See closely, right now welfare based state-centric model is following corona step by step! There is no space for laissez-faire economy anymore. This plague is asking for reforms as the current governance models of most of countries, especially based on free-market ideology, have failed to manage this crisis immediately.
For better or worse, corona outbreak is going to restructure the world in a spectacular way due to its huge scale. This crisis has revised the memories of Great Depression in 1930s, Oil Crisis of 1970s, and Global Financial Crisis of 2008. All of these events have ignited debates and their repercussions have led to a significant shift in market based ideological framework of the economies. Evidently, COVID-19 seems to be flip the current world order and is harbingering toward something new.
Before 1930s, economists were inclined toward ‘no government intervention’ model but Great Depression of 1930s introduced a shift toward ‘state intervention’ framework, as preached by J.M. Keynes. Later, Oil Crisis of 1970s gave a hard blow to Keynesian economics and thus monetarism got strong grounds, as preached by Milton Friedman. While the Global Financial Crisis of 2008 exposed the vulnerabilities of liberalized and deregulated financial markets and the worlds started reorientation toward regularized financial markets.
Now with current outbreak of coronavirus, world is again searching for new meaning and new solutions. Broader questions are being raised about the governance systems, their foundational values and their philosophies on crisis management all over the world. Right now, the free market models based on self-centric behavior have proved catastrophic.
When this outbreak loomed at first place in China, the ruling communist party imposed aggressive lockdown in Wuhan to stop the contagion. As in its governance model, social benefits are valued more than individual benefits. This lockdown actually provided facility to other provinces to get prepare for the prevention and containment of this virus. The speed at which China has controlled the virus and jumpstarted its economy has left other countries in awe.
In China, testing and treatment were made free and new temporary hospitals were constructed in recorded time in epidemic hotspots. All of this was possible due to state controlled society that preferred humanity over profits.
Apparently, the US hardcore neoliberal capitalist model proved ill-suited and ill-equipped to control this outbreak. The focus of its healthcare system is on profits and not over marginal social benefit. This system is neither having universal health care nor federally guaranteed paid sick leaves for workers. How can an epidemic be contained, if infected people aren’t able to afford test, medicine and quarantine stay time.
What if even pharmacies are free to set prices of vaccines and drugs as well? Private pharmaceutical companies would not produce a cure as it’s not profitable for them. Why would a private firm invest such a huge amount to discover a drug that would eventually end the patients of this virus? China can test 1.6 million people each week, according to WHO estimates, while only a few thousand have been lab tested for virus in US. This crisis has exposed the indisposition and dissension in US governance system like never before.
The measures US has taken to deal with current outbreak include nationalizing the health system, offering tax deferrals to airlines and cruise lines, and release of funds to pay for treatment of uninsured infected people. But all these measures aren’t aligning with the spirit of free-market capitalism. It might be called as democratic socialism but not free market capitalism. To cope with this crisis, US is itself moving toward an economic system that is based on morality and community welfare.
The Chinese socialism based governance model has successfully worked against COVID-19 and thus is accruing grounds for China in global leadership. China has been commended by WHO for its speed, transparency and competency with which it has tackled this outbreak. Now, China is sending aid to countries around world, and is helping in meeting global medical demand while US is unable to manage for itself only. On the same time, imposition of EU travel bans without taking European leaders into confidence, further tightening of sanctions on Iran, cutting aid to Afghanistan over peace talk-impasse, is further posing question over economic ideology of US – as Corona is test of humanity as well.
Capitalism right now is proving itself as crime against humanity. A system in which tax cuts to huge corporations and few wealthy businessmen are preferred over human needs.
And now it is proven that fight against this virus and future viral infections can’t be really won unless governments fund a public sector that values public health over profits. Politics seems to reorient itself toward investment in public goods and services especially for health, as this crisis has highlighted the critical value of robust safety nets. Welfare and collective ethos based economic and governance models are global inspirations. Now and even before, such market paradigms have already been projected, as, latest Noble prize winner in field of Economics asked for welfare-based reforms in educational and health sector for poverty alleviation.