Richard D. Wolff is a Professor Emeritus of Economics at the University of Massachusetts and Visiting Professor in the Graduate Program in International Affairs at the New School University. He holds a BA in History (Harvard College), an MA in History (Yale University), an MA in Economics (Yale University), and a PhD in Economics (Yale University). For the last twenty-five years, professor Wolff, in collaboration with Stephen Resnick, has expanded the “Marxist notion of class as surplus labor,” while rejecting the concept of economic determinism, found in most schools of economics. Besides writing, teaching, and lecturing, Wolff is one of the founders for the Association of Economic and Social Analysis (AESA) and its quarterly journal (Rethinking Marxism).
On September 20, 2020, Richard Wolff published “The Sickness is the System: When Capitalism Fails to Save Us from Pandemics or Itself.” In this collection of over fifty essays, Wolff examines the deepening economic crash, systemic racism, and the coronavirus pandemic, and how they have all coalesced under an unjust economic system.
[Note: The most recent data from this review are from 2020]
American wages have stagnated since the 1970s while the cost of living has steadily increased. The federal minimum wage, for example, is $7.25. It has remained at $7.25 since 2009. Meanwhile, 2,153 billionaires own more wealth than 4.6 billion people from around the world (making up 60% of the global population). In the US alone, the three richest people own more wealth than 50% of the population. As inequalities rise, millions of ordinary citizens are chasing the American Dream into a deepening hole of student, credit card, mortgage, and auto loan debt, while stressing out over job security, flat wages, and eroding benefits.
Many American corporations have moved their businesses overseas rather than providing American workers with protections, salaries, benefits, and retirement packages. They are driven by maximizing their profits, not with helping the people of their own country.
In developing countries, there are fewer (health, safety, environmental, and so on) regulations imposed on corporations. There are also natural resources to be exploited, which indigenous populations often depend upon for their daily survival. Poor workers in developing countries are often coerced into working for these corporations under unfair conditions. They usually work for pitifully low wages and long hours.
Christopher Ryan, in Civilized to Death, provides an example of what these conditions are like for locals, who are forced into this kind of dehumanizing work. “Multinational corporations routinely expropriate land in poor countries (or ‘buy’ it from corrupt politicians), force the local populations off the land (so they cannot grow or hunt their own food), and offer the ‘luckiest’ among them jobs cutting down the forest, mining minerals, or harvesting fruit in exchange for slave wages often paid in company currency that can only be used to buy unhealthful, industrially produced food at inflated prices at a company-owned store. These victims of market incursion are then often celebrated as having been saved from ‘abject poverty.’ With their gardens, animals, fishing, and hunting, they had been living on less than a dollar per day. Now, as slave laborers, they’re participating in the economy. This, we’re told, is progress.”
In America, around 30 million citizens have no medical insurance. They cannot afford the astronomical costs of insurance, especially if they are suddenly confronted with a medical emergency. 100 million Americans who do own insurance still struggle with “high deductibles and/or sizable co-pays.” And many American workers, despite the state of their insurance, don’t have sick leave. They can’t afford to take time off from their job if they feel sick. Then there are millions of undocumented immigrants who are afraid to go to medical facilities because they don’t want to be locked in cages, separated from their intimate families, and deported.
When many workers become sick and have to quarantine, they aren’t given enough (if any) money to cover their costs. A lot of workers, especially those with families, live from paycheck to paycheck. They have no economic incentive to go into quarantine if they get sick. All through the Trump Administration, corporate profits were protected, such as with tax reliefs. Essential workers, whose health is threatened daily by the pandemic, receive inadequate protections, if they receive them at all.
Viruses have always been around throughout the centuries. They are not uncommon. During the 1918 flu epidemic, more than 700,000 people died from H1N1. “H1N1 resurfaced again in 2009 as ‘swine flu.’ Other recent viruses include SARS (2002–2004) and MERS (since 2012).” (Wolff)
Systematic preparation for future outbreaks of dangerous viruses is a social necessity. Producers of ventilators, masks, hospital beds, and so on, should have stockpiled them. There should have been extensive planning for a distribution of supplies and a training of volunteers to cope with sudden outbreaks.
“To block disease transmission, plans should have been made to accommodate supervision, distribution of supplies, etc. likewise, the consequences of social distances — lost jobs, closed businesses, disrupted supply chains, crippled purchasing power, chaotic credit markets, etc.–should have been planned for.” (Wolff)
Capitalist industries failed to prepare for this public health crisis because they had no incentive to prepare. Their goal is primarily to increase their private profits. The Trump administration didn’t compensate for the failures of the corporate sector because political interests often overlap with corporate interests.
Viruses happen periodically in history. They are not new, but they can be devastating when they are not researched and prepared for. The only rational, humane response to the inevitable threat of a pandemic is to plan to minimize death, sickness, damage, and loss. The US government should have (but did not) produce a necessary supply of masks, ventilators, hospital beds, gowns, protective gear, and testing kits. They should have invested more into medical research, economic support for citizens, and public health measures.
In a capitalist system, however, profits are more valuable than efficiency. Capitalism tends to move overtime toward instability and inequality. Minimum wages, universal basic income, progressive tax structures, redistributive schemes, and so on, may slow, stop, or reverse these tendencies temporarily.
In our present system, corporations first accumulate massive amounts of debt. Then they borrow vast sums of money at lower interest rates, trying to cope with past economic crashes (which recur every four to seven years on average), while building toward the next crash, and the next.
When the pandemic sent the economy into a full-or-partial lockdown, with businesses closing down and profits stopping, corporations could not pay off their debts. As a result, Wolff wrote, “Defaults then undermined and froze credit markets that traded securitized corporate debt, the derivative instruments insuring that debt and those securities, and so on.”
Toward the end of April 2020, 30–40 million Americans were estimated to have filed for unemployment. 10–12 million undocumented immigrants, who were not included in this figure, might have lost their jobs as well, but couldn’t file for unemployment insurance out of fear of deportation.
Capitalism has been an economic system for 300–400 years. Its modern form dates back to England in the 17th century. Then it spread from Europe to America, from America to Japan, and so on, eventually becoming a global system. Wherever capitalism settled, every four to seven years on average, there has been an economic crash.
Our current crash is already the greatest economic crash since the time of The Great Depression. The Great Depression began in 1929 and ended in 1941. In this century already, from 2000–2020, there have been three economic crashes, each named for their triggers. “The trigger in 2000: dot-com stock prices. In 2008: people failing to pay mortgages. In 2020: a virus.” These recurring crashes are due to an unstable system but only the symptom is named for each crash. Nobody addresses the system itself.
Richard Wolff wrote that “We have a system that doesn’t work for most people. It produces grotesque inequality, it is unstable, and it has proven incapable of securing our safety during a global pandemic. This virus came at a time when we should have and could have known that our economic system was vulnerable to crashes. Make no mistake, blaming the virus for this crash muddles the issue. The problem is the system.”
Nobody will know the true devastation of this economic crash for many years. Hundreds of thousands have died, millions are sick, millions are unemployed, countless businesses are shut down permanently, renters are being evicted from their homes, industries are collapsing, families are falling into deeper debt, depression has risen, suicide has risen, and on, and on.
The Trump administration downplayed the seriousness of the coronavirus, scapegoated other countries (like China) rather than accept responsibility, undercut funding for medical research before the pandemic began, ignored outcries for help early on, pressured employees to return to their jobs without providing them with safe work environments, provided barely any economic support for struggling citizens, failed to adequately plan for distribution, all while playing political games about election frauds to manipulate a diehard base.
Workers are urged to return to their jobs to help out the stock market economy. They are even hailed as essential. But they are not provided with protection, supplies, or livable wages. Stimulus bills are given out of political deliberations rather than economic necessities.
Over the last half-century, in both the US and UK, neoliberalism overtook Keynesian capitalism. Private capitalists used the ideology of neoliberalism to cover their attacks on Europe’s social democracy and America’s New Deal programs. With goals of privatization and deregulation under neoliberal policies, manufacturing work moved to low-wage countries, unions were brutally attacked, automation replaced human workers, and more illegal immigrants were hired because they were unprotected (unable to legally contest unfair conditions such as unpaid wages, poor wages, and an absence of benefits,). Meanwhile, venture capitalists, executives, shareholders in multinational corporations, and so on, through capital gains, dividends, merger fees, bonuses, and higher salaries, enriched themselves at the expense of the majority of the population.
A small minority of the population controls (owns and runs) public and private enterprises. They reap most of their profits from their enterprises, while working to undo whatever reforms the working class has struggled to achieve. Reforms may have been hard won over many decades, but they will not often endure under consistent neoliberal assaults. These enterprises are anti-democratic in nature. Inequalities and imbalances will recur unless the system is changed to be more democratic.
On March 27, 2020, the first stimulus package was truly disappointing for the average American. The 2.2 trillion dollars spent in The Coronavirus Aid, Relief, and Economic Security (CARES) Act was paid for with government debt. This debt only encouraged the corporate sector to borrow more money from banks, insurance companies, wealthy individuals, foreign governments, and so on, even after already being laden with debt from previous crises during the past twenty years. Ordinary working Americans will have to pay back the interest to the initial loan with their taxes, while all they had received was a pitiful one-off check.
The US treasury has borrowed vast sums of money, trying to force the economy back into its pre-pandemic state. Monetary authorities have lent money at extremely low interest rates to corporations and banks. The economy before the pandemic was not an ideal state. Global capitalism hadn’t healed itself from past crashes and was building toward another one before the virus hit. The pandemic was a trigger for a crash that was inevitable. Pre-COVID capitalism has always valued private profit over public health and safety. These priorities eventually led to vulnerabilities and instabilities.
On July 2020, over 50 million Americans filed for unemployment in the last 16 weeks. The number is still rising. Many who are unemployed want to give back to society, to produce, to meaningfully contribute. Many desperately need to work to support themselves and their families. They need to eat, to have access to healthcare, to be able to afford shelter, and so on.
During the Great Depression, a Federal reemployment program was founded by President Franklin Delano Roosevelt. People who lost their jobs could get new jobs, helping to build up national infrastructure. From 1935 to 1943, the WPA (Works Progress Administration) had given jobs to over 8.5 million people. They worked to build parks, schools, bridges, housing, airports, and roads.
According to the Encyclopedia Britannica: “The agency’s construction projects produced more than 650,000 miles (1,046,000 km) of roads; 125,000 public buildings; 75,000 bridges; 8,000 parks; and 800 airports. The Federal Arts Project, Federal Writers’ Project, and Federal Theater Project — all under WPA aegis — employed thousands of artists, writers, and actors in such cultural programs as the creation of art work for public buildings, the documentation of local life, and the organization of community theatres; thousands of artists, architects, construction workers, and educators found work in American museums, which flourished during the Great Depression. The WPA also sponsored the National Youth Administration, which sought part-time jobs for young people.”
It is possible for millions of people to return to work. The federal government can create a program of reemployment, where citizens can use their unique skills to teach, perform, and build. They can be trained to create more sites for testing. They can aid in distribution, administration, education, construction, manufacturing, and cleaning, working with dignity and respect. Sadly, though, many politicians believe more in private enterprise than in public reemployment, even when the economy has undergone a market failure.
Under neoliberalism, government intervention is avoided whenever possible (with the exception of the military, police, judiciary, and so on). Laissez-Faire capitalism is valued highly. Neoliberals argue for a “free market,” where private enterprises are left alone without government taxation and regulation. Neoliberal politicians do not want to stockpile, organize, support, or endorse anything that private enterprises can do instead.
In societies influenced by neoliberalism, such as the UK, US, and Italy, preparation for the coronavirus pandemic was weak. In societies less influenced by neoliberalism, such as South Korea and China and New Zealand, preparation was much stronger. Private employers, who belong to the minority of their capitalist societies, prefer a neoliberal ideology. They want to maintain their economic dominance, motivated by self-interest more than compassion. They’re threatened by government interference, union organization, regulation, and so on, because they could lose out on their profits.
Executives of private enterprises enjoy the free market, but only when it benefits them. As Martin Luther King Jr. said, “It’s socialism for the rich and rugged capitalism for the poor.” When the stock market fell in early 2020, the US government intervened to support those who owned the bulk of stocks. Many of these people are billions of dollars wealthier since the pandemic began. Other major benchmarks for securities, such as the Dow Jones Industrial Average, The Standard, and Poor 500, have also recovered economically. While neoliberals claim to hate government intervention, they like it when they’re made wealthier from intervention.
Government intervention subsidized those recoveries. The Federal Reserve pumped unprecedented amounts of money into the economy after mid-March. This wealth caused the stock market to rise again. Corporations benefited while ordinary Americans suffered. Corporations hired more lobbyists, donated vast sums of money to politicians, and so on, influencing policy decisions in their favor. They received a lot of help from the government while smaller businesses received little help in comparison. The Federal Reserve provided banks with lower interest loans and bought up corporate and government debt. Banks, corporations, and wealthy individuals bought stocks off of each other, selling them at higher prices than before.
Unlike during the New Deal, where programs were developed to help people out, such as with Social Security, a minimum wage, and the WPA, millions have become unemployed during the coronavirus pandemic. There is no guarantee that their old jobs and benefits will return. Those who quit their jobs, refusing to work in unsafe environments, may not be eligible to receive unemployment insurance. Many employees are expected to work under unsafe conditions, while fearing to ask for a safer environment, benefits, and higher wages. They are threatened with the prospect of joining millions of unemployed citizens. The Labor of Bureau Statistics has confirmed that employee wages are declining at a much faster rate than predicted.
There are social movements that are pushing back against these unfair conditions. Black Lives Matter marches, teacher’s strikes, nurse’s strikes, fights for debt relief, protests to prevent eviction, and so on, have risen up in contrast to corporate interests. Corporate wealth and power have concentrated in the government, influencing who the government will help and how. As inequality deepens, as more people become desperate, calls for justice will rise out.
The corporate sector holds the most dominant influence on the US economy. They were tied to the creation of the Federal Reserve in 1913. The Federal Reserve is the central bank of the United States, established by Congress and signed into law by the president. They’re supposed to maintain the stability of price, preventing extremes of deflation and inflation. They’re also supposed to moderate the regular business cycles of an economy, which includes dealing with recessions, downturns, depressions, etc. The Federal Reserve has a mixed record with price stability. They have an even worse record when it comes to the prediction, moderation, and prevention of certain business cycles.
The Federal Reserve has, on the other hand, created trillions of dollars (out of nothing) to deal with recent crises. They have lowered interest rates to almost nothing. This created money goes to large corporations and banks. These corporations are not hiring large numbers of unemployed people into the workforce — as trickle-down proponents claim — because it is not profitable for them to do so.
Millions of unemployed people cannot afford to buy what is produced by these corporations as much as they did before. After 40 years of stagnating wages and rising debt, they’ve lost their means to consume. Rather than help the economy to grow, corporations spend the money they’re given in the stock market.
They buy more stocks and hope to sell those stocks for more. As a result, the economy suffers from higher levels of inflation. The Federal Reserve, which supplies money to these major corporations, cares primarily about preserving the system. Their priority isn’t about protecting citizens from a deepening inequality.
American politicians often promote the idea that all citizens are free and equal in a democratic society. The Declaration of Independence said, “We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.”
George Carlin, an American comedian, retorted that “This country was founded on a very basic double standard. It was founded by a group of slave owners who wanted to be free! So, they killed a lot of white English people in order to continue owning their black African people, so they could wipe out the rest of the red Indian people, and move west and steal the land from the brown Mexican people, giving them a place to take off and drop their nuclear weapons on the yellow Japanese people.”
While the majority of the population suffers from rising inequality, a minority of citizens are super wealthy. While many groups are historically oppressed, other groups are privileged because of their sex, race, and class.
Capitalism unequally distributes its wealth and burdens. Racist ideology distracts the working population from fighting against their unjust circumstances by dividing them apart, categorizing them in sub-groups of superiority and inferiority. The powerless are blamed for their predicaments, but the system is never addressed.
Poor people, people of color, and immigrants are demonized for capitalism’s failures while they are given far less of an opportunity to succeed. Mass incarceration, social isolation, job insecurity, unemployment, and so on, are methods to keep powerless people in an endless cycle of poverty and desperation. They are often forced to live in slum conditions, unable to afford better housing, healthier food, insurance, etc. Their neighborhoods are policed much more harshly than affluent neighborhoods. They are arrested more frequently and are subject to more police violence.
Capitalists use racist ideology to undermine the solidarity of the working class. Their racism is infused in media narratives, hiring practices, police treatment in different communities, education, housing, public policies, attitudes, and so on. Politicians focus more on condemning the vile behavior of lone individuals than in dealing with systemic issues.
As Professor Wolff wrote in The Capitalism/Racism Partnership, “The business cycles ever besetting capitalism threatened the entire working class with periodic unemployment, poverty, etc. That constant threat — as well as the recurring downturns themselves — risked provoking working class opposition to capitalism as a system.”
“Racism facilitated offloading instability’s risks and costs onto the African-American community that was last hired, first fired. A large part of the white population could thus escape capitalism’s instability or suffer less from it. Racist argument then blamed African-Americans for their unemployment and poverty by contrasting it with that of most whites. Racism and capitalism reinforced one another in this way… Racism assigns African-Americans to the bottom of the income and wealth distributions (via racist hiring, housing, schooling, public policies, and attitudes).”
Wolff went on to write, in regards to how neoliberalism has spread to more of the working population since the 1970s, “Long-Term wage stagnation and profit driven technical changes are subjecting more and more whites to conditions previously limited largely to African-Americans. Hence the household disintegrations, drug dependencies, etc. long afflicting African-Americans are affecting whites as well… The resurgence of white-supremacy represents anxiety about descent into conditions that capitalism and racism had earlier let most whites escape…”
White working-class people have historically suffered from poor conditions too. They’re another shock-absorber for capitalism’s instabilities. While they have occasionally joined forces with the black working-class to great effect, their efforts at solidarity are often undermined. Rather than paying the working-class higher wages and providing them with adequate protections, wealthy capitalists have divided the working class apart on racial lines, pitting them against each other for scarce jobs. The white working-class has also used their privileges to gain more work, better housing, and so on, using racist ideology to their advantage.
Just as African Americans have suffered from unjust conditions due to capitalism, so too have women. Before capitalism, there was the system of feudalism, where serfs worked for and answered to lords. They were subordinated under the dominion of churches and governments. There was no separation between work-life and home-life. Serfs had little to no money and were often resigned to the land of their birth. They were under a moral/religious obligation to obey their lords and God.
When capitalism replaced feudalism, proponents of capitalism promised that the new system would be free, equal, and democratic. Capitalism meant an escape from rigid social hierarchies, belonging to lords, and remaining for life on one patch of land. People could choose who they worked for, where they went, and what they did.
Women, however, were excluded from most of the benefits of capitalism. They were at first forced to remain at home. At home, they cleaned, cooked, took care of their children, working like feudal serfs under the power of men. After WWII, more women entered the workforce, but they were often forced into low-paying jobs, suffering from sexual harassment. In the 1970s, as wages began to stagnate, women needed to bring money into their household while still maintaining that household. They worked double-shifts at home and at work, while being funneled into lower-paid “pink collar jobs,” which were often essential but not valued as much.
Since the coronavirus pandemic hit, millions of people have become unemployed. At first, there was a tremendous drop in jobs in March and April. Then slowly jobs began to return. In December, however, the comeback slowed down and even reversed. There were 140,000 fewer jobs in December of 2020 than in the month before.
In the last month of 2020, men gained 16,000 more jobs while 156,000 more women lost their jobs. White people gained more jobs while non-white people lost more jobs. 40% of jobs gained by white males, on the other hand, were in the hospitality industry. These types of jobs are usually temporary. They’re also places where workers are vulnerable to the coronavirus.
The Trump Administration pushed people to go back to work as soon as possible, but not to improve safety conditions for workers. Corporate CEOs wanted to “get the economy going” as well. While the United States locked down, there was a low level of support for people who needed rent money, food, clothes, shelter, and so on.
Millions are out of work now. Many who do hold jobs work fewer hours. Essential workers often work in unsafe environments for no additional compensation. They risk their lives and may potentially infect those they live with. Those who have worked virtually, but fear returning to in-person jobs, will be fired if they do no not come in. They’re trapped in a position where they either must work to keep their benefits/salary or quit.
Poor people of color have disproportionately suffered the worst effects from this pandemic. Indigenous communities have suffered tremendously as well, but they are rarely ever talked about, even though they are one of the groups at highest risk to the disease. Many companies still haven’t ensured proper safety measures for their employees such as with frequent testing, ventilators, socially distanced workspaces, paid sick leave, masks, contact tracing, daily disinfecting, etc.
Many businesses don’t want to pay for proper safety measures, but expect people to return to work. In the US, where more people are put into prison per capita than in any other country, a lot of prisoners are forced into labor under dangerous conditions. They often are paid a fraction of what most citizens make. Because prisoners are forced to work for so little, ordinary workers are undercut whenever they demand higher wages and more safety measures.
In the United States, a lot of employees depend on their jobs to receive their medical insurance. In Europe, most developed countries have a universal healthcare system. Healthcare is considered a basic human right. Meanwhile, US citizens spend more money on medical care than any other advanced industrial country in the world. Despite insurance being so costly, Americans still do not receive the best healthcare overall.
A lot of European countries provide their citizens with public or public-and-private healthcare. The United States healthcare system, however, is a business first. Pharmaceutical companies, insurance companies, device manufacturers, and so on, desire to make a profit. They want to minimize costs and overcharge to make more money.
During the coronavirus crisis, the US imposed mass unemployment on its citizens. In Germany, fewer people lost their jobs (ticking up from 5% to 6%). While the German government bailed out employers, most employees were allowed to keep their positions. The German working-class have protections (unlike in the US). They have social influence due to the strength of their labor unions and political left.
European leaders told their people that COVID-19 was a serious threat as well. They wore masks, gloves, and went into lockdown. President Trump gave Americans ambivalent messages about the severity of the virus, even lying about it on multiple occasions. According to a John Hopkins study, four countries with authoritarian leadership — the United States, Brazil, Russia, and India — experienced a far higher rate of coronavirus cases than other countries did. The United States, for example, makes up 5% of the world’s population but has 25% of its positive cases. Countries, such as South Korea and New Zealand, fared far better in preparedness and execution.
Viruses have affected human civilizations for centuries, while responses have differed. The Bubonic plague (also known as the Black Death) was a disease in 14th and 15th century Europe. Fleas, which lived on rats, carried the disease. This plague killed a third of all people in Europe.
Centuries later, in 1900, the Bubonic plague spread into San Francisco, California. Henry Gage, the then-governor of California, hid the reality of the disease from the public. The federal government denied its truth too, not revealing that large numbers of people were dying from it. Then the virus became too big to ignore.
After the truth came out, Gage lost his reelection to George Pardee in 1902. Pardee employed medical solutions to deal with the disease rather than hiding its existence. Although the plague hit two years after he first contained it, he brought it under control again.
Private enterprises have failed to deal with the coronavirus because these enterprises value profits over human lives. The US government didn’t compensate for the failures of the corporate sector either — as President Roosevelt did during the Great Depression, after a lot of pressure from the left. As a result of public and private failures, hundreds of thousands of Americans have died in 2020. Many more will continue to die.
When the Black Death broke out in the 14th and 15th centuries, wiping out a third of all people in Europe, feudalism was already a weakened system. The soil wasn’t as fertile as before, crops didn’t yield as much as earlier seasons, serfs were malnourished. As lords counted their rising riches, serfs starved and died. As the plague infected countless numbers of people, feudalism declined. Eventually there weren’t enough serfs left to serve their lords.
Capitalism before the coronavirus pandemic was already a weakened system. COVID-19 only exposed its ugliness. Corporations owed massive amounts of debt. The Federal Reserve had pumped trillions into the economy at lowering interest rates. Corporations borrowed money from the Federal Reserve at almost zero costs. This money went into the stock market, and into the pockets of the few, rather than to those who needed it the most.