The US is already experiencing record unemployment, and stock markets are crashing all over the world. The economic impact of coronavirus is already huge. Does this mean the end of capitalism? Or are we reading too much into this economic shock? Previous economic crashes, such as 2008, made no change at all to the global capitalist economy, so why would coronavirus?
Yes, as international connectivity is being destroyedShow moreShow less
Planes, travel, ships - as the hallmarks of global trade go down, where does that leave us?
Easy international travel is key to the free market
Connectivity is an essential part of a global trade, which in turn lead to prosperity. With the fall of the airline and other mobile industries, economies will inevitably turn inwards and move towards protectionist models.
Many companies rely on international travel, utilizing globalization to their advantage to cut production costs and to ship their products around the world, selling as many goods as possible to as many people as possible, regardless of their geographical location. However, the COVID-19 pandemic has revealed why capitalism’s reliance on global connectivity is not sustainable. After all, the rapid spread of COVID-19 was partly facilitated by infected individuals traveling alongside other passengers on trains, ships, airplanes, and various modes of public transport. These “vulnerabilities generated by interconnectedness are further reinforced by austerity. Indeed, capitalists’ mantra to ‘cut all unnecessary costs’ has left societal systems with little safety margin to cope with unexpected events. From a capitalistic, return-maximizing point of view, cutting costs to the bare minimum may make sense. From a crisis preparedness angle though, it is irresponsible and indeed, dangerous.”
The COVID-19 pandemic has revealed that global interconnectedness is both a blessing and a curse, and capitalism isn’t a sustainable economic system due to its failure to acknowledge this. Companies will be unable to manufacture and ship products as efficiently as they previously could. The protectionist business models they will inevitably adopt to cut their financial losses will result in millions of people losing their jobs, while prices simultaneously skyrocket. If companies decide not to do this, and operate as if there is no global pandemic, they risk infecting even more people and further contributing to the spread of a deadly virus. Capitalism poses a threat to the welfare of society in both instances, and once individuals realize this, the demands for capitalism to be replaced with a more sustainable economic system will increase.
[P1] Capitalism relies on international travel because it allows for goods to be manufactured cheaply and shipped all over the world.
[P2] International travel and interconnectedness contributed to the rapid spread of COVID-19 because infected people and objects were traveling to different countries.
[P3] Companies will turn towards protectionist models as their supply chains disintegrate due to the lack of safe international shipping methods, which harms workers and consumers alike.
[P3] Capitalism, in this sense, is dangerous and a public health hazard. Therefore, the demand for it to be replaced will increase.