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Will coronavirus herald the end of capitalism? Show more Show less
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The US is already experiencing record unemployment, and stock markets are crashing all over the world. The economic impact of coronavirus is already huge. Does this mean the end of capitalism? Or are we reading too much into this economic shock? Previous economic crashes, such as 2008, made no change at all to the global capitalist economy, so why would coronavirus?

Yes, as international connectivity is being destroyed Show more Show less

Planes, travel, ships - as the hallmarks of global trade go down, where does that leave us?
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Easy international travel is key to the free market

Connectivity is an essential part of a global trade, which in turn leads to prosperity. With the fall of the airline and other mobile industries, economies will inevitably turn inwards and move towards protectionist models.

The Argument

Many companies rely on international travel, utilizing globalization to their advantage to cut production costs and to ship their products around the world. They aim to sell as many goods as possible to as many people as possible, regardless of their geographical location. However, the COVID-19 pandemic has revealed why capitalism’s reliance on global connectivity is not sustainable. After all, the rapid spread of COVID-19 was partly facilitated by infected individuals traveling alongside other passengers on trains, ships, airplanes, and various modes of public transport. And now that airplanes are no longer flying at their normal capacity, global supply chains have been disrupted as well- and the heavy reliance on international travel has thrown our globalized society into shock. These vulnerabilities generated by interconnectedness are further reinforced by austerity. Indeed, capitalists’ mantra to ‘cut all unnecessary costs’ has left societal systems with little safety margin to cope with unexpected events. From a capitalistic, return-maximizing point of view, cutting costs to the bare minimum may make sense. From a crisis preparedness angle though, it is irresponsible and indeed, dangerous.” [1] The COVID-19 pandemic has revealed that global interconnectedness is both a blessing and a curse, and capitalism isn’t a sustainable economic system due to its failure to acknowledge this. Companies will be unable to manufacture and ship products as efficiently as they previously could, and learning how to cope with this will be a learning curve for industries that relied almost entirely on deteriorating global supply chains. They will inevitably adopt protectionist business models to cut their financial losses, which will result in millions of people losing their jobs, while prices simultaneously skyrocket. If companies decide not to do this and operate as if there is no global pandemic, they risk infecting even more people and further contributing to the spread of a deadly virus. Capitalism poses a threat to the welfare of society in both instances, and once individuals realize this, the demands for capitalism to be replaced with a more sustainable economic system will increase.

Counter arguments

International supply chains are resilient. Once the pandemic ends, countries and companies will likely revert back to how business operated prior to the existence of COVID-19. Transnational links, connected by a system of airplanes and other modes of transportation, are being eroded because international travel is not safe during a pandemic. As a result, many countries have stopped outsourcing their manufacturing and have instead turned towards domestic production to create jobs, prevent shortages, and become self-reliant. Although doing so is more expensive, businesses recognize that it is necessary for the short-term if people want to keep their local economies afloat. The existence of capitalism as an economic system is not wholly contingent on the existence of global supply chains. Although these supply chains help to facilitate many of capitalism's goals, such as cutting unnecessary costs and manufacturing products as cheaply, quickly, and efficiently as possible, capitalism can ultimately survive without this- at least for the time being. What we're currently witnessing in regards to businesses manufacturing their products domestically rather than internationally is only a temporary solution to the issue at hand. Once the COVID-19 pandemic ends, international travel will resume. It is very likely that governments and businesses will take extra safety and sanitary precautions to prevent the outbreak of another virus because they have a financial incentive to help prevent further economic disasters. Capitalism is flexible and resilient- it is capable of adapting and changing alongside the needs and demands of consumers, who are now prioritizing health and safety over everything else.

Proponents

Premises

[P1] Capitalism relies on international travel because it allows for goods to be manufactured cheaply and shipped all over the world. [P2] International travel and interconnectedness contributed to the rapid spread of COVID-19 because infected people and objects were traveling to different countries. [P3] Companies will turn towards protectionist models as their supply chains disintegrate due to the lack of safe international shipping methods, which harms workers and consumers alike. [P3] Capitalism, in this sense, is dangerous and a public health hazard. Therefore, the demand for it to be replaced will increase.

Rejecting the premises

References

  1. https://eyeonglobalhealth.com/2020/03/20/what-does-coronavirus-tell-us-about-capitalism/

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This page was last edited on Wednesday, 15 Jul 2020 at 18:10 UTC

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