Namoura Arabika Sidikalang Bubuk

September 20, 2020 Leave a comment
𝐍𝐀𝐌𝐎𝐔𝐑𝐀 𝐂𝐎𝐅𝐅𝐄𝐄

Mengenal beragam jenis kopi yang sudah mendapat predikat sebagai kopi terbaik tentu tak lepas dari jenis kopi satu ini, kopi Sidikalang. Jenis kopi satu ini ternyata tidak kalah populer dengan jenis kopi yang lain seperti kopi Luwak. Sama sama berasal dari Indonesia, kopi Sidikalang ternyata juga mendapat pengakuan dari banyak pencinta kopi tidak hanya di Indonesia tapi  juga di negara negara lain seperti negara Amerika Serikat. Pertanyaannya, lalu apa yang menjadikan kopi Sidikalang ini begitu spesial?

Kopi Sidikalang ini juga sangat terkenal akan cita rasanya yang unik dan lezat. Kopi Sidikalang berasal dari Sumatera, tepatnya di sebuah ibukota kabupaten Dairi, Sumatera Utara.

Selain mendapat pengakuan dari para penikmat kopi di negeri sendiri, negeri Indonesia, kopi Sidikalang ternyata mampu bersaing dengan jenis kopi lain termasuk kopi Brazil. Hal ini tentunya bukan sesuatu yang mengejutkan karena kopi Sidikalang memiliki cita rasa khas yang tidak dimiliki oleh jenis kopi lain. Di tempat asalnya sendiri, pulau Sumatera, boleh dibilang kopi Sidikalang adalah rajanya kopi.

Namoura Coffee dengan bangga menghadirkan ikon kopi sumatera ini untuk kalian para penikmat kopi berkualitas, Arabika Sidikalang Bubuk yang memiliki kadar kafein lebih tinggi dibanding jenis kopi lain pada umumnya, aroma khasnya adalah manis karamel yang berpadu dengan sedikit rasa rempah. Kemudian, after taste khasnya adalah perpaduan antara citrus, dark chocolate dan fruity yang cukup segar. Ikon kopi Sumatera ini kami hadirkan dalam bentuk tiga kemasan, yakni: 250 gram, 500 gram, dan 1 Kg.

Namoura Gayo Arabics

December 5, 2019 Leave a comment

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Coffee from Takengon, Center of Aceh or commonly called Aceh Gayo coffee is already famous in the world. As the name implies, this coffee is managed by the Gayo people who are original Aceh residents. This type of coffee is one of the most widely consumed coffees as well as exported abroad. Premium product quality, with professional quality control, Quality control by machine and manual sorting process (Double Picked).

Specifications:

  • Single Origin Aceh Gayo Arabica Coffee with Grade 1 quality
  • Processing Method: Semi-washed
  • Altitude: +/- 1,400m
  • 11-13% Moisture; Defect 0-3%
  • Quality guaranteed
  • Suitable for roasters and also coffee connoisseurs who like to roast by themselves

Come join us here with our Namoura Gayo Arabics.

Economics in the Time of COVID-19

Edited by Richard Baldwin and Beatrice Weder di Mauro | CEPR Press

COVID-19 is spreading human suffering worldwide; that is what we should all be focused on. But we are not doctors. We are economists – and COVID-19 is most definitely spreading economic suffering worldwide. The virus may in fact be as contagious economically as it is medically.

Joining the OECD’s dire growth forecast of 2 March 2020, the European Commission said on 4 March 2020 that both Italy and France are at risk of slipping into recession, and the IMF said it sees “more dire” possibilities ahead for the global economy.

This book is an extraordinary effort for extraordinary times. On Thursday 27 February, we emailed a group of leading economists to see if they’d contribute to the effort. The authors responded and the eBook came together literally over the weekend (the deadline for contributions was Monday 2 March 2020). The eBook is a testimony to the power of collaboration in a network that has the size, speed, flexibility, and talent of CEPR.

The key economic questions addressed in the book are: How, and how far and fast, will the economic damage spread? How bad will it get? How long will the damage last? What are the mechanisms of economic contagion? And, above all, what can governments do about it?

Read pdf

The Shifting Geopolitics of Coronavirus and the Demise of Neoliberalism – (Part 2)

European economic historians fear some déjà vu memories of the Black Death, which spread in the continent in the mid-14th century and led to the death of one third of the population. This reduction of demography caused scarcity of labor, increase in wages, decrease in inequality, and contested the then-feudal system in Europe. It also paved the way for the Industrial Revolution which Industrial Britain was hit by ‘King Cholera’ in 1831-32, 1848-49, 1854 and 1867. Tuberculosis also was responsible for the death of one-third of the casualties in Britain between 1800 and 1850. This nightmarish refrain comes back now stronger as epidemics have been ‘great equalizers’, and may initiate long-term implications nor only for European economic growth, but also for the world economy. After the US Federal Reserve decided to slash the benchmark interest rate to between zero and 0.25 percent (down from a range of 1 to 1.25 percent) and to buy $700 billion in Treasury bonds and mortgage-backed securities in a Sunday emergency meeting, the Dow Jones industrial average plunged 2,250 points at the open and trading suspended almost immediately the following day Monday, March 16.

President Trump has framed the pandemic in xenophobic terms and made the wildly-irresponsible claim that “it will go away. Just stay calm. It will go away”. However, the new pandemic has revealed the most cynical aspects of neoliberalism. In a ‘Capitalism versus Coronavirus’ debate, the focus was on whether the American neoliberal model of capitalism makes the United States and its economy particularly ill-suited and ill-equipped to deal with a health crisis of the size of Coronavirus. Jeffery Sachs, Director of the Center for Sustainable Development at Columbia University, asserts, “We don’t have a public health system. We have a for-profit, private system. We have tens of millions of people that have no health coverage. We have no systematic testing. We are scrambling, and it has been weeks with this virus multiplying, with the pandemic spreading in the United States.”(1)

2020 will go into history books as a year that has exposed not only a public health failure, but has also indicated an era of geopolitical recession and a fall-from-grace moment of the neoliberal system in the new century. The unanticipated public health risk now can be reduced “neither to ethical virtues nor to a need for investments”; and “the crisis puts the flaws of our short-sighted, exploitative, hyper-individualistic times in glaring focus.”(2)

This two-part paper examines what I term a 3-C complexity: a) contextualization of the pandemic spread in 2020; b) correlation with the world finance markets instability and sudden drop in oil prices in mid-March, as Brent crude fell 12.2 percent, or $4.15, to trade at $29.68, its lowest level since January 2016; and c) concern about the future of neorealist capitalism. Part 1 published a few days ago probed into several dualities circulating now in the public sphere worldwide: is Coronavirus a ‘nature-made’ or ‘man-made’ pandemic? How scientific research can sort out the truth from various conspiratorial assumptions about a ‘deliberate’ causality and possible ‘manipulation’ of the virus in international politics? One fundamental question remains open about whether the international community and the whole United Nations system have balanced the highly-sought nuclear deterrence with some virus deterrence or minimum strategy of biosecurity.

Part 2 of the paper proposes how Coronavirus has imposed a de facto trickle-across economics on the famous Reaganite trickle-down economics, or trickle-down theory, has shifted into negative economic entanglements. In New York the hot touristic hub of the world, Mayor Bill de Blasio ordered local bars and restaurants to close their doors in an effort to halt the spread of Coronavirus. He wrote in a message to his fellow New Yorkers March 16, “We must respond with a wartime mentality.” In Paris, French President Emmanuel Macron said in a somber address to his fellow citizens, “We are at war. We’re not up against another army or another nation. But the enemy is right there: invisible, elusive, but it is making progress.” He decided the army should be drafted in to help move the sick to hospitals.

In developing countries like Morocco and Philippines, where agriculture, tourism, and the financial remittances of their workers abroad represent the backbone of the national economy, there are indicators of a gloomy rest of the year since severe consequences of Coronavirus will kick in by June or July. On the whole, the United Nations’ trade and development agency, UNCTAD, foresees the current economic uncertainty and immobility will likely cost the global economy $1 trillion in 2020. The second part of the paper concludes the dominant neoliberal system is forcibly getting a reality check through a tiny virus. It argues for a human dimension and precedency of society before economy and profit in reconstructing an edited social democracy system, as a due correction of neoliberalism.

Coronavirus’s Trickle-Across Economics

By March 16, world finance markets, including Wall Street, suffered a brutal bloodbath as the Dow Jones Industrial Average dived around 13 percent in its worst percentage loss since 1987’s ‘Black Monday’ crash. Four days earlier, the US stock market had wiped out the entire $11.5 trillion of value it gained since Trump’s 2016 election victory. The once-gregarious President Trump, who told his fellow Americans “Coronavirus will go away. Just stay calm”, realized “we have an invisible enemy.” He acknowledged the virus could push the U.S. into recession. “This is a bad one. This is a very bad one.”(3) Trump seems to face echoes of 1929 in the Coronavirus engulfing crisis. Some analysts said it is Black Monday all over again; and predict “a scale of damage unseen in the modern U.S. economy: the potential for millions of jobs lost in a single month, a historic and sudden plunge in economic activity across the nation and a pace of sharp market swings not seen since the Great Depression.”(4)

The Yale economics professor and 2013 Nobel prize laureate, Robert Shiller, has written about the narratives that affect the economy. He asserts Coronavirus is “a very unusual situation. People didn’t anticipate that anything like this could happen just a few months ago. The idea that, in this modern time, we could actually have a serious epidemic and that the government would be struggling to contain it.”(5) These Coronavirus-driven negative shifts raise new questions about the Trump administration’s economic policy, which has been guided by trickle-down economic theory. Trickle-down economics, also known as Reaganomics, have been highly celebrated as the savior of the West from the 1980 recession during the Reagan administration. By adopting certain benefits such as tax cuts on businesses, high-income earners, capital gains, and dividends, this policy claims benefits for the wealthy trickle down to everyone else in society.

The essence of such a claim is blurry between the pragmatism of science and the fallacy of capitalist ideology. During his first year in office, President Trump signed the Tax Cuts and Jobs Act, which has lowered corporate tax rate from 35 percent to 21 percent beginning in 2018. The top individual tax rate dropped to 37 percent. Trump’s tax plan cut income tax rates, doubled the standard deduction, and eliminated personal exemptions. The corporate cuts are permanent while the individual changes expire at the end of 2025.(6) In the first week of March 2020, leaders of the major Wall Street banks were summoned to the White House to discuss the coronavirus economic fallout. The Trump administration is reported to be considering more corporate tax cuts, toward the airlines and hospitality industries, and a temporary payroll tax cut. Trump’s White House is considering requesting the approval of Congress of a $850 billion stimulus package to stabilize an economy, and another $50 billion in direct stimulus to help the airline industry. The White House’s plan includes also another $100 billion in funding for programs aimed at providing paid sick leave, food assistance, and other aid to American workers. The total requested Coronavirus financial allocations can top $1 trillion.

Tense Times at World Financial Markets [Getty]

Other nations have considered generous governmental packages to help stimulate their local economy. Britain launched a $39 billion economic stimulus plan just hours after the Bank of England slashed interest rates. Italy has decided a $28 billion package to ensure that companies and workers were helped through the crisis. Qatar has allocated a $23.35 billion stimulus package to shield its economy. China earmarked $15.9 billion to fight the epidemic. These are some of the best-conceived financial remedies for the ramifications of an unstoppable pandemic. But, they could be no more than a short-lived effect of an aspirin for a long-term economic headache.

Still, I remain skeptical these wishful trickle-down measures will not solve the problem. The verticality of the trickle-down approach, or similar stimulants of large private companies, will not match the vast horizontality of the emerging Coronavirus-derived economic recession. Coronavirus has flattened whole public and private businesses, and affected both sides of the economy: supply and demand. Metaphorically, the world economic turbo has lost power instantly and became idle in mid-March with open-ended alarmist measures of precaution and isolation. Moreover, the Coronavirus impact is likely to reinforce and deepen trends toward closed-doors policies, mistrust, decoupling, and deglobalization. It reinforces uncertainty and builds up on the demise of the World Trade Organization, as one of the most relevant turning points towards deglobalization, as well as the rise of nationalism, populism, protectionism, and the growing backlash against migration in the five years.

Coronavirus has grounded all engines of the economy including manufacturers, malls, airlines, hotels, and Disney worlds. Most cities are in a lockdown isolation, and people staying home. They are not going out to restaurants, not heading to shopping centers, not traveling or buying cars. Any world economy dislikes stagnation and isolation. As an example, seventy percent of the US economy is driven by consumer spending, and it has been in an unprecedented shutdown. It is highly unlikely most economies can avoid a recession in the short term. A considerable number of businesses will go bankrupt; and once again, the middle class will lose some of its financial capability. The hard effects of Coronavirus will reveal themselves when individuals people can get back to work, go out and spend money by July or August. A Bloomberg Economics model places the odds of a recession over the next year at 52 percent, the highest since 2009. JPMorgan’s John Normand said financial markets across assets have priced in an 80 percent probability of a recession happening.

The question remains unsettled about how much time will be needed for the consumer and business confidence to recover. This is an age of uncertainty and perplexity par excellence. Several finance experts predict the Coronavirus ramifications would not reverse until 2031. For instance, Goldman Sachs’ economists declared the U.S. economy all but recession-proof at the dawning of 2020. Alan Blinder, a former Federal Reserve vice chairman and currently professor at Princeton, says “I wouldn’t be one bit surprised if when we look back at the data, it is decided … that the recession started in March. It wouldn’t be a bit surprising to me.”(7) Robert Reich, professor of Public Policy at the University of California at Berkeley and former Secretary of Labor in the Clinton administration, believes Trump’s measures would be “useless”. He argues “they would be too slow to stimulate the economy, and would not reach households and consumers who should be the real targets. And they would reward the rich, who don’t spend much of their additional dollars, without getting money into the hands of the poor and middle-class, who do.”(8)

To help face the economic crisis in the United States as an example, the government needs a pragmatic vision to avoid the economic losses at the bottom and middle-class of the socio-economic echelon. Reich has called Congress to immediately enact an emergency $400 billion. He also recommends the money should be spent in key areas: a) Coronavirus testing and treatment; b) Paid sick leave and family leave this year, renewable for next year if necessary; c) Extended Medicaid and unemployment insurance; and d) Immediate one-time payments of $1000 to every adult and $500 per child, renewable for next year if necessary.

Other economists have argued Coronavirus may be “the most positive thing” that has happened to the global economy in recent years. Peter Zeihan, author of the new book “Disunited Nations: The Scramble for Power in an Ungoverned World”, believes China is the world’s workshop; “In absolute terms, China is by far the biggest beneficiary of this American-led Order. Japan and the Europeans had carved Chinese territory into imperial spheres of influence. The Americans ended that. China’s manufacturing prowess required the economies of scale of all China being under a single government system.”(9)

One should not focus on the ramifications of this Coronavirus shutdown only, but also on the correlation with the Russian-Saudi spat over oil prices and production, which is essentially the equivalent of pouring gasoline over a flame. In the last week of February, members of the Organization of the Petroleum Exporting Countries (OPEC), a cartel of 15 countries of oil-producing nations, met in Vienna to discuss how to deal with the disease’s impact that has lowered global demand for oil. Russia was invited to the meeting although it is not officially a member of the organization; but had vowed, three years ago, to coordinate its production levels with the fifteen members, in an alliance known as OPEC+.

There are outstanding issues between Moscow and Riyadh over a reasonable oil production cut. Saudi Arabia, the cartel’s leader, suggested the participants collectively cut their oil production by about 1 million barrels per day. However, Russia, wary of the plan, stopped at around 500,000 barrels a day. The Kremlin is said to be favoring keeping oil prices at a low level, which would “hurt the American shale oil industry or is gearing up to seize a bigger sliver of Asian and global oil demand for itself.” Emma Ashford, an expert on petrostates at the CATO Institute in Washington explains, “the Russians are more worried about market share and think they’d do better compete with the Saudis rather than cooperating at this point.”(10) Russia’s strategy has not settled well with the Saudis, who decided the slash their oil exports further in early March to wage a price war with Russia. the price per barrel went down by about $11 to $35 a barrel — the biggest one-day drop since 1991.

Coronavirus represents an epistemological overture into the science of epidemics and pandemics. The University of Pennsylvania’s Wharton School has offered a new course about Coronavirus and other black-swan outbreaks. A primary goal of the class “Epidemics, Natural Disasters and Geopolitics: Managing Global Business and Financial Uncertainty” is to bring “expert knowledge on how to deal with these crises to investors, workers, consumers and savers, so that they are better informed and can make better decisions,” said Mauro Guillen, a professor of international management, who coordinated the class. The half-semester course, which starts March 25, has proven popular — 450 students have already registered, roughly 5½ times the typical Wharton class size. Nobel laureate Paul Krugman has started a series of Master Class lessons “Economics and Society” online with an initial subscription of $15. He aims to teaching individuals the principles that shape political and social issues, including access to health care, the tax debate, globalization, and political polarization. He argues economics is not a set of answers—”it’s a way of understanding the world”.

Politicization of Coronavirus in International Relations

No wonder how epidemics and pandemics have been politically manipulated in the course of history. They have often energized right-wing politicians’ calls for policing the borders and blocking migration. For instance, the Habsburg monarchy in the Austro-Hungarian Empire in the 18th century erected a cordon sanitaire from the Danube to the Balkans, in the form of a chain of fortresses, supposedly to stop infection entering from the neighboring Ottoman empire. Serving also as a military, economic and religious border – a demarcation line between Christianity and Islam – it was patrolled by armed peasants who directed those suspected of infection to quarantine stations built along its length.(11)

The current political debate in Europe and the United States over Coronavirus echoes isolationism and ‘closed-doors’ policy. Trumpian-minded Americans and Euroskeptics are capitalizing on the fear factor of the pandemic to impose more barriers and border security. While contesting immigration and terrorism, right-wing populist politicians argue Coronavirus vindicates concerns about the need to protect their country’s borders. The threat is portrayed as “foreign, and the response is to build walls and stop flights. According to this narrative, globalization accelerates the threat.(12)

In France, Marine Le Pen leader of the far-right National Rally, formerly known as Le Front National, has called for border closures with Italy. After meeting Prime Minister Edouard Philippe, she told reporters, “I am asking for control of our borders. It feels like I am asking for the moon whereas in fact running checks at your borders should be the first act of common sense.” Her colleague Aurélia Beigneux has warned, “The free circulation of goods and people, immigration policies and weak controls at the borders obviously allow the exponential spread of this type of virus.” Hyperconnected global cities might be towering forces economically, but they are also entry ports for infection. Living in a “flyover states” is, for once, an enviable position.”(13) The first round of France’s local elections held March 15 was marked with an eerie atmosphere of semi-lockdown and global pandemic, leading to record abstention. Other nationalists in Europe like Hungary’s prime minister, Viktor Orban, had complained that Europe could not have open internal borders if its outer borders were weak, allowing asylum-seekers to enter unchecked. Furthermore, Lorenzo Quadri of the right-wing Lega dei Ticinesi in Switzerland, which is not a member of the EU, has called for a ‘closed-doors’ policy. He argued “It is alarming that the dogma of wide-open borders is considered a priority.” This is a marriage in heaven between right-wing politics and the fear of the new pandemic.

The rise of nationalism may bring the EU’s already frayed unity on the Schengen system to an end while the debate has not settled yet among Europeans about the ‘wisdom’ of Brexit. Nine countries, including Germany and France, have used emergency provisions to reinstate some controls at different times.(14) Marie De Somer, head of the migration program at Brussels-based think tank European Policy Centre, points out “Schengen is in a very poor and problematic state”, and its restoration to its full functionality hinges on “changing the bloc’s asylum and migration rules.”(15) In retrospect, some authoritarian regimes like China have capitalized on the outbreak of certain epidemics and pandemics. Chinese leaders have historically boasted of their ability “to conquer disease as a sign of strength. President Xi has concentrated power around himself, which makes him a more likely target of blame for an angry, frightened populace if the experiment fails. Perhaps that’s why he has retreated from the public eye recently, allowing his lieutenants to be seen man-aging the situation.”(16)

The coverage of Coronavirus in the globe media has positioned China to be a maverick with a post-pandemic narrative and solidified its pursuit of global leadership. Beijing has sought to get traction about its ‘successful’ defeat of the virus by assuming a lead role in assisting Italy and Spain, and capitalizing on the perceived inadequacy and inward focus of U.S. policy. It has also tried to reframe the narrative since the outbreak was interpreted as a propaganda disaster for the government. China feared Coronavirus would be called China’s “Chernobyl”, and would ultimately undermine the leadership of the Chinese Communist Party. Reports have indicated Dr. Li Wenliang—the young whistleblower silenced by the government who later succumbed to complications from the COVID-19—was likened to the Tiananmen Square “tank man.”(17)

By mid-March, China was claiming victory. “Mass quarantines, a halt to travel, and a complete shutdown of most daily life nationwide were credited with having stemmed the tide”, and “China’s signature strength, efficiency and speed in this fight has been widely acclaimed”, declared China’s Foreign Ministry spokesman Zhao Lijian.(18) One of the op-eds published by China’s state-run Xinhua news agency emphasized that China has adopted the “most comprehensive, most strict and most thorough preventative measures” to combat the pandemic. With a nationalist tone, the People’s Daily boasted that, “China can pull together the imagination and courage needed to handle the virus, while the US struggles.” Chinese officials seized the European and American Coronavirus stress to regularly remind a global audience of the superiority of Chinese efforts and criticizing the “irresponsibility and incompetence” of the “so-called political elite in Washington,” as the state-run Xinhua news agency put it in an editorial.(19)

Nicholas Christakis, a Yale professor, expressed a widespread sentiment when praising China for “an astonishing achievement from a public health point of view”.(20) World Health Organization have praised China’s approach to controlling the Coronavirus spread, which has been an oversell of Chinese public diplomacy and soft power. It has sent medical supplies to hard-hit Spain and Italy, and offered guidance to Spain, Iraq, Iran and other nations. WHO Director General Tedros A. Ghebreyesus called the Chinese-Italian cooperation a “heartwarming example of solidarity”. Zhang Jun, China’s ambassador to the United Nations, responded “a friend in need is a friend indeed. We’ll do whatever we can to help other countries in fighting the COVID-19.” Chinese officials have succeeded in turning the ‘home-made’ Coronavirus into a global mega-opportunity of public diplomacy. In short, an authoritarian 2020 China is outperforming the US’s soft power in Europe, which was rebuilt by the very America-designed ‘Marshal Plan’ after World War II. Beijing has had its historical moment of being a global leader on public health, and thus ready to take on other types of global leadership.

Embarrassed Neoliberalism at a Moment of Truth!

With the growing radius of Coronavirus’s health and economic implications, humanity is sliding downhill in 2020. Adam Smith’s famous mantra ‘laissez passer, Laissez faire’, has dramatically shifted into ‘rester chez sois, mourir chez soi’ (stay at home, die at home). For weeks, the scarcity of coronavirus testing in the US has been a dilemma. CNN reported many Americans suffering symptoms associated with the virus said they were angry and frustrated after trying to get tested only to be turned away. For instance, Maryland Governor Larry Hogan captures the challenge on both local and federal levels. He acknowledged, “No, we don’t have enough test kits and neither does any other state, and no, the federal government does not have an answer. We are behind, and that’s going to continue to be a problem.” The US public health system has gone astray. Adam Gaffney of Harvard Medical School and president of the advocacy organization ‘Physicians for a National Health Program’ asserts “This is not a healthcare system – it is atomized chaos. For again, in the American way of paying for healthcare, our hospitals (or increasingly, our multi-hospital systems) are silos, some rich and some poor, each fending for themselves, locked in market competition.”(21) In Europe, Italy has had the highest death rate and many of the victims have been among people in their eighties and nineties. According to the New York Times, Italy has the oldest population in Europe with about 23 percent of residents 65 or older, whereas he median age in the country is 47.3, compared with 38.3 in the United States.

Between Trumpism of the late 2020s and Thatcherism and Reaganism of the 1980s, one can visualize the transformation of Neoliberalism as catchall for anything that smacks of deregulation, liberalization, privatization, or fiscal austerity. Neoliberalism has derived from several notions, which are supposedly grounded in the concept of homo economicus, the perfectly rational human being, found in many economic theories, who always pursues his own self-interest.(22) The term had existed in French “néo-libéralisme”, and appeared in 1898 in the works of the French economist Charles Gide to describe the economic beliefs of the Italian economist Maffeo Pantaleoni. ‘Neoliberalism’ also gained momentum in an international intellectual gathering, “Colloque Walter Lippmann” (the Walter Lippmann Colloquium), convened by French philosopher Louis Rougier in Paris in 1938. Lippman was an American journalist who wrote a well-read book “An Enquiry into the Principles of the Good Society” in 1937. The Colloquium’s objective was to construct a new liberalism as a rejection of collectivism, socialism, and laissez-faire liberalism. It defined ‘neoliberalism’ as involving the priority of “the price mechanism, free enterprise, the system of competition, and a strong and impartial state.”(23)

In a post-World War II and a capitalist-communist Cold War context, classical liberal economist Milton Friedman used the term in his 1951 essay “Neo-Liberalism and its Prospects”. He rejected what he considered “widespread—if naive—faith among even the intellectual classes that nationalization would replace production for profit with production for use.”(24) He also contested what he deemed as waning collectivism, in a subtle reference to socialism and other forms of social democracy; “collectivism is likely to prove far more difficult to reverse or change fundamentally than laissez-faire, especially if it goes so far as to undermine the essentials of political democracy. And this trend, which would be present in any event, is certain to be radically accelerated by the cold war, let alone by the more dreadful alternative of a full-scale war. But if these obstacles can be overcome, neo-liberalism offers a real hope of a better future, a hope that is already a strong cross-current of opinion and that is capable of capturing the enthusiasm of men of good-will everywhere, and thereby becoming the major current of opinion.”(25)

The famous political duo, Thatcher and Reagan, performed their neoliberal dance well. During her gutsy 11-year tenure as Prime Minister in London, Thatcher pushed for deep transformation of the British society, and became the driving force behind inserting a neorealist engine in public policies. She left the country “a markedly different place”. British neoliberalism flourished “through a neoliberal policy programme of massive tax cuts for the rich; a drawn out, but eventual crushing of trade unions; widespread privatisation of housing, telecoms, steel, and gas; financial deregulation; and the introduction of competition in the provision of public services.”(26) Across the Atlantic, the Reagan administration had its golden moment in gutting union power and cutting public spending. Reagan’s mannerism in his public discourse helped convince the Americans with his mantra of the time: “the most important cause of our economic problems has been the government itself.”

In his 1982 essay “A Neo-Liberal’s Manifesto”, Charles Peters, editor of the Washington Monthly, addressed how neoliberals positioned the pursuit of financial liberalization and individual enterprise as a ‘virtue’. He wrote, “If neo-conservatives are liberals who took a critical look at liberalism and decided to become conservatives, we are liberals who took the same look and decided to retain our goals but to abandon some of our prejudices… Our primary concerns are community, democracy, and prosperity. Of them, economic growth is most important now, because it is essential to almost everything else we want to achieve.”(27) Still, any trend of the Neoliberal philosophy advocates the ‘wisdom’ of four particular pillars: ‘privatization’, ‘deregulation’, ‘free markets’, and ‘individuation’, as a construct antithetical to the protection of group interest. Over the following decades, Neoliberalism was embraced not only among conservatives or republicans in the West, but also among labors and democrats including Bill Clinton. Nobel-winning economist Joseph Stiglitz argues that capitalism does not have to produce inequality. Instead, he says inequality is the result of choices capitalist countries make.  

In the late nineties, the term ‘neoliberalism’ caught up with two developments: financial deregulation, which would culminate in the 2008 financial crash and in the still-lingering euro debacle. The second is economic globalization, which accelerated more ambitious type of trade agreement, in a world of free flows of finance. Financialization and globalization have become the most overt manifestations of neoliberalism in today’s world.(28) David Harvey considers Neoliberalism a “political project” launched by a corporate capitalist class with the objective of “curb(ing) the power of labor.(29) He recalls how the rise of social movements, advocacy of consumer protection, and other reformist initiatives posed a threat to the ruling class’s interests. He notices the ruling class “was not omniscient but they recognized that there were a number of fronts on which they had to struggle: the ideological front, the political front, and above all they had to struggle to curb the power of labor by whatever means possible. Out of this there emerged a political project which I would call neoliberalism.”(30) He firmly believes the neoliberal political project was not “an ideological assault” only; but, also “an economic assault”, and “the bourgeoisie or the corporate capitalist class put it into motion bit by bit.”(31)

Other Neorealism skeptics have argued the public policies of the Obamas and Clintons of the world, and their overlook of vulnerable citizens, have enabled the election of Donald Trump in November 2016. Cornell West points out, “We gird ourselves for a frightening future. The neoliberal era in the United States ended with a neofascist bang. The political triumph of Donald Trump shattered the establishments in the Democratic and Republican parties – both wedded to the rule of Big Money and to the reign of meretricious politicians.(32) West believes the age of Obama was the last gasp of neoliberalism, and argues “despite some progressive words and symbolic gestures, Obama chose to ignore Wall Street crimes, reject bailouts for homeowners, oversee growing inequality and facilitate war crimes like US drones killing innocent civilians abroad.”(33)

From a ‘normative’ perspective, Neoliberalism may claim principles of free enterprise and equal opportunity in the market, and potential prosperity as the ‘natural’ law of the market. It has developed itself into what amount to right-wing postmodernism. John Horgan, author of the book “The End of Science”, recalls when postmodernism was popular with left-wing, counter-culture types, who associated science with capitalism, militarism and other bad isms in the 1960s and 1970s. But, as he said, “over the past few decades, extreme postmodernism—and especially the idea that all claims reflect the interests of the claimer–has become even more popular among those on the right.”(34)

British PM Margaret Thatcher and US President Ronald Reagan at the White House [Getty]

Neorealist public policies pushed their way in London, Washington, and beyond. The spread of Neoliberalism sprung across the ideological divide between the right and the left, and also across the partisan caucuses at the House of Commons and Congress. Even nominally left-wing political parties, like the UK Labour Party and the Democratic Party in America, would eventually “cave into its practices, assimilating its core principles.”(35) The ideology of Neorealism also caught up with several international institutions like the International Monetary Fund, World Bank, and World Trade Organization, and imposed on an unprecedented scale across the world. Most developing nations took the lead from them to implement their recommended reforms. David Harvey recalls during the debt crisis in Mexico in 1982 for example, the IMF said, “We’ll save you.” Actually, what they were doing was “saving the New York investment banks and implementing a politics of austerity.”(36) A similar scenario was played out vis-à-vis Greece’s recent crisis. Ultimately, “they bailed out the banks and made the people pay through a politics of austerity.”(37)

In Morocco, one of the studious implementers of the IMF’s recommendations of neoliberal reforms, known as the ‘structural adjustment programme’ since the early 1980s, officials decided “abandoning public services such as education and health, privatizing public facilities and institutions, shifting towards an export-oriented economy, particularly in agriculture, opening up of Moroccan market to foreign products, and decreasing subsidies for basic products like wheat, sugar and oil – and even cancelling the petrol subsidy. These economic trends were deepened by ostensibly “free” trade agreements signed by Morocco in the mid-1990s.”(38) Two decades later, stark contradictions of a tale of two Moroccos emerged and has triggered several open-ended protests: “a Morocco of mega projects: Tanger-Med Port, highways, high-speed trains (Train à Grande Vitesse, TGV), luxurious cars, villas, palaces and touristic resorts with large pools and vast golf courses. Another Morocco which ranks very low in the human development index (HDI), vacillating between 126 and 130 out of 188 countries during recent years.”(39)

These neoliberal policies have led also to vast inequalities and social malaise among Moroccans, decoupled with political despotism as the Makhzen, the patronage network of royals, military officials, landowners, civil servants and others around the King,  which “has taken over almost all political and economic decisions in the country; economic neoliberalism with the dominating forces of neo-colonialism, privatisation and export-oriented development; and finally climate change, especially extreme events like droughts and floods.”(40) Now, the Coronavirus effect and limitations of neoliberal policies may undermine the validity of la Commission Spéciale sur Le Modèle de Développement (CSMD), special committee for the development model, which Morocco has created late 2019 with the aim of consulting with various political parties and social actors in the country. The membership of Commission is reported to be decided by three heavy-weight figures: Fouad Ali El Himma, King’s advisor; Hafid Elalamy, trade minister; and Mostafa Terrab, Chairman and Chief Executive Officer of the Moroccan state-owned phosphate-mining company OCP. CSMD is expected to submit a report by the end of June 2020, which will identify the growth challenges and design policies to ensure a better distribution of wealth across Moroccan territories and social classes. CSMD’s report will most likely fall back on the very neoliberal economic policy that are in place.

IMF Managing Director Kristalina Georgieva speaks during a news conference in Rabat, Morocco, [February 20 2020 Reuters]

Global Neoliberalism may live through a patina of pragmatism “until the nukes start flying or a virus hits. Getting healthcare ‘consumers’ to consider their market choices follows a narrow logic up to the point where none of the choices are relevant to a public health emergency… The fundamental premise of neoliberalism, the Robinsonade I, has always been a cynical dodge to let rich people keep their loot.”(41) For instance, Trump’s policies have benefited from the claim of a mixture of hands-on and hands-off government policies. Lily Roberts, director of Economic Mobility and Andy Green managing director of Economic Policy at the Center for American Progress notice “Trump’s economy continues to squeeze Americans who are struggling to make ends meet. As the costs of rent, child care, health care, and postsecondary education continue to rise faster than wages, declining earnings and persistent wage and wealth gaps illustrate that, for many Americans, the ability to save for retirement or send children to college is out of reach.”(42)

There is an even greater consequence of the ideology’s supremacy. The question is how Neoliberalism has reduced state power, willfully transferring authority into the hands of “unaccountable transnational corporations. Services were outsourced; the market left in charge. This development has proved a dangerous one, as it has reduced government’s ability to respond to the needs of its electorate. The resultant disempowerment, as subsequently felt by the people, has in many cases led to disenfranchisement.”(43) Once again, the upper hand of corporate America and its multinationals allies is poised to benefit from the upcoming Coronavirus vaccine revenues.

President Trump and Health and Human Services Secretary Alex Azar at the White House [Getty]

During his press conference at the White House, US Health and Human Services Secretary Alex Azar, who was a drug industry lobbyist and former drug company manager, was comfortable with a system that puts corporate profits over public health. He stated “Frankly, this has such global attention right now and the private market players, major pharmaceutical players as you’ve heard, are engaged in this, that we think that this is not like our normal kind of bioterrorism procurement processes, where the government might be the unique purchaser, say, of a smallpox therapy. The market here, we believe, will actually sort that out in terms of demand, purchasing, stocking, etc. But we’ll work on that to make sure that we’re able to accelerate vaccine as well as therapeutic research and development.”(44)

Apparently, neoliberal-minded officials are playing the lobbying card in favor of dominant pharmaceutical companies and labs. Secretary Azar has gone back to the very neoliberal textbook and claims “the market will actually sort” the mess. Yes, Holy market is the savior! These right-wing politicians seek to impose what has become an irrational diagnosis of the dilemma, and to pave the way, once again, for the pharmaceutical companies to make vast profits in the months and years to come. In a sad reflection, Hawaii-based medical doctor and professor, Seiji Yamada, notices how Coronavirus exposes the vulnerabilities that humans set up for themselves “by buying into the neoliberal program.”(45)

Coronavirus, Humans, and the System

Over history, democracy has been unhelpful in epidemics. Like previous pandemics, Coronavirus has caused super disruption of public life around the globe. Frank Snowden, a professor emeritus of the history of medicine at Yale University asserts, “There’s not a major area of human life that epidemic diseases haven’t touched profoundly. Epidemics have tremendous effects on social and political stability. They’ve determined the outcomes of wars, and they also are likely to be part of the start of wars sometimes.”(46) In the past two decades, humans have been exposed to fast-rate and timely-condensed waves of epidemics and pandemics such as SARS, MERS, Ebola, Swine flu, and now Coronavirus. It’s a macabre way of recasting “how we think about human history: not as a succession of ages and epochs, but of apocalyptic death rattles and societal collapses.(47) Kurt M. Campbell, former Assistant Secretary of State for Asia and the Pacific and Thomas Wright of the Brookings Institution argue “the world has grown, over the past decade, more authoritarian, nationalistic, xenophobic, unilateralist, anti-establishment, and anti-expertise. The current state of politics and geopolitics has exacerbated, not stabilized, the crisis.”(48)

In the past three decades, the Neoliberal system had it its way, and desperate workers had no choice, but to “work both longer and harder. And they die younger.”(49) If the new pandemic persists toward early summer 2020, workers will not be able to make ends meet, or may not get favorable opportunities to make up for their lost source of income. A sizable number of small enterprises will be forced to declare bankruptcy. Either in the West and in developing nations, the state’s role has shrunk into an agency of regulating fear and forbidding public gatherings. WHO has become a de-facto world institution of providing no more than statistics of infected cases, deaths, and the scope of Coronavirus spread. However, such pandemics and epidemics reveal “what really matters to a population, what is at stake, and especially whom and what these societies value.”(50) Most international organizations can deliver no more than public relations operations. By mid-March, the International Chamber of Commerce (ICC) and the World Health Organization (WHO) agreed to work closely to ensure the latest and most reliable information and tailored guidance reaches the global business community. ICC has vowed to “regularly send updated advice to its network of over 45 million businesses so that businesses everywhere can take informed and effective action to protect their workers, customers and local communities and contribute to the production and distribution of essential supplies.”(51)

The world’s struggle with Coronavirus can be a reflective and defining moment in modern history. Do we have a public health safety net? How the have-nots are coping with Coronavirus? Do we have an epidemic deterrence strategy since Great Powers have gone to extremes to develop their nuclear deterrence capabilities since World War II? In the fight against Coronavirus, Americans too are currently becoming collateral damage. The Trump administration is reported to be “particularly ill-prepared for such an undertaking. Not only were they distrustful of elite warnings, thanks to decades of conservative attacks on the American intellectual establishment, but the president was personally unwilling to believe news that might be politically damaging and surrounded by a staff too scared or too incompetent to convince him otherwise. They ignored the advice of public health experts warning them to ramp up testing, ignored warnings from doctors on the ground that things were getting bad, and failed to tell Americans that social distancing was necessary before it was (arguably) too late.”(52)

Pandemics historians have been mesmerized that “the more civilized humans became – with larger cities, more exotic trade routes, and increased contact with different populations of people, animals, and ecosystems – the more likely pandemics would occur.”(53) The impact of Coronavirus, as a shutdown of societies across the globe, contests the premise of neoliberal policies. It calls for deconstructing and demystifying any neoliberal ideology when it masquerades as economic science. In his “The Neoliberal Plague” essay, Bob Uri notices the ignorant brutality of this system appears to be on its way to “getting a reality check through a tiny virus.”(54) Other pertinent questions are looming on the horizon: what should come first: society or economy, public health or profit, citizens’ well-being or plutocracy? Is it time for a paradigm shift in public policies? What kind of new critical vision(s) would emerge from the Coronavirus wreckage? For sure, the promise of the Westphalian and ‘social contract’ modern state has been disappointing with the lack of one of the basic human needs: public health. One of Thatcher’s memorable sayings still echoes: ‘there is no such thing as society’. As a result, humans have been reduced to competitors. William Pearse regrettably notices, “Coldly rational – ruthless even – neoliberalism has set people against each other, valorising the notion of ‘getting ahead’ – the question, of whom, and by what means, too infrequently asked.”(55)

Ian Bremmer, professor of Applied Geopolitics at Columbia University argues “the challenge we face today is the unwinding of the American-led world order, and the absence of global leadership to step in and take its place. We live in a G-Zero world… and the geopolitical recession is its effect. In a geopolitical recession, fracturing global politics fuels global risks instead of helping solve them.”(56) The Coronavirus moment sends another signal about the dysfunctionality of the neorealism-driven global politics. It is certain there will be an US-Euro-Chinese techno-nationalism and protectionism.(57) Bremmer captures four contributing factors which need to be addressed before the world can emerge back from the G-Zero:

  1. Inequality and other economic dislocations as derived from globalization. The rise of “my country first” politics in the world’s advanced industrial democracies has been accompanied by the domestic delegitimization of political institutions in democracies, with spillover into the international sphere.
  2. Tendency of certain Great Powers and emerging regional powers toward undermining efforts of the 20th-century’s most advanced and economically-successful democracies in dealing their very real existential crises here in the 21st century. Bremmer considers Russia foremost among the former, “who 30 years after the end of the Cold War is looking for ways to destabilize the West while boosting its own geopolitical fortunes.”(58)
  3. Declining efficiency and effectiveness of the international system. The multilateral institutions the world currently has in place to help manage global politics and assist worldwide coordination are no longer fit for purpose.
  4. U.S. Indifference and Trumps’ decision to actively take a step back from global leadership cannot be overstated. Americans increasingly felt the United States was shouldering too much on behalf of others, militarily and otherwise.(59)
Previn Mosley stands with other health care reform supporters at a Big Insurance September 22, 2009 in New York City [Getty]

Since we did not learn the financial lesson of the 2008 stock market crisis, Coronavirus is here to inspire us with a deep reflection on the existing economic and political infrastructure, and the ongoing widening margin between the wealthier 1 percent and the poorer 99 percent of the population. Since 2008, many of us, including myself, have suffered losses of savings and skyrocketing inequality. The middle class is losing its battle with maintaining its living standards and declining purchasing power. Now, we are losing much more: confidence in the state, in the health ministry, in the economy, and in the whole system to save us from a tiny virus. In developing countries, schools and universities had to jump unprepared to the implementation of remote teaching of students with no particular prior training, know how, or indicators of success.

In an interview conducted in his office in MIT in 1991 during the scientific confusion about AIDS, Thomas Kuhn told John Horgan “the question as to what AIDS is as a clinical condition and what the disease entity is itself is not — it is subject to adjustment.  And so forth.  When one learns to think differently about these things, if one does, the question of right and wrong will no longer seem to be the relevant question.”(60) With Coronavirus lurking with no apparent strategy of containment or cure, the world needs to go back to the drawing board after forty years of globalization, free trade, and other ideological constructs of Neoliberalism. I would also borrow David Harvey’s proposition to think over; “What if every dominant mode of production, with its particular political configuration, creates a mode of opposition as a mirror image to itself?”(61) There is an opportunity for the left, humanists, intellectuals, citizen-advocacy group, and the global civil society to initiate a debate about a post-Coronavirus, above neorealism political and economic reorganization of society.

Return to the Human Dimension and Moral Democracy

Some commentators have argued for social democracy or social state. Any advocacy of such concepts will collide with the classical skepticism about collectivism and other brands of socialism. The concepts of ‘socialist’ and ‘social’ democracy have been polluted and stigmatized enough to stir up similar reactions in the future. The public debate can spare us an already-lost battle in the 1950s. The 2016 Bernie Sanders electoral platform flirted with several options of free public health, free university tuition. He was deemed as a ‘radical socialist’, and the Democratic Party chose Hillary Clinton as the counterforce to candidate Trump. In March 2020, Sanders relates the Coronavirus dilemma with previous public health challenges in the United States. In his op-ed “Coronavirus highlights the flaws in our health care and economic systems”, Sanders points “it is not just a question that in normal times — tragically, unbelievably — 13% of Americans, or about 34 million people, say a friend or family member recently passed away after being unable to afford treatment for a condition, according to a poll from Gallup and West Health. Now, during the coronavirus outbreak, the lack of health care threatens all of us, showing that we are only as safe as the least insured person in America.”(62) He has called for providing direct emergency $2,000 cash payments to every person in America every month for the duration of the crisis. “We are likely already in a recession,” Sanders stated.

Scott Gottlieb, former US Food and Drug Administration (FDA) Commissioner noticed a pattern of ‘rationing’ screening opportunities; while the federal government officials discouraged hospitals from developing and using their own in-house testing kits because they would need to obtain FDA’s permission to use them. A recent Healthcare.com and YouGov poll conducted March 10 has shown nearly half (48%) of the participants said they were not very confident they could deal with the costs, which exceed $3,000, (23%) — or not at all confident (25%). Only 31% said they could pay out of their savings, while 42% said they would borrow through their credit card (22%), their family (12%) or their bank (8%).

Some economists feel nostalgic to Smith’s ideas about free market, as he “anticipated much of the corruption and exploitation currently observed in the capitalist system”. Smith cautioned against some exploitative shifts of capitalism in disregarding the virtue of justice. He wrote in “The Wealth of Nations” book in 1776, “To hurt in any degree the interests of any one order of citizens for no other purpose but to promote that of some other, is evidently contrary to that justice and equality of treatment.” Industrial psychologist Paul Vorster points out, “It probably isn’t much of a stretch to say that Smith would have been a proponent of the idea that business ethics is about doing what is good for the self (the organisation) and the other (the consumer and employee) in a mutually beneficial manner. Look after the needs of consumers and they will do the same for you.”(63) Vorster remains hopeful societies will consider a purer form of capitalism as a moral economic philosophy, instead of only an exclusively economic philosophy, is required for economies to return to the principles of prosperity, justice and liberty.(64)

As Coronavirus has apparently brought Neoliberalism to its knees with a complete shut of the system worldwide, a new dawn will emerge with tougher questions: what a post-Coronavirus containment world would say about the survival of individuals, families, and societies? It will be an opportunity to revisit the ‘social contract’ paradigm, which has historically assisted the development of classical liberalism. Jeffery Sachs argues the US government has to be judged “on its incompetence, its venality, its ignorance and it will add to our costs and our dangers absolutely in an enormously depressing and significant way.”(65)

What is needed now, more than ever, is a public debate of moral autonomy of citizens in redefining the rights and obligations of the state and reconstructing their moral authority. The debate needs to kick off on a blank slate with a fresh beginning and new momentum. I argue for a moral democracy and a moral state as an anti-thesis of both Neoliberalism and the better dressed up ‘ethical capitalism’, which derive from the classical Adam Smith’s lucid explanation of the forces shaping what we still call ‘free market’: prosperity, justice and liberty. Our Coronavirus reality and the absence of the state, with no pro-active health safety net, seem to warrant a return to the natural law, Kantian principles, and the basic human needs paradigm. The new pandemic has taken us back to a fundamental question: How to reconcile the gap when the state fails to protect the citizen? What should come first: person or profit? To use Immanuel Kant’s terminology, what would be the 2020’s ‘metaphysics of morals’, which represent a “system of a priori moral principles that apply the categorical imperative to human persons in all times and cultures?”

In his well-received book “In Defense of Anarchism”, Kantian scholar and philosopher Robert Paul Wolff wrote, “The defining mark of the state is authority, the right to rule. The primary obligation of man is autonomy, the refusal to be ruled. It would seem, then, that there can be no resolution of the conflict between the autonomy of the individual and the putative authority of the state. Insofar as a man fulfills his obligation to make himself the author of his decisions, he will resist the state’s claim to have authority over him.”(66)

Morality should not be regarded as a mere utopian virtue, but rather as a factual drive for collective progress. Since the Westphalia Treaty, the state, the private sector, the stock market, and other structural forces have monopolized the status of unit of analysis for so long. They ought to cede the place be the individual, the family, the welfare state, and the principle of health for all, education for, and prosperity for all. Kant argued that the supreme principle of morality is a standard of rationality that he dubbed the “Categorical Imperative”, which he characterized as an objective, rationally necessary and unconditional principle that we must always follow despite any natural desires or inclinations we may have to the contrary. Any law, which represents a set on norms to regulate the relationship between the state and citizens, in perceived in Kantian philosophy as an element, which directly links all the fields: ethics, philosophy of law, philosophy of politics, and historical philosophy. Kant maintains the focus on the individual, the free moral self and subject, whereas he places structure and all the embedded political institutions and economic regulations at the periphery, with an open mind for perpetual peace. He urged the self to “act only on that maxim through which you can at the same time will that it should become a universal law”.(67)

In the midst of the Coronavirus turmoil, Edgar Morin, philosopher, sociologist and Emeritus Director of Research at the Centre Nationale de la Recherche Scientifique (CNRS) in France, remains optimistic. he spoke about the theme “Changer le monde: il n’est pas trop tard” (To change the world: it is not too late” at the first edition of “Une Époque Formidable” public lectures series. He notices humans know so much knowledge even about death; they have never had some much information and multiple expertise. But, they have lost a sense of direction. He explains, “We have accumulated so much information about humans, but we have not known yet how to be human. In our schools and universities, the knowledge of our human identity is not part of our academic curriculum. In terms of politics, we have lost the compass”. He also puts the emphasis on the question “Where should we go from here?”(68)

For decades now, a number of social psychologists and conflict theorists have argued for the wisdom of a basic needs paradigm in designing public policies. As John Burton argued in 1998, “If there is competitive material acquisition, on the one hand, and an individual desire for collaborative relationships, on the other, the explanation of the preponderance of adversarial and aggressive behaviors would have to be the conditions imposed by systems as they have evolved. If this is the case, conflicts at all social levels are due to past failures to include in institutions and in decision making a human element and to employ available intellectual resources continually to reassess institutions and social norms and thus resolve problems as they emerge.”(69)

The Peace Studies founder and 2016 Nobel Peace Prize candidate, Johan Galtung, has argued for a strong interconnectedness between basic human needs and development. He explains how “it does make sense to talk about certain classes of needs, such as ” security needs, ” “welfare needs , ” ” identity needs,” and “freedom needs,” to take the classification that will be used here, and postulate that in one way or the other human beings everywhere and at all times have tried and will try to come to grips with something of that kind, in very different ways.”(70)

The pyramid of basic human needs [Simply Psychology]

Dr. Mohammed Cherkaoui, Senior Researcher at Al Jazeera Centre for Studies.

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  38. Jawad Moustakbal, “Despotism, neoliberalism and climate change: Morocco’s catastrophic convergence”, Middle East Eye, July 31, 2017 https://www.middleeasteye.net/big-story/despotism-neoliberalism-and-climate-change-moroccos-catastrophic-convergence
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  40. Jawad Moustakbal, “Despotism, neoliberalism and climate change: Morocco’s catastrophic convergence”, Middle East Eye, July 31, 2017 https://www.middleeasteye.net/big-story/despotism-neoliberalism-and-climate-change-moroccos-catastrophic-convergence
  41. Rob Urie, “The Neoliberal Plague”, March 6, 2020 Counterpunch, https://www.counterpunch.org/2020/03/06/the-neoliberal-plague/
  42. Lily Roberts and Andy Green, “The State of the Trump Economy”, Center for American Progress, February 5, 2019 https://www.americanprogress.org/issues/economy/news/2019/02/05/465835/state-trump-economy/
  43. William Pearse, “A Critique of Neoliberalism”, ENOMICS, April 9, 2019 https://inomics.com/insight/a-critique-of-neoliberalism-1379580
  44. Jeffrey Sachs, “The Trump administration’s ludicrous approach to coronavirus vaccine”, CNN. March 5, 2020 https://edition.cnn.com/2020/03/05/opinions/ludicrous-plan-coronavirus-vaccine-opinion-sachs/index.html
  45. Seiji Yamada, “Neoliberalism and the Coronavirus”, Counterpunch, February 7, 2020 https://www.counterpunch.org/2020/02/07/neoliberalism-and-the-coronavirus/
  46. Ishaan Tharoor, “How epidemics have changed the world,” The Washington Post, March 8, 2020 https://www.washingtonpost.com/world/2020/03/06/how-epidemics-have-changed-world/
  47. Ishaan Tharoor, “How epidemics have changed the world,” The Washington Post, March 8, 2020 https://www.washingtonpost.com/world/2020/03/06/how-epidemics-have-changed-world/
  48. Thomas Wright & Kurt M. Campbell, “The Coronavirus Is Exposing the Limits of Populism”, The Atlantic, March 4, 2020  https://www.theatlantic.com/ideas/archive/2020/03/geopolitics-coronavirus/607414/
  49. Rob Urie, “The Neoliberal Plague”, March 6, 2020 Counterpunch, https://www.counterpunch.org/2020/03/06/the-neoliberal-plague/
  50. Ann Scott Tyson and Sara Miller LIana, “Containing coronavirus: Where democracy struggles – and thrives”, The Christian Science Monitor, March 2, 2020 https://www.csmonitor.com/World/2020/0302/Containing-coronavirus-Where-democracy-struggles-and-thrives
  51. WHO, “ICC-WHO Joint Statement: An unprecedented private sector call to action to tackle COVID-19”, March 16, 2020 https://www.who.int/news-room/detail/16-03-2020-icc-who-joint-statement-an-unprecedented-private-sector-call-to-action-to-tackle-covid-19
  52.  Zack Beauchamp, “The deep ideological roots of Trump’s botched coronavirus response”, VOX, Mar 17, 2020 https://www.vox.com/policy-and-politics/2020/3/17/21176737/coronavirus-covid-19-trump-response-expertise
  53. Nicolas LePan, A visual history of pandemics”, Word Economic Forum March 15, 2020 https://www.weforum.org/agenda/2020/03/a-visual-history-of-pandemics&nb…;  
  54. Rob Urie, “The Neoliberal Plague”, March 6, 2020 Counterpunch, https://www.counterpunch.org/2020/03/06/the-neoliberal-plague/
  55. William Pearse, “A Critique of Neoliberalism”, ENOMICS, April 9, 2019 https://inomics.com/insight/a-critique-of-neoliberalism-1379580
  56. Ian Bremmer, “We Are in a Geopolitical Recession. That’s a Bad Time for the Global Coronavirus Crisis”, Time, March 13, 2020 https://time.com/5802033/geopolitical-recession-global-crisis/
  57. Patrick M. Cronin, Michael Doran & Peter Rough, “Geopolitical Implications of the Coronavirus”, March 13, 2020 https://www.hudson.org/research/15816-geopolitical-implications-of-the-coronavirus
  58. Ian Bremmer, “We Are in a Geopolitical Recession. That’s a Bad Time for the Global Coronavirus Crisis”, Time, March 13, 2020 https://time.com/5802033/geopolitical-recession-global-crisis/
  59. Ian Bremmer, “We Are in a Geopolitical Recession. That’s a Bad Time for the Global Coronavirus Crisis”, Time, March 13, 2020 https://time.com/5802033/geopolitical-recession-global-crisis/
  60. John Horgan, “The Coronavirus and Right-Wing Postmodernism”, Scientific American, March 9, 2020 https://blogs.scientificamerican.com/cross-check/the-coronavirus-and-right-wing-postmodernism/
  61. Bjarke Skærlund Risager, “Neoliberalism Is a Political Project: An Interview with David Harvey”, Jacobin, https://www.jacobinmag.com/2016/07/david-harvey-neoliberalism-capitalism-labor-crisis-resistance/
  62. Bernie Sanders, “Coronavirus highlights the flaws in our health care and economic systems”, CNN, March 15, 2020 https://edition.cnn.com/2020/03/15/opinions/bernie-sanders-opinion-coronavirus-health-care-economic-system-flaws/index.html
  63. Paul Vorster, “The three principles of ethical capitalism”, The Ethics Institute, February 29, 2019 https://www.tei.org.za/index.php/resources/articles/ethics-opinions/7712-the-three-principles-of-ethical-capitalism
  64. Paul Vorster, “The three principles of ethical capitalism”, The Ethics Institute, February 29, 2019 https://www.tei.org.za/index.php/resources/articles/ethics-opinions/7712-the-three-principles-of-ethical-capitalism
  65. Ali Hasan, “Capitalism versus Coronavirus, The Intercept, March 12, 2020 https://theintercept.com/2020/03/12/capitalism-vs-the-coronavirus/
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The Shifting Geopolitics of Coronavirus and the Demise of Neoliberalism – (Part 1)

One should highlight the distance between fiction and reality. However, a number of China politics observers and Western military officials have claimed a strong link between Coronavirus and recent research conducted at the Wuhan Institute of Virology.

In a symbolic and rather ironic gesture, a Chinese aircraft landed in Rome, Italy, Europe’s epicenter of the Coronavirus spread, March 12, 2020, carrying nine medical experts and 31 tons of medical supplies, including intensive care unit, medical protective equipment, and antiviral drugs. Chinese businessman Jack Ma, founder of the Alibaba Group, offered to donate 500,000 coronavirus testing kits and one million masks to the United States, which declared a national emergency over the outbreak in the second week of March. China has been ‘the workshop of the world’, for that past three decades, since it has provided a quarter of the manufacturing in the world, as economics Nobel laureate Paul Krugman would say. Interestingly, China now has positioned itself to be the doctor and the lab of the West. For more two months now, the struggling efforts to contain Coronavirus in Europe and elsewhere are signaling the need for a paradigm shift in public health management, economic strategies, biosecurity and possible revision of neorealism, which simply means capitalism on steroids.

Earlier in February, Italy’s permanent representative to the European Union (EU), Maurizio Massari, had pleaded for help via the Emergency Response Coordination Centre. “We asked for supplies of medical equipment, and the European Commission forwarded the appeal to the member states. But, it didn’t work.”(1) The Centre serves as EU’s crisis hub, monitors natural and man-made disasters around the clock, administers the need of any EU member state – which cannot handle a crisis on its own- and forwards the appeal to other member states, which can then volunteer assistance.

The European negligence of Italy’s catastrophe, at the heart of the continent, has echoed a sentiment of resentment among Italians, who felt they had been let down by other EU member states several times; now and at the peak of the 2015 refugee crisis, when some 1.7 million individuals reached the EU southern territory. Massari’s statement implies some bitter taste of Europe’s lack of solidarity; he said, “The coronavirus crisis is similar to the refugee crisis: Countries that are not immediately affected are mostly not willing to help. Different countries obviously have different threat perceptions. We [Italy] feel that the coronavirus is a global and European threat that needs a European response, but other countries don’t see it that way.”(2) 

Such a negative response in Brussels, the EU capital, has bewildered political observers, and triggered new questions about the purpose of the EU, once perceived as the most unified and most strategic post-state alliance in the world. Elisabeth Braw, director of the Modern Deterrence project at the Royal United Services Institute, has noticed fellow EU countries “have failed, in a shameful abdication of responsibility, to give medical assistance and supplies to Italy during an outbreak. China is filling the void.”(3)

European economic historians fear some déjà vu memories of the Black Death, which spread in the continent in the mid-14th century and led to the death of one third of the population. This reduction of demography caused scarcity of labor, increase in wages, decrease in inequality, and contested the then-feudal system in Europe. It also paved the way for the Industrial Revolution which Industrial Britain was hit by ‘King Cholera’ in 1831-32, 1848-49, 1854 and 1867. Tuberculosis also was responsible for the death of one-third of the casualties in Britain between 1800 and 1850. This nightmarish refrain comes back now stronger as epidemics have been ‘great equalizers’, and may initiate long-term implications nor only for European economic growth, but also for the world economy. After the US Federal Reserve decided to slash the benchmark interest rate to between zero and 0.25 percent (down from a range of 1 to 1.25 percent) and to buy $700 billion in Treasury bonds and mortgage-backed securities in a Sunday emergency meeting, the Dow Jones industrial average plunged 2,250 points at the open and trading suspended almost immediately the following day Monday, March 16. 

The spread of Coronavirus, or Covid-19 virus, has brought the world to nearly a standstill. It has grounded world airlines, and represents an existential threat to many airlines. For instance, US President Trump’s 30-day ban on most flights to America from Europe, which took effect on March 14th, will erase the $20bn lucrative transatlantic routes made in sales last year. The real drama has expanded from the depiction of ghost towns in Hollywood movies into real ghost countries like Italy, Spain, and Germany. Several other countries have opted for forced quarantine of their population. We are at an era of self-imposed viral discrimination between the self and the other in the once-cozy social settings, work places, public gatherings, and even in churches, mosques and temples.   

President Trump has framed the pandemic in xenophobic terms and made the wildly-irresponsible claim that “it will go away. Just stay calm. It will go away”. However, the new pandemic has revealed the most cynical aspects of neoliberalism. In a ‘Capitalism versus Coronavirus’ debate, the focus was on whether the American neoliberal model of capitalism makes the United States and its economy particularly ill-suited and ill-equipped to deal with a health crisis of the size of Coronavirus. Jeffery Sachs, Director of the Center for Sustainable Development at Columbia University, asserts, “We don’t have a public health system. We have a for-profit, private system. We have tens of millions of people that have no health coverage. We have no systematic testing. We are scrambling, and it has been weeks with this virus multiplying, with the pandemic spreading in the United States.”(4)

2020 will go into history books as a year that has exposed not only a public health failure, but has also indicated an era of geopolitical recession and a fall-from-grace moment of the neoliberal system in the new century. The unanticipated public health risk now can be reduced “neither to ethical virtues nor to a need for investments”; and “the crisis puts the flaws of our short-sighted, exploitative, hyper-individualistic times in glaring focus.”(5)

This two-part paper examines what I term a 3-C complexity: a) contextualization of the pandemic spread in 2020; b) correlation with the world finance markets instability and sudden drop in oil prices in mid-March, as Brent crude fell 12.2 percent, or $4.15, to trade at $29.68, its lowest level since January 2016; and c) concern about the future of neorealist capitalism. Part 1 probes into several dualities circulating now in the public sphere worldwide: is Coronavirus a ‘nature-made’ or ‘man-made’ pandemic? How scientific research can sort out the truth from various conspiratorial assumptions about a ‘deliberate’ causality and possible ‘manipulation’ of the virus in international politics? One fundamental question remains open about whether the international community and the whole United Nations system have balanced the highly-sought nuclear deterrence with some virus deterrence or minimum strategy of biosecurity. The paper also addresses a new trend of Trumpian electioneering and the pursuit of a German pharmaceutical company to develop an anti-Coronavirus Vaccine.  

Part 2 of the paper will propose how Coronavirus has imposed a de facto trickle-across economics on the famous Reaganite trickle-down economics, or trickle-down theory, has shifted into negative economic entanglements. In New York the hot touristic hub of the world, Mayor Bill de Blasio ordered local bars and restaurants to close their doors in an effort to halt the spread of Coronavirus. He wrote in a message to his fellow New Yorkers March 16, “We must respond with a wartime mentality.” In Paris, French President Emmanuel Macron said in a somber address to his fellow citizens, “We are at war. We’re not up against another army or another nation. But the enemy is right there: invisible, elusive, but it is making progress.” He decided the army should be drafted in to help move the sick to hospitals.

In developing countries like Morocco and Philippines, where agriculture, tourism, and the financial remittances of their workers abroad represent the backbone of the national economy, there are indicators of a gloomy rest of the year since severe consequences of Coronavirus will kick in by June or July. On the whole, the United Nations’ trade and development agency, UNCTAD, foresees the current economic uncertainty and immobility will likely cost the global economy $1 trillion in 2020. The second part of the paper concludes the dominant neoliberal system is forcibly getting a reality check through a tiny virus. It argues for a human dimension and precedency of society before economy and profit in reconstructing an edited social democracy system, as a due correction of neoliberalism. 

Deadliest pandemics in history [WHO-CDC]

As an uncontrollable cross-border pandemic, Coronavirus is a new harrowing reminder of the fragility of human life; but, can be interpreted as the most democratic super disease of our time, with no discrimination on the basis of any particular race, geography, political ideology, wealth, or degree of development or underdevelopment. As one British commentator put it, “It spares neither Leave nor Remain, neither imam nor Chinese doctor, and respects no national border. So even as national leaders fall back on atavistic national responses, the dictates of science and reason have to surface – there is no other way forward.”(6)

The radius of contagions across the five continents seems to echo the morale of an article “The Microbe as a Social Leveller”, written by Cyrus Edson, the New York City health commissioner in 1895. Edson had marveled the reflections of 17th-century English communist Gerrard Winstanley, as he wrote that “the microbe of disease is no respecter of persons.” He explained that while impoverished people would be most at risk from disease, the rich would never be entirely safe from infection. For Edson, the “socialism of the microbe … is the chain of disease, which binds all the people of a community together.”(7)

During March in particular, wealthy nations in Europe, North America and the Gulf could not prevent new infection cases while poor nations were struggling with providing basic resources of water, sanitizers, and drugs for their citizens. Between January and March, Coronavirus was spreading at unimaginable velocities. 

Creeping Numbers

By March 18, the World Health Organization (WHO) announced 200,106 confirmed cases, 8010 deaths, and 82,813 recovered in 167 countries. The scope of the Coronavirus spread has displayed some ironic areas of concentration. The list of countries with more than 200 confirmed cases includes: China 81048; Italy 21157; Iran 12729; South Korea 8086; Spain 5753; France 4469; Germany 3795; USA 1678; Switzerland 1359; United Kingdom 1144; Netherlands 959; Sweden 924; Norway 907; Denmark 827; Japan 780; Belgium 689; Austria 655; Qatar 337; Greece 227; Singapore 212; and Bahrain 211.(8) In China, nearly 60 million people were already subject to quarantine measures; and Italy became the European epicenter of the pandemic with the total of 21157 cases and 1441 deaths.

WHO had been reluctant to announce Coronavirus was “officially a pandemic”, and did not decide to bring the bad news until March 11. WHO defines a pandemic as “the worldwide spread of a new disease” (an epidemic is confined to “a community or region”). Director-General Dr. Tedros A. Ghebreyesus of the top health agency stated, “There is so much attention to that word. Other words matter more: prevention, preparedness, political leadership and people… We’re in this together.”(9) As Laura Spinney, author of “Pale Rider: The Spanish Flu of 1918 and How it Changed the World”, points out, “After the 1918 flu outbreak killed 50 million, nations created new organizations to fight infection. But in an age of pandemics and renewed great power rivalry, they are no longer enough.”(10)

History of Pandemics

Across the Atlantic, the Coronavirus infection cases in the United States jumped from 1 case on January 22 to 2179 on March 13. This represents what is called an ‘exponential curve’, as the number of the cases doubles every two or three days, which would be one hundred million cases by May, according to the estimates of the Washington Post. Anthea Roberts and Nicolas Lamp, authors of an upcoming book “Winners and Losers: Narratives about Economic Globalization”, notice that instead of adopting a common frame to understand this threat, “actors are doubling down on their existing critiques of globalization and neoliberalism… Political observers view the coronavirus as a perfect illustration of the advantages or flaws of authoritarianism or democracy—pick your poison.”(11)

Since 2009, there have been five declarations of international public health emergencies: the swine flu pandemic in 2009, a polio outbreak in 2014, the Western Africa Ebola outbreak in 2014, the Zika virus outbreak in 2015 and another Ebola outbreak in the Democratic Republic of the Congo in 2019. Between 2011 and 2018, WHO detected 1,483 epidemic events in 172 countries. The Organization qualified them as signs of a new era of high-impact and swiftly spreading epidemics. It has also warned of the entirely credible threat of a respiratory pathogen ultimately provoking a global, biological calamity that “could claim some 50 to 80 million lives and destroy up to 5 percent of the world economy, besides causing social and political instability.”(12)

Pursuit of Scientific Data

At the age of fast Internet and social media, the world opinion has consumed a variety of virus misinformation and disinformation and internalized deep fear and anxiety. There have been allegations about the existence of ‘secret labs’, ‘government plots’, and implicit ‘manipulation’ of the virus in the U.S.-China geo-economic competition, and possibly an anti-Iran conspiracy. By March 16, the number of deaths in Iran topped 850, including Ayatollah Hashem Bathayi Golpayegani, a member of the clerical body that appoints the supreme leader, after testing positive for the new coronavirus and being hospitalized.

The overall panic has helped sell alarmist information. Samuel Scarpino, a business professor of network science at Northeastern University College of Science, points out, “A link between social contagions and real biological contagions are a feature of modern outbreaks because of misinformation and fake news.” So far, two dominant narratives have circulated the globe: China ‘manufactured’ the virus, and the United States ‘started’ the outbreak deliberately. Philip Reeker, senior State Department official in Washington, said “malign” Russian actors were attempting to sow disinformation about the origin of the coronavirus. 

A woman mourns during a funeral held at Beheshte Masoumeh Cemetery for the victims of the new coronavirus in Qom, Iran, [March 17, 2020 -Getty]

The public understanding of Coronavirus can be categorized into two main discourses: one is scientific, and the other is interpretive of certain incidents. From a scientific perspective, a recent ecologist study conducted in the Malaysian Borneo and China put the current coronavirus outbreak in China in a wholly new light. Scientists working with EcoHealth Alliance, a nonprofit research group, concluded the pandemic was “spillovers”, which are instances of an animal virus jumping into a human. Disease ecologist Kevin Olival and his colleagues collected samples from thousands of bats in China. He explained “we found evidence for, in total, from all the sampling we did in China, about 400 new strains of coronaviruses.”(13) Bats are known for carrying some dangerous ones, particularly viruses that have the potential to kick off global outbreaks.(14) One of the coronaviruses that the researchers found was a very close genetic match for the SARS virus. 

Another EcoHealth Alliance ecologist, Hongying Li, highlighted there were any number of ways these people seemed at risk of inadvertently coming into contact with bat saliva, urine or poop. She said, “In some places, you could find bats roosting in people’s homes. A lot of people reported, ‘Once a bat flew into my house and I killed it’ or ‘Bats ate the fruits in my backyard.’ “(15) Researchers at the Wuhan Institute of Virology and the Wuhan Jinyintan Hospital in China, who have worked closely with EcoHealth Alliance, compared the new virus with the bat samples they’d collected. They found an extremely close match. They released a detailed paper showing that the new coronaviruses’ genetic makeup is “96 percent identical to that of a coronavirus found in bats.”(16)

Despite China’s alleged containment of the virus in Wuhan, there has been no clear-cut remedy while scientists race to find an effective vaccine. The Chinese authorities have advocated the use of traditional remedies. Patients are given a bag of brown soup — a traditional Chinese remedy blended from over 20 herbs, including ephedra, cinnamon twigs and licorice root, alongside mainstream antiviral drugs, according to China’s Ministry of Science and Technology. However, a team of experts at London’s Imperial College published a new document and warned the current public health threat is the “most serious” from a respiratory virus since the Spanish Flu in 1918. They advised the UK government adopts a strategy of “epidemic suppression” – for a period of potentially 18 months or more – rather than “mitigation”. Such mitigation strategy revealed that the British National Health Service capacities “could be exceeded by at least eightfold – and about 250,000 people could die.”(17) 

EcoHealth Alliance ecologists examine one temporarily captured in a cave in Guandong, China [EcoHealth Alliance]

In the United States, the Centre for Disease Control and Prevention (CDC) asserts Coronaviruses are “a large family of viruses that are common in people and many different species of animals, including camels, cattle, cats, and bats. Rarely, animal coronaviruses can infect people and then spread between people such as with MERS-CoV, SARS-CoV, and now with this new virus, named ‘SARS-CoV-2’. The SARS-CoV-2 virus is a betacoronavirus, like MERS-CoV and SARS-CoV.  All three of these viruses have their origins in bats.”(18) CDC also concluded “this is the first pandemic known to be caused by the emergence of a new coronavirus. In the past century, there have been four pandemics caused by the emergence of novel influenza viruses.”(19) 

Dr. William Schaffner, a professor at Vanderbilt University School of Medicine and longtime adviser to the CDC explains how the spread of Coronavirus has been solidified by two major factors: “Asymptomatic transmission and mildly symptomatic transmission”; and considers them “the drivers of spread in the community.”(20) Other scientists have ranked the Coronavirus lethality at 2 percent compared with 10 percent of SARS. However, military historian and world affairs author, Joseph V. Micallef, highlights coronavirus has never been encountered before. He wrote, “Like other coronaviruses, it is a zoonotic disease: an infectious disease caused by bacteria, viruses, and parasites that spread from non-human animals (usually vertebrates) to humans. Many of those initially infected either worked or frequently shopped in the Wuhan seafood wholesale market.”(21)

Daily confirmed cases of Coronavirus outside China March 14 [WHO-BBC]

Coronavirus’s Conspiratorial Interpretations 

A number of literary works have come back to the limelight at the peak of Coronavirus spread. One of them is “The Eyes of Darkness” published in 1981. The author Dean Koontz mentions a deadly virus called the “Wuhan 400,” which he described as a “severe pneumonia-like illness” that spreads attacking “the lungs and bronchial tubes” and “resisting all known treatments.”(22) Dombey, one of the main characters of the novel, narrates a story about a Chinese scientist who brought a biological weapon called “Wuhan-400” to the United States: “To understand that,” Dombey said, “you have to go back twenty months. It was around then that a Chinese scientist named Li Chen defected to the United States, carrying a diskette record of China’s most important and dangerous new biological weapon in a decade. They call the stuff ‘Wuhan-400’ because it was developed at their RDNA labs outside the city of Wuhan, and it was the four-hundredth viable strain of man-made microorganisms created at that research center.”

One should highlight the distance between fiction and reality. However, a number of China politics observers and Western military officials have claimed a strong link between Coronavirus and recent research conducted at the Wuhan Institute of Virology. Some have argued Coronavirus is one thing and the “dark secrets”, being developed in biowarfare labs around the world, are quite another. Moreover, there has a pattern of ethnicizing the new virus as the “Chinese virus” in Western media and publications.

The WHO China office heard the first reports of a previously-unknown virus behind a number of pneumonia cases in Wuhan December 31, 2019. The main narrative then alluded to the possibility that the new virus could have originated from a Wuhan seafood market, where wild animals, including marmots, birds, rabbits, bats and snakes, were traded illegally. After meeting Tedros A. Ghebreyesus, Director-General of WHO at the Great Hall of the People on Beijing’s Tiananmen Square, a symbol of the Chinese Communist Party’s political might, on 28 January 2020, Chinese President Xi Jinping stated “the epidemic is a devil. We cannot let the devil hide.”(23) By February 15, the Chinese Ministry of Science and Technology released a new directive titled: “Instructions on strengthening biosecurity management in microbiology labs that handle advanced viruses like the novel coronavirus.” As of March 11, Chinese health authorities acknowledged over 81,032 cases and 3,204 deaths 

Steven Mosher, president of the Population Research Institute and author of “Bully of Asia: Why China’s ‘Dream’ Is the New Threat to World Order”, remains skeptical about what was behind Xi Jinping’s urgent call for setting up a national system to control biosecurity risks “to protect the people’s health”, since lab safety is a “national security” issue, one week after his statement about “the need to contain the coronavirus” February 15. Mosher also believes China has had a problem “keeping dangerous pathogens in test tubes where they belong, doesn’t it? And just how many “microbiology labs” are there in China that handle “advanced viruses like the novel coronavirus”?”(24) President of the Population Research Institute calls for some deductive reasoning of Wuhan being the birth place of Coronavirus. He argues “It turns out that in all of China, there is only one. And this one is located in the Chinese city of Wuhan that just happens to be … the epicenter of the epidemic. That’s right. China’s only Level 4 microbiology lab that is equipped to handle deadly coronaviruses, called the National Biosafety Laboratory, is part of the Wuhan Institute of Virology.”(25)

Patients wait to be transferred from Wuhan No 5 Hospital to Leishenshan Hospital, the newly built hospital for coronavirus patients, in Wuhan. China, on March 3, 2020 [Getty]

Reports have indicated the People’s Liberation Army’s top expert in biological warfare, a Maj. Gen. Chen Wei, was dispatched to Wuhan at the end of January to help with the effort to contain the outbreak. According to the PLA Daily, Chen has been researching coronaviruses since the SARS outbreak of 2003, as well as Ebola and anthrax. This would not be her first trip to the Wuhan Institute of Virology, either, since it is one of only two bioweapons research labs in all of China. However, Mosher argues the deadly SARS virus has escaped twice from the Beijing lab; and both “man-made” Corona and SARS epidemics were quickly contained, but neither would have happened at all if proper safety precautions had been taken.

Ivo Daalder, president of the Chicago Council on Global Affairs and a former U.S. ambassador to NATO, has criticized China for its “secrecy and inaction”, which turned the possibility of an epidemic into a reality.(26) He recalls doctors in Wuhan, an industrial city of 11 million people, noticed, by the end of December 2019, an increased number of sick people with symptoms similar to the SARS outbreak that had killed nearly 800 people in 2002-03. The patients were quarantined, and the Wuhan health commission issued a public notice stressing no cause for alarm. The infections were traced to a live-animal food market, which was shut down on January 1, and the genetic sequence of a new coronavirus was identified two days later.

Consequently, Daalder’s Op-Ed piece triggered some uproar with Chinese officials. Zhao Jian, China’s consul general in Chicago, sent a letter to the editor of the Chicago Tribune, accusing Daalder of “inaccuracies and bias.”(27) Chinese diplomacy has been mobilized in the West to control the narrative, and to promote the idea that the Communist Party’s response to the outbreak has in fact been transparent and effective. The Chinese Embassy in London accused the Economist of “hold[ing] a prejudice against China’s political system.” In Paris, the Chinese Embassy said that, in some media outlets, “the reflex criticism of everything Chinese is bordering on paranoia.” In Berlin, Chinese diplomats accused the media of “continuing to stir up and spread panic.” Ironically, China’s Embassy In Copenhagen demanded that the Jutland Post, the best-selling newspaper in Denmark, “publicly apologize to the Chinese people” for publishing a cartoon depicting a Chinese flag with illustrations of a virus instead of stars.(28) 

Western observers have been skeptical about China’s over-secrecy about the dynamics of the Coronavirus spread and mass mobilization of interlocutors to impose an official, but less credible, narrative. Lucrezia Poggetti, EU-China relations analyst at the Mercator Institute for China Studies points out “the Communist Party clamped down on information shared about the disease and dispatched more than 300 people to generate positive news stories around the outbreak.”(29) Others have warned of missing information from China. For instance, Anthony Fauci, director of the U.S. National Institute of Allergy and Infectious Diseases, pointed to the gap, and questioned the difference between “numbers that are given to you in a press conference as opposed to numbers [where] you can actually look at the data.”

Coronavirus patients are housed in a sports arena converted to a makeshift hospital Sunday in Wuhan, China [Reuters]

Anti-Coronavirus Vaccine and Trumpian Electioneering

In an interesting twist in the world campaign against the new pandemic, the science of Coronavirus has turned into a new battle of knowledge and brain drain, and a new trend of Trumpian profiteering. Members of the German government have expressed resentment to the news President Trump had offered $1bn to Tübingen-based biopharmaceutical company, CureVac, to secure the vaccine “only for the United States”.(30) CureVac was founded in 2000 and specializes as in “development of treatments against cancer, antibody-based therapies, treatment of rare illnesses and prophylactic vaccines.”(31)

Christian Lindner, leader of the liberal FDP party, accused President Trump of electioneering, “Obviously Trump will use any means available in an election campaign.” Moreover, German economy minister Peter Altmaier pointedly stated “Germany is not for sale.” His colleague foreign minister Heiko Maas told the Funke Mediengruppe research network “German researchers are taking a leading role in developing medication and vaccines as part of global cooperation networks. We cannot allow a situation where others want to exclusively acquire the results of their research.”(32)

Consequently, Washington has sought to calm the uproar. A US official stated “the US government has spoken with many [more than 25] companies that claim they can help with a vaccine. Most of these companies already received seed funding from US investors.”(33) CureVac investors decided not to sell the vaccine to a single state; and the principle investor dievini Hopp BioTech holding stated “If we are successful in developing an effective vaccine, then it should help and protect people across the world.” Trump’s pursuit of electioneering any Coronavirus vaccine has solidified the rumors circulating possible deliberate production of the virus in a lab for strategic goals.

Germany tells Trump “Germany is not for sale” [Getty]

So far, some promising news have emerged about a possible breakthrough in designing a drug to fight the pandemic. China’s Science and Technology Ministry has announced a new drug known as ‘Favipiravir’, and developed by a subsidiary of Japanese Fujifilm Toyama Chemical, had produced encouraging outcomes in clinical trials involving 340 patients in Wuhan and Shenzhen. In Australia, disease experts at the University of Queensland in Brisbane are excited about two existing medications that would eradicate the Coronavirus infections: Chloroquine, an anti-malarial drug, and HIV-suppressing combination lopinavir/ritonavir.

There is no certainty yet about the validity of these medical experiments while 35 companies and academic institutions are racing to create a potential vaccine. The common wisdom among most medical experts is a mere hope that the development of a Coronavirus vaccine will need between 12 to 18 months. Trump has pressed for a vaccine to be ready in November, the due date of the US presidential elections. However, it remains an impossible deadline. Annelies Wilder-Smith, professor of emerging infectious diseases at the London School of Hygiene and Tropical Medicine explains, “Like most vaccinologists, I don’t think this vaccine will be ready before 18 months.”

Part 2 of the paper will address three main themes: Coronavirus’s ‘Trickle-Across’ economics, politicization of Coronavirus in international relations, and embarrassed Neoliberalism and return to the human dimension. It will be published in a few days.

Dr. Mohammed Cherkaoui, Senior Researcher at Al Jazeera Centre for Studies.

References

(1) Elizabeth Braw, “The EU Is Abandoning Italy in Its Hour of Need”, Foreign Policy, March 14, 2020 https://foreignpolicy.com/2020/03/14/coronavirus-eu-abandoning-italy-china-aid/

(2) Ibid

(3) Ibid

(4) Ali Hasan, “Capitalism versus Coronavirus, The Intercept, March 12, 2020 https://theintercept.com/2020/03/12/capitalism-vs-the-coronavirus/

(5) Karin Pettersson, “The corona crisis will define our era”, Social Europe, March 16, 2020 https://www.socialeurope.eu/the-corona-crisis-will-define-our-era

(6) Will Hutton, “Coronavirus won’t end globalisation, but change it hugely for the better,” The Guardian, March 8, 2020 https://www.theguardian.com/commentisfree/2020/mar/08/the-coronavirus-outbreak-shows-us-that-no-one-can-take-on-this-enemy-alone

(7) New Frame Editorial, “Coronavirus and the crisis of capitalism”, New Frame, March 16, 2020 https://www.newframe.com/coronavirus-and-the-crisis-of-capitalism/

(8) WHO, “Novel Coronavirus (COVID-19) Situation” March 15, 2020 https://experience.arcgis.com/experience/685d0ace521648f8a5beeeee1b9125cd

(9) World Economic Forum, “Coronavirus is officially a pandemic – but we can change its course: Today’s WHO briefing”, March 11, 2020 https://www.weforum.org/agenda/2020/03/coronavirus-is-official-a-pandemic-but-we-can-change-its-course-who-briefing/

(10) Laura Spinney, “Coronavirus and the Geopolitics of Disease”, The Statesman, February 19, 2020 https://www.newstatesman.com/politics/health/2020/02/coronavirus-and-geopolitics-disease  

(11) Anthea Roberts and Nicolas Lamp, “Is the Virus Killing Globalization? There’s No One Answer”, Barron’s, March 15, 2020 https://www.barrons.com/articles/is-the-virus-killing-globalization-theres-no-one-answer-51584209741

(12) Mariano Turzi, “Coronavirus: The Weight Of Geopolitics And Macroeconomics”, Worldcrunch, March 4, 2020  https://www.worldcrunch.com/world-affairs/coronavirus-the-weight-of-geopolitics-and-macroeconomics

(13) Nurith Aizenman, “New Research: Bats Harbor Hundreds Of Coronaviruses, And Spillovers Aren’t Rare”, NPR, February 20, 2020 https://www.npr.org/sections/goatsandsoda/2020/02/20/807742861/new-research-bats-harbor-hundreds-of-coronaviruses-and-spillovers-arent-rare

(14) Ibid

(15) Ibid

(16) Ibid 

(17) Greg Heffer, “Coronavirus: PM moves UK to ‘suppression’ after new analysis of COVID-19 death rate”, Sky, March 17, 2020 https://news.sky.com/story/coronavirus-govt-ramped-up-measures-after-new-prediction-of-250-000-deaths-11958680

(18) CDC, Situation Summary, March 15, 2020 https://www.cdc.gov/coronavirus/2019-ncov/cases-updates/summary.html

(19) Ibid

(20) Elizabeth Cohen “Infected people without symptoms might be driving the spread of coronavirus more than we realized”, CNN, March 14, 2020 https://edition.cnn.com/2020/03/14/health/coronavirus-asymptomatic-spread/index.html

(21) Joseph V. Micallef, The Geopolitics of the Coronavirus, Military.com, February 25, 2020 https://www.military.com/daily-news/2020/02/25/geopolitics-coronavirus.html

(22) Brian Ives, “Dean Koontz: Did He Predict The Coronavirus In ‘The Eyes Of Darkness’ In 1981?”, March 14, 2020 https://wmmr.com/2020/03/14/dean-koontz-did-he-predict-the-coronavirus-in-eyes-of-darkness-1981/

(23) Laura Spinney, “Coronavirus and the Geopolitics of Disease”, The Statesman, February 19, 2020 https://www.newstatesman.com/politics/health/2020/02/coronavirus-and-geopolitics-disease

(24) Steven W. Mosher, “Don’t buy China’s story: The coronavirus may have leaked from a lab”, The New York Post, February 22, 2020 https://nypost.com/2020/02/22/dont-buy-chinas-story-the-coronavirus-may-have-leaked-from-a-lab/

(25) Steven W. Mosher, “Don’t buy China’s story: The coronavirus may have leaked from a lab”, The New York Post, February 22, 2020 https://nypost.com/2020/02/22/dont-buy-chinas-story-the-coronavirus-may-have-leaked-from-a-lab/

(26) Ivo Daalder, “Commentary: China’s secrecy has made the coronavirus crisis much worse”, Chicago Tribune, February 13, 2020, https://www.chicagotribune.com/opinion/commentary/ct-opinion-china-coronavirus-epidemic-secrecy-daalder-20200213-xs5uhj2lqverbde6aprxldh5q4-story.html

(27) Annabelle Timsit, “China is mobilizing to control the narrative on coronavirus”, Quartz, March 5, 2020 https://qz.com/1812162/china-mobilizes-against-medias-malicious-coronavirus-coverage/

(28) Ibid

(29) Ibid

(30) “Coronavirus: anger in Germany at report Trump seeking exclusive vaccine deal,” The Gurdian, march 16, 2020 https://www.theguardian.com/world/2020/mar/16/not-for-sale-anger-in-germany-at-report-trump-seeking-exclusive-coronavirus-vaccine-deal

(31) “Coronavirus: anger in Germany at report Trump seeking exclusive vaccine deal,” The Gurdian, march 16, 2020 https://www.theguardian.com/world/2020/mar/16/not-for-sale-anger-in-germany-at-report-trump-seeking-exclusive-coronavirus-vaccine-deal 

(32) “Coronavirus: anger in Germany at report Trump seeking exclusive vaccine deal,” The Gurdian, march 16, 2020 https://www.theguardian.com/world/2020/mar/16/not-for-sale-anger-in-germany-at-report-trump-seeking-exclusive-coronavirus-vaccine-deal

(33) “Coronavirus: anger in Germany at report Trump seeking exclusive vaccine deal,” The Gurdian, march 16, 2020 https://www.theguardian.com/world/2020/mar/16/not-for-sale-anger-in-germany-at-report-trump-seeking-exclusive-coronavirus-vaccine-deal 

The Pandemic and Capitalism

Once in a long while a new book comes along that challenges prevailing patterns of progressive social and economic thought in a way that is both deep and far-reaching, yet still evidently originating from within the critical left, so as—potentially—to prove persuasive to thoughtful and open-minded progressives. Capitalism on Edge is such a book.

The author, Albena Azmanova, a reader of social and political thought at the University of Kent in England, has the advantage of deep perspective. She grew up disobedient under the socialist autocracy that was late-stage communism in Bulgaria, was involved in the dissolution of that system, and shared in the disillusion with what came after. A second element of perspective—more useful in some quarters than in others—is that she writes with complete mastery of the philosophical idiom of the Frankfurt School and as much clarity as that tradition permits. There is one difficult chapter in her book, a dive into the deep mines of critical social thought, but the rest is straightforward, accessible, and luminously clear.

Azmanova develops a synoptic treatment of the modern history of capitalism, which resolves into roughly four phases. The first, called liberal or laissez-faire capitalism, ran from the mid-nineteenth century to the 1930s and featured the clearing out of the remaining legal vestiges of feudal hierarchy—such as slavery and the legal subordination of women—and in some cases also associated protections such as guilds, so that free labor and free capital could make their way through free markets. This system collapsed in the 1930s after the Great Depression. It was replaced, in Western democracies—in the United States during the New Deal and in Europe after 1945—by welfare state capitalism, featuring regulation, social insurance, strong trade unions, and large, stable, national industrial corporations.

Welfare state capitalism succeeded for a generation; it tamed some of the tendencies toward crisis in capitalism while remaining sufficiently dynamic—and allowing sufficient personal liberty—to outlast the socialist and communist challenges from the revolutionary East. But it eventually fell prey to discontents, from both radicals and reactionaries. Azmanova observes that the successes of welfare-state capitalism blurred the convention lines of class conflict in the West, through the emergence of a significant professional class and the diffusion of nominal ownership of capital assets, giving a large share of the population the perception of an ownership stake in the system. The security and community of the welfare state fostered the youth rebellions of the baby boomers – and these in turn brought on the reaction. Rising inequality imposes social discipline on the insecure.

The next phase was neoliberalism, which took hold after the stagflation of the 1970s and combined free trade with privatization, deregulation, and fiscal austerity, relieved by bouts of tax cutting and easy money, all contributing to a vast rise in inequalities. This system was justified by the necessity of “competitiveness” and defended with Herbert Spencer’s old Social Darwinist clarion call: “There is no alternative.” Neoliberal policies did not dismantle the welfare state all at once—many parts of it lasted a long time and some are still with us—but they undercut the accepted legitimacy of those policies and institutions, and spawned an intellectual reaction that moved onwards, not backwards, largely accepting the free-market critique of Roosevelt and Keynes and embracing the core tenets of the neoliberal view.

Neoliberalism received a shock at the dawn of our century with the bursting of the dot-com bubble and then 9-11, and an even bigger one with the financial crisis of 2007-2009. All this gave rise to a backlash from the left, at least in Western countries. This movement is characterized by the trope of exclusion of certain groups from the general prosperity, inflected by a group consciousness and a politics of identity. The left in short became neoliberal in its core commitments. It no longer sought fundamental reform of the capitalist system, still less its overthrow. Instead the “progressive” view—as personified across the globe by luminaries ranging from Paul Krugman to Thomas Piketty—is to seek redistribution within the system, an economics combining growth with opportunity. Opportunities are to be delivered by education, affirmative action, anti-discrimination enforcement, and similar measures, plus a reorientation of the tax burden toward the ultra-wealthy in the name of social justice. Social entrepreneurship and self-help are other aspects of this worldview.

These measures aim to make neoliberal austerity—an ideology lent protective cover by calls for “fiscal responsibility”—more balanced and more fair, and to curtail the most egregious consequences of capitalism, including environmental injustice, extreme poverty, and differential life expectancy, so that they do not fall so heavily on people of color or other marginalized groups. But those in the neoliberal left do not dispute the system itself. Nor do they question its success at delivering the goods in the form of material sufficiency and of incessant, seductive novelty in the experiences of consumption. Acceptable politics therefore resolves into a tussle between Hillary Clinton 2016 and Elizabeth Warren 2020, between “America is already great” and calls for wealth taxes and anti-trust, to make capitalism work (somewhat) better than it actually does. To people with this perspective, Bernie Sanders and Jeremy Corbyn were beyond the pale.

Meanwhile, Azmanova argues that capitalism itself has moved on, leaving its neoliberal phase behind and the global left-neoliberal critique and prescriptions largely dangling in mid-air.

Precarity capitalism’s main trait is not growth or competitiveness but instability

Precarity capitalism, Azmanova argues, is our fourth phase and has become the new face of the old system. Its main trait is not growth or competitiveness but instability, and its dominant form of inequality is not of income or wealth but of security and self-confidence. The crucial divide within economies dominated by precarity is between a minority ensconced in a diminishing set of safe career paths or sufficient wealth not to bother worrying about that, and a majority living in persistent anxiety over the costs of health, housing, education, the quality of public services and other formerly ordinary attributes of middle-class life. And to this one might add the overarching fear of ecological limits, manifested mainly as climate change.

For a long time, left critics, including this reviewer, held to a view that crises would eventually breed a new politics, restoring elements of decency and authentic democracy to the social structures of the West. First Naomi Klein and now Azmanova have demolished this notion; Klein by showing in her 2007 book The Shock Doctrinehow crises are manipulated—and even fostered—to generate neoliberal outcomes, and Azmanova by pointing out the consistent resilience of post-crisis capitalism. This has been at no time so evident as after the Great Financial Crisis of 2007-2009, which appeared, for a time, to be on the verge of bringing down the whole system. We face, Azmanova says, not a crisis of capitalism but a “crisis of the crisis of capitalism.” Perhaps especially for someone like me, who has used the word “crisis” in the subtitles of three books, this is a depressing thought.

The shifting political paradigm that Azmanova describes is becoming more and more apparent. Donald Trump spotted it in 2016. And he won the presidency by placing himself, if only rhetorically, at the head of a revolt of the insecure, of people whose world no longer offered stable middle-class employment in regions enriched by the taxes paid by industrial corporations and their workers. To his followers, Trump offered a return to national capitalism under national control—an illusion, but one with resonance and bite. One could also see the Azmanova impulse in the youth movement that swept Bernie Sanders forward in 2016 on a platform of a $15 minimum wage, Medicare for All, tuition-free public college, and the Green New Deal—a quartet uniquely effective in speaking to the insecurities of the youngest voting cohort. Notably, when Sanders speaks about his education plan, for example, it is the basic issue of cost that dominates, not the vague concepts of opportunity and competitiveness that characterized the education rhetoric of the Clinton-Gore-Obama era. One can see here, as well, why Sanders could not break through in 2020; his approach could not reach the older set who have spent their lives imbibing the neoliberal tropes.

Azmanova traces the defect of modern capitalism to its root: the predominance of the quest for competitive profit, which has of course been the leading feature of the system, its life force, since its beginning 500 years ago. What is the alternative? A plausible candidate, let me gently suggest, may be identified in the mists of mid-twentieth century social thought. It is the idea of countervailing power, or a system where the untrammelled pursuit of profit is controlled by accommodating the interests of stakeholders with conflicting concerns: jobs, health, safety, pollution, the public purpose, and above all, relative stability and security over long periods of time. That idea, once widely acknowledged in America but submerged in the neoliberal tides, has perhaps a future still ahead.

In other words, we do not need a revolution or utopia, but rather a reversal of a canonical late twentieth century error: conflating economic success with shareholder value, devil take the hindmost. That prescription was avidly advanced by economists in the 1970s and ‘80s, such as Milton Friedman and Michael Jensen, and avidly promoted thereafter by tycoons and CEOs. Its fatal flaw was time-inconsistency: What maximizes the stock price on any given day bears no relation to the requirements of maintaining the firm, nor to the production of economic value over time. It is, rather, what fosters predatory finance and executive larceny—the Western equivalents of nomenklatura privatization, which turned much of Eastern Europe over to oligarchs after autocratic socialism collapsed.

There is perhaps one thing that Trump and his cohort have grasped that would usefully complement the agenda of solidarity, sustainability, social insurance, and countervailing power that emerges from this book. And that is that the failure of the neoliberal model to deliver on its promises of growth through competitiveness and “tough love” for ordinary workers and the poor is not due solely to the fact that it handed Anglo-Saxon capitalism over to predators, thugs, and fraudsters posing as financiers. It is also due to actual existing competition from better-performing systems. We must consider the fact that Anglo-Saxon money-manager capitalism isn’t the only economic system out there in the world today. There are alternatives. And not only that: Experience shows us that the alternatives are superior, both in delivering competitiveness and in improving living standards and reducing extreme poverty, as well as in retaining the capacity to respond to an extreme crisis, coming, for instance, from the biosphere.

A mixed economy featuring corporations with long time horizons, stable relationships with their bankers and countervailing power was never wholly dismantled in Germany, in Scandinavia or Japan, and it took root in Korea, where it survived several severe financial shocks that would have demolished it in Europe or North America. These serve as the prime examples of successful resistance within the West to untrammelled exercise of financial power.

And there is China. We need not be detained by squabbles over whether the Chinese system is capitalist or socialist, whether the most influential economist over modern China is Karl Marx, John Maynard Keynes, or Henry George. Elements of both systems, and inspiration from all three thinkers, can be found in the way China’s economy works today. But the large Chinese state-owned corporations and China’s presence on the world stage are unquestionably Galbraithian, focused on market share, learning, new technologies, and improvement of the national capital stock. And so, in important respects, has been the Chinese state, which prizes above all autonomy, predictability, and social stability, and if not always firm control of its banking sector, the willingness to override that sector’s autonomy whenever necessary. China is no democracy, and modern China was built on many epic disasters, including the famine and Cultural Revolution, none of which appeal as models. But that it is a functioning society capable of mobilizing to meet vast challenges has never been clearer than in recent days. And one can say the same of South Korea, and perhaps of Japan, while in Europe Germany is, so far, the best prepared to handle the corona crisis.

What is the source of this resilience? It is not, of course the leadership of a Communist Party, which does not exist in Korea or Japan or Germany. What these societies share is that over four neoliberal decades they maintained their large industrial corporations as going concerns in line with national strategies, along with their productive base and social organization; they did not give everything over to the market. And over those decades, put to the test against the neoliberal corporation dominated by Wall Street, there is no doubt which side won out. The Galbraithian firm fostered and protected by a vigilant state now dominates world markets in most advanced sectors and many that are more modest but no less basic. It is also capable of meeting the challenge of mobilization facing the world in this pandemic; in the production of medical masks, for instance, China ramped up capacity almost six-fold in a month. Money-market capitalism, in a vast transformation initiated in the early 1980s by Reagan and Paul Volcker, has left an industrial shell, with capacity in some areas limited by bottlenecks in others, and by the failure, so far, of clear and effective chains of command. The Anglo-American model is therefore now under enormous stress, as capital markets crumble and market-based networks begin to break down.

In the crisis now upon us, the issue before the Anglo-American side is whether the reality of our situation will now sink in. Will we recognize, in time, the need to mobilize all our resources, to socialize our health system and keep the supply chains open until the virus can be contained? Will we realize that when this is done, life will not be what it was before, and that a vast reorganization of economy and society will be necessary? Or will the neoliberal ideologues in control succeed in squelching that debate—which they are trying to do, at this writing, by focusing on bailouts and stimulus in the belief that somehow the bubbles now bursting can be reinflated in a few months? Will we remain mired in illusions of growth, with or without equity and inclusion? Or will we now and finally displace those illusions, with a new wave that understands the nature of precarity capitalism and what must be done, as Albena Azmanova has so ably set forth in Capitalism on Edge.

Capitalism on Edge: How Fighting Precarity Can Achieve Radical Change Without Crisis or Utopia by Albena Azmanova • Columbia University Press • 2020 • 272 pages • $29.10

McDonald’s: Outposts in a Cultural Empire

I know it’s become a dogma that McDonald’s is the fount of all ill-health, but I can’t help but remain a fan. I am very fond of a quarter-pounder with cheese. It once restored me from heat-stroke while reporting on a demonstration in Cairo’s Tahrir Square. There’s nothing more welcome than a pair of golden arches when you are four hours into a long road trip. And, seriously, is there anything better for quelling a hangover?

The day after Donald Trump was elected President of the United States, I went to cure my political hangover at a preview screening of The Founder, a biopic about Raymond “Ray” Kroc, the mastermind behind McDonald’s. Kroc, born in Chicago in 1902 to Czech parents, begins the movie as a down-on-his-luck hero, a struggling middle-aged salesman humping a heavy multi-spindle milkshake mixer around out-of-the-way diners. “Increase supply and demand follows!” exhorts Kroc in the film to the nay-saying diner owners who shake their heads at him. Michael Keaton plays Kroc with a shorn head and a grinning, thrusting attitude; abrasive, impatient, ambitious. It’s a classic rags-to-riches American success story.

But at another level, especially in the second half, the film transforms into a very different—though equally Hollywood—story. From hero-entrepreneur, Kroc turns into the villain of American cinema: an evil corporation. McDonald’s has long veered between the sweet and the bitter, convenient and yummy but bad-for-you; the film reflects the wider dichotomy inherent in capitalism and globalisation. The McDonald’s story may have begun with a heroic ambition, but its successful world domination has turned it into an object of derision.

The McDonald brothers opened their first restaurant in 1937, a family-friendly place specialising in hot dogs. They invented their famous fast food system in 1948, the year that little Donald Trump turned two. Then, towards the end of the 1950s, Kroc took over the franchising and the number of restaurants began to mushroom. This is the era in which the movie is set—among the Americana of gas stations, cars, teenagers, hamburgers and roller-skates. This age is nostalgically recalled as an era when everybody knew their country was great, a time when its greatest generation settled into a prosperous middle-class assumption. On the face of it, McDonald’s was a perfectly benign embodiment of all that. A family eatery—what could be more apple pie? (Caution: filling is hot). Standardised quality, cleanliness, efficiency, burgers, fries, shakes, all served within 30 seconds.

But as waistlines bulged complacently, McDonald’s became demonised as a petri dish of E. coli, obesity and sugar-laced diabetes. Super Size Me, the 2004 documentary by Morgan Spurlock during which he ate nothing but McDonald’s food for a month, didn’t help. The effects on Spurlock were hair raising and his doctors begged him to stop eating so many hamburgers. McDonald’s has had to respond to its critics: less salt, less sugar, salads on the menu, calorie counts on packaging.

Such efforts have not assuaged middle-class distaste and healthy outrage. But I remember how McDonald’s first opened in Tbilisi, the capital of Georgia, when I was living there in the late 1990s. It was a time of post-Soviet drear, the economy had flatlined and electricity in winter was down to four hours a day. When McDonald’s opened, it was as if an alien spaceship had landed from planet civilisation. It was such an important event, representing the future, hope and, more concretely, foreign investment, that the president of the country, Eduard Shevardnadze, the former head of Foreign Affairs for the USSR, attended the opening. I gatecrashed; it was the hottest ticket in town. Inside was a revelation: brightly lit, warm in the winter, air conditioned in the summer, clean toilets and—a first for incredulous Georgians—a no-smoking zone!

It was expensive, it was aspirational, it was American. The arrival of McDonald’s does not bring democracy; but it does mean that a little piece of the American Dream has come to a location near you. The opening of an outlet in a new country heralds change, economic opportunity, optimism, a new era. What signalled the end of the Cold War more clearly than McDonald’s opening in Moscow in 1990? The lines went around the blocks for days; 35,000 people applied to work there.

McDonald’s has been at the vanguard of globalisation—its very emblem. In 1986, The Economist created the Big Mac index which compares the prices of a Big Mac in different countries, as a way of gauging a country’s relative purchasing power. (McDonald’s signature burger was originally sold as the Aristocrat; its inventor, Michael Delligatti, just died in November, at the impressive age of 98.) Thomas Friedman, a high priest of the global liberal order, even came up with the Golden Arches theory in his 1999 book The Lexus and the Olive Tree. This states that the establishment of a McDonald’s indicates a healthy middle class; economic prosperity engenders political stability. No two countries with McDonald’s restaurants have gone to war with each other, he said.

That was almost true when he wrote it, if we ignore the US invasion of Panama in 1989 and ongoing clashes between India and Pakistan. Since then, however, we’ve witnessed the war between Lebanon and Israel in 2006, Georgia and Russia in 2008, and then Russia and Ukraine in 2014. So much for Globalisation dovetailing with the End of History to bring about Peace in Our Time. But there’s no doubt that McDonald’s represents an American economic model of consumerism that has come to be increasingly translated—by different narratives, from Islamic State to Anonymous—into its political evil-twin: American hegemony.

But it was the backlash against globalisation within the US itself that landed the country with its businessman President-Elect—and not without accompanying ironies. Because for Trump—a one man corporation, for whom no brand can be too big—there is no ambivalence about McDonald’s at all. He loves the stuff. Back in the 1990s he even did a McDonald’s ad: “This thing you’ve pulled off, it’s amazing,” he says, posing behind a broad master-of-the-universe desk, burger in hand, a “yuge” letter “T” behind him in the corner-office window. “A Big ‘n Tasty for just a dollar? How do you do it?” he asks. It’s odd to watch the now. His voice is lighter, and his head honcho shtick played for laughs. He’s lovin’ it. During the election campaign he was even photographed eating McDonald’s on his private jet. “One bad hamburger, you can destroy McDonald’s,” he said, “they’re out of business… I like cleanliness, and I think you’re better off going there than maybe some place that you have no idea where the food is coming from.” Simultaneously on corporate message while playing to mainstreet values like he’s just a regular guy.

During the election Trump managed to cast himself as the underdog hero. It’s a familiar Hollywood character, a cultural trope. American movies have always illustrated how the country sees itself. They shape and project the American dream. They map the evolution of American experiment, reflecting and refracting its politics, economics and society. Good guys and baddies genre-hop between Westerns and conspiracy thrillers and tear-jerker redemptions. But the tough guys, wise guys, gunslingers, and crusading whistle-blowers have this in common: the leading man is invariably cast as an individual, a maverick, the guy with the big idea—like that he wants to “Make America Great Again,” for example.

In The Founder, Ray Kroc is initially framed the same way. The director, John Lee Hancock (who has spent a career producing sentimental popcorn stuff: Saving Mr Banks, The Blind Side) has produced a standard hagiography. Kroc drives cross country to investigate a hamburger stand in San Bernardino that is doing such a roaring business it has ordered six of his milkshake mixers. “OPPORTUNITY OPPORTUNITY OPPORTUNITY!” Kroc shouts at the McDonald brothers—like Apprentice finalists under the spotlight—as they take in the long line queuing for hamburgers. He tours the kitchen and sees how the brothers have applied Henry Ford’s assembly-line principles to hamburger production. Close up on ketchup and mustard delivery nozzles. Innovation! Technology! The future! The art of the deal! When Kroc persuades the wary McDonald brothers to let him be their franchise manager he tells them, “Do it for your country! Do it for America!” Expansion, enterprise is patriotic.

The second half of the movie, however, gives way to a counterpoint to the might-is-right portrayal of American capitalism. Kroc gets the franchise deal and successfully rolls out more restaurants, but the McDonald brothers are obstructive; they won’t amend agreements or let Kroc play around with the original recipes. Enter a financier who comes up with a new economic model in which Kroc’s new company buys the land for the new restaurants and then leases it to the franchise holders for a percentage of their profits. (Did you know that McDonald’s is now one of the world’s largest landowners?) Soon Kroc buys out the brothers. But he never honours his handshake promise to give them a share of future profits. They no longer own the rights to their name and he puts their original San Bernardino restaurant out of business. From hero-entrepreneur, he has morphed into the evil corporation. It’s a complicated, queasy tale of two halves. Is Ray Kroc the good guy or a baddie?

“McDonald’s does not bring democracy; but it does bring a little piece of the American dream to a location near you”

But Eric Rentschler, who teaches a course on Hollywood and the American Dream at Harvard, is not surprised by the ambivalence. The narrative of The Founder, he pointed out to me, is echoed, for instance, in The Social Network, the film about Facebook. The Winklevoss twins (Cameron and Tyler) who had the original idea, lose out to Mark Zuckerberg, the guy with the vision to execute it on a giant scale. The Steve Jobs movie—same thing. His brilliantly inventive partner, Steve Wosniak, is left behind to languish. “There Will be Blood,” added Rentschler, mentioning the Daniel Day-Lewis masterpiece of ball-breaking frontier entrepreneurialism. “Another marvellous American dream narrative. The darker side of the American dream is a bloody entity. It’s a kind of social Darwinistic scenario.”

“Greed is good,” said Gordon Gekko in Wall Street. “Dog eat dog, rat eat rat,” says Ray Kroc in The Founder. “My life has been about winning,” Trump told Time magazine during the Republican primary campaign. In all these stories there is a price to be paid for what Rentschler calls “the wreckage you leave behind in your quest for success.” In The Founder, Kroc’s marriage disintegrates, (in real life he was married three times), Zuckerberg betrays his friend Edmundo, Steve Jobs cuts his daughter Lisa out of his life. But “the cost is personal, it is not society, not people, not the masses. And the masses want Apple computers and social media and cheap fast hamburgers.” The films never settle whether the price is worth paying. After all, I admit, I have an iPhone, a MacBook and a Facebook account.

At the end of the movie Kroc airbrushes the innovative McDonald brothers out of the story by having “Founder” printed on his business cards. Kroc made billions but he also gave billions away in his will. How to unpick and understand American myth making? Is McDonald’s good or bad? How did we get from fast food to junk food, from broadsheets to fake news, from land of the free to Guantánamo, Abraham Lincoln to Donald Trump?

For Americans, though, this election, as divisive as it was, is only another episode in a long-running series. As far back as the 1940s Hollywood was exploring the conjunction of the mass media, entertainment and politics. Elia Kazan’s terrifying and prescient 1957 film A Face in the Crowd follows a homespun guitar twanger from jail to television fame and political influence. Kazan said the film was meant as a warning “of the power TV would have in the political life of the nation.” In the 1980s, he wrote that the film “anticipated Ronald Reagan,” the logical convergence of performer and politician. Trump’s election makes the film look even more perceptive. “Instead of long-winded public debate,” says one character, “people want caps and slogans… punchlines and glamour.”

Trump seems to have grasped this especially well, but politics as entertainment is an old saw. Politicians have long sold themselves through their stories as much their straplines: Barack Obama cast himself as an embodiment of the American dream, the son of an immigrant who rose to the presidency; Bill Clinton played on his humble roots in a nowheresville town called Hope. Hillary relied on her competence and policy—and failed to connect. Trump, conversely, inherited a property empire, went practically bankrupt, but bounced back with a business which is more a brand name merchandising outfit than anything else. He has more in common with Citizen Kane (media manipulation, sexcapades, cynical ambition) than with the outsider Jimmy Stewart in Mr Smith Goes to Washington.

So why didn’t voters—or enough voters—identify Trump with big bad corporate America? Maybe because he was decidedly individual; the corporate narrative didn’t quite fit. He had room instead to play different versions of the leading man: the buccaneer, the maverick, the accidental politician. As rural and Rust Belt America lost its economic footing, millions of voters who once voted for Obama picked Trump. Politics has always been a seesaw between perception and portrayal; demagoguery and democracy. Voters swing one way and then another.

McDonald’s still has 36,000 restaurants worldwide. At home, the nation worried after watching Super Size Me still eats their hamburgers. But its revenues are falling. In 2015, McDonald’s reported a 10 per cent drop in sales. In November, Fitch, the ratings agency, downgraded the firm, pointing out that the company has “approximately $26bn of total debt.” Like Trump, its finances are not necessarily what you’d expect. McDonald’s may be big, but it is also a big target. It has had to respond to its critics and customers. Supply side economics has had to give way to demand. It remains to be seen how Trump manages his political “customer base.” Will smart marketing be enough?

Wendell Steavenson, December 14, 2016

After Capitalism

The US banking system faces losses of over $3,000bn. Japan is in a depression. China is headed for zero growth. Some still hope that urgent surgery can restore the status quo. But more feel that we are at one of those rare points of inflection when nothing is the same again.

But if one dream is over, what other dreams wait in the shadows? Will capitalism adapt? Or should we be asking again one of the great questions which has animated political life for nearly two centuries: what might come after capitalism?

Only a few years ago that question had been parked, deemed about as sensible as asking what would come after electricity. Global markets had pulled China and India into their orbit, and capitalism’s triumph appeared complete, with medievalist Islam and the ragged armies that surround the G8 summits jostling to be its last enfeebled competitor. Multinational companies were said to command empires greater than most nation states, and in some accounts had won the affiliation of the masses through their brands.

Yet the lesson of capitalism itself is that nothing is permanent—”all that is solid melts into air” as Marx put it. Within capitalism there are as many forces that undermine it as there are forces that carry it forward.

In this essay I look at what capitalism might become on the other side of the slump. I predict neither resurgence nor collapse. Instead I suggest an analogy with other systems that once seemed equally immutable. In the early decades of the 19th century the monarchies of Europe appeared to have seen off their revolutionary challengers, whose dreams were buried in the mud of Waterloo. Monarchs and emperors dominated the world and had proven extraordinarily adaptable. Just like the advocates of capitalism today, their supporters then could plausibly argue that monarchies were rooted in nature. Then it was hierarchy which was natural; today it is individual acquisitiveness. Then it was mass democracy which had been experimented with and shown to fail. Today it is socialism that is seen in the same light, as a well-intentioned experiment that failed because it was at odds with human nature.

What happened to the military is another useful frame for thinking about capitalism’s future. We are only a few generations from societies where the military stood at the apex of status and respect. War was part of the natural order, the inevitable way to resolve disputes. Yet, against all odds, in much of the world armies were tamed and civilised, turned from often cruel masters into professional servants.

I do not suggest that capitalism will disappear any more than war has. Complex, interconnected market economies will continue to generate huge surpluses, fuelled by the continuing flow of new scientific knowledge. But just as monarchy moved from centre stage to become more peripheral, so capitalism will no longer dominate society and culture as much as it does today. Capitalism may, in short, become a servant rather than a master, and the slump will accelerate this change. Past depressions were cruel but they also hurled ideas from the margins up into the mainstream, speeding their motion through the three stages that Schopenhauer described happening to all new truths, being first ridiculed, then violently opposed, then treated as self-evident.

***

To understand what capitalism might become we first have to understand what it is. This is not so simple. Capitalism includes a market economy, but many traditional market economies are not capitalistic. It includes trade but trade, too, long precedes capitalism. It includes capital—but Egyptian pharaohs and fascist dictators commanded surpluses too.

The French historian Fernand Braudel offered perhaps the best description of capitalism when he wrote of it as a series of layers built on top of the everyday market economy of onions and wood, plumbing and cooking. These layers, local, regional, national and global, are characterised by ever greater abstraction, until at the top sits disembodied finance, seeking returns anywhere, uncommitted to any particular place or industry, and commodifying anything and everything. Capitalism became an “ism” when the vigorous banking and trade of Genoa and Venice, London and Bruges, combined with inventive manufacturing to create a world where the holders of abstracted capital became dominant, displacing the many other contenders for pole position, from warriors and scholars to bureaucrats and makers of things.

There have been more embedded versions of capitalism too on the path to today’s hedge funds and derivatives. They have included close alliances with the state (40 per cent of the investment in Silicon Valley came from government), the rule of great industrial combines (as in Korea), and the strange hybrids of mercantilist communist capitalism in China and tycoon-led capitalism of southeast Asia. There have been buccaneering free markets—like the US in the 19th century—and highly socialised ones like Switzerland in the 20th.

But as Karl Marx predicted, capitalism is expansive: 19th-century capitalists bought politicians, art collections, landscapes and universities with equal relish. Contemporary capitalism is at ease with corporate sponsorship, diamond skulls and old masters, as well as software programs and space travel. Its methods have spread into healthcare, land management, and charity (though “philanthrocapitalism,” the idea that the rich can save the world, may not survive the crisis). Anything can be turned into a commodity to be bought and sold—from sex to art and religion—and capitalism has been nothing if not inventive. Even climate change has turned into a potential boom for capitalism, with taxpayers subsidising new waves of R&D, and governments persuaded to sponsor carbon markets which give traders, brokers and investors yet another way to grow rich.

Capitalism has a complicated relationship to politics: sometimes constrained and tamed by it, and sometimes seeking to dominate it. Both the Conservative and Liberal parties in Britain are substantially dependent on donations from hedge funds. Labour has been bailed out by City financiers and asked a succession of bankers to lead commissions on topics as far from their competence as public health and welfare reform. Boris Johnson handed oversight of London’s employment and skills board to a man who had been running a hedge fund. The same pattern can be seen in the US where both parties are enmeshed in Wall Street—one reason why they have found it hard to respond to a crisis that has so challenged their assumptions (Obama’s early steps have sometimes seemed less assured and less radical than Roosevelt’s in part because whereas FDR used comparative outsiders for advice, Obama has opted for insiders like Larry Summers and Tim Geithner).

The expansive and creative character of capitalism encouraged both Davos man, and his radical critics, to assume that big capitalism would inevitably become even bigger—ever more entwined with politics and culture. At a time when seven year olds were being recruited to sell Barbie dolls on commission to their friends this view seemed plausible. Through everything from mind-changing drugs to computer games and extreme sports, capitalism seemed to be reaching into deep human desires as only religions had done in the past.

Yet only a few decades ago there was great interest in what would supersede capitalism. The answers ranged from communism to managerialism, and from hopes of a golden age of leisure to dreams of a return to community and ecological harmony. Today these utopias can be found in the movements around the World Social Forum, on the edges of all of the major religions, in the radical sub-cultures that surround the net, and in moderated form in thousands of civic ventures across the world. They are bound to find new adherents. But their weakness and the weakness of much contemporary anti-capitalist literature (from David Korten, Wendell Berry, Alain Lipietz or Michael Albert) is that they offer little account of how their visions might be realised and how powerfully entrenched interests would be overcome.

Marxism’s intellectual strength, by contrast, came from its claim that capitalism was not the all-powerful system portrayed by writers like Michael Hardt and Antonio Negri today, but was rather a system that was bound to destroy itself. In the Marxist account technological development would be the driver of change, becoming revolutionary through the contradictions between the forces and relations of production. In the 19th century the mechanism was expected to be the impoverishment of the proletariat; in the 20th century’s revised accounts it would be the empowerment (or on some accounts the proletarianisation) of the knowledge workers. Either way capitalism would spawn its own gravediggers.

The fact that this didn’t happen, and that capitalism instead spread wealth on a vast scale, has pushed Marxism to the edges, to protest parties like France’s new Nouveau parti anticapitaliste, or the pacified academic arguments of a Marxism that merges into the abstractions of literary theory.

But restless capitalism has continued to give grounds for believing that it might destroy itself. A generation ago the American social scientist Daniel Bell, wrote of the “cultural contradictions of capitalism,” arguing that capitalism would erode the traditional norms on which it rests—willingness to work hard, to pass on legacies to children, to avoid excessive hedonism. Japan in the 1990s was a good case in point—its slacker teenagers rejecting their parents’ work ethic that had driven the economic miracle.

Related arguments have presented demography as the Achilles heel. Capitalist materialism has undermined the incentives for people to have children, sacrificing income and pleasure for the hard grind of family life. (And meritocracy further encourages parents to lavish their ambitions for advancement on just one or two children.) Hence the sharply reduced birthrates across Europe and among white Americans. At some point the resulting demographic imbalances threaten to undermine the generational contract which any society depends on, with a growing group of the elderly demanding ever more from a shrinking group of younger workers. The collapse of the savings rate—to around zero by 2007 in the US when it needs to be closer to 30 per cent to cope with ageing, is a stark symptom of a capitalism that has lost the ability to protect its own future. (Ironically, China despite its high savings rate, may be even more at risk, as the one-child policy transforms it from a young to an old country faster than as ever happened before in human history.)

Other critiques have emphasised capitalism’s vulnerability to success. Extraordinary productivity gains in manufacturing reduce its share of GDP, leaving economies more dependent on services which are inherently harder to grow. There’s a matching vulnerability in consumption. Having successfully met people’s material needs, capitalism is threatened if they then lose interest in working hard and making money, turning instead to new age counselling, mid-life gap years and three-day weekends. Capitalism’s only response is to invest ever more in creating new needs fuelled by anxiety about status, or beauty and body mass, a perverse result that may make developed capitalist societies more psychologically troubled than their poorer counterparts.

***

All of these critiques have hit some of their targets, though none gives much sense of how capitalism’s contradictions might be resolved. Nor do they say much about the turbulent dynamics of capital itself. To find insights into how the current crisis might connect to these longer-term trends we need to look not to Marx, Keynes or Hayek but to the work of Carlota Perez, a Venezuelan economist whose writings are attracting growing attention.

Perez is a scholar of the long-term patterns of technological change. In Perez’s account economic cycles begin with the emergence of new technologies and infrastructures that promise great wealth; these then fuel frenzies of speculative investment, with dramatic rises in stock and other prices. During these phases finance is in the ascendant and laissez faire policies become the norm. The booms are then followed by dramatic crashes, whether in 1797, 1847, 1893, 1929 or 2008. After these crashes, and periods of turmoil, the potential of the new technologies and infrastructures is eventually realised, but only once new institutions come into being which are better aligned with the characteristics of the new economy. Once that has happened, economies then go through surges of growth as well as social progress, like the belle époque or the postwar miracle.

Before the great depression the elements of a new economy and a new society were already available—and encouraged the speculative bubbles of the 1920s. But they were neither understood by the people in power, nor were they embedded in institutions. Then, during the 1930s, the economy transformed, in Perez’s words, from one based on “steel, heavy electrical equipment, great engineering works and heavy chemistry… into a mass production system catering to consumers and the massive defence markets. Radical demand management and income redistribution innovations had to be made, of which the directly economic role of the state is perhaps the most important.” What resulted was the rise of mass consumerism, and an economy supported by new infrastructures for electricity, roads and telecommunications. During the 1930s it wasn’t clear which institutional innovations would be most successful (fascism, communism and corporatism were all contenders), but after the second world war a new model of state regulated capitalism emerged characterised by suburbs and motorways, welfare states and macroeconomic management, which underpinned postwar growth.

Seen in this light the great depression was both a disaster and an accelerator of reform. It helped to usher in new economic and welfare policies in countries like New Zealand and Sweden that later became the mainstream across the developed world. In the US it led to banking reform, the New Deal and the GI Bill of Rights. In Britain depression, as much as war, led to the creation of the welfare state and the NHS.

One implication of Perez’s work, and of Joseph Schumpeter’s before her, is that some of the old has to be swept away before the new can find its most successful forms. Propping up failing industries is in this light a risky policy. Perez suggests that we may be on the verge of another great period of institutional innovation and experiment that will lead to new compromises between the claims of capital and the claims of society and of nature. In retrospect these periodic accommodations are as integral to capitalism as financial crises—indeed it’s only through crisis and institutional reform that capitalism adapts to a changing environment and rediscovers the moral compass that is so vital for markets to work well. The late 19th century accommodation came in response to fear of revolution and gave us state pensions, universal schooling, trade unions and universal suffrage, putting paid to the ideals of 19th-century liberalism. A second accommodation came 50 years later out of depression and war, and made variants of social and Christian democracy the norm in every rich country, pushing up states’ share of GDP and introducing visible hands to guide the markets’ invisible one.

***

If another great accommodation is on its way, this one will be shaped by the triple pressures of ecology, globalisation and demographics. Forecasting in detail how these might play out is pointless and, as always, there are as many malign possibilities as benign ones, from revived militarism and autarchy to stigmatisation of minorities and accelerated ecological collapse. But the new technologies—from high speed networks to new energy systems, low carbon factories to open source software and genetic medicine—have a connecting theme: each potentially remakes capitalism more clearly as a servant rather than a master, whether in the world of money, work, everyday life or the state.

Capital itself is a good place to start. One of the oddities of the contemporary economy is that the systems of capital allocation have become so divorced from the real economy. Most funding for new scientific knowledge comes from governments, not markets, and most funding for the big companies producing goods, technologies and services is internally generated, rather than coming from stock markets. Meanwhile most of the work of financial markets has involved finance capital taking positions against itself, hedging and betting with instruments of ever greater opacity.

Even before the crisis there were many counter tendencies, all trying to re-establish capital as a servant of the real economy and to force greater transparency. They had both practical justifications (market risk is amplified the more degrees of separation there are between prices of financial assets and underlying value), and moral ones (the more degrees of separation there are, the less possible it is for markets to act with moral responsibility). The many moves in this direction include the still tentative attempts to make pension fund investments more accountable for their social and environmental effects (for example through big US funds like CalPERS or Calvert); the arguments that stock exchanges should police the transparency and integrity of their investors; the plans to outlaw offshore tax havens; the slow but steady rise of a social investment industry (which now accounts for a tenth of invested assets in the US); and the growth of genuine venture capital that takes risks on new ideas and technologies (sadly, most of the British industry wouldn’t meet that definition). We are also again hearing arguments for publicly owned banks to finance housing, infrastructure or innovation, for Tobin taxes and higher capital gains tax for short-term investments. When Britain’s government tires of owning banks it may even decide that they would survive better as mutuals than plcs.

Another intriguing part of this story is the growth of capital in the hands of trusts and charities, which now face the dilemma of whether to use their substantial assets (£50bn in Britain) not just to deliver an annual dividend but also to reflect their values. Bill Gates found himself at the sharp end of this dilemma when critics pointed out that the vast assets of his foundation were often invested in ways that ran counter to what it was seeking to achieve through its spending.

Even money itself may be rethought. The privileges that accompany the ability to create money will come in future with more responsibilities, but we may also see more enthusiasm for alternative currencies that are more embedded, like the local currencies in Germany or timebanks.

Consumption is the second place where the signs of change are unmistakable. In the high debt countries (including the US and Britain) there will simply have to be less of it, and more saving. It’s an irony that so many of the measures taken to deal with the immediate impact of the recession, like VAT cuts and fiscal stimulus packages, point in the opposite direction to what’s needed long term. But there are already strong movements to restrain the excesses of mass consumerism: slow food, the voluntary simplicity movement and the many measures to arrest rising obesity, are all symptoms of a swing towards seeing consumerism less as a harmless boon and more as a villain. The mayor of Sao Paolo, Gilberto Kassab, banned all billboards in 2006. David Cameron has railed against toxic capitalism corrupting young children, as well as toying with the idea of personal carbon accounts to limit high carbon lifestyles. Reinforcing these trends are shifts in the balance of the economy away from products and services, towards a “support economy” based on relationships and care (from nurseries and therapy to weekly organic food deliveries). Networked technologies help this trend, and on the edge of the market there is a growing subculture of clubs that bring together consumers to buy their own producers (Ebbsfleet United is an example here in Britain: a football club now owned by some 20,000 fans, brought together on the web, that won the FA Trophy last year).

Mirroring these changes are shifts in how things are made, as capitalism moves away from the destruction of nature to something closer to balance with it. Visit the BMW factories in Germany and you can see a new model of capitalism which attempts to reuse all the materials that go to make up a car. These production systems are pointers to a different ideal of manufacturing which will be celebrated in the Shanghai 2010 Expo where the world’s fastest growing economy will present a low-carbon vision of capitalism very different from the version that China has embraced over the last two decades.

Knowledge too is dividing between capitalist models and cooperative alternatives. A decade ago, every government’s industrial policies put a premium on the creation and protection of intellectual property. Universities were forced to commercialize their ideas, on the grounds that without financial incentives there would be no way to galvanise biotechnology or the next generation of artificial intelligence. Yet against expectations different models have thrived as well. A high proportion of the software used in the internet is open source. The creative commons approach is gaining ground in culture as an alternative to traditional copyright and Wikipedia has become an unlikely symbol of post-capitalism.

The third place we should look for changes is the world of work. The varieties of work experience are vast, with huge disparities of pay, fulfilment and power. In some sectors the slump will give new momentum to the old idea that workers should employ capital rather than vice versa. Cooperatives like the Mondragon group (which has over 100,000 employees and has doubled in size each decade) and employee-owned firms like John Lewis, have thrived. In other sectors, too, there has been a long-term trend towards more people wanting work to be an end as well as a means, a source of fulfilment as well as earnings. The decisive issue here, however, is whether capitalism can find a new accommodation with the family. Capitalism is being brought ever more intensively into family life, and many of the areas of greatest prospective employment growth are on the periphery of the family, in health and care. But everywhere there are also signs of a tense divide between work and family as a rising proportion of employees, especially women, have to simultaneously care for young infants and ageing parents. Volumes of evidence now confirm the vital role that families play in nurturing the skills and attitudes of future citizens, yet we are still far short of a new architecture of rights and flexibilities.

Many of these changes are forcing states to consider once again how to socialize new risks. The last two accommodations—of the late 19th century and the mid 20th century—were at root about risk, as governments took on the task of protecting people against the risks of poverty in old age, ill-health and unemployment. China looks set to catch up with the west in this respect; it desperately needs to create a viable welfare state and health service if the Communist party is to remain legitimate, and contain a political backlash against capitalistic excesses. Elsewhere the battleground will be care. As populations age it is in principle feasible for everyone to insure themselves, and even for that insurance to be calibrated to DNA results and lifestyles. But experience suggests that it is hard to design insurance markets for care that are both efficient and seen to be fair. For the majority the gulf between what’s needed and what’s on offer is widening, as life expectancy continues to rise and disability becomes the norm. Within a generation we may be on the threshold of a major expansion of collective provision, born of our shared vulnerability to disability, dementia and being left without children or spouses to look after us. That provision will be shaped by access to far more accurate information about individual dispositions, or the effectiveness of treatments, and it will undoubtedly make use of business capabilities. But it is highly unlikely to be capitalistic.

Governments may also be drawn further into financial services. So far the financial services industry has been remarkably slow to offer products better fitted to contemporary needs—like variable mortgages that can be put on hold for periods out of work. But some governments (such as Denmark and Singapore) have created personal budget accounts for citizens, and it’s not hard to imagine some offering services where people can borrow money for a period of retraining, parental leave or unemployment, and then repay through the tax system over 20 or 30 years, or through a charge on homes, with much lower transaction costs than the banks.

Personal welfare accounts; personal budgets in health; personal carbon allowances. All may turn out to be distinctive parts of the architecture of a reformed state that pools risks while also personalising its services. All may be part of new deals that combine new rights with greater obligations to save, to pay for health and education, and to share the costs that will come from greater flexibility at work.

The last great accommodations were about the state, and states are being pulled back into much more active roles as the recession bites. But some of the most important guarantees of security lie beyond the direct reach of government. In the US the proportion of people who say that they have no one to talk to about important issues has risen from 10 per cent to 25 per cent in 20 years. Contemporary biology and social science has confirmed just how much we are social animals—dependent on others for our happiness, our self-respect, our worth and even our life. There is no inherent contradiction between capitalism and community. But we have learned that these connections are not automatic: they have to be cultivated and rewarded, and societies that invest large proportions of their surpluses on advertising to persuade people that individual consumption is the best route to happiness end up paying a high price.

That our social relationships matter as much as our income may change how politics is thought about. The short-term effect of the downturn will be to focus all attention on GDP’s dispiriting decline. But the longer trend is towards seeing GDP as less important than other measures of social success, including well-being. Over the last year the OECD has mobilised a glittering array of Nobel prize winners to advise on what should come “beyond GDP”: President Sarkozy has announced his eagerness to adopt some of their ideas and Obama will want measures of success that take account of health improvements, greener cities and better education rather than just measuring how much people have spent.

What also lies beyond GDP is a more pluralistic idea of how companies should be run. For decades the publicly quoted plc has been the norm. But the current crisis is reminding us that more diverse business forms can be more resilient. The building societies that didn’t privatise have survived far better than those that did. Charities tend to survive recessions better than conventional businesses and Britain’s 55,000 or so social enterprises may bounce back faster than firms without a social mission. Not surprisingly, the Conservatives are toying with policy ideas to strengthen credit unions and community investment funds, food cooperatives and energy service companies, all part of a search for an economic vision to replace the 1980s vision of big bang and privatised utilities.

Capitalism’s crisis is, of course, a global one, and has shown up the limitations of the global institutions that took shape half a century ago. China is set to become a dominant player in a strengthened IMF and World Bank, followed by India and Brazil. The G20 is edging out the G8 as the club that matters. And waiting in the wings are possible new institutions to police and manage carbon, to handle everything from global migration to the regulation of biotechnology, alongside less formal institutions to help the world’s public to engage, from e-parliaments to global campaigning platforms like Awaaz, an online newspaper.

No one can know which of these possibilities will come to fruition. There are in principle an infinite number of directions social systems can take. But history suggests that at key moments evolution is highly selective. Only a few models turn out to be sustainable, with an affinity to the prevailing technologies, values and power structures.

In the first phase of the crisis the most successful claimants for support have been the big, failing (and well-connected) industries of the last era of capitalism. But the arguments are moving on—to how recovery plans can back job growth, fixing the future (as in San Francisco’s electric car infrastructures or Korea’s massive green jobs programme) rather than trying to fix the mistakes of the past. It’s not clear yet which politicians will be able to articulate a vision of a “servant capitalism” better suited to the 21st century. David Cameron has made some attempts—hard though that may sometimes be for the descendant of generations of stockbrokers. Gordon Brown is a son of the manse, but also deeply implicated in the crisis. Obama should be ideally suited to offering a new vision, yet has surrounded himself with champions of the very system that now appears to be crumbling.

The result is that a large political space is opening up. In the short run it is being filled with anger, fear and confusion. In the longer run it may be filled with a new vision of capitalism, and its relationship to both society and ecology, a vision that will be clearer about what we want to grow and what we don’t. Democracies have in the past repeatedly tamed, guided and revived capitalism. They have prevented the sale of people, of votes, public offices, children’s labour and body organs, and they have enforced rights and rules, while also pouring resources in to meet capitalism’s need for science and skills, and it has been out of this mix of conflict and co-operation that the world has achieved the extraordinary progress of the last century.

To discover what comes next, maybe we should look upwards. Skylines provide the simplest test of what a society values, and where its surpluses are controlled. A few centuries ago the greatest buildings in the world’s cities were forts, churches and temples; then for a time they became palaces. Briefly in the 19th century civic buildings, railway stations and museums overshadowed them. And then in the late 20th century everywhere they were banks. Few believe that they will be for much longer. But what will come next—great leisure palaces and sports stadiums; universities and art galleries; water towers and hanging gardens; or perhaps biotech empires? We need to rekindle our capacity to imagine, and to see through the still-gathering storm to what lies beyond.

Geoff Mulgan, April 26, 2009

The Meritocracy Trap

Meritocracy is in trouble. Recent years have seen a flood of articles deploring inequality and blaming meritocracy for it. In the vanguard is Yale Law professor Daniel Markovits who attacked meritocracy in its home, in an address to Yale University graduates in 2015. His new book, The Meritocracy Trap,1 has just been published.

Professor Markovits is a meritocratic champ himself: “In the summer of 1987…I graduated from a public high school in Austin, Texas, and [then] attend[ed] Yale College. I then spent nearly 15 years studying at…the London School of Economics, the University of Oxford, Harvard University, and finally Yale Law School—picking up a string of degrees [in philosophy, econometrics, mathematics and law] along the way.”

Despite his own success in the meritocratic sweepstakes, Markovits is highly critical of what he sees as an inevitable bad outcome.

The book has nine chapters, beginning with ‘The Meritocratic Revolution’ and ending with ‘The Myth of Merit.’ The text abounds in sweeping statements (more on some of those in a moment), with (apparently) no references in support. But no, that’s wrong! In fact, half the Kindle book is taken up by notes and references, linked by a line of text (and you can get to the text from the reference, but not vice versa, which makes checking sources as you read difficult).

Given the vast amount of research material that Markovits cites, this should perhaps have been three or four books rather than one. Instead he has chosen to write one book in a deceptively non-academic way. Perhaps this is why the text is in fact incredibly repetitive. We read many sentences like the following:

 Meritocracy blocks the middle class from opportunity.

[M]eritocracy concentrates these vibrant wellsprings of creativity in a narrower and narrower elite, farther and farther beyond the practical and even the imaginative horizons of the broad middle class.

Meritocracy comprehensively excludes the middle class from social and economic advantage, and at the same time conscripts its elite into a ruinous contest to preserve caste.

Rising economic inequality…principally comes not from a shift of income away from labor and toward capital but rather from a shift of income away from middle-class labor and toward superordinate labor.

The middle class is literally shrinking: the share of all households that might sensibly be called “middle class” has fallen by nearly a fifth from its peak…

We are told many, many times that the middle class is dying, and meritocracy is to blame. We get it. A shorter book, with a less redundant text and fewer, more focused references, would have been a great improvement.

There are three parts to Markovits’s argument: First the facts, some precise, many squishy. Second the diagnosis: the root causes of the malaise described in Part One. And finally: action, what should be done to remedy the situation.

The Facts

First, the facts: Yes, the proportion of Americans in the middle-income range has shrunk since the 1950s and their incomes have stagnated relative to those below them and those above—what Markovits calls “superordinate workers” in occupations like finance and tech. Yes, the income distribution has become less equal. The OECD data for 2018 show the US ranked at 34 out of 38 nations (the US Gini2 coefficient was 0.39; South Africa was the worst at 0 .62, the Slovak Republic the best at 0.241). The US figure shows a small increase, from just over 0.3 in 1979 to  0.39 in 2018. And yes, the incomes of the top one percent now exceed those in the middle and on the bottom by outrageous margins. An oft-quoted statistic is that CEO pay has increased from around 20 times that of the average worker in in the 1950s to around 360 times today—although, mercifully, only cited once by Markovits.

Another set of facts is less easy to measure: the happiness or otherwise of the different classes. Markowitz contends that everyone is unhappy, but for different reasons. “An unhappy, even disconsolate affect increasingly dominates superordinate work and elite life,” he writes, giving quotes like this as examples: ‘My Typical Day Shows Why Lawyers Are Miserable and Lonely’ (Business Insider, November 2013). Lawyers’ workloads have hugely increased in past decades, as have their incomes and their stress levels and the same for what Markovits calls other “superordinate” workers in finance, tech, and big business in general.

In other words, the elite are paid a bundle but have to work too hard. And what choice do they have? They are their own “capital” says Markovits. They can’t just collect rent, as in the good old days of the land-owning aristocracy. They must work to be rich, and society forces them to compete, so they “burn out,” even though it is hard for the rest of us to feel sorry for them. After all, why don’t they just retire when they get rich enough?

The misery of the middle is more understandable. Their wages have stagnated even though government statistics tell us that the unemployment level is historically low. Not that these numbers are totally trustworthy. They don’t account for the very large numbers of people who are no longer looking for work. Why? Are they content to live on savings? On welfare? On disability payments, where the numbers have much increased even as other health statistics, like life expectancy, have generally improved? (Social Security disability numbers in the U.S. have increased from 6.2 million in 2004 to 8.5 million in 2018.)

The main problem for the middle class, correctly identified by Markovits, is not their wages but the instability of their jobs: precarity is the ugly but fashionable term. Lifetime employment and the serious on-the-job training that led to it is now a rarity. Workers are instead selected by their educational credentials, even when a degree is unnecessary. All this, Markovits claims, is facilitated by the computerization of everything, from manufacturing to the granting of home mortgages.

The Diagnosis

Meritocracy, in the form of a college degree, particularly a degree from an elite college, is the problem, says Markovits. Elite colleges have become more competitive; they accept a smaller proportion of applicants than they did decades ago—although it is not clear to what extent this depends on the base application rate. Are prospective students applying to more colleges now than they used to? In which case the acceptance rate of colleges just reflects an increase in the denominator, not necessarily an increase in their selectivity. Markovits argues for the latter and gives in support some statistics on the elevated SAT (Scholastic Admissions Test) levels now required of matriculants.

The process seems to operate like this. As more kids go to college, a degree has mutated from a bonus to a necessity. As elite credentials became increasingly essential for career advancement, elite schools came under increased scrutiny for their non-meritocratic admissions of “legacy” students and the children of the rich and powerful (e.g., politicians and potential donors). In a strange metamorphosis, college education for the many elevated the value of elite education for the few.

Elite admissions officers now are explicitly concerned about the effect of their policies on social mobility.3 Increasing reliance on “objective” measures like the SAT and the ACT (American College Testing) was the first response. Next came affirmative action and the obsession with “diversity.” These two moves seemed at first to defuse attacks on elitism: if the campus is suitably multicolored and most applicants have passed a high test bar, what’s the problem?

The problem, says Markovits, is that the rich can coach their children, from kindergarten to high school, to beat the tests, thus maintaining  an effectively hereditary ruling caste, albeit a generally unhappy and overworked one: “modern meritocracy operates not through more and more accurate testing for natural talent, deployed earlier and earlier, but rather through more and more intensive cultivation of nurtured talent, extending longer and longer [emphasis added].” Sensitive to this critique, several elite colleges have recently made the SAT and ACT optional. In response to the potential loss of business, in May 2019, the College Board came up with a sort of diversity test, the Adversity Index.3 It was widely criticized and abandoned in August. Where this process will go in the future is uncertain.

Michael Young, who originated the term in a brilliant 1958 satire The Rise of the Meritocracy, predicted much of what Markovits laments: the rise of an IQ-meritocratic ruling class. Young deplored what he predicted, but Markovits isn’t having any of it: “Young’s satire missed its mark by a mile,” he writes. Markovits’s criticism is that Young failed to see that the meritocratic process itself creates a society—highly automated, dominated by finance and high-tech—that sustains the meritocracy itself. “Meritocracy has built a world that makes itself—in all its facets, including meritocratic inequality—seem practically and even morally necessary,” the writes.  What this seems to mean is that all those technical innovations, in automation and fintech and elsewhere, that give the meritocrats their high-paid positions, would not have been created without meritocracy itself: “The feedback loops between exclusive education and skill-based innovation entrench and expand the elite’s privilege and shrink and marginalize the middle class.” Without the rise of the meritocracy, the world would be a simpler 1950-ish sort of place, with stable jobs and a thriving middle class.

The contrary view, of course, is that technology and science evolve through the curiosity and talent of scientists and engineers interacting with the laws of nature. In modern Western society, unlike, say, ancient China, innovation promotes more innovation. Society imposes some direction, but it is often hard to detect. The invention of the digital computer, for example, arose from Alan Turing’s 1936 mathematical paper on computable numbers. But social factors influenced the construction of actual computers to aid decoding efforts in WW II. Turing was clever, of course (first-class honours and all that), but his discoveries were because of his brilliance not the fact that he was a member of an elite (he was middle class) or because anyone saw the meritocratic benefits of close attention to the Entscheidungsproblem. The fact that modern technology supports an elite class is surely more an effect of the technology itself than of self-sustaining positive feedbacks, as Markovits claims. The elite exploit the technology because it is there; they didn’t invent it to prolong their existence.

Individual Differences

The phrase “individual differences” doesn’t occur in the book. The phrase “natural talent” appears only once, as criticism. Markovits really does seem to believe that nurture is all and nature nothing. It’s worth noting that if there is no such thing as natural talent, if nurture really is everything, then the only fair way to assign privilege, to assure “equality of results,” is to admit students to prestigious places like Harvard and Yale by lottery, something which was seriously proposed by recent commentator. Markovits does mention the “birthright lottery,” by which he means not the genetic allocation of talent but the assortative selection of privileged parents. But he thinks that lottery is unfair.

Hence, says Markovits, if a meritocratic elite exists, it is because of unfair advantages, with no contribution from natural talent. But natural talent exists and can clearly succeed without the high-cost filter of elite colleges. Michael Young pointed out that in pre-meritocratic Britain, people of great ability were to be found in the uneducated classes. Clement Attlee’s post-war cabinet contained  people like Ernest Bevin and Herbert Morrison, neither college educated. In contrast, the cabinet of Tony Blair was “largely filled…with members of the meritocracy.” The British leadership of 1945 was quite different from, but surely no worse than, the leadership of 2001.

Young also saw that when smart people marry, they tend to have smart children. Twin studies have shown that the smarts of the kids are partly inherited. Coaching and expensive schools can help, but some privileged kids still don’t make it, as the efforts of the fraudulent parents in the Varsity Blues scandal shows. There is such a thing as “natural talent.” So, as Young predicted, a meritocratic elite is to some extent an hereditary elite. There seems to be no way for a meritocracy to avoid this.

Markovits’s other mistake is assuming that performance on IQ-type tests can be significantly improved by education and coaching. Given a target population with some education, further coaching makes little difference. Indeed, the tests were explicitly designed to be test-retest reliable. Doubts have been raised recently. Responding to a booming test-coaching industry, the College Board recently announced its own “practice tool” which boosted scores 90 points or more in weakly controlled experiments. The conclusion still seems to be that “[T]he best independent research suggests that formal coaching can further boost a student’s score, but only by a little bit.”

Tests like the SAT are useful because they do predict college performance, not perfectly but  better than other selection methods although, again, there is some debate about this. The SAT may have become less predictive in recent decades. The problem might be inadequacy of the test itself, as many claim. But it might also be the students and set of colleges (selective vs non-selective) used to estimate the SAT-grade-point correlation. Or it may be that the courses taken by first-year students are at least as responsible for their grades as their own talent and effort. The first-year “core curriculum” is a thing of the past in many, perhaps most colleges.  Consequently, a student’s grades may be more  function of her ingenuity in selecting first-year courses that match her ability, than of her ability in coping with a curriculum that is standard for all. Grade inflation (the camouflage term now is grade compression) is an acknowledged problem and students well know which courses are easy and which are not.

The fact is there is such a thing as natural talent and elite schools now get most of it. If the best jobs and careers go to graduates of these schools, a stratified society will be the inevitable result.

The Solution?

Markovits’s recommendations are as modest as his theory is all-embracing. To solve inequality, remove the limit on the payroll (social-security) tax. This is an idea that has been around a long time and seems quite reasonable. The payroll tax is certainly regressive, since it only falls on incomes below $133,000 or so—a large salary for many, but trivial for the superordinate mega-rich that are his main target. It’s hard to see how to justify the limit if you think inequality has become excessive.

Markovits considers the money spent by the rich on educating their children as a form of inheritance. To tax it, and to curb the dominance of elite private colleges, Markovits suggests putting a limitation on their tax exempt status. Again, fair enough, given the fact that many top-ranked schools make enough money from their endowments to abolish tuition fees entirely. Charities are supposed to devote a large proportion of their income to supporting charitable activities. Do Harvard, Yale, Princeton and the like really do this? Or do they waste their income on swollen non-teaching bureaucracies and luxurious support facilities? It’s worth a debate.

Markovits also takes a swipe at finance, which exists simply to allocate resources but takes up 10 percent or more of  GDP. It is now the source of great wealth, much of it generated through clever instruments like the collateralized debt obligations (CDOs) which contributed to the collapse of 2008. A Nobelist economist even claimed, post-2008, that bundles of hundreds of individual mortgages (CDOs) somehow made them more secure. Of what use are regulators who fail to spot the risks posed by CDOs and the like? Markovits offers no solution, but the growth and complexity of modern finance is a problem that goes beyond the technical shenanigans of superordinate quants.

Hierarchy

Every civilization has an elite. There is always a hierarchy of some sort. A hierarchical structure is probably inevitable in any complex organization. So the issue is not hierarchy or no hierarchy, but how should the hierarchy be selected?

The problem is that almost any hierarchy is incompatible with what has become an American dogma: that all people are equal, not just in terms of their legal rights as citizens, but in essentially everything. Books like Malcolm Gladwell’s bestseller Outliers seem to imply that exceptional people are the largely the result of exceptional effort—the “10,000-hour rule.” There is nothing otherwise special about them, except perhaps a bit of luck. This makes it hard to live with any kind of hierarchy. Those below the top are led to feel that their failure is somehow not their fault but simply due to poverty or a limited access to an elite education. It puts the confirmed egalitarian in an insoluble bind.

Daniel Markovits doesn’t believe in natural talent, hence ‘The Myth of Merit,’ his last chapter. Logically, he should favor random selection, if not for everything, then for positions of power. But he fails to follow through. His way out is via the idea that “Meritocracy has built a world that makes itself,” i.e., that meritocracy is self-perpetuating. But if we believe that there is such a thing as talent, which includes wisdom, virtue and energy as well as the ability to do well on the SAT, then surely the best society is the one that puts people high in these qualities in charge: Thomas Jefferson’s “natural aristocracy.” Markovits’s answer is to condemn the very idea of merit—thus abandoning logic for the embrace of  an obvious falsehood, that everyone can do anything if only they’re given a proper chance.

Effort is good; it’s good to believe that you can achieve by thinking and working hard. But it is destructive for society to think that those who do succeed have no special merit. Equality of opportunity is good. But if—and this is where I disagree with the professor—we are not all equally talented, then equality of opportunity also guarantees inequality of results. If society is not to dissolve into chaos, the system must be fair and give all as much opportunity as possible. But society must also recognize that even if we achieve that ideal, some people have more talent than others. Even, perhaps especially, in a fair and just society, they will likely land on top.

References and Notes:

1 Daniel Markovits (2019) The Meritocracy Trap: how America’s foundational myth feeds inequality, dismantles the middle class, and devours the elite. (Penguin Publishing Group. Kindle Edition).

2 The 0-1 Gini coefficient is the standard measure of income inequality (1 is completely unequal, 0 is complete equality); it is less arbitrary than threshold measures such as “the fraction of X living in poverty”, or ill-defined terms like “middle class.”

3 See for example College Admissions Ride the Equality Roundabout (J. Staddon, Academic Questions, in press)

Capitalism: Misunderstood

Capitalism is often a misunderstood economic concept. People are so stuck on that old timey capitalism that they aren’t willing to see just how capitalism has evolved over time and can bring solutions to a lot of America’s problems. I hear all of these crazy misconceptions thrown around about capitalism all of the time. So I’ve taken the opportunity to debunk some of these popular capitalism misconceptions.

There is only one form of capitalism: There are multiple types of capitalism, the two main types being crony capitalism and conscious capitalism. Crony capitalism is what has left many people scarred. These are power hungry nuts, that don’t care about anyone but themselves. The goal for them is not to build wealth, it’s to gain power and control. On the other hand, conscious capitalism is not about a power trip. It’s about building wealth, creating freedom and empowering others to do the same. Many people fail to realize that conscious capitalism exists, this is why it has become my mission to change that. I want people to know that capitalism doesn’t have to be negative for society and it is actually the way to solve a lot of problems that we have in the US.

Capitalism will only serve to make the rich richer: Despite popular belief, capitalism is not only a rich man’s game. In fact, capitalism is the only economic setup that will allow people of ANY status to create their own wealth. As long as you’re willing to get out and compete, you can create your own opportunities. Not to mention, capitalism naturally creates job opportunities and keeps our economy revitalized. It becomes a pattern: entrepreneurs go out and create new opportunities, they hire others to help their business thrive who then in turn are inspired to create their own opportunities and hire people to help their business and so on and so forth. You have wealth being rapidly generated and more employment opportunities than ever before. Everyone that’s willing to get out there and put in the effort will ultimately make money.

Capitalism is an old way of thinking: Couldn’t be further from the truth. The beauty in capitalism is that it is a constantly evolving practice. It allows people the freedom to get creative and find new solutions to both old and new issues that our country faces. It is a way for the people to make an impact on the world rather than sitting back and letting the government control everything. It allows for collaborative efforts to find real solutions. Naturally, there is a trial and error process, but this is what allows for effective problem solving. At the end of the day, if you’re one track minded and stuck in your ways, capitalism will be difficult for you. Because it is forever evolving, it requires a certain level of adaptation and ingenuity.

Capitalists are greedy pigs: There is no doubt that some capitalists are very greedy and selfish, but that’s a personal issue and has nothing to do with capitalism itself. In fact, real conscious capitalists strive to spread wealth and empower others to be able to build financial freedom. I think a major issue is that people have become too entitled and expect things to be handed to them. Since capitalism doesn’t offer any handouts, people assume it’s because capitalists want the wealth all to themselves. However, this is not the case at all. At the end of the day, you have to work if you want to get the reward. Why? Because the more people give to you, the more they expect back and ultimately you lose your freedom.

So, yes, it’s true. Capitalism isn’t just about grumpy, old men looking to rule the world. Capitalism is about wealth creation, empowering others and most importantly freedom! Capitalism provides opportunity for any and everybody to build wealth and live the lifestyles that they want. So it’s time to stop looking to the government for a handout and go create your own opportunities because this is your way to achieving real freedom for you, for your family and for all.

Ziad K. Abdelnour, October 20, 2020

Capitalism: The Ultimate Empowerment

Liberty is the true backbone for empowerment, for it gives one the opportunity to stand up for oneself. But somehow history has deleted liberty from capitalism and framed it as an evil entity that breeds chaos. Yes, indeed in a society where there is unbridled capitalism there will be chaos — Utter chaos! Because that’s how 7 billion people finding expression to fulfill their desire would look like: colorful, chaotic, and dynamic, like the forest. And forests are forever. Unlike a tamed garden that will go berserk at the first sigh of a storm, forests nurture life. The Leftist idea that we as a society need to be governed is a misplaced idea. If the world doesn’t need a supreme leader and can be run by independent countries governed by their respective authority — Then why can’t countries be run by independent states? why not states by independent cities, why not cities by independent districts, why not districts by independent neighborhoods, and why not neighborhoods by free individuals? This is the motto of capitalism — if you want to fix something, don’t pick someone else’s pocket. Fund your own schemes. This is highly empowering.

But the moment you step there. People ask questions. But never pay attention to the answers.

What about the increasing gap between the rich and the poor? In a society that blooms with unbridled capitalism, this gap would increase exponentially.’ If so, How will it empower us socially and economically? ​ — They ask.

Now, consider the Gini coefficient index which measures the proportion of income inequalities: 0% indicating absolute equilibrium, and 100% meaning total inequality (which for obvious statistical reasons can never be attained). You must have heard the staged lie that the Gini is out of the box and rising. Well, the fact is – the stats indicate that too. From the early 19th century to the early 21st century the index did rise from near 40 to near 70. Upon further inquiry, one will find that during the early nineteenth century, 35 percent of the global inequality found by the Gini index was due to differences across national borders. At the same time, 65 percent of the inequality was generated by differences in incomes within each country. But by the early twenty-first century, 85 to 90 percent of the inequality was due to differences across national borders, while only 10 to 15 percent of inequality was due to income differences within each country. In other words, the main source of inequality in the world has changed from within-border inequality to cross-border inequality. The cross-border income inequality rise is subject to multitudes of reasons — historic distribution of wealth, differences in the availability of resources and the potentiality of the resources, psychological mindset of the citizens that affects productivity, State intervention through foreign trade policies, subsidization, predatory pricing, and so on. It thus is not fair to compare the figures of cross-border income differentia. But, what’s rewarding is that the industrialization and silicon revolution ‘exponentially’ decreased the income inequality within borders contrary to popular belief. Look at poverty. In the early 19th century the percentage of people below the standards of living was a staggering 81% which now has decreased to 18%. When I say, below the standards of living — I mean ‘Charles Dickens’ poor. Now, if that’s not a clear demonstration that Capitalism is empowering, then what is!

Not only socially, but also economically, people have been lifted out of sheer servitude. The standards of livings have been increased drastically. And wherever there are traces of Leftist Intervention in the society one is sure to find oppression. That is the nature of socialism. Humans are myopic by nature, they can’t look beyond a certain level of complexity. Now, in this condition, if you hand them over a city to plan, or a whole country to govern, and expect them to make the many complex economic evaluations which themselves do not obey mathematics, then they are bound to make errors even with the best of intentions. And we blame the consequences of all such errors on capitalism. No! But I guess we don’t deserve such reasons. Capitalism is for the future. And when it shall show its true colors – People shall see it for what it actually is.

Hitesh Mistry, November 12, 2020

So You Think Capitalism Is Evil

Everywhere I go, I’m within earshot of someone ranting about capitalism. How it’s to blame for all the issues in the world — and in the angry person’s life. Inevitably, others will join in and before I realize it I’m in the middle of a Capitalism-Fucked-The-World-Up support group.

If you give the same reason for every issue — global warming? capitalism; the financial crisis? capitalism; my divorce? capitalism — that warrants suspicion about your thoughtfulness. So frankly, this anti-capitalism attitude has always struck me as lazy thinking.

Blaming ‘capitalism’ is hardly specific enough to identify the deficiency, let alone to work out a well-supported solution.

But you know me, I’m curious, and it’s interesting to listen to what people say, so during my holidays I embarked on a mission to understand these complaints.

I couldn’t believe what I found.

Capitalism creates bullshit jobs?

When people blame capitalism, “capitalism”, I think, refers to a particular way of organizing society. Since Karl Marx and probably before that, the capitalist way of structuring the economy has been charged with allowing capital to take advantage of laborers — sowing the seeds for exploitation.

Bullshit jobs are the Western, 21st-century version of this pointless toil.

Bullshit jobs, as defined by David Graeber (the anthropologist who coined the term), are jobs that are redundant according to those who have them. According to his oft-cited survey results over a third of all employees think that their form of paid employment does not contribute anything. Graeber concludes:

Huge swathes of people, in Europe and North America in particular, spend their entire working lives performing tasks they secretly believe do not really need to be performed.”

Some go further, and also accuse the ‘the system’ of tricking the rest of us, those who don’t ‘admit’ to having a bullshit job, into falsely believing that our efforts have significance:

“One of the greatest triumphs of capitalism: convincing workers that labor is ‘meaningful’”. — Andrew kortina

The exploitation is total.

If many people in different jobs judge their daily grind to be meaningless, that would lend support to such generalizations. However, recent studies have cast doubt on Graeber’s data. While Graber’s estimations turn out to be based on sketchy data gathered by a commercial party, official surveys paint a picture according to which “socially useless jobs” (the academic term for bullshit jobs) are less common than previously believed. From a recent study:

We use a representative dataset comprising 100,000 workers from 47 countries at four points in time. We find that approximately 8% of workers perceive their job as socially useless, while another 17% are doubtful about the usefulness of their job.

While Graber’s speculations are based on half-baked ‘evidence’, more thorough empirical investigations indicate that he has overstated his case. By extension, claims that capitalism has “tricked” us seems to lack support. If about 90% of “workers” judge their work to be useful, it requires stronger evidence to show they’re all deluded. Until capitalism-jeekers present evidence of such mass-hypnosis, they need to stop making up stories about people who work a lot being tricked by capitalism or having psychological issues — it’s (mostly) untrue and quite offensive.

Moreover, even if Graber’s extrapolations weren’t exaggerations, capitalism isn’t responsible for people accepting bullshit jobs. Rather, capitalism seems to enable us to fulfill our childish desire for social status — a desire our species felt long before capitalism. Consumerism provides a way of gratifying our need to keep up with the Joneses: the acquisition of material goods as measure of success offers a quick route to excelling your neighbor. This need is deeply human — as we’ll see below — not exclusive to homo sapiens in capitalist societies.

Capitalism Didn’t Change Human Nature

Another charge often leveled against capitalism is that it brought about a fundamental change in the human soul.

For example, in How Much Is Enough? Money and the Good Life we read that

Experience has taught us that material wants know no natural bounds, that they will expand without end unless we consciously restrain them. Capitalism … has taken away the chief benefit of wealth: the consciousness of having enough.”

The claim is that, thanks to capitalism, our wants have gone out of control and we now desire excessively.

Capitalism is an easy target, but, again, this accusation doesn’t survive reflection. Charles Chu gives the correct reply to this:

It is unfair, I think, to blame capitalism for destroying “the consciousness of having enough.” Evolutionary theory has taught us that all living creatures have a natural drive to survive and reproduce. The endless pursuit of more is part of human nature, not the result of a capitalist society.”

People crave bragging rights. Before shinier cars, there were fancier wigwams. At most, capitalism can be charged with bringing out these tendencies in us. Again, though, blaming capitalism for causing this behavior lets ourselves off the hook way too easily.

The excessive consumption and environmental crises that comes with satisfying the rich Westerner’s need for social status are terrible, but capitalism isn’t exactly holding a gun to our heads when we purchase that new car. That’s all on us.

There’s more going on.

‘‘Capitalism’’ Doesn’t Have Exculpatory Power — or does it?

Perhaps it is this: people often blame capitalism for encouraging certain behavior. For instance, capitalism is said to impose a perverse incentive structure, rewarding people for un-rewardable — morally wrong — behavior.

While this observation is probably correct, it doesn’t go as far as the capitalism-jeeker wants is to go. Imagine a greedy hedgefund manager, his soul thoroughly bent out of shape due to capitalist influences, who, when people ask him why he was such a selfish dick, claims that “capitalism made me do it.” We wouldn’t buy the excuse. He’s still to blame.

When people behave obnoxiously, shouldn’t we hold them accountable, rather than the way their society happens to be structured?

Perhaps, again, capitalism brought out these perverse tendencies in those people, but, as our response to the hedgefund manager’s plea of innocence indicates, it seems wrong to say that capitalism — and not the person —bears responsibility.

Or so I thought.

This was my first reaction, but I later realized this rebuttal is too quick. If you’ve been following the news for the past decade, you probably can’t shake the impression that there seem to be structural forces producing the same repeated errors. That suggests that the cause of these moral faults is systemic:

“Conspiracies in capitalism are only possible because of deeper level structures that allow them to function. Does anyone really think, for instance, that things would improve if we replaced the whole managerial and banking class with a whole new set of (‘better’) people? [Yes, I did.] Surely, on the contrary, it is evident that the vices are engendered by the structure, and that while the structure remains, the vices will reproduce themselves.” — Mark Fisher, Capitalist Realism

This, I now believe puts the finger on the sore spot. In the rest of this essay, I will try to show that capitalism has produced a perverted elite, and numbs the moral consciousness of the rest.

Capitalism and Today’s Moral Impoverishment

Tragically, in a capitalist society greed can run amuck. Managements are sometimes tolerated or even embraced who should not be — managements preoccupied with self-interest, managements blind to their own ethical lapses, managements with a record of racist or misogynist or homophobic tendencies. Boards of directors afflicted by conflict or indifference will sometimes look the other way at the actions of their management teams.

Everyone knows the famous movie line, when Gordon Gekko told us that “greed is good.” Coded to maximize shareholder value, our economy, as Tim O’Reilly has said, runs on the wrong algorithm.

For example, this devastating New York Times longread exposes how, in many countries, McKinsey’s consultancy work knowingly strengthens abhorrent regimes. McKinsey, in turn, defends its clientele by claiming that change of corrupt governments is best achieved from the inside, but the NY Times report reveals that expression of good intent to be dubious at best.

To begin, it’s not at all clear that they have these intentions. The article cites Calvert Jones, a researcher from Maryland University who has been studying these practices for almost 20 years:

Outside experts might even reduce, rather than encourage, domestic reform, Ms. Jones said, partly because consultants are often unwilling to level with the ruling elite … “They self-censor, exaggerate successes and downplay their own misgivings due to the incentive structures they face.””

I wonder why they’d do that if they’re so keen on improving the world?

And if they do mean well, their strategy for achieving ethical change misfires, and in some cases makes things worse:

Robert G. Berschinski, a State Department official in the Obama administration, said business leaders and policymakers often believed that actively engaging with authoritarian governments would lead to economic reform, which in turn would drive political reform. “But what is becoming increasingly clear, in Russia, China and Saudi Arabia — in all three of those instances — that belief has not proven to be true,” he said.

Some of these people are straightforward about this. My flatmate, who works at Morgan Stanley, almost laughed at me when she had to convince me that it’s their own wallet (i.e. the market demand), and not concern for the environment, that persuades banks to offer ‘green accounts’. And this hilarious account by a Goldman Sachs trader of his experience at Stanford’s Graduate School of Business offers an interesting peek into the workings of their minds:

“ One class was about … how corporate mottos and logos could inspire employees. Many of the students had worked for nonprofits or health care or tech companies, all of which had mottos about changing the world, saving lives, saving the planet, etc. The professor seemed to like these mottos. I told him that at Goldman our motto was “be long-term greedy.” The professor couldn’t understand this motto or why it was inspiring. I explained to him that everyone else in the market was short-term greedy and, as a result, we took all their money. Since traders like money, this was inspiring. … He didn’t like that motto … and decided to call on another student, who had worked at Pfizer. Their motto was “all people deserve to live healthy lives.” The professor thought this was much better. I didn’t understand how it would motivate employees, but this was exactly why I had come to Stanford: to learn the key lessons of interpersonal communication and leadership.”

Not everyone is so honest. Others — most — seem to have double standards. The NY Times critique astonishingly reveals how McKinsey’s work in Saudi Arabia helped the regime to better execute their anti human-rights measures. Of course, McKinsey was quick to sympathize: it was “horrified by the possibility, however remote,” that their report could have been misused.

Such cases everywhere once you look for them. For instance, during a recent interview, the ex-politician and former European Commissioner Neelie Kroes said that she, at that time, actually should have been sitting in the plane to attend a meeting on NEOM, the futuristic resort that Saudi Crown Prince Mohammed bin Salman is building. Until recently, international investors were eager to step into the project. But after the after last month’s killing and dismemberment of a Washington Post columnist by Saudi agents, things became a lot more difficult.

Kroes was a member of the project’s advisory board. When asked why she had linked her name to a brutal dictatorship, she replied: “When I talk to the crown prince, I have the chance to talk to him about my views on, for example, the freedom of expression.” That opportunity, apparently, justifies teaming up. (You should be skeptical about such rationales by now.)

Meanwhile, the crown prince isn’t exactly changing his mind after these intimate conversations. Bin Salman’s regime has, for example, imprisoned many peaceful activists. Eighteen of them are women. In prison, Amnesty International reported, they are tortured and sexually assaulted.

According to The Wall Street Journal, these tortures are instigated by a close confidant of the crown prince himself. The apparent reformist tendency of Bin Salman — Saudi women get to have a driving license and a place in the cinema — is nothing more than quasi-progressive window dressing, meant to give the West the comfortable illusion that things are moving in the right direction.

See how this works?

Okay, we’ll do one more example. According to Sheryl Sandberg, member of Facebook’s board of directors, “at its best Facebook plays a positive role in democracy.” Recently, it was revealed that she is closely involved in the recent privacy scandals surrounding Facebook, and also personally instructed staff to find out whether philanthropist and CEU-founder George Soros, who criticized Facebook, could be taken down. Since then, feminist organization Lean In’s, number-one priority has been to distance herself from her.

Zooming out, a pattern emerges in which the elite deceitfully combines the rhetoric of social responsibility with the rapacious pursuit of profit. Involvement in a progressive cause is all too often used as a smokescreen for unscrupulous cynicism. The feminism of Kroes and Sandberg and the nice words of McKinsey are nothing but ‘image laundering’.

In Winners Take All; The Elite Charade of Changing the Worldformer McKinsey consultant Anand Giridharadas exposes the ‘improve-the-world-as-long-as-you-benefit’ mentality of today’s economic elite. Giridharadas doesn’t dispute that good work is being done. His point is that many powerful people aren’t willing to accomplish fundamental changes as soon as their self-interest is no longer served by it. What perhaps once were progressive ideals is now merely a moral conscious that needs to be suppressed, if not silenced.

Because, make no mistake, their self-interest always comes first.

Capitalism: Good for Who Exactly?

Especially in the US, the conviction that Millennials are the first generation to be worse off than their parents is gaining ground:

[Compared to previous generations,] what is different about the world around us is profound. Salaries have stagnated and entire sectors have cratered. At the same time, the cost of every prerequisite of a secure existence — education, housing and health care — has inflated into the stratosphere.

Co-occurring with the rise of capitalism, the modern world has seen a startling rise in financial inequality. Since the implementation of neoliberal policies in the late 1970s

“The share of national income of the top 1 percent of income earners soared, to reach 15% … by the end of the century. The top 0.1 percent of income earners in the US increased their share of the national income from 2% in 1978 to over 6% by 1999, while the ratio of the median compensation of workers to salaries of CEOs increased from just over 30 to 1 in 1970 to nearly 500 to 1 by 2000. … The US is not alone in this: the top 1 percent of income earners in Britain have doubled their share of the national income from 6.5% to 13% since 1982.” — David Harvey, A Brief History of Neoliberalism

Reading that, I can’t shake the eery feeling that neoliberalism intends to (1) re-establish the conditions for capital accumulation and (2) to restore some kind of kleptocratic power for economic elites. It sounds like a conspiracy theory, but is it?

According to the French superstar economist Thomas Piketty — some scientists put him up there with the likes of Adam Smith, Karl Marx and John Keynes — it might well not be. In his magnum opus Capital in the Twenty-First Centuryhe disproves the neoliberalist promise that the free market will distribute wealth equally. While it has traditionally been thought that market forces decrease economic inequality — economists call this the Kuznets curve — Piketty’s data shows that wealth, in fact, does not ‘trickle down’ at all. Rather, in a properly functioning free market, inequality is set to increase:

Source: Adapted from Thomas Piketty by The New Yorker

Let’s analyze. The purple line shows Piketty’s estimate of the rate of return on capital going back to antiquity and forward to 2100. The yellow line shows his estimate of the economic growth rate over the same period. The purple line indicates that the wealth of the possessing class (land, houses, machines, shares, savings, etc.) grew faster than the economy for almost two thousand years — indicating that people with property had higher returns than people who worked. The return on capital was between 4 and 5 percent, while the annual growth of the economy was well below 2% (see the yellow line).

The twentieth century, containing two World Wars, far from representing normality, was a historical exception unlikely to be repeated, Piketty argues. In the normal eras, the growth rate has been below the rate of return, implying steadily rising inequality. If capital yields a higher rate of return than the economic growth rate is, those with capital will own an increasingly larger piece of the pie.

Rather than fostering equality, the free market, in its default mode, widens the gap between those who have and those who have not.

Let’s look at a concrete example. In August 2017, the Financial Post featured a story titled “Something has gone awry with the Philips Curve.” The Philips Curve predicts that less unemployment leads to higher prices. This chain is somehow broken. In the USA, for instance, since 2010, as the unemployment rate has fallen from 10% to 4.4%, inflation has hovered between 1% and 2%. Where did the chain break? Prices aren’t increasing as a result of rising employment because salaries aren’t increasing. Wage growth held at around 3.5% year-over-year, but has been stuck around 1% since 2009. If corporations don’t respond to increased profits by raising pay, that means that an increasingly larger slice of the pie goes to the owners of capital while the suppliers of labor get a smaller piece of the total amount of value that we produce. It’s exactly the kind of pattern that Piketty would predict, and yields a picture like this:

As the chart shows, in the US, while the income share of the richest 10% has continuously risen since the 1980s, the share owned by the bottom 50% of the population dropped.

“Perhaps globalization has gone too far,” you reply, “but is also the driving force behind the most important development in the last 40 years: the phenomenal growth in prosperity in 2.5 billion (!) people in China and India. Many countries — Japan, South Korea, Taiwan, Hong Kong and Signapore — that achieved a ‘Western’ standard of living did so by opening up to the world market. Surely, 2.5 billion people count for something?”

They do, and the emphasis on economic prosperity disguises the rest of their story. While China, for example, lifted hundreds of millions of people out of poverty, Chinese people have not at all been granted more civil or political rights. Economic growth doesn’t seem to father moral progress.

And while, acknowledged, their material conditions have improved, income disparity is an even bigger problem in emerging countries. The gap between rich and poor has increased in nearly every region in the world over the past few decades.

Capitalism Numbs: How Ethics Became Irrelevant

Wow. In a capitalist economy, increasing inequality is the rule, not the exception. And despite their ostentatious ideals, it is precisely such elites who instill distrust in society through their fakeness. The widespread scale of these vices suggests that, while they are instantiated in individuals, their ultimate cause might be systemic.

If you’re cynically disposed, you might reply: “So capitalists want to make money and some powerful people are hypocrites, got any other news?”

To begin, this response underestimates the seriousness of the situation. But since you ask, yes, I do have other news. It’s not just the elite who are morally impoverished.

In their legendary 1848 pamphlet The Communist Manifesto, Karl Marx and Friedrich Engels observe:

“[Capital] has drowned the most heavenly ecstasies of religious fervour, of chivalrous enthusiasm, of Philistine sentimentalism, in the icy water of egotistical calculation. It has resolved personal worth into exchange value.”

Almost 200 years later, this is as true as ever. These days, everything is evaluated in terms of money alone. In politics, there is an ever stronger tendency to reduce every social issue to a calculation, a financial-economic issue. Parties across the political spectrum share this implicit ideology and always seek the same solutions: more market, less government, more growth. Politics is no longer a battle of ideas, but pretends that all choices are financial ones.

This, for example, loops back to the point about bullshit jobs: while I don’t think the human need for social status is a product of capitalism, the mindset that more jobs — even if they’re pointless — is always a good thing because it contributes to economic growth might well be.

Today, it’s easier to imagine the end of the world than it is to imagine the end of capitalism, philosopher Slavoj Žižek quips in Living in the End TimesHis remark gets at two things. It registers the widespread sense that capitalism is the only viable political and economic system and it diagnoses that all of us have great trouble imagining a coherent alternative to it. The historian Francis Fukuyama is famous for writing that we may be witnessing The End of History and the Last ManWe’ve arrived at the end of history”, because liberal democracy is the final form of government — there can be no progression (only regression) from liberal democracy to an alternative system. Whatever its merits, Fukuyama’s thesis that history has climaxed with liberal capitalism is accepted, even assumed, at the level of the cultural unconscious.

The feeling that neoliberalism is the end point of mankind’s ideological evolution, has caused political and cultural sterility. ‘Economic growth’ or ‘more money’ should not be the main considerations in the societal debate, but politicians have become technocrats who pursue only these causes.

Pulling it all together, the biggest problem with capitalism is, I believe, that it seems to distort, no, cancel, moral compasses. We know the price of almost anything but the value of almost nothing. For many, the only way of hearing the words ‘good’ or ‘bad’ is as ‘more money’ and ‘less money’. We try to eliminate ethics by trying to look for an objectivity that isn’t there.

I think the recent crises show that the problems of our time ask for an answer that goes beyond numbers, an answer that is rooted in a clear vision of a good life. Morality should play an important role in political debate, but fake morality is the new “opium of the people”. Anyone who, when the cameras are rolling, shows that his heart is in the right place, that his company is committed to a better world, can continue to act abhorrently when behind the scenes.

Somehow ‘we’ have developed a weird kind of numbed understanding for the repulsive behavior of the elites. Capitalism has produced a supersaturation of ethical corruption that fails any longer to outrage or even interest. An uncanny sense of exhaustion. The abolishment of ethics and the desensitization that results from it, are the hidden problems of our era.

Maarten van Doorn