Coronavirus and Capitalism: Unveilings, Expansions, & Rupture

By Maya Bhardwaj

The coronavirus pandemic has upended much of the constants of modern capitalism. However, its impacts have not only unveiled and in some cases exacerbated capitalism’s excesses – it has also opened space for a potential troubling of and resistance to capitalism as a given. This moment under lockdown is a key political moment, where if the global Left is able to cohere an analysis about racialized and gendered capitalism through the increased visibility of economic and structural violence under coronavirus, it may then be able to reshape the narrative around more caring and regenerative socioeconomic alternatives and advocate for deep and transformative systems change.

INTRODUCTION

It has been over 150 years since Karl Marx upended neoclassical political economy with his analysis of labour and exploitation under capitalism in Das Kapital, and over 100 years since these principles sparked leftist revolutions across the world. However, following the collapse of the Eastern Bloc and many socialist governments in Africa, Asia, and the Americas, capitalism has maintained its global stranglehold. This has continued amidst the hurricanes, wildfires, and pollution of climate change; mass migration and border camps; endless wars provoked by oil and the military industrial complex; and worker and human rights abuses within most major corporations.


Added to this, coronavirus has heightened the volatility of labour, trade, and bordering in modern-day capitalism, foreshadowing recession and provoking questions on capitalism’s viability. In this paper, I will apply the lens of Marxist political economy to disruptions caused by the coronavirus pandemic in order to explain how COVID-19 has revealed and exacerbated instability, worker exploitation, and alienation under modern-day capitalism. By applying these theories to the disruption engendered by the pandemic, I argue that we can learn how to shift from capitalism’s instability and violence to imagine a more equitable and sustainable system.


CAPITALISM, INSTABILITY, AND CORONAVIRUS

Coronavirus has likely sparked a global recession. In Marxist crisis theory, this is not because the free market, ordinarily self-regulating, has experienced disrupted global capital and commodity flows: it is because crisis is inherent to global capitalism. Marxists argue that crises can be triggered from overproduction, underconsumption, overaccumulation and falling profit, and disproportionality alike. Most of these crises include disruption in the circulation of capital and the tendency of the rate of profit to fall. Here, employers overinvest in constant capital or physical accoutrements in the factory to boost productivity, disregarding that the true generator of increased capital is labour, or variable capital. This triggers a ratio of higher investment to profit, so the rate of profit falls. When this happens, and crises ensue, the capitalist class is incentivized to increase labour exploitation, expand to new markets, or destroy old productive forces - provoking cycles of crisis.[1]


The coronavirus has revealed these cycles of crisis in neoliberal globalized capitalism, likely triggering recession following 2008’s financial sector collapse and the subsequent breakdown of circuits of capital propped up by Wall Street and the housing market’s financialization.[2] With COVID-19, millions lose jobs, stores shut due to lockdowns, and tourism ceases, massive sums of money are no longer reinvested into the economy through consumption as disposable income dries up, causing a crisis of underconsumption due to disruption of capital accumulation.


Simultaneously, the housing market, manufacturing, and garment industries are experiencing crises of overproduction with a glut of goods with slashed prices on the open market, while companies withhold wages or, due to quarantines, lose total access to the labour inputs that they are dependent on to create value. As the labour pool diminishes and freedom of mobility stops, most factories have ground to a halt, triggering a crash in global stock markets further exacerbated by the bailouts and interest rate cuts following the 2008 recession.[3] This in turn triggers a crisis of overaccumulation, with limited spaces of investment for profit. Border closures and the lockdown of trade has left many countries, particularly those in the Global South but also across Europe, struggling with a lack of healthcare supplies like hospital beds, tests, and ventilators. The legacy of imperialism, forced dependence on foreign aid, and the flooding of Southern markets with cheap and subsidized commodities under free trade agreements mean some countries in the Global South are without basic goods.[4]


Diminished remittances to the Global South may imperil millions of families who depend on this international capital flow and may even result in a “cash crunch” for many cash-poor economies. Concurrently, an accumulation of global debts may place already shaky national economies reeling from 2008 in peril for years to come, especially as governments plan to bail out myriad industries.[5]


COVID-19 also threatens emerging markets and replicates neo-imperialist patterns. Countries with high early supply chain production levels, like Mexico, are being pressured to reopen factories in order to funnel goods into the Global North.[6] In response to the pandemic, the World Bank is prescribing further structural reforms - disregarding that its past reforms to bring Southern markets into the neoliberal global economy have made their economies more imperiled by the virus.[7]


Trump has neatly called coronavirus “the Chinese Disease” while disregarding America’s dependence on Chinese labour, and the US’s non-citizen-only travel ban has expanded xenophobia and disrupted US-based international companies without stopping disease spread.[8]


But in some ways, COVID-19 has disrupted the extraction and imperialism that capitalism engenders. Countries in the Global South have shut their borders to Global North travelers and businesses, citing Europe and the US as the new epicenters for disease spread.[9] And the drying up of demand for commodity goods has crashed oil prices, reduced deforestation, and massively cut air and water pollution from air travel, perhaps indicating that not only instability and environmental devastation are inherent to capitalism, but also that transitioning from capitalism can provide both economic and ecological stability.[10]


EXPLOITATION UNDER CAPITALISM AND CORONAVIRUS

Much of the instability within capitalism that COVID-19 provoked derives from disrupted labour patterns. This falls neatly within the Marxist theory that value derives from labour - that is, the exchange value produced by selling goods on the market comes from the labour inputs and time required to produce these commodities. But, since capitalists need to extract surplus value, or profit, from the value that workers create, they will inherently find ways to cut wage costs or pass on costs to workers in other ways. Because workers do not receive the full value of their labour, they are unable to access the goods they produce, either by deriving use value from using them, or by selling or obtaining them on the market. Hence, it is not capitalist efficiency or supply and demand that determines how much profit the capitalist will make - it is how much surplus value they can extract from the labour force. In essence, this is Marx’s theory of exploitation.[11]


This exploitation precedes COVID-19, through unpaid or withheld worker wages, increased hours or faster production demanded without increased pay, or unstable or unsafe conditions that allow capitalists to cut costs and extract further surplus value. Workers cannot avoid this exploitation because they cannot opt out or choose to wait for higher value wages, as they lack access to the means of production or the decisions around what is produced. Additionally, Marx argues that extracting surplus value demands that there is surplus labour, or a pool of unemployed workers willing to take on poorly paid or exploitative work.[12] But prior to the pandemic, many of these conditions were obscured, ignored or normalized. Post-pandemic, employers can blame exploitation on the burdens of production in a pandemic, and can expand exploitation and increase profit due to a greater pool of unemployed labour caused by mass layoffs where workers will stay silent in order to avoid being replaced.


Amazon typifies this pattern of already existing worker exploitation expanding and clarifying post-pandemic. While Jeff Bezos, at a net worth of over 138 billion USD, is one of the 500 richest people in the world, most Amazon warehouse workers make just above the US minimum wage. Bezos makes an Amazon worker’s yearly salary from extraction of worker labour and reinvestment of capital in stocks, in under fifteen seconds.[13] Amazon extracts additional surplus value from workers through discount gimmicks and undercutting competitors by offering cheaper products contingent on lower-paid labour. Prior to COVID-19, workers had already been pushing back: workers had identified Bezos’s oversized wealth as deriving directly from their experience of low wages, endless hours without breaks, unsustainable workloads, workplace medical emergencies, suicides, and anti-organizing intimidation. Many of the pushes for living wages and unionization worldwide were fueled by this articulation, plus the argument that Bezos could easily increase worker wages for workers without impacting Amazon’s financial solvency or Bezos’s personal assets.[14]


Post-pandemic, Amazon has used the pandemic as a justification for increased exploitation. Arguing that lockdowns have increased online demand, and that implementing health measures increases costs and lowers production, Amazon has refused to close American warehouses despite confirmed cases of COVID-19 in nearly 130 workplaces. Some warehouses have even enacted mandatory overtime. When warehouses have caved to pressure to close, Amazon has required American workers to use their sick or vacation leave, and to take unpaid leave after that. While over 300 workers have walked out, workers who have been perceived as walkout organizers, like Chris Smalls in New York, have been targeted for individual medical quarantine or early termination.[15] In France, in response to governmental and union pushes for better health and labour standards, Amazon opted to shutter its warehouses completely.[16] Amidst all of this, Amazon’s profits have increased by over 25% during lockdown - a clear case of worker exploitation allowing capitalists to reap greater profit.[17]


Amazon is not unique in its exploitation of workers, pre- or post-pandemic: for most workers, exploitation characterizes modern-day labour, and shutdowns and layoffs during the pandemic have further stifled dissent as workers must accept rapidly worsening conditions to sell their labour at all. In Bangladesh, multinational apparel companies have used the excuse of unsold product due to lockdown to withhold wages from garment workers.


While brands like Uniqlo and Gap can take the financial hit, surplus labour and worker precarity mean they can pass the costs of disrupted distribution to a replaceable labour force.[18] In the global gig economy, where many workers already experience heightened precarity due to their status as independent contractors, companies without employees can avoid increased costs from health measures or sick leave during the pandemic. Uber, already under fire for defining itself as a platform rather than an employer - hence avoiding costs like providing drivers security, protections, or paid leave - has bypassed governmental requirements to provide workers time off or protective gear by labeling drivers independent contractors and thus responsible for their own health. Because workers do not qualify as employees, they also do not qualify for many governmental furlough schemes or other safety nets. Infection rates for Uber and other rideshare drivers have skyrocketed, and without protections like sick pay, workers who cannot take time off to self-isolate have died.[19] Similarly, for delivery workers labeled independent contractors, companies like Deliveroo have provided contactless delivery to assuage customer fears, but require workers to risk exposure at food preparation sites. With increased food delivery demand, and avoiding the costs of acknowledging delivery workers as workers by labeling them contractors and foregoing providing PPE, companies reap massively increased profits. The migrant, undocumented, and non-local language-speaking status of many of these workers means employers can further exploit them as workers cannot access employment alternatives and as the state actively sustains workers’ status as a precarious and manipulable surplus labour force through incarceration, deportation, and fear.[20]


Under neoliberal influence on the public sector, migrants and other precarious workforce exploitation has been expanded during the coronavirus pandemic by the state, subverting Marx’s focus on private and for-profit employers. In India, state governments shut down interstate trains and roads after meeting with state property developers, trapping migrants to perform unsafe and poorly compensated labour for the state, or travel home on foot.[21] In state-run healthcare systems worldwide, workers are being asked to serve endless hours without adequate protective equipment or overtime pay at the same time that governments fund bailouts for airlines and cruise lines,[22] provoking nurses worldwide - and doctors in Pakistan - to strike.[23] Cleaners in government buildings in the UK have died from COVID-19 due to lack of protections from outsourcing contractors and direct employers alike.[24] Public transit workers have faced infection and death worldwide, with many forced to work without PPE or lose employment.[25]


In these cases, public sector workers are exploited not merely because their labour time and value is necessary, but because neoliberalism has provoked governments to downsize services and public funds, transferring duties to the private sector. When crises hit, governments pass on stress to the system to workers by invoking morality under crisis, masking neglect of worker well-being and poor preparation for crisis. Hence, even as a non-profit employer, the state can exploit workers through rent-seeking behavior. And the pandemic has provided cover for increased privatization of services, including UK NHS expanded turnover to consultants and private healthcare.[26] Neoliberalism explains this form of worker exploitation, where the state’s focus - like private entities - shifts from providing service to maintaining profit.


CAPITALIST ALIENATION AND CORONAVIRUS

Beyond workplace exploitation, Marx also explains exploitation and class stratification through the concept of alienation. Workers are severed from the means of production and the product of their labour time, thus losing autonomy over their purpose or “species-essence.” Subverting proletarian labour for exchange value and profit, rather than creating use value, separates workers from their labour, their bodies, and each other. This falsely centers relations with objects and obstructs understanding the true relations between humans. This obscuring of relations segregates the proletariat from other classes and hampers meaningful resistance against the capitalist class by replacing interdependent relations between workers with the market. Capitalism creates and requires alienation to exploit a subservient labour force with limited access to rebellion, and to maximize consumers who turn to the market because they cannot access their own production.[27]


We can chart alienation and class stratification’s growth through a dialectical materialist lens in human and class relations from capitalism’s rise through today. The dispossession and primitive accumulation that pushed peasantry into urbanized proletariat in Europe’s Industrial Revolution; informalization and today’s gig economy; and the development of “knowledge workers”[28] producing intangible goods, can all be read as alienation from use value. Urbanization removed humans from rural ecology; housing instability, insufficient income, and gentrification now break up communities formed by the working-class today. This destruction of community also normalizes competition rather than mutual aid as humans lose relationship to each other and instead compete for jobs, acclaim, and social power on the market. Commodity fetishism furthers alienation and competition by centering consumption as core to identity, messages reproduced in media, advertising, and pop culture.


Losing human social relations also obscures capitalism’s unnaturalness and the possibility of alternatives, centering capitalist realism - the idea that capitalism is the only option.[29