The Covid State: Dispatch Three from a Changing World

As the subtitle of this piece suggests, this is the third in a series of online editorials responding to the Covid-19 pandemic. The first, ‘The Mask of the Red Death’, was published on 21 March, the second, ‘We Are All Unclean’ on 20 April. Our forthcoming issue, #8: Comrades, this is madness, contains an extended essay that synthesises, extends and reworks what we have published so far. The series will continue as the crisis does. 

The full dimensions not of the Covid state have yet to emerge. Since the state is at any time, as Poulantzas put it, a form-determined, ‘material condensation of the balance of class forces’, its shape is to be contested. 

What can be immediately dismissed, however, is the idea that any form of socialism is afoot. ‘By the end of the month,’ Paul Mason predicted back in mid-March, ‘there’ll be only two kinds of people in British politics: reluctant socialists and enthusiastic ones.’ That along with a war economy of contestable parameters, the crisis favours the emergence of a new common sense, and that it could even include elements of socialist thinking, is arguable. What is not even susceptible to a charitable reading are the ideas either that with the present constellation of forces, a government consisting of such figures as Boris Johnson, Rishi Sunak, Dominic Raab, Michael Gove and Priti Patel, governing with an historic majority, are under any pressure to become ‘reluctant socialists’. 

On an economic level, to imply that the interventionary aspects of whatever are our coming war economies necessarily mean ‘socialism’ represents not our ideological victory over our enemies, but theirs over us. And of course, though such intervention is a given, what is not is either its nature or its degree. Sunak warned that people are ‘addicted’ to job guarantee programmes, and that he is anxious to begin rolling them back – even as the infection rate seemed to be rising again. And contestation is not only between left and right, but within the ruling class, too. Calls by George Osborne and the Economist for the government to start slashing as soon as possible evidence its hawkish austerian wing. 

The hubris of seeing in this moment the inevitability of socialism follows the shattering electoral defeat of the left, and can only end in two ways: with demoralisation; or with the predicate-shifting disavowal that leads one to find a socialist militant in Sir Keir Starmer. Starmer refuses in any but the most ‘forensically’ polite manner to hold the government to account over its delayed and botched response to the crisis, the failure to provide adequate protective equipment to staff, the failure to test and trace early, the shortfall in its protection for workers, and the concomitantly mounting death rate – about which government figures are breathtakingly disingenuous. Instead he prefers to lobby the government over a lockdown ‘exit’ plan, in hopes of not appearing to call for a more economically costly, debt-incurring response than the government. Let cowards flinch, indeed.

There will be, with the ear of some in power, clear-sighted conservative intellectuals who, knowing that some reconfiguration is inevitable, advocate its careful and as-long-as-possible-term planning. More importantly, the government knows that with all that regrettable support for measures to save lives, they must show judicious care in their rollback from protective measures. So constrained, Boris Johnson has nonetheless been identified as a hawkish advocate of ending the lockdown as soon as possible, the better to get capital accumulation running again. Given his own near-death spell in intensive care, this tacitly aligns him with that growing cadre of morituri te salutant for neoliberalism which has been most full-throatedly articulated by those disaster nationalists and residuaries of the Evangelical-Capitalist resonance machine. It is, even, mildly encouraging that Johnson cannot openly take up the war cry so energetically expressed by Jair Bolsonaro, Donald Trump, Glenn Beck, Trump’s National Economic Council advisor Larry Kudlow, economist Stephen Moore, and, infamously, Trey Hollingsworth, and lieutenant governor Dan Patrick of Texas, who suggested that the elderly would – and by implication should – be willing to die for the economy. Nonetheless, what Johnson has defaulted to is, of course, not even close to socialism, but the same common sense of capitalist biopolitics to which almost every neoliberal government and central bank, from the US Federal Reserve to the Bank of Canada, Bank of England, Bank of Japan, ECB and the Swiss National Bank, has reluctantly acceded. 

Every measure grudgingly implemented by the Johnson administration, moreover, has been designed to cryogenically freeze vast regions of British capitalism, preserving the inequalities therein to be reanimated at a later date. The preference for wage subsidies for business, patchy self-employment support, and no support for renters, over, say, a more egalitarian, parsimonious and stimulus-efficient basic-income guarantee, is a case in point. Millions of workers, with little or no support from the state, have been forced to risk their health and that of others around them by crowding onto contagious public transport and going to work every day. Even as they take that compulsory risk, they are subject to a combination of patronising official ‘thanks’ for being ‘key workers’, obtusely invidious news reports wondering why-oh-why so many continue to fill up trains and buses, and spiteful vigilantism from some members of the public ‘reporting’ them to the police.

These are, of course, the poorest and most precarious workers – and disproportionately of colour. And though the government has been forced to acknowledge that migrant workers are a core group of ‘key workers’, and begs for them to stay for the duration of the crisis, it has made it clear that the deportations will continue once the pandemic subsides. Under coronacapitalism, non-essential production has been furloughed; racial capitalism has not. This is the subtlety of reaction, the dark underside of public sentimentality about ‘key workers’. Lauded for their ‘sacrifices’, they are actually being sacrificed.

And sacrificed to what is, in the truest sense of the word, a fetish. The genre of handwringing commentary that poses a ‘hard choice’ between health and ‘the economy’ merely exposes the intangibility of the latter. The ‘economy’ is no more an object with needs and wants than the king-God Moloch – unless we endow either with them, and give up our weak and needy to the fiery idols. The ‘economy’ denotes that realm of human production and reproduction in which surplus value is produced, and the exploiters of that surplus value are becoming anxious that its flow has been shut off – as measured in the almighty contractions of global GDP. 

Yet, even amongst the furloughed, and without minimising the very real hardships these unprecedented days have meant for so many, meals are still cooked, bottoms still wiped, tears still dried. Where previously these services were in some cases paid for, they formed part of GDP – now they do not. Likewise, the owners of capital are still owning it in the same way as they did three months ago, only now all the indicators that supposedly justify their obscene levels of remuneration are heading downwards at an unprecedented rate. Far more than even the crisis of 2008, Covid-19 is exposing that it is workers, their productive and reproductive labour, who do the key work for capitalism. Might one of the reasons for the eagerness to end the lockdown in order to revive the ‘economy’ be that the lockdown demonstrates the possibility of abolishing the ‘economy’?

For the first time in their history, then, capitalist states have been forced to effectively suspend capitalist relations of production for an unknown period. The longer the lockdown, the deeper the cut to growth, and the higher chance of a catastrophic recession with massive destruction of capital once lockdown support measures are withdrawn.

Yet, there is no alternative to such draconian curtailments. And no swift route out of them for the government. Notwithstanding Boris Johnson’s unreal talk of ‘success’, the claims for Britain being ‘past the peak’, reaching a ‘plateau’ in death rates, the most recent news is that the infection rate is increasing again as the government talks of unwinding restrictions. The number of active cases continues to climb, now reaching approximately 160,000 on official data. For comparison, active cases have started to dip in Italy, though the number remains close to 100,000, while in China, the number of active cases has fallen to a few hundred. This is why, when Johnson speaks about the ‘road map’ out of lockdown, he is unlikely to give specific dates. Therefore, while the British government readies its recovery programme – with Sunak and his allies doubtless looking on with envy at US states reopening under pressure from Trump (despite evidence that the US death rate is likely almost to double by the end of the month) – it is not obvious what they can do.

Even in the aftermath, and even in capitalism’s own terms, that austerian answer – further sacrifice more of those already sacrificed to keep capitalism going – is far from straightforwardly appealing. This is the dilemma of the war economy. If anything, the severity of the crisis indicates the need for permanent, aggressive countercyclical state activism. The politics of pandemics, moreover, will necessitate a state with far more resilience – thus ‘slack’, thus ‘waste’ in neoliberal idiom – than has hitherto been permitted. 

It is on such matters that the right is divided, in a way that it wasn’t in 2008. Against Osborne and his ilk, leading Tories, like Bernard Jenkins, are calling for a period of intense statism, and are backed by sectors of pro-capitalist opinion in the Financial Times. Right Keynesianism, predicated on a new digital productivism, appears to be emerging as a preferred option. 

More saliently, the true organic intellectuals of capital – central banks, investment banks, and their technocrats – are displaying an uncharacteristic ambivalence about renewed austerity. While, predictably, worrying about ‘fiscal slippage’, the concern of Morgan Stanley, Goldman Sachs, and Bank of America Merrill Lynch, is that the system – even in Latin America, the original proving ground of austerity – cannot sustain another assault by the axemen. Bank of America Merrill Lynch expects a new policy regime, a transition from ‘from a regime of tight fiscal and loose monetary policy, to a regime of loose fiscal and even looser monetary policy’. In Ireland, the former chief economist at the Bank of Ireland, Jim Power, argues that renewed austerity would be ‘economic suicide’. In the UK, even Boris Johnson refuses to say the A-word, and insists in public that the government does not believe it will be necessary.

If austerity is not the ‘obvious’ capitalist response that it was in 2008, nor can Brexit any longer play the cohering role in policy-making that it was supposed by now to do before the pandemic. Although the government’s agenda was relatively thin, it had a certain logic: leading the UK out of its entanglement in a regional trading bloc, liberating it from regulatory restrictions and the jurisdiction of European courts, the British state could embark on a freewheeling global strategy based on striking bilateral trade deals. It could offer terms and conditions, howsoever to the detriment of labour and environment, that it would not be able to offer inside the EU. Of course, that approach was always dubious: aside from the Trump administration, few national states were interested in handing the UK fresh export markets. India didn’t care, China wasn’t interested, the Commonwealth idea was a fantasy. The world was already deglobalising, so the opportunities were not piling up. What the pandemic has just done is turbocharged deglobalisation.

Shipping, the infrastructural crux of globalisation, responsible for $12 trillion of world trade, was in decline before the pandemic. It was under pressure from Trump’s trade war on China, new regulatory regimes driven by Washington’s desire to crush sanction-busters, and a general sag in world trade. Now it is in crisis. Trade is expected to fall by 13–20 per cent, as ports are closed, cargo is left to rot, and seafarers are stranded in remote countries, on board vessels, or stuck in hotels, without pay. 

The fragility of long-range, just-in-time global supply chains having been exposed, the industry trend will probably be toward more digitised surveillance and roboticisation on the one hand, with less reliance on face-to-face contact, and a search for shorter routes and shorter supply chains on the other. Countries that can will have to build up national resilience, so that they can source essential goods quickly in the event that shipping grinds to a halt. Rather than globalising further, trading systems are likely to be regionalised – a long-term trend exacerbated by Covid-19. So, while pandemic management will require more international cooperation, existing trends toward deglobalisation in the economy are likely to be accelerated far beyond anything Trump achieved. What does British capitalism, likely to be one of the economies hardest hit by the pandemic, do in such circumstances? Open more freeports? It is hard to see how it does not, by force of circumstance, become one of the more statist economies.

A similar problem confronts the government on an issue that it might not have expected: fossil fuels. The Conservatives have fully internalised the language of climate governance, integrating it in a pro-capitalist agenda that allows it to develop fossil-based industry unimpeded. With a formal target of ‘zero net emissions’ by 2050, it pursues the normal strategy of restating this commitment while implementing policies – Heathrow expansion, for example – that make it impossible to meet. The government also let it be known, particularly to the right-wing press, that freedom from ‘Brussels bureaucrats’ would liberate industry from many of the EU’s exiguous climate rules. This would limit space for popular pressure, empower the denialist fringe, and might help industry undercut European competitors. However, the pandemic has abruptly brought forward an already emerging issue with fossil fuels that not even the most short-termist administrations can overlook.

The oil industry now expects ‘peak demand’ to arrive sooner than expected, while the extraction cost of oil and gas relative to yield, is soaring. If deglobalisation advances, shipping industries contract, and aviation becomes less common – all highly plausible in the near future – then the growth expected by fossil capitalists up to 2040 is unlikely to materialise. If the profit advantage that fossil fuels have over renewables is apt to disappear soon, then the economic advantage of burning as if there is no tomorrow disappears too. This is perhaps why elements of pro-capitalist opinion are pushing for some sort of green interventionism, congruent with wider calls for sustained economic intervention. 

There is also political pressure for recovery plans to include proposals for decarbonisation. The EU is vaunting its own ‘Green Deal’.  In the UK, a cross-party group of MPs is demanding that the government impose carbon-cutting conditions on any aviation industry bailout. These are, as yet, straws in the wind. But they also indicate a political opportunity window that could be exploited by opposition forces – and suggest that a slash and burn strategy for British capital might not be tenable.

In short, with the two lynchpins of late capitalist growth – globalisation powered by fossil burning – in crisis, this is uncharted territory. As at the start of the 2008 crisis, the popular response has been to rally round existing authorities, and hope – in vain – that their trust is repaid with a minimum of fairness. However, it is clear that global capitalism will need to be drastically restructured, not only to eliminate glaring dysfunctions exposed by the pandemic crisis, but to prevent another from occurring, to cause similar chaos. This comprehensive crisis of capitalist civilisation reaches right into its biophysical limits. With no good options for any government, this will likely be profoundly destabilising for the reactionary forces whose power was in the process of being consolidated. 

The danger is that governing paralysis, soaring unemployment and poverty, and growing state authoritarianism will create fecund ground for forces well to the right of Trump, Johnson and Bolsonaro. If the left does not swiftly recover from its recent defeats, organise behind a radical recovery programme, and coordinate the sorts of militant forces capable of supporting it, then the beneficiaries will be the atomic forces congealing around 5G conspiracism, anti-lockdown protests, and worse.