Economy, Globe, World

Neoliberal power in times of pandemic

The neoliberal model that has imposed the hegemony of the market over the corrective and balancing action of the modern state (as far as this is possible in the capitalist system) is showing all its limitations with the current coronavirus pandemic.


Juan Diego García


That the question is dramatic in the United States is not only due to Trump’s management, since in the main he followed the neoliberal model, in place in that country long before Trump. The course of economic events belies the assertion by prophets of the model that with full market autonomy and the reduction of the function of the state, the cyclical crises of the system would disappear.

That assertion is also belied by the fact that, in a key aspect of the modern forms of the social order (healthcare), the dominant role of private enterprise and the drastic reduction of the public sector’s role in managing it leave a dramatic balance which the current pandemic shows in all its harsh reality.

The lower income sectors of society suffer the health system’s deficiencies much more than the rest of the population: vaccination, medical treatment, various measures to diminish the psychological impact of the lockdown and isolation caused by the pandemic and, of course, the indispensable economic assistance to cope with the coronavirus’s inevitable impact on the economy (unemployment, widespread bankruptcy of businesses, excessive increase in the price of essential items) etc.

While large sections of the population (working classes and poor people in general) try to cope as best they can with the hard impact of the pandemic, large profits are being made in certain sectors of the business world, either because market demand favours them or because state support is usually greater and more generous to these sectors than to the rest of the population.

Paradoxically, those businessmen who always preach about how the state is an obstacle and must be reduced to a simple property policeman, now demand that they are helped by public funds (to which they themselves generally contribute little).

The pandemic, for obvious reasons, has hit health with enormous intensity, and in this sector the neoliberal model is showing all its limitations in an especially sensitive way since it concerns nothing less than the lives of human beings.

The shameful spectacle of the United States could not be worse and not only because of the measures taken by the previous administration (in many ways as neoliberal as the preceding ones) but because one of the mantras of the model’s advocates has always been to reduce public health services as much as possible and leave the main role to the private sector.

Although to a less dramatic extent, the same thing happens in the Europe of the welfare state due to the many measures which have weakened public healthcare on the Old Continent in favour of private companies. The drama on the periphery of the system is all the more alarming since in many cases there have not even been modest forms of welfare state.

The contrast is even greater if this situation is compared to China, Russia or even to countries like Cuba or Venezuela.

Although China and Russia have chosen some neoliberal formulas, they have zealously conserved the characteristics of state capitalism limiting the power of private businessmen and maintaining very overt social discipline and control of their population. Everything points towards the results being very positive, especially in the case of China.

Cuba has achieved very encouraging results since, despite all the limitations caused by the United States’ blockade, it has managed to maintain a very effective public health system and its pharmaceutical sector is showing considerable progress.

Something similar is happening to a lesser extent in Venezuela, also hit by blockades by the United States and the European Union. Its health system functions despite everything and has even donated oxygen to the population of Manaus, abandoned to its fate by the insane government of Bolsonaro.

The current global scandal over the management of the vaccines highlights to a greater extent the risks of leaving key matters for social order in the hands of private enterprise, and more so if this operates as a monopoly and has immense power compared to the states. The European Union itself is literally humiliated by one of these pharmaceutical consortia which allows itself to fail to keep legally binding agreements on deliveries in order to divert them to other markets with higher prices.

If a power like the European Union can be subjected to blackmail by a multinational, what could not happen in countries of lesser economic and political potential?

To start with, the global distribution of the vaccine already carries the nasty stamp of business interests and of the “sacred” principle of profit above all other considerations.

It is not surprising that the vaccine is assured for rich countries at the expense of the rest of the world population. It is the same perverse logic according to which in each country, one way or another, the vaccine is administered first to the affluent classes at the expense of the poor and hard-working majorities.

And that in several cases criminal use has been made of social and political influences to jump the vaccine queue making a mockery of the priorities established for medical reasons.

Therefore it is not desirable, in any respect, for key matters for the social majorities to be subject to businessmen’s judgement and even less so if they are organised in monopolies that act as real national and international mafias.

And in key areas such as health, it is not desirable for businesses that produce medicines (a matter of life and death) to be in the hands of private consortia with a total absence of the state.

The state must have a leading role in research and in production itself, and it must possess the legal instruments to enable the authorities to control the essential aspects of production and distribution.

Basic research is always paid for by the state while the production based on that research is left to private companies who take control of the market and therefore the profits.

It is unacceptable that research is financed by public funds leaving the processes that generate profits to the private sector. It is also unacceptable that, for political reasons (no less than because of pressure from pharmaceutical multinationals) many countries (the EU, for example) refuse to buy vaccines from Russia or China when these would be cheaper and equally effective.

Once again, it is clear to all where power really lies, beyond its purely superficial forms through the formal powers of liberal ideology. Neoliberalism only underlines this reality, showing it in its most egregious and antidemocratic forms.

(Translated by Philip Walker – Email: – Photos: Pixabay

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