Covid-19 and the General Crisis of Capitalism

Bikram Mohan


The pandemic generated by the SARS-CoV-2 virus that causes COVID-19 has unearthed the severe deficiencies that afflict capitalism worldwide in its full glory, or better said, its misery. The COVID-19 pandemic has exposed the unfairness engendered by growing inequality, on the one hand, and how fragile capitalist governments are in the face the health care crisis, on the other. It has also exposed the gravity of the economic crisis that capitalism displays, while it has never ceased to generate income inequality and capital accumulation. Capitalism has used the COVID-19 pandemic to further suppress the position of the working class and the toiling masses in the economy and society. The COVID-19 pandemic will leave behind a world riddled with deeper contradictions that will become more unbearable for the oppressed than ever. The pandemic has accelerated imperialist tendencies towards confrontation, armed conflicts in the light of looming social upheavals. In conclusion, the COVID-19 crisis has accelerated the general crisis of capitalism and deepened inter-imperialist contradictions.

COVID-19 and social inequality

The far right and social-democracy, or whatever is left of it these days, have been debating over the need for a comprehensive policy to protect the population from the effects of the pandemic. The right-wing has been arguing in favor of ending the lockdown measures in order to let the virus run amok. Capitalism is in crisis and as such the pandemic is considered by some as a means to reduce what is viewed by some as population excess. Lobbyists from insurance companies and other sectors in the corporate space have been warning since the beginning of the pandemic about the cost of the pandemic and the economic impact of lockdowns compared to the economic impact of losing population. With this, some corporate lobbyists have been effectively arguing that the economic impact of lockdowns on their businesses is disproportionally large compared to the loss of GDP due to mortality. This is explained by the fact that those most vulnerable to the disease, the poor and the elderly either contribute little to the GDP or can be replaced by the unemployed.

The impact of the pandemic since its inception has been unequal in terms of how different sectors of the population have been affected by the virus. Social inequalities have fueled glaring imbalances in how the virus has affected various sectors of the population. It was evident to some since the very beginning that the poor, those employed in menial jobs, the under-insured or uninsured and the elderly would carry the bulk of the burden.

The impact of socio-economic inequalities on severe illness and mortality is and continues to be the subject of study. The reliability of these studies depends strongly on the availability of quality data, which many times is in the hands of corporations. As a result, this issue has been scrutinized the most in more industrialized countries compared to so-called mid- and low-income countries. The issue of socio-economic inequality had been studied in the US. This is due to the availability of data of reasonable quality and activism from the side of some experts who have raised red flags in view of the glaring disparities in how the pandemic has affected various constituencies in the country. The disparities are so obvious that even US Government sources have provided a synthesis of the statistics. Three main groups have been affected disproportionately in the US: American Indian or Alaska native, African Americans and Hispanics. The number of COVID-19 positives is a factor of 1.8, 1.4 and 1.7 with respect to whites, respectively. The disparity becomes more acute when looking at the prevalence of severe disease. This is measured through the rate of hospitalisation and mortality. The rate of hospitalisation is a factor of 4, 3.7 and 4.1 times greater than for whites, respectively. In terms of mortality, the factors are 2.6, 2.8 and 2.8 respectively. No evidence has been put forward by the medical community that genetic factors may impact the probability of severe disease for an entire racial group. These strong biases speak to socio-economic factors, rather than genetic predispositions inherent to the various races as whole.

There are two important factors that determine the probability of severe outcomes: the probability of contracting the virus and the probability of developing severe disease when contracting the virus. The first factor depends strongly on the type of job the subject has. Workers that engage in more menial professions, where manual work and interaction with others are more probable, are in higher danger of contracting the virus compared to other professions. In addition, workers in low income households are more likely to use public transport, where infection is more likely compared to those that own a car. This issue is more acute in so called mid- and low- income countries. In addition, low income households tend to live in smaller dwellings where a relatively large number of people live together and cannot social distance compared to more affluent households. This issue is also particularly acute in mid-and low- income countries, where informal settlements are the norm for more vulnerable communities. Ethnic minorities in the US are known to engage in low-income labor, therefore making these groups more likely to get infected. In terms of the risk of developing severe disease, the prevalence of co-morbidities, such as diabetes, hypertension and obesity, play a strong role. It is also known that those with low income do not have the same access to fresh and whole foods compared to more affluent communities. The diet of low income communities is sadly based on low quality processed foods, which are based on starch, contain corn syrup and other agents that have sparked a pandemic of diabetes, obesity and hypertension in the country. This, in addition to the fact that low income households tend to be under-insured or not insured at all, and therefore treatment of chronic diseases becomes deficient, creating the conditions for ethnic minorities in the US to be more prone to severe disease. These factors are also prevalent in mid- and low-income countries.

Another sign that points to socio-economic vulnerabilities as a driving factor to severe disease and fatal outcome is the significant gap between officially recorded morality and what is referred to as excess mortality. The latter is based on the counts of death certificates compared to previous years.1 Where the computed excess mortality is significantly greater than the mortality officially recorded as being COVID-19 related, social vulnerabilities and healthcare under-coverage drive mortality. This has been observed in countries with relatively reliable reporting systems, such as Indonesia, South Africa and Turkey. In those countries it has been observed that most of the mortality is under reported, especially in densely populated areas. This is related to the fact that many vulnerable communities do not have access to proper health care, or choose not to interact with inadequate or unreliable health care delivery.

Capitalism views the poor and under-privileged as expendable in the big scheme of things. Far-right Governments, such as Bolsonaro’s in Brazil, have made it very clear that his lack of strategy in regard to the pandemic is not necessarily an oversight, but rather a strategy intended to reduce population excess. The pandemic is far from over, in addition to the fact that the virus continuously mutates, thus creating new strains that behave differently compared to the original virus. While the virulence of the virus will likely wane, this pandemic will continue to kill the vulnerable in large numbers for years to come. That said, it may appear to some that the rate with which the virus is reducing the population is not comparable to what can be achieved by armed conflicts and major wars. In practice, the pandemic does not appear to be in a position to act as a replacement for armed conflicts. In this sense, the arguments put forward by the far-right are not necessarily reflective of depth of the crisis that capitalism irrevocably finds itself in.

By contrast, social-democracy wants to portray itself as the savior of the poor by arguing differently from the far-right, where more emphasis is done on controlling the pandemic and rolling out vaccination. While this may appear to be a sign that social-democracy cares more about the vulnerable than the far-right does, the reality on the ground points to a very different interpretation. The COVID-19 pandemic has been used by corporate capital to launch an attack on the economic position of the toiling masses, where income inequality, corporate profit and capital accumulation have seen new heights. It is this that social democracy has vowed to safeguard at all cost. The so-called defense of the vulnerable has in reality turned against the most vulnerable through the economic pressures that private monopoly capital is allowed to exert on the toiling masses. As will be seen below, monopoly capital has gained significant ground in terms of corporate profits and capital accumulation, while the toiling masses have suffered a serious setback in terms of labor rights, loss of income, rampant unemployment and underemployment. Tens of millions of jobs have been lost irrevocably, whereas corporate capital has increased profits and the rate exploitation continues to rise. Income inequality and Gini coefficients have gained momentum at rates that surpass those triggered by the 2008 crisis. Only governments now, even in the most affluent countries, are more powerless than ever to face the social pressures generated by the crisis.

Pharmaceuticals and the power of corporate capital

One of the areas where the crisis of capitalism in its neo-liberal incarnation is showing its repulsive face is the problem of vaccination and how unequal its distribution has become. Bourgeois-liberals have been arguing about the so-called “vaccine nationalism”, where wealthier countries proactively purchased vast quantities of vaccine, leaving other countries behind. For instance, the Government of Canada has purchased 338 million doses, enough to vaccinate the population five times over. By contrast, India has ordered 116 million doses, or the equivalent of 4% of its population. While the facts that substantiate this criticism are there on the surface, what bourgeois liberals and the imperialist press do not particularly shed light on is the role of large pharmaceutical corporations in the current state of affairs and how a handful of them are in reality behind the scarcity. Indeed, many countries in the dependent world have been left behind, where governments of more developed countries have spent billions of dollars on private corporations for research, development and massive production of vaccines.

The bourgeois press have hailed some of the pharmaceuticals, such as AstraZeneca and even Pfizer, for not aiming at cranking up vaccine prices at this early stage. Other companies that command a smaller market share, such as Moderna, have given us a flavor of the large gap between corporate price and cost of production that the industry appears to be entitled to. The reality is that private monopolies in the vaccine space control the entire chain of research, development, prototyping and mass production of vaccines. Governments and researchers funded by them, even in the wealthiest countries, have found themselves powerless to stand up to these pharmaceuticals. The well-being of billions of people is now in the hands of a handful of private corporations whose sole intention is to strive at the extraction of maximum profit.

By lowering prices for the first version of the vaccine, AstraZeneca, Johnson & Johnson, and to a lesser extent Pfizer/BioNTech, are trying to secure future markets. They do so by creating dependence on their commodity, where scientists are used as accessories to trials and related R&D efforts required by them. Pharmaceutical corporations are cognizant that the pandemic will linger of years to come and that the current efforts are just the first pass in what is to become a profitable business model. The emergence of new strains, due to the natural process of mutation that the virus undergoes, invariably renders the virus more resistant to known vaccines. As a result, vaccines need to be tuned or even re-developed, where new products will emerge in the market. Something similar happens to the virus of the flu, where new vaccines appear seasonally. The difference here is that COVID-19 will remain significantly more virulent in the years to come. Tens of millions of people are expected to die from the virus if efficient vaccines are not rolled out in time to at least to hundreds of millions of people around the world with relevant co-morbidities. Pharmaceutical corporations are essentially creating the conditions for a market that may generate hundreds of billions of US dollars in revenue over the next years.

Paradoxically, AstraZeneca, has provided the cheapest vaccine so far, while at the same time it has received the greatest investment. AstraZeneca has received over $11 billion US in investments, overwhelmingly private, with some contribution from Government funding. Private funders surely do not bank on charity in the long term as a strategy for investment. AstraZeneca has been heavily criticized for its opacity and inability to deliver the vaccine in the quantities promised initially. The business model pursued by the corporation also remains a subject of debate and speculation, where it is suspected that the prices for their vaccine may increase in the future.

Instead of pursuing a strategy whereby vaccination is targeted to those most vulnerable to severe disease and death, Governments have fallen under the pressure of pharmaceutical corporations through their lobbyists and conduits, such as Dr. Fauci and the like. Dr. Fauci and other epidemiologists advise governments to plan for massive vaccination campaigns, where most of the population is expected to be inoculated to achieve the so-called herd immunity. This is despite the fact that a significant fraction of the population has already developed some form of immunity to the disease. Naturally developed immunity is corroborated by the very small number of re-infections recorded around the world. In addition, a subject who gets vaccinated is not guaranteed not to be infected with new strains of the virus. Therefore, vaccination is no guarantee against re-infection. A strategy that would selectively target vulnerable members of the communities would not be as profitable to corporations compared to universal vaccination. In turn, vaccination hesitancy is typically linked with right-wing inspired conspiracy theories and the so-called “fake news”. While this connection is certainly substantiated, the narrative around the need for massive vaccination is tailored to fit the interests of large pharmaceutical corporations, rather than having the interest of the population in mind.

Pharmaceutical corporations in the West, through their lobbyists and the many scientists on their payroll or whose research funding is dependent upon them, have efficiently managed to sideline the Russian and Chinese vaccines. This is done on unscientific grounds under the disguise of scientific debate. The Russian and Chinese corporations that have developed these vaccines have become competitors to Western corporations and as such have become the target of unfair criticism or have been blatantly ignored by the relevant medical authorities that are in charge of approving the use of vaccines in their respective countries. This puts in question the objectivity and impartiality of the approval process that these agencies are bound to uphold and how this process has become subjugated to corporate interests. The World Health Organization is not alien to these biases either.

Capital accumulation, income inequality during the COVID-19 crisis

Many bourgeois and petty-bourgeois economists have acknowledged that large corporate capital has profited from the pandemic at the expense of growing income inequality. It is well known that the brunt of the crisis is being born by the working class and the toiling masses. The economic status of the middle classes is being challenged as well. This happens through enhanced unemployment, wage cuts and other forms of economic pressures exerted on the toiling masses. Low-income workers have been particularly hardly hit by the lockdowns and their aftermath. Under these conditions, the level of exploitation of the working class has been taken to a new level.

The Poverty and Shared Prosperity Report 2020 of the World Bank has shed light on quantitative analysis pertaining to the economic impact of the lockdowns on the most vulnerable. This report indicates that about 100 million people have been pushed the ranks of extreme poverty2 in 2020, and about 150 million people by 2021. According to the World Bank almost 10% of the world population would be considered to be living under conditions of extreme poverty. The report also indicates that the so-called middle-income countries, which according to our definition are dependent countries many of which have de-industrialized as a result of neo-liberal policies, will carry the bulk of the pressure. According to the World Bank, about 40% of the world’s population or 3.3 billion live under the $5.50 US a day mark. This is in the light of growing dependence of dependent countries on imperialist countries and private monopoly capital, which speaks to the inability of capitalism to meet the needs of vast sectors of the world population.

The Gini coefficient, which is used to gauge income inequality, has increased sharply during the lockdowns and their aftermath. The Gini coefficient focuses on the relations of distribution and not directly on the relations of ownership in production, which in Marxism are the determining factor in the economic analysis. The Gini coefficient is used by bourgeois liberal economists as a means to articulate the petty bourgeois critique of monopoly capital, without having to deal with the core of the economic analysis and the private character of the appropriation of labor under capitalism. That being said, the increase of the Gini coefficient in the European Union as a whole has been estimated at around 3.5% during the hard lockdowns alone, where it has continued to increase during the months that followed. Similar tendencies have been observed in other regions of the world. Empirical analyses of the data are indicative of the presence of a correlation between the increase of the Gini coefficient and COVID-19 prevalence and outcomes. While such analyses are deemed superficial from the Marxist stand-point they do reveal the extent to which the pandemic has affected the toiling masses all over the world.


1 The methodology behind the computation of excess mortality varies from country to country. Typically, mortality is compared with the average mortality of the previous five years.

2 Extreme poverty is defined by the World Bank as living on less than 1.9 USD a day.

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