How Covid capitalism is making the pandemic worse

The very existence of covid capitalism points to the essential truth of George Carlin’s adage that government, “[Is] a big club and you aren’t in it”.


“There’s an old saying in emergency management — disaster is the wrong time to exchange business cards.”Former FEMA deputy administrator Tim Manning

For most of his presidency, much of the left in the United States and abroad hoped that Donald Trump wouldn’t touch off a ruinous war or other disaster through malice or carelessness. Until the current health crisis began, aside from epic deregulation, trade wars that harmed farmers and other working people in his country, and the continuation of and, in some cases, strengthening of an already militaristic foreign policy (despite his public pronouncements to the contrary), it still seemed like the United States had dodged a bullet in terms of being led by such a uniquely unqualified individual.

This was revealed as wishful thinking when the novel coronavirus found its way to American shores and brought the world’s most powerful nation and economy to its knees. Even before disaster struck, the current administration was filled with unqualified cronies of the Chief Executive, including his own family members like Jared Kushner, who had no business being involved in the country’s foreign policy, let alone the response to a global health crisis.

Making the situation worse, following the tradition of the modern American Republican party, the current administration’s ‘cost cutting measures’ had left the country more vulnerable in critical areas by gutting agencies like the Centers for Disease Control and had led many experts to leave the government in frustration.

Realizing the seriousness of the situation, as reported by multiple outlets, many large U.S. businesses were ready to change their usual production to provide, among other things, much needed personal protective equipment for healthcare and other essential workers as the number of infections grew in the spring.

Despite their pleas to be given direction, the administration failed to invoke the Defense Production Act to put them to work on fair terms for the public good, with the president insisting that its temporary use would amount to ‘nationalization’ of these companies.

While the act was invoked a few times to increase the production of ventilators, it seemed to be as much for partisan political purposes or, as is often the case with this president, as part of a grudge against individual CEOs and companies, as it was to save lives.

Arguably worse, as reported by the Daily Beast, as early as February, well connected insiders were made aware of, and probably took actions like short selling stocks, after being told by administration officials like National Economic Council Chairman Larry Kudlow about the seriousness of the novel coronavirus at the same time the president and these officials were downplaying the danger to the general public.

To those less invested in it, it’s obvious that one of the things that have made it so difficult for the United States to confront the health crisis is an almost religious belief that ‘free markets’ can solve any problem. Another one the most egregious ongoing examples of this failed philosophy in action lies across the Atlantic in the U.K., where the Conservative government of Boris Johnson sidelined the nation’s trusted national health service in favor of contracting out vital efforts like testing and contact tracing to a variety of large, politically connected firms.

Johnson’s government appears to have used the health crisis as a justification to hand out 100s of millions of British pounds in government contracts to well connected companies. If this were happening in say, Venezuela, it would rightly be called corruption. After seeing the results, many on the British left are also calling it a waste of taxpayer money by the type of rightwing government that always cuts services for poor and working people in the name of ‘fiscal responsibility’.

As explained by the British Medical Association on its website, “Among the deals that have been struck: DHL, Unipart and Movianto to procure, manage logistics of and store PPE (personal protective equipment); Deloitte to manage the logistics of national drive-in testing centers and super-labs; Serco to run the contact tracing program; Palantir and Faculty A.I. to build the COVID-19 datastore and Capita to onboard returning health workers in England.”

The most recent example of how badly relying on the profit motive to guide policy is at such a critical time was the failure of Serco, a company that seems to do a little of everything, feeding at the government trough in many countries. Like many other firms during this crisis, the company has been given lucrative contracts without a bidding process.

As reported by the Guardian months ago, the firm, before it received contracts to help the U.K. government respond to Covid 19, had already had to pay an almost $1.3 million fine for not living up to a previous contract regarding accommodations for asylum seekers in the country. Demonstrating its obvious political connections, Serco is run by Rupert Soames, the grandson of Winston Churchill, and was the place of employment of a junior health minister, Edward Arger, who worked as a lobbyist for the company before joining the Conservative government.

In what became a national scandal, the company was paid almost $59 million to manage the data resulting from the country’s app based track and trace system. In doing so, they used an outdated version of Microsoft Excel that couldn’t add the names of those who had tested positive for the disease when it reached its maximum file size. In the end, at least 16,000 names were left off the list as a result of this blunder, meaning that their contacts, many thousands more people, weren’t traced and asked to isolate for their own and other’s health.

As Open Democracy U.K., which has been at the forefront of efforts to hold the country’s government accountable during this difficult time, detailed in a recent report, despite performing so abysmally and putting lives at risk, Serco just received another $58 million to set up Covid 19 drive through testing centers.

Not to be left out of the large scale handout, consultants from powerful firms like McKinsey were brought in to help the government at least in part because ongoing, decades long austerity measures had gutted the civil service in the country, leaving it without the expertise to deal with the crisis.

As Tom Sasse of the country’s Institute for Government told the Week, “As numbers in the civil service have been significantly cut back in recent years, we have seen government departments rely more and more on consultants. It is not always clear that these consultants are being used well or where they can add value.”

Considering all this, the working people of the United Kingdom might have hoped that the largest opposition party in the country’s parliament might have defended them from the crony capitalism of Boris Johnson and the rogues gallery of rightwingers he’s assembled on his front bench. Instead, the party’s new leader, Sir Keir Starmer, has removed the more radical voices pushed into the spotlight under Jeremy Corbyn and seems set on returning it to the neoliberal New Labor era best represented by Tony Blair, when firms like Mckinsey prospered just as much, regardless of how mixed the results of their work.

It’s also important to note that in those nations within the U.K. with devolved parliaments, the character of these governments impacted their response when they diverged from the central government as it began easing lockdowns. Scotland and Wales, which continued with stricter measures, while still facing increasing caseloads, are doing better than far right Northern Ireland in terms of hospitalizations and deaths.

The very existence of covid capitalism points to the essential truth of George Carlin’s adage that government, “[Is] a big club and you aren’t in it”.


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