19/03/20: The Coronavirus and ¿The end of capitalism?


Efraín Gonzales de Olarte

The pandemic unleashed by Covid19 is a bio-socioeconomic phenomenon that is testing not only countries but also the capitalist system. Beyond the number of infected and dead – which statistically is much lower than the current flu – has generated a paranoia that depends on the uncertainty of its evolution and on the countries’ ability to cope with it. Furthermore, it tests the effectiveness of democracy, the capacity of governments and the quality of States.

China was the first country to deal with the problem and, according to official information, appears to have controlled its spread. What was the formula: absolute quarantine, curfew and blocking of any type of mobility of people, which the Chinese complied immediately, this for two reasons, China has a strong state, an autocratic government and a population whose civic culture is forged vertically since centuries.

In the antipodes, Italy, which already has the highest number of deaths, did not take the first cases seriously, the measures were taken progressively until the moment when it was already a major public health problem, so they reacted and did something similar to China but very late, because there was probably democratic deliberation before taking the measures. Furthermore, unlike China, Italy has an old population, which is, more vulnerable.

The United States of Trump, almost in a similar way to Italy, have reacted late, with some arrogance and self-sufficiency, but suddenly they realized that Covi19 is a threat to “America first” and they begin to take measures. Immediately after the economic impact has begun to perceive. The reduction of economic activity in public areas is beginning to be felt, even Amazon that sells by mail, is having to fire 100,000 workers. The New York Stock Exchange has had several unprecedented crashes in recent days, that is, economic expectations – which are partly real and partly psychological – have begun to internalize the possibility of facing an economic recession, just before end of the year elections.

Obviously, the medium and small countries can only imitate China, to the best of our ability, to the extent that our states are capable and, above all, to the extent that our culture and needs allow. The world is paralyzed and the Covi19 – an exogenous and unexpected phenomenon – has put the capitalist system to the test, even in China, which prides itself on being socialist.

It is interesting to note various side effects of Covi19. On the one hand, environmental pollution decreased significantly in China and, probably, in the world, giving reason to those who maintain – among them Pope Francis – that the capitalist system is jeopardizing the ecological sustainability of the planet. Better proof for those, like President Trump, who deny the relationship between the economic system and climate change. On the other hand, it is becoming clear that the solution to the pandemic does not come from the market or the private sector, but from the state, the cooperation, solidarity and altruism. Lets see how China is cooperating with Italy and other countries, how employees of major companies are willing to reduce their wages, but also companies are willing to earn less so that their workers do not lose their jobs, the quality of health systems and especially their universal access has begun to be valued. Also, we realize that we could live well without so much consumerism, that at the end of the day we are forced by “states of emergency”, “quarantines”, “states of catastrophe”. In other words, the Covi19 questions us about our ways of life, our standards of consumption, but above all about our ethical values, within which individualism and selfishness turn out to be dysfunctional.

Finally, what is clear is that the economic and financial impact must be enormous, there will be many bankruptcies of companies of all sizes, unemployed masses, people will have spent their savings, tourism and all those activities that work based on contact of people will have to rethink their business strategies, it is also highly probable that poverty will increase in all countries. International trade itself will be restricted. In other words, the Covi19 is an important factor of deglobalization, which will favor those governments that say “my country first”.

The world will not be the same and I wonder if this is not the beginning of the end of neoliberal capitalism as we know it, and perhaps it will reinvent itself or drastically change. A virus smaller than a thousandth of a bacterium could change the world we know more than various revolutions and, most worryingly: this will not be the last virus.

We have to change.


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