Three responses to the coronavirus crisis

Whilst the end of capitalism is not on the horizon is strengthening the welfare state a way to help those suffering from the consequences of the COVID-19 pandemic?

Jean De Munck
29 April 2020, 12.01am
National Health Service (NHS) staff members clap outside the Royal Berkshire Hospital during the weekly "Clap for Our Carers" campaign, which looks to highlight the support for the NHS, in Reading, Britain on April 23, 2020.
Tim Ireland/Xinhua News Agency/PA Images

How can we manage the pandemic? What will happen in its wake? Some believe the coronavirus crisis will lead spontaneously to a greater awareness of the dead ends of anarchic globalisation. They dream that the end to the crisis will also be, in one fell swoop, the end of deregulated capitalism.

Such optimism is questionable. The end of capitalism is not on the horizon. Meanwhile, and unfortunately, authoritarian and populist political tendencies are immune to the coronavirus. There is no single automatic, rational political outcome inherent to this crisis. Democracies will be severely tested, not only by the health crisis but also by the economic crisis to come.

When it comes to crises, Europe has ample experience. After 1945, Europe responded with a model of practical synergy between the state and capitalism. The welfare state’s architecture, boldly rebuilt, can inspire a unique response to the current crisis. The economist Eloi Laurent is right when he says, ‘The most useful lesson of the beginning of this crisis is also the most universal: the welfare state is the strategic institution for the 21st century’. But two dominant models are challenging the welfare state model today: the authoritarian state capitalist model and the right-wing populist model. They are shaping the policies responding to the corona crisis.

Response 1: Authoritarian state capitalism

Authoritarian state capitalism combines an authoritarian, centralised mode of government with aggressive capitalism. China and Russia are the obvious examples.

In response to the Covid-19 crisis, these countries are tightening control over public space, silencing dissenting voices, and imposing authoritarian measures. The crisis has made it possible for them to expand and perfect extremely intrusive electronic surveillance systems, including facial recognition. The state apparatus is centralised, bureaucratic, and supported by a loyal army. Against the coronavirus, these states, unlike democracies, don’t have to improvise a ‘state of emergency’ because that’s how they rule all the time. As demonstrated by the case of China, brutally managing the health crisis is particularly useful in generating regime propaganda.

Direct control over civil society is a legacy of 20th-century totalitarian regimes. The ideological state apparatus impels citizens to suffer their fate silently, and controls daily life according to the imperatives of order and productivity. State capitalism goes to great lengths to seize world market shares, especially in niches pried open by the health crisis (masks and drugs, for example). Such regimes intend to take advantage of the looming economic crisis as a means to extend their influence over global institutions, competing with Westerners at their own game: accumulating capital.

Response 2: Right-wing populism

Right-wing populism emerged after 2008 and has become established since the electoral victories of Trump in the United States in 2016 and Bolsonaro in Brazil in 2018.

In this model, the relationship between the state and capitalism is reconstructed around reaffirming the state’s role (which clearly distinguishes this model from neoliberalism). The state remains formally democratic but assumes a fierce, authoritarian attitude. The ruling bloc aggressively takes over the public media space, in part by incessant scapegoating. It transforms elections into popular plebiscites for programmes centred on the defence of sovereignty against internal and external enemies.

However, unlike the first model, this type of government doesn’t seek to control civil society directly. It doesn’t deploy an omnicompetent administration – on the contrary, it destroys the government’s public services expertise and capacity for action and instead seeks to allow companies to take full control of society. Thus this autocratically inclined state supports, according to a seeming paradox, economic, health, educational, social and environmental deregulation on a massive scale. It doesn’t seek to control or replace private-sector leaders but rather to promote them and allow them to operate freely throughout all levels of society.

Like the first model, the second can flourish and expand during the coronavirus crisis. The state goes all in on policies of tight borders and police management of public security. The crisis is the perfect opportunity to re-advertise the ‘wall’, which supposedly stops migrants and the virus along with them. While systematically denigrating experts and intellectuals, the government saturates media with chaotic, aggressive speeches. Meanwhile, the pandemic is an opportunity to eliminate regulations (labour, environmental, tax) supposedly unkind to business.

The welfare state was born in Europe out of the great social crisis caused by industrialisation, and was institutionalised after the total disaster of the Second World War.

Thus we’ll see the kind of policy observed after hurricanes Katrina (2005) and Harvey (2017) in the United States. Naomi Klein calls it ‘shock doctrine’: transforming disasters into opportunities to reinforce capitalism. For example, the ‘corona stimulus bill’ (March 2020) doesn’t aim to launch a new nationally managed healthcare and prevention programme. In fact, it’s devastating for American workers and (what remains of) social security while being extremely business-friendly. At the same time, the White House has just suspended all environmental regulations on its territory, for an indefinite period. It’s taking advantage of the crisis to impose pro-free market solutions, which in normal circumstances can’t be imposed.

A Western European response: a mixed model?

Erdogan’s Turkey represents an interesting mix of the two models. The dictator inherited a totalitarian state apparatus, which inclined him towards the first model, but adopted a political style that clearly goes in the other direction. In Europe, meanwhile, the second model seduces the Polish, Hungarian, English and Israeli elites, and attracts extreme-right parties in Flanders, France, and Italy.

The current fortunes of both models testify to the fact that it’s simply no longer possible to continue shrinking the state, as neoliberalism tried to do from 1990 to 2016. Both models reinvest the state’s power not to move beyond capitalism but to save it, at the expense of fundamental freedoms, social justice, and public deliberation.

A third model is available, however. The welfare state was born in Europe out of the great social crisis caused by industrialisation, and was institutionalised after the total disaster of the Second World War. It tries to preserve the rational core of each of the above irrational formulas. From the authoritarian state model, the welfare state borrows the idea that the response to dysfunction and crises requires the intervention of a strong (but legitimate) state with powers that penetrate civil society. It mitigates this by embracing the rule of law. An interventionist state is not necessarily anti-democratic; on the contrary, under certain conditions, it can be favourable to individual freedoms. At the same time, like right-wing populism, the welfare state holds that the market can be a form of effective coordination, but it rejects the idea of ​​a generalised commodification of life, which leads to dictatorship by private companies and mass inequality. It also rejects the policies of scapegoating, exclusion, and incessantly manipulating public debate.

We are entitled to expect European governments to immediately revive this third model. Unfortunately, they’re not demonstrating such lucidity. They remain intellectually bound to the neoliberal ideology. They impose ever more drastic cuts in what they have learned to call ‘social costs’ (instead of ‘investments’ in education or health). They practise a budgetary austerity blind to the genuine social needs of people, deliberately reduce the state’s tax base, and, to top it all off, vote enthusiastically for international agreements (such as CETA) which limit their own investment and regulatory capacities.

Response 3: the welfare state

The coronavirus crisis will be politically useful if it takes us back to the foundations of this alternative model of managing capitalism.

The welfare state is not a liberal state with a small dose of generosity. Liberalism sees in society only a set of individuals who are united by contracts. Such a vision had an undeniably liberating power in the holistic, hierarchical realm of the ancien régime, which assigned to every individual a place and a status. But it’s an insufficient vision for guiding and governing industrial societies. It can, however, be rectified by what the social sciences revealed during the 19th and 20th centuries, which can be summed up in a fairly simple idea: interdependencies bind together individuals. Organised into systems, these interdependencies constitute an autonomous level of reality, which can’t be regulated by our individual wills, nor even by contracts between individuals.

If there is one area in which the importance of this systemic approach to the social is borne out, it’s public health. A pandemic like the one we’re experiencing shows that health can’t be fully privatised. Health does, of course, have an individual aspect, which is unique to each person: one person’s risks differ from another’s. But it also has a social aspect, whether local or broad-based: my health depends on the hygiene of those around me. It depends on every other person with whom I happen, even sporadically, to be in physical contact. Everyone’s hygiene is a condition for my personal health. Since a virus can circulate and thrive via surfaces no less than fleeting interactions, everyone’s health also depends on the physical infrastructure that connects us, and the quality of the water, air, and food that flows between us. Hence the reality of interdependencies which eludes the simple aggregate of individual behaviours. This is what sociologists call the ‘system’, whose structures and functions are irreducible to individual behaviour (although that doesn’t mean the latter is insignificant).

The interdependencies of which the coronavirus reminds us also apply, mutatis mutandis, to work accidents, unemployment risks, financial systems, global migration, and climate change. This dimension of social reality wasn’t readily apparent to political philosophy. It only became salient with industrialisation, which continually generates new interconnected, material and social systems. The systems emerge or decline, change or evolve, and are unpredictable. They can be identified and understood only by the natural and social sciences—not by political philosophy, whose reasoning is based only on normative concepts, themselves essential but insufficient for managing a society.

The current pandemic provides striking proof: the greatest threats to collective effectiveness are concealment of information and lack of debate.

Since the Enlightenment, modern democracies have been guided by building a rational, or at the very least reasonable, society that expands individual freedom and social equality. The new systemic social theory doesn’t break with this, but it does give an essential role to the state. As the expression and instrument of the collective will, the state is a system which has the responsibility to regulate other systems as much as possible. To do so effectively, the state must have three characteristics: it must be sovereign, democratic, and interventionist.

State and Health sovereignty

First, the current pandemic shows the crucial importance of spatial control over human interactions, which is essential to stopping the pandemic and distributing aid. The modern state is a systemic protection device for a given territory. This sovereignty is never fully acquired, but it’s an ideal regulator, which is repeatedly challenged by previously unnoticed interdependencies.

The current crisis demands a new concept: health sovereignty. In the health field, it would be the direct counterpart of the ‘food sovereignty’ demanded by farmer global justice movements. Indeed, it’s absurd for Europeans to import protective masks from China or rely heavily on drugs produced in the United States. The state must strive to localise production of basic public health equipment. The deregulated world market disseminates production capacities according to the law of specialisation, which is bound by comparative advantage. This is why no community can rely on free trade for its survival.

However, it’s also clear that new interdependencies in terms of sickness and health are emerging. They result from the circulation of goods, people, and equipment. These systems know no borders. The causes of medical problems lie both outside and within countries. New drugs are invented all over the world, products must be exchanged. Thus we must not misconstrue health sovereignty as health self-sufficiency. Health sovereignty presupposes the state’s inclusion in a transnational framework that can produce and distribute worldwide equipment paramount to the health of all. Hence it has nothing to do with narrow-minded nationalism or dogmatic protectionism. Cooperation in transnational institutions is as essential as local basic infrastructure.

Democracy: a condition for efficiency

Thus we’re not going to restore a ‘Leviathan state’ (the unfortunate title of a recent opinion piece in the Belgian press), which would destroy freedom in order to guarantee security. The second condition for an effective welfare state is the existence of an open, attentive and deliberative public space.

The current pandemic provides striking proof: the greatest threats to collective effectiveness are concealment of information and lack of debate. Amartya Sen demonstrated this in the case of famine. The state must ensure that information flows completely and freely in order to allow continuous policy deliberation. Only through open debate can uncertainty and complexity be tackled. Muzzling certain members of society limits the public space as well as the choices required to address the magnitude and multidimensionality of health problems. At the same time, open discussion is essential if citizens are going to apply binding government measures. Citizens deprived of the opportunity to discuss the purpose of such measures react with suspicion and free riding. Thus the measures fail and the state, thanks to its baffling high-handedness, loses legitimacy.

Moderate socialism

Building democracy isn’t just about building a free public sphere. It’s also about levelling the field. Without adequate infrastructure, ‘right to life’ and ‘right to health’ are empty words. Infrastructure can be partially supplied by the market, but unfortunately only at the expense of equality and with adverse effects. Indeed, we know how free-market healthcare can become ‘iatrogenic’, as Ivan Illitch pointed out in Medical Nemesis: The Expropriation of Health. We know the terrible inequalities that come with it. Hence the state, assigned a dual mission of healthcare production and distribution, must introduce corrective measures. On the supply side the state must guide the economy to produce healthcare goods and services, and, on the demand side, make them universally accessible in accordance with principles of justice.

Unlike countries with a hyper-liberal tendency, the welfare state offers permanent tax-funded public health infrastructure. In addition, various social insurance and regulatory control schemes provide for affordable care, moderately priced drugs, and public hospitals. In the midst of the coronavirus crisis, the importance of these schemes is tragically proven. Tackling health inequality is a measure of a healthcare system’s legitimacy, and even of its effectiveness: the great inequalities between individuals and groups increase the risks to both the healthcare and political systems.

The collectivist structure of some public healthcare systems doesn’t completely exclude the market mechanism from the healthcare sector. The market has certain advantages: it promotes innovation and productivity, and makes it possible to combat rent seeking. Hence a state-market institutional mix must be established, as was the case in all West European countries after 1945. Certainly, we must constantly review and transform the recipe for this institutional compromise to adjust it to the economy’s new constraints (digital, services, etc.). But a balance between collective and private ownership of the means of production is mandatory. Thus a certain dose of socialism is recommended in the health field, as in other fields.

Revive the welfare state

Sovereign, democratic, interventionist, and redistributive: only the successor to the 20th-century welfare state can ensure the democratic resilience of our societies in the 21st. In the midst of the coronavirus crisis, after two decades of criticism and attack, many voices are giving it new life.

Nothing is simple, however. Today’s welfare state is in mortal danger, undermined by four structural challenges. The first is financial: treating it with debt and austerity has left it on life support its tax base has to be entirely redefined (e.g. via a Tobin tax on financial transactions, GAFA tax, property tax). Second, the relationship between the welfare state and economic growth must be rethought. Growth isn’t an end in itself, but a means. If our societies’ resilience (ecological, financial, health, social) is everyone’s goal, the growth must touch certain sectors and not others. In any case, the umbilical cord between the welfare state and productivism deserves to be cut. Third, the welfare state’s integration into transnational channels would allow it to confront long-term interdependencies, which extend (well) beyond its territory. Finally, the welfare state must reduce its bureaucracy. Hierarchical, standardised, and purely managerial relationships undermine its legitimacy in the eyes of the public it claims to serve.

The coronavirus crisis reminds us of the urgency of meeting these challenges. It forces Europe to revive the welfare state. Without new consensus in its favour, crises will deepen and upheavals will become increasingly violent. If that happens, then on Europe, too, the way will be clear for the two state models already ravaging the planet.

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