So far in this century, the 2007-2008 global economic crisis and the COVID-19 pandemic have transformed our society in fundamental ways. The 20th century had to contend with two World Wars and a third ideological one, the Cold War. The 18th and 19th centuries marked a global turn to enlightenment, as previously traditional agrarian economies in continental Europe started to industrialize, starting with Britain then Belgium and France. The Industrial Revolution delivered significant socio-economic changes in these industrializing societies.
On the surface, the Industrial Revolution in the 18th and 19th centuries, the World Wars in the 20th century and the COVID-19 pandemic in the 21st century have little in common. The times and technologies reflect different civilisations. On close examination, however, all of these phenomena fundamentally transformed socio-economic and political life of their respective societies in a way that could not be imagined beforehand. But even then, the undercurrents of capitalism determined that the emergence of new socio-economic changes left traditional class relations intact, in eternal conflict to access and control scarce resources. This piece will first sketch the patterns of capitalism during these major epochs, before turning attention to the capitalism architecture within which the COVID-19 pandemic continues to operate here in South Africa.
Karl Marx’s theory of class conflict, still relevant today, is rooted in his analysis of the relations of labor and capital during the Industrial Revolution. For Karl Marx, industrial change exposed the social imbalances between those who controlled the means of capital and those whose only contribution to the market was their labor. In the last century, nationalisms were largely the organising principle of social, political and economic relations. In this light, during his first speech in parliament on June 21st 1921, Benito Mussolini, the Italian dictator, made the following claim: “We deny your internationalism, because it is a luxury which only the upper classes can afford; the working people are hopelessly bound to their native shores.”. The Cold War would follow this nationalistic doctrine; the quest to build economic empires around national consensus of ideology.
On the 2007/08 global economic crisis, the dominant analysis about capitalism seems to suggest that the crisis was a renewal of capitalism rather than ideological surrender. This argument considers that governments the world over were committed to bail out financial capital (banks) while the proletariat was left to find their way out of the misery caused by capital. What about COVID-19?
Capitalism and the drivers of COVID-19’s global spread
There are several ways in which capitalism has played out in the cause, spread, effect and responses to COVID-19. Let us consider a few.
First, the cause, spread and effect. There is a lot of controversy surrounding the causes of COVID-19, so I will skip the rather murky debate. If we examine the main drivers of global spread, airlines and airports immediately come to mind. This also explains why the pandemic spread rapidly to the most globally connected economies, Europe and North America. Travel restrictions around the world have devastated the airline industry, which according to director-general and CEO of the International Air Transport Association (IATA), is set to lose $84.3bn in 2020, a net profit margin of -20.1%, the worst in history. One of the major casualties of the air travel restriction is the gold industry. Tom Palmer, the CEO of Newmont Mining Corp., the world’s biggest gold producer laments that the company has been forced to shut down operations in Canada, Argentina, Mexico and Peru, mainly because they could not transport gold supplies. If history is anything to go by, governments will do everything they can to bail out national airlines and the gold industry.
The point is this: the uniqueness of COVID-19 is that it threatens global capitalism. By this token, even African countries have gone on strict lockdown in response to COVID-19, inattentive to the devastating effects of starvation, floods, locusts, HIV/AIDS and Malaria on their populations.
Residual Capitalism in South Africa’s dealings with COVID-19
Let us look at how South Africa has responded to the pandemic, and ways in which capitalism continues to play out. The government has rolled out a R500 billion stimulus package which includes expansion of social safety net for the poor and the working class. This is the largest stimulus package in history. The social relief programme requires that state bureaucracy deliver not only effectively, but also efficiently. Which is to mean, the government is expected to possess capacity it has never possessed, and to do what it has never done before since 1994.
The first critical point relates to the willingness of the government to roll our such monumental programme. President Ramaphosa has underscored that this relief programme is about saving lives. This is of course reasonable considering that health and mortality are inextricably linked. But so is HIV/AIDS. Between 1997 and 2012, a total of 3 189 000 South Africans died from HIV/AIDS; equivalent to the entire population in Durban. Roughly 2000 children in the country die in hospital every year, from malnutrition related conditions. And, close to 10,000 South African children under the age of five die annually out of hospital; also from hunger and starvation related conditions. If COVID-19 is a standard to which response to threat of human life should be measured, then government’s response to HIV/AIDS, hunger and poverty has been underwhelming.
For the proletariat and the precariat class, poverty is a matter of life and death. The number of poor and unemployed in the country have been rising for a decade. The government’s claim was that it was doing everything it could under the circumstances. But the current pandemic reveals that the government can do more than it has always done, as far as poverty, hunger, and HIV/AIDS is concerned.
But that is not the way capitalism works. It thrives on impersonal bureaucracies such as large corporations and governments. When President Ramaphosa announced the R500 billion stimulus package, there were muted debates, if cynical, whether giving each of the approximately 60 million South Africans R1 billion each would not be an effective strategy. For the poor and the working class, what would finally trickle down to them is support in form of social grants and humanitarian food parcels. And even then, whether the proletariat and the precariat would benefit from this package is dependent on whether they have access to the institutions of power which disburse them. These institutions create buffers, and employ force if necessary to protect their inefficiencies and their alliances with the interests of the bourgeoisie.
Take SASSA, for example. This is the agency responsible for disbursing social grants in the country. There are approximately eighteen million people in South Africa who rely on social grants. These millions of vulnerable South Africans make up 20% of all households in the country.
In addition to the regular social grants, a social relief grant of R350 is now available during COVID-19. On this particular grant, by the end of May 2020, SASSA claimed that it had received 6 million applications which met the basic criteria, pending confirmation of the submitted information. While there have been some outright rejections of some 1.5million applicants who have been confirmed as possessing other income, so far, only 116,000 grants have been processed. This is mere 2.5% of those who are eligible for the grant. Part of the reason for such inefficiency is that SASSA is operating with only one third of the regular staff.
In desperation, grant beneficiaries across the country have been forced to sleep in the cold for up to two days, waiting in the queue. Most of them cannot afford to travel back to their home, so physical hardship is a cheaper bet. The police and the army have been responsible to ensure that these beneficiaries are orderly. SASSA’s official response to these sorts of inefficiencies and inconveniences was that beneficiaries needed to calm down, they will be paid even if it would take another month. The guiding principle here is that the poor and the working class are dealing with an impersonal bureaucracy, which hides behind regulations and laws, even when for the poor, these grants are the difference between them and the next meal.
Bourgeoise as the loud minority during COVID-19 lockdown in South Africa.
During phases five and four of the lockdown, the voices of the bourgeoisie in defence of privilege were the loudest. For a moment, one would be forgiven to have thought that South Africa is an exercising nation, and that the lockdown took that fundamental factor away. Some of those who do not exercise became activists for the right to exercise. And then alcohol. The extent to which South Africans would go to access alcohol was probably unknown until the phases five and four lockdown. There were reports of mortuary break-ins for access of alcohol, as well as loading of cooler boxes containing alcohol in coffins as an excuse to legitimise gatherings.
What is more, Liberty Life, a conservatist NGO took the government to court, to fight for the right to wash hands and wear masks without being told to do by the government. The fight to open spaza shops was included in the Liberty Life case as some kind of tokenism, as if to sugar-coat the core argument of bourgeoisie interests. In the end, the courts delivered their verdict in defence of the bourgeoisie, those already with a form of capital whether financial, social or other. The proletariat and precariat classes were out in the cold, able to access the courts only adversely, if at all. Even when such access is a matter of daily survival.
The bourgeoisie has the time and the resources to take on large bureaucracies. It has access to means of negotiating with these bureaucracies, and if need be, to force them through the courts in defence of its interests. The proletariat and precariat live in a different reality, in ordinary times and under COVID-19. For these impoverished classes, the implications of COVID-19 on their health and economic activities, along with the bureaucratic inertness, all these pause a major threat not just to their livelihoods but also to their lives. These classes do not bring much to the market, and, the market with legal and bureaucratic body guards, responds rather brutally to the impoverished.
The privileges of capital amidst COVID -19 in South Africa
Turning to the mining sector, as one of South Africa’s leading export earner, it has always relied on cheap labor for more than a century. About 10% of these workers are drawn from Lesotho, Eswatini, Mozambique and Botswana, for the simple reason that they form cheap labor, and therefore useful to ensure quick profits for the sector to recover. Mining companies in South Africa are embarking on the largest labor transportation exercise in history, as they seek to urgently get these workers back to work. Graham Herbert, a labor consultant contracted to transport mine labor to the mines claims that for over thirty years, he has never seen such a large movement of labor for the gold and platinum mining sub-sectors. This is a glaring case of the length that capital will go to prop itself up.
In the final analysis, it is necessary to revisit the old age question as to whether capitalism is equipped to address poverty meaningfully and effectively. This an old contest. According to Harris-White (2006), it is not. This is because it is responsible for creating poverty and inequality conditions, and, it thrives under these conditions. The development success of South Africa’s Social response to the impacts of COVID-19 is largely constrained by the architecture of capitalism, which in its brutality employs state power to protect the interests of those who already have, who can access these institutions. Some of the potentially effective opportunities which could break such development impasse might lie in finding and using informal systems for humanitarian and development interventions.
Jason Musyoka is a Lecture at the University of Pretoria. He writes for DDP in his personal capacity and his views do not represent those of the organization.
List of references
Harriss-White, Barbara (2006). Poverty and capitalism, Economic and Political Weekly, 11(13), 1241–246.