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Capitalism, the State Religion

Photograph Source: su-ch – CC BY 2.0

With Old Testament locusts and plagues re-emerging for the late capitalist era, one could be forgiven for imagining that an avenging God has been awakened. As the virus winds its way into the nooks and crannies of modernity, innocents are being sacrificed at the altar of ‘the economy’ while the lunatic circus in the New York – D.C. corridor prattles on about stock prices and miracle cures amidst the carnage. The ratio of Dow points to body count measures the distance from the outer ring to a precise location in hell.

The deeply instantiated ideology of better living through capitalist technocracy is coming face-to-face with its religious underpinnings in government without governing, in the fantasy that markets will save us. While it would be foolish to underestimate the near-heroic ignorance and incompetence of Donald Trump, he is but a vessel for the state religion, not its cause. As inconvenient as this may be for business folk, political party bosses and the hopeful, it is when we emerge from the current crisis that the environmental reckoning will be upon us.

A slightly interesting question is what passes for competence in the upper rungs of public self-service? While it would be both right and just if Mr. Trump were charged with negligent homicide for his mishandling of the coronavirus pandemic, he did so using the same logic that motivated the Wall Street bailouts, the ACA (Obamacare) and the TPP (Tans-Pacific Partnership). It seems that in D.C.-world, America is a capitalist country. This carries with it a logical hierarchy in which people are an afterthought.

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Graph: The American solution to the coronavirus pandemic is to rescue the stock market. There are few virus test kits, little protective equipment and not nearly enough ventilators, but stock prices are rising thanks to the Federal Reserve. Most stocks are owned by corporate executives and oligarchs. It is a large component of their wealth. This is why raising stock prices is a priority for both Republican and Democratic administrations. Source: St. Louis Federal Reserve.

As the powers that be consider when to reopen ‘the economy,’ they never closed the one that matters to the rich. Rising stock prices are a talisman in the capitalist religion. With $4.5 trillion in new money dedicated to refilling the bank accounts of the rich versus $1.5 trillion for annoying and death-adjacent humans, who says government priorities are misplaced? And in contrast to the economic arcana put forward to explain their movements, stock prices are rising because the Federal Reserve is financing their rise.

Lest the listing of D and R program failures together seem a case of orpples, of comparing apples to oranges, report after report from early-mid March had Donald Trump and his senior aides touting market-based solutions to the provision of virus test kits, protective equipment and ventilators. That the WHO (World Health Organization) offered the Trump administration a virus test that worked apparently wasn’t good enough. The administration went with a CDC test that didn’t work as it touted patented tests made by private corporations to protect profits.

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Graph: In 2018, the U.S. spent two and one-half times the OECD average on healthcare per person and still had the lowest life expectancy and the highest rate of preventable deaths. This is years after Obamacare was passed, meaning that it didn’t fix the healthcare system. Lest this not be clear, more people die every year from this broken healthcare system than have died in the U.S. from the coronavirus pandemic to date (4/7/20). Teal is government spending; orange is private, and blue is out-of-pocket. Source: commonwealthfund.org.

The Wall Street-Chamber of Commerce funded claim that the economy can be quickly reopened is potentially homicidal in the sense that it is the fact that it has been partially closed that will have caused new infections to level off. The conceptual challenge appears to be that a pandemic is a process, not a moment in time. For instance, optimists claimed early on that the mortality rate in the UK was an inexplicably low 1.4%. In fact, it takes some weeks to die from Covid-19, meaning that they weren’t considering the progression of the illness. As of this writing, the mortality rate in the UK is a bit over 10% (5,373 dead / 51,608 infected), making it a mid-level plague.

The distinction between essential and non-essential workers also poses a conceptual challenge in that essential workers appear to be the most expendable. Employers have excluded themselves from the obligation to protect them from infection under the capitalist canard that work is voluntarily undertaken. The get-back-to-work crowd proclaims the economic necessity of working while the political class rains $4.5 trillion in bailouts down on corporate executives and oligarchs. Whither the stock prices of the guillotine makers?

With large numbers of human beings languishing in prison, the American political leadership apparently distinguishes them from concentration camps through active versus passive extermination. Forcibly keeping people in close proximity to one another in a pandemic allows them to die without having been actively murdered, goes the theory. Were this distinction applied to the political leadership or corporate boards of directors, such ‘passive’ murder would be front page news. It’s past time to empty the prisons.

As predictable as the sun rising in the east are the defenses of capitalism being put forward by in-the-process-of-being-bailed-out bankers and corporate executives. In fact, the Ayn Rand institute was founded and funded by bankers who were ‘forcibly’ bailed out by the Federal government in 2009. The nature of the force used? They were offered the money and they said ‘yes.’ Social Security and Medicare recipient Rand, like her sole-mate (sic) Friedrich Hayek, would have been proud.

For those unschooled in the precise nature of this American hypocrisy, right-wing economists Friedrich Hayek and Milton Friedman joined philosopher Karl Popper to found neoliberalism as ‘pragmatic’ capitalism following WWII. Capitalism is the one true religion, goes the theory, and so whatever actions are needed to support it are pragmatic. The paradox of having the Federal government support ‘free markets’ is that doing so means that they are neither free nor markets.

While oligarch Trump is more likely than not up to the task, the Obama administration’s bailouts set a high bar in terms of institutional corruption and government bias toward ruling class interests. The automaker bailouts codified the tiered wage structure that executives had demanded to cut labor costs as they paid themselves multi-million dollar bonuses. This took place while AIG, the recipient of the largest corporate bailout in history, was paying multi-million dollars bonuses to the executives who sank the company by writing ‘risk-free’ insurance policies.

While Donald Trump is blameworthy in many respects, his actions regarding the coronavirus pandemic follow the American playbook of protecting the rich while letting the chips fall where they may for the rest of us. The U.S. has long had a much higher child mortality rate than first world countries. And it is the health outcomes of the working class and poor that bring broad measures like life expectancy down and preventable deaths up. The only noticeable difference that Obamacare made is that the compensation of health insurance executives went up after it was passed.

This ties to the Trump administration’s abysmal response to the coronavirus pandemic in that letting poor and working people die from preventable illnesses has been the American way since the so-called founding. Again, more people have died from preventable illnesses every year since Obamacare was passed than have died from the pandemic to date.

In the U.S., the pandemic began with professional class travelers who brought the disease back with them from abroad. While this is ultimately incidental, they can afford social distancing while ‘essential’ workers can’t. Reports that black and Hispanic workers are disproportionately dying from Covid-19 racialize the economic conditions that explain this outcome. These same ‘essential’ workers are experiencing high child mortality rates, declining life expectancies and premature deaths from preventable illnesses.

The U.S. has the money and the resources to ameliorate the economic impact of the pandemic. But it is using them to boost stock prices, bail out Wall Street, buy the corporate debt of companies that issued too much of it to enrich their executives, and to save the favored industries of the oligarchs. Social distancing costs too much in lost profits, so it will more likely than not be ended early. In the American religion, ‘the economy’ exists outside of human considerations.

A central strand of the defense of capitalism comes through country comparisons. Germany is capitalist, the U.S. is capitalist, and these have had dramatically different mortality rates from the coronavirus pandemic. So how can capitalism be blamed for the bad outcomes? The U.S. has a Gini coefficient— a measure of income inequality, of 45.1 compared with Germany at 31.7, so how can they both be considered capitalist? The Gini coefficient is directly relevant through class-based healthcare provision in the U.S. system.

Again, the U.S. child mortality rate is 6.5 per 1,000 versus Germany at 3.8. The U.S. has a third world child mortality rate and Germany has a first world rate. This relationship holds along most measures of healthcare outcomes. Where it doesn’t hold is with cost— the U.S. system is far more expensive per capita than Germany’s. More pronounced class divisions in the U.S. determine who receives adequate care and who doesn’t.

The argument can be made after the corporate bailouts of 2009, and now 2020, that the U.S. isn’t capitalist. The serial rescues of the rich, corporations and industries from failure weren’t guided by official state policy in the sense of promoting an economic program except inasmuch as the agenda is to keep those in power, in power. Additionally, the U.S. isn’t a ‘mixed economy’ of distinctly public and private institutions in that the Federal government is keeping private corporations on life support without it being articulated policy or defining cases of need before they occur.

The term ‘state capitalism’ can be applied to both the U.S. and China. The central difference is that the Chinese communist party maintains political control over Chinese corporations, while U.S. based corporations substantially control the American political system. Political theory recognizes the U.S. system as state corporatism, better known in the twentieth century as Italian style fascism. The term is applied descriptively, not pejoratively.

The American healthcare system was crafted by corporations for their own benefit. The balance of power between hospitals, pharmaceutical companies, medical equipment makers and health insurers doesn’t include a public service component. Since Obamacare was passed, these industries have been consolidating against one another, not to improve the healthcare system. Healthcare is an afterthought when profits are the motive.

Capitalism is an ideology premised in not being ideological. It ties Barack Obama’s pragmatism to Donald Trump’s belief in markets. If Mr. Obama didn’t believe in markets, he never would have saved Wall Street. But by saving Wall Street, he proved that he doesn’t believe in markets. What is pragmatic about the rich always and everywhere being the primary beneficiaries of government bailouts? There is nothing prima facie pragmatic about it. But it always is the case. Welcome to the state religion.

Finally, with Bernie Sanders exiting the race for the Democratic nomination, the Democrat’s gambit that Joe Biden can beat Donald Trump is about to be put to the test. It seems that three and one half years of the contrived idiocy of Russiagate— the last vestige of which was just abandoned by Robert Mueller’s investigators, was to repeat the losing strategy of 2016. Handing Donald Trump a second term seems risky to me. We might have a pandemic or something that requires a functioning government. But Democrats seem determined to do so. God help the rest of us.

 

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Rob Urie is an artist and political economist. His book Zen Economics is published by CounterPunch Books.

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