Neither confinement nor pandemic are the cause of the catastrophe
By Juan Torres López: Business leaders have been warning for months of the danger that a new confinement could produce an "economic catastrophe" and I think they are wrong.
I do agree that there can be a catastrophic collapse of economies, but not for that reason.
Confinement is terrible for the economy. There is no doubt. But that would not be what could lead to the greatest non-war economic disaster in contemporary history.
We have already been able to verify that the first confinement produced an unparalleled deterioration in economic activity, the ruin of millions of companies around the world, despite the fact that governments have spent on aid of all kinds to maintain their income and also the out of millions of homes, about 12 trillion dollars, according to estimates by various international organizations. In Spain, the state debt has never increased so rapidly because never have Spanish companies received more aid, in less time and under more generous conditions. Although, even so, insufficient.
One does not have to be very perceptive to understand that a second confinement, even if it was somewhat less strict than the previous one, would be even worse for everyone, for companies, for state finances and for families, in all parts of the world.
But the catastrophe, as I say, is not produced by confinement and not even by the pandemic.
The measures that are inevitable to take in the face of Covid-19, from the lightest distancing to the most radical confinement, are not the problem to avoid, as business leaders believe, but rather remedies for the problem. If the pandemic is followed by an economic catastrophe, as it is possible that it will happen if we continue without giving adequate responses, it will not be because there have been one or more confinements but because our societies have not been endowed with the resources to face a type of damage that It is known that they can occur at any time, as has happened with those generated by the spread of a coronavirus, something that had been warned many times that it was going to happen.
The catastrophe derives from the fact that health systems and public services in general have been dismantled in previous years, the only ones that can be in a position to deal with disasters of this type because the private ones, logically and even legitimately, are dedicated to obtaining benefits And this is not achieved by serving the entire population equally, whether or not they have resources, as must be done in an emergency like the one we suffer.
The catastrophe comes from the fact that we have decided to accumulate combat planes, tanks, missiles, ships armed to the flag ... in the face of the more than hypothetical danger of a military attack and we have not invested in the forecast of more probable damages, such as those produced by pandemics or natural disasters.
The catastrophe occurs because basic research has not been funded in the public sector that allows private innovation later, and because we have left the development of basic products, such as drugs and vaccines that we now urgently need, to be subordinated to private profit.
The catastrophe is going to occur because the States and central banks have been renounced to ultimately take charge of the financing of what the markets cannot solve, as paradigmatically occurs with the effects of a natural disaster, of emergencies. or pandemics like the one we are experiencing. The catastrophe occurs because it was established that private banks financed governments at the cost of multiplying interest-based debt, so that when public financing is inexcusably needed to help companies, it is in an extreme situation and, then, or it is impossible to help them further, or it can only be helped at the cost of an increase in unsustainable debt that will sink economies for decades.
At the rate we are going, an economic catastrophe is going to actually occur, but not because a new confinement is decreed but because the stock markets are going to explode, taking the financial sector and then all the economies after them, because they are artificially inflated with an investment. It is speculative that has nothing to do with the financial and real needs of companies, and because world banks are insolvent and only live by artificially increasing debt and based on privileges, aid and public favors.
In short, we are going to a catastrophe, but for a simple reason that is not wanted to be put on the table.
Human beings do not only have problems that can be solved through commercial exchange, seeking private profit and starting businesses to earn money by satisfying the needs of the people.
It is true that a large part of our problems can be solved, better or worse depending on the circumstances, thanks to the markets; thanks to the initiative of the most innovative, entrepreneurial subjects or those with the greatest attraction to risk; creating companies that, seeking the interests of their owners, satisfy a part of the general interest ... in short, thanks to the fact that capitalism is very powerful when it comes to solving problems that can be solved through markets, through the private appropriation of resources , the profit motive and the accumulation of capital. But, whether we like it or not, it turns out that human beings and society in general have other problems that it is impossible to solve through this type of procedure and that is what business leaders do not understand even when faced with a pandemic and that is why they do nothing but ask that taxes be eliminated and the State weakened.
When we consider dedicating resources to the military defense of the nation, we do not resort to the market, hoping that each one will pay for the part of defense that interests them the most so that an optimal common defense is achieved. When we have to organize the police, the administration of justice, the management of traffic… we do not trust private companies or the desire for profit, nor do we trust the market that can give such good results in other areas. Defense, justice, political representation and many other resources as essential as these are common goods that either cannot be allocated through markets or, if it could, it would only be at the cost of inefficiencies and unacceptable asymmetries.
The catastrophe that is coming is the consequence that our civilization has privatized and subordinated to the individual interest (of a few) what is property and collective interest and does not dedicate the necessary resources to maintain the common goods that allow to save life, economy and also companies when - as now in the middle of a pandemic - markets are useless and the profit motive is even counterproductive. We don't want to spend money protecting the environment and nature bleeds all around us. We have not wanted the States to have their own financing through central banks or guarantee that credit is considered an essential public good for the economy to function, and the debt has been overwhelmed and now we cannot give thousands of companies what they really need in the middle of a health emergency: aid and money for nothing. We have considered the State the source of all problems and we have tied its hands in order not to pay taxes and now we ask it to save us with unlimited aid. We have allowed the powerful to dismantle democracies so that there would be no counterpowers capable of limiting their privileges and now we regret that there are governments with illiterate and populists at the forefront who only know how to blindly face a complicated health emergency. We have been determined to convince people that people are atoms, individuals with no relationship, no attachment, or common interests with those around us, and now we have a fractured and Cainite society that fights and destroys itself, when necessary. complicity and unity.
The catastrophe will occur because we do not seem to be aware or because we do not want to admit that a pandemic like the one we are experiencing inevitably paralyzes, in whole or in part, the capitalist machinery for generating income and profits. And that, therefore, it is essential to resort to mechanisms other than those of the market and the profit motive to save even the markets and the profits of the companies. In an emergency like the one we are experiencing, money must be created from scratch, as central banks can do, and not subject economies, companies and households even further to the slavery of private credit; Access to income and even essential goods and services must be guaranteed when these cannot be provided by private companies in the market; It is necessary to help with lost funds and promote cooperation and the satisfaction of the common interest and not competition. Denying reality - as business leaders do - and asking that a health emergency be faced as if it were a wave of colds and a paralysis of the capitalist economy in a good number of activities and economic sectors as if it were just another crisis, it only leads to a much bigger disaster.
Whether business leaders like it or not, companies that stop operating or that can only do so with low or minimal activity cannot be saved in the middle of a pandemic with more capitalism (and much less with the neoliberal capitalism of the last decades that wants end the State) but with common goods, with public aid, with public initiative and ownership and with cooperation and solidarity, that is, with socialism or whatever it may be called, but not with capitalism that a virus and previous bad policies have made stop working. Either they change the discourse of these last forty years and assume reality or they themselves will sign their death warrant.
Source: https://blogs.publico.es/juantorres/2020/11/06/ni-el-confinamiento-ni-la-pandemia-son-la-causa-de-la-catastrofe/
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