"A global pandemic can only be overcome with a global remedy"
x Mario Hernández / Claudio Katz: Interview with Claudio Katz, Marxist economist :: "The problem is not the pandemic, but capitalism"
I was stung by a reflection from the general delegate of the Garrahan Hospital, from the Nursing sector, Raquel Leyra, who told me that the problem is not the pandemic, but capitalism.
Of course.
We need thousands of workers who think like that, so maybe what he imagined at the beginning of the pandemic will happen, I think wrongly, Slavoj Zizek, who said that we were going towards communism.
What happens is that the scene has changed. The pandemic lasts longer than expected with rebounds that affect the whole world and reached a viralization according to globalization, urbanization, overcrowding, the destruction of habitat that contemporary capitalism generated, that is why what the partner you dated.
The issue is that we are now in a new scenario where what we are beginning to discuss is the vaccine, because it is increasingly necessary to solve this pandemic and the only way to do it is by accelerating global cooperation.
A global pandemic can only be overcome with a global remedy. And it is the complete opposite of what the great powers are doing, starting with Trump who encourages competition for benefits, in partnership with companies and States. All are striving to arrive first and secure the patent and the contracts, instead of collaborating and consecrating a public good, they rule the competition for profit at the expense of health.
The large laboratories are making fortunes without any risk, without any investment because all the research funds are provided by the State and the taxpayers, and nobody explains how those funds are distributed in contracts as dark as they are secret. Everything indicates that the vaccine will be paid twice, with the subsidy from the States to make it, and with the sale price. And to top it all we have this national vaccine war at the expense of global public health. Especially Trump, who is focused on prioritizing the vaccine for US citizens, hoarding remedies, disputing contracts with European companies. It is in a business trade war for the vaccine that is the opposite of what the world needs to overcome the pandemic. This is Trump, we already know him.
Crimes Committed by Large Pharmaceutical Companies
Basically Trump ends his presidency with great failures in all areas, I think there is the superficial image of a man who transgressed the rules, a kind of madman without a compass but Trump had a very defined plan that was to use the military geopolitical power of the United States. UU to regain the economic leadership of his country. And that is why he promoted this mercantilist commercial agenda to try to take advantage of the advantages that the United States still has in finance and technology to see if it regained economic power.
He hoped to subdue Europe, Japan and surpass China. And precisely China was its main failure, it failed to stop it, it continued to advance. Nor did the accompaniment of Europe against China, of the Middle East countries last. And not even on the geopolitical level, because Trump used all threats, resorted to warmongering rhetoric, accentuated the harassment in front of China but was very cautious, because he carried the heavy legacy of Bush's military failures.
Finally he spoke a lot but was very careful in the concrete policy towards Syria, Afghanistan, North Korea, Iran. It was a long way from the geopolitical victories that Reagan achieved or the division of the political field that Nixon achieved. It also ends with a rebellion of African Americans that has revolutionized the country, very popular multiracial demonstrations and, above all, it is trying to hide its criminal irresponsibility in handling the pandemic that has left a record of infected and dead. I believe that in synthesis he has failed and it seems to me very unlikely that he will achieve reelection.
You have to be careful because the North American electoral system is so indirect, you vote by electoral college, now voting by mail is going to have an important weight, you can do all kinds of tricks and outrages, and Trump is used to adversity. But it would seem that it is very difficult for him to achieve re-election. Whether Trump or Biden wins, it seems to me that the central problem continues to be China. It is the great unknown of the next few years, what will happen to China. More than looking to see if it is Biden or Trump, because deep down the two are going to have a common strategy, with nuances, to try to stop China. The future of China is much more unpredictable and difficult, because it was successful in managing the pandemic, it started there and they controlled it, they have had fewer victims than Europe, the United States, they have managed to manage social distancing, restriction of movement , etc.
But do not forget that China originated the pandemic and exported the virus because it is the center of global accumulation and because it accepted all the norms of capitalism that lead to a pandemic. So it is a double sided. It controlled it but originated it because it was connected with capitalist accumulation. I say that the great unknown is China, because how it will do to maintain the global expansion project of the Silk Road, when there is a global depression.
There are three fields where the US-China confrontation will continue
Obviously, that does not replace it, as had been proposed, Xi Jinping's program with the development of the domestic market.
That is precisely what they could not do, because China had a spectacular transformation in recent decades, but in 2008, after having grown so much, the growth model they had was broken, which was a growth model associated with the United States, one had a deficit commercial the other surplus, one was creditor the other debtor; everything was going well until 2008 and there the contradictions of China came to the fore, overinvestment, overproduction and they tried to make the internal decoupling.
The housing bubble too.
Exact. And the indebtedness and the shadow banks, and they tried to decouple with internal growth and a public works plan to replace the external market but in 2012, when Xi Jinping arrives, they realize that this does not work and then comes the Route of the silk. Again trying an exit abroad and there come the great conflicts with the United States.
First Obama, and then Trump they say "this is where you came" and that conflict will continue. Perhaps not so much if Biden wins on the commercial plane, because it has been shown after Trump that it is very difficult to deal with tariffs and disarm the entire network of transnational companies and supplies, but there are three fields where the confrontation will continue.
First the 5G technology (the internet of things), the currency because China is seeking to internationalize and make the Yuan convertible (it is still far away because it is very difficult) and the geopolitical confrontation will continue because there the issue is whether China will to be able to break the leadership of a western bloc that if Biden wins, he will surely try to rebuild.
When talking about China, one gets lost in all this and forgets what I think is the most important, which is the internal question of China, which has two dimensions, a policy of very strong disputes between power, where there are two large sectors , the coast and the interior. One very neoliberal the other wants internal accumulation and Xi Jinping trying to mediate.
But the most important thing is the social struggle. You wrote about this, and you know the subject (*). And among the things that I was reading at this time, it struck me that there are many descriptions of a new proletariat.
They are not the old peasants of 20 or 30 years ago.
Of course, the generation changed and the workers' struggle began for social demands, independent unions, they are quite successful, in general the managers are quite afraid of them and they concede.
That brings us to a kind of internal China conclusion. I believe that there is a struggle at the bottom of three political projects. It is not a homogeneous world and one can speak of China as if it were a kind of unitary bloc. There is a current of the very neoliberal leadership with an ideology of free trade, of globalist optimism that wants to strengthen the capitalist class in formation.
Then there is another opposite sector that wants a state capitalism, very based on the weight of the current structure and there is a current of what is called "the new Chinese left" that proposes a renewal of the socialist project and it is very interesting to start reading them .
The things they do are becoming increasingly known in the West, because although they all have some connection with the old Maoism, it is with a view of generating a lot of criticism of Maoism. But a socialist project, of non-capitalist modernization, of resuming proposals of internationalism, of anti-imperialism. I think we have to start looking at China on all levels from now on.
A hundred years ago we were the breadbasket of the world in relation to the exports that were made to England and now we are going to be a kind of pig factory of the world. In relation to this idea of production and export to China of pigs.
Each Latin American country has another primarized specialization. We are going down the level, we had soybeans.
At the beginning of the last century the cattle.
And now they take us down another step. I think that is more general. Obviously Latin America is a source of supply of raw materials for China. I would say not as geopolitical as Africa.
China is very cautious, it wants a purely economic relationship so as not to clash directly with the United States, but it is already the main investor, importer and partner of large countries such as Brazil or Argentina.
And notice that in the pandemic he had an intelligent attitude towards Latin America, because unlike Trump, he offered aid, respirators, now credits and if they discover the vaccine first, they say they will do it as a global public good.
They have an extremely astute policy, but that does not change that they want free trade agreements and with them they sell manufactured products and buy raw materials from us and, therefore, all the problems of Latin America that are going to get much worse from for now, because beware that the pandemic is going to leave a tremendous scar throughout the region.
First, because it did not pass by, it settled here, throughout the region, with an enormous mortality rate. It was shown that having tests did not reduce the number of deaths. Chile and Peru did many tests, but as they did not have primary care for those affected or social assistance from the State, the dead are in the streets and in Peru there is sale of oxygen among the population that is about to die.
Also in Ecuador and Bolivia.
And then social inequality will deepen because it hits the informal hard, because it increases family debts, because there is a digital gap between the sector of boys who are connected and half of the Latin American children who lost the school year, and then it will have an economic collapse much worse than that of the core countries.
China, USA, Europe are going to fall 5% but Latin America is going to fall 10%. And ECLAC the other day gave a terrifying report, said that in the region 2,700,000 companies will be destroyed, that the unemployed will increase by 11,000,000 and poverty will increase by 45,000,000 people. It is a horror scene.
So the structural problems, this relationship with China and the US are going to get more serious, on two different levels, because with the US the main problem is the imperial attitude.
The United States with Trump or Biden has a state policy, it is the Monroe doctrine, it is the Fourth Fleet, it is the fight against drug trafficking, it is the military bases in Colombia, managing the embassies, promoting coups d'état as in Bolivia with an alliance rightist. With the US, before anything else, there is the problem of how we resist the harassment of Venezuela and Cuba and the US military policy of treating us as the Ministry of Colonies.
But with China there is the big problem, of another type, because we do not have a problem of resistance to military geopolitical harassment, but there is the problem of how we negotiate in another way, because if each country continues to negotiate for its own it will be pure primarization. Until we form a bloc and create another axis of relationship between the entire region and China.
The bulk of the debt with the bondholders is pedaling forward, there is a short-term relief and a long-term nightmare
I ask you to reflect on the agreement of the Argentine Government with the bondholders.
Basically the arrangement is a postponement of payments. All the bulk of the debt with the bondholders is pedaling forward, there is a short-term relief and a long-term nightmare. There is a respite now and a suffocation for a while. With what repeats a history that we know, the bondholders are going to win in the long term, because even if they now have a haircut, they are going to end up obtaining a higher remuneration than any other debtor and it is the same as always, because again Argentina You get into debt, there is capital flight, there is a default, the bonds are exchanged, the new bonds are legitimized, there is a respite, then you can't pay and you get into debt again.
And as always, the right-wing governments are the ones that borrow and the progressives the ones that rescue. It is the opposite of what is usually thought. It is not that progressive governments get into debt, it is the right, MartÃnez de Hoz, Cavallo, Macri and then Kirchner comes and now Alberto and the rescue comes. Some make the scam and others validate it.
The problem is going to be more serious because the economy is shattered, we are going to have a 10% drop in GDP and before we have a break, when we have to pay this it will be very hard.
I also think that it is a mistake to think that this was needed to grow. Argentina is going to fall so much that after a collapse like the one we are going to have, it will grow, the issue is how it grows and in favor of whom it grows. It's like when we had the arrangement with the vultures, which was claimed to be a condition for growth. It is not like that, it is a condition to fix a type of economic model.
I believe that what many colleagues have said, when they celebrate Argentina loses, when the bondholders are happy, we lost, is true. Note that those who are happy are not only those of the governing sector, Caputo is also happy and that is because he will not go to prison, because with this exchange what he did is legitimized.
It was said that there was a capital flight, but since the bonds that are reported are now exchanged, the complaint no longer makes sense if next month the bond with which the fraud was made is diluted into a new bond and the new holder it is not going to take care of that problem. We dragged a problem and we will have to discuss the same thing again, the audit.
And now comes the negotiation with the IMF that is going to be different.
But the IMF is unlikely to impose a short-term payment on Argentina.
I say this in the sense that it requires some type of measure that of course the private bondholders did not get into that. I am talking about labor, pension, and tax reform.
Of course, the IMF's conditions are not going to come from the side of "get paid now." In addition, the IMF does not discuss cuts or the price of the new bond. The IMF is paid for everything and nobody disputes it. A debt that was a scam, which they themselves say was for Macri to win the elections. They acknowledge it publicly. Everything is going to be like the great debt that we all have to pay. And the issue will be later, the IMF now has a benevolent face, it says that public spending must be made, that it must grow, wait for the world economy to stabilize and the IMF will return as usual.
