I defined neo-liberalism in other articles. Same point. You have to do a little work. Just look them up, I can’t be doing everything for you. 3. You’re twisting my words to make a bogus point. It was you that presented the person I called a sponge as a victim, not me. From my point of view he was misrepresenting a very carefully worded article, with a glib remark which might have the effect of misleading others as to the meaning of my work. His intent, as I judged it, was destructive. It was not criticism that has earned any respect. It was not an equal argument or counter-argument. It was an intended insult. I believe your points are being made with similar intent. End of conversation.

        1. A Person

          I thought you were a journo? That was the most lazy response ever. You were questioned by 2 people on here and never replied to any questions. “Look up my previous post”. Seriously, how arrogant are you? Stop posting articles if you cannot respond to a critic.

  5. Cian

    Nice article Eamonn – I agree with most of this. The comparison to Climate Change albeit at a different timescale is very interesting.

    The one small quibble I would have is that when the banks were saved in 2008 through cash injections – it wasn’t a gift – it was loan/buyout. e.g. Bank of Ireland got €4.7 billion and has repaid €5bn. AIB got €16bn (and we ended up owning it). AIB is getting back on its feet and when we sold 25% to the market we got €6bn back. Although we are looking to lose money AIB.

    If the state were to put to money in people’s accounts – would they be expected to pay it back? Or is this a ‘gift’ (and the ‘repayment’ to the state is via VAT and supporting jobs and taxes?

    1. EK

      Cian, that’s an interesting point. I imagine the details of gift/loan would be a sticking point for financial institutions and government when it comes to making payments, but the idea only makes sense if it is a gift. Besides, like the welfare Christmas bonus, the money will be going straight back into the economy. What interested me was David McWilliams’ description of what cash is (and what it isn’t) and how this applies to the concept of basic income. I’d have to go into this a bit more elsewhere, but his analysis goes some way towards undermining the “free money” idea that opponents of basic income always bring up. Yet free money, to an extent, is exactly what will be required at some stage to deal with climate change and AI, as it is being looked at now to deal with the pandemic.

  6. Truth in the News

    How much each day, each week, every month, every year is collected in taxes
    to pay for the bale out, would it not be more prudent to have this renegotiated
    and apply this within the economy, little point in printing extra Euros, Dollars
    or Sterling, when the end result is to buy consumer goods which originate in
    most instances from China, with the wealth ending up there too, which in turn
    is used by the well connected in China to buy up the rest of the so called
    Capitalist World assets, in fact its the Tax Payers and the Citizens that are
    propping up the entire economic fabric to the tune of nearly 50 K apiece, is
    not time the tables were reversed

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