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, without spending, capitalism will collapse
Capitalism relies on the exchange of goods. When you can't exchange goods, the system collapses.
Capitalism is a 'system of competition'
Without vendors or consumer purchasing power, there can be no competition.
Capitalism requires the 'voluntary exchange of goods'
If there are no goods, there can simply be no exchange. Even when goods are available, people are too afraid of the coronavirus to spend disposable income on non-essentials.
Yes, as international connectivity is being destroyed
Planes, travel, ships - as the hallmarks of global trade go down, where does that leave us?
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.
Global supply chains are being destroyed by coronavirus
Big industries rarely exist within one territory. Large scale services and manufacturing companies depend upon global supply chains for commodities. These will fall apart as transnational links erode.
Global supply chains are built on inequality are being destroyed by coronavirus
Supply chains are global because companies choose to host each constituent part where it is cheapest. This practice deepens the inequality upon which capitalism depends.
No, capitalism is too ingrained in the way we live
Capitalism is so intrinsic to the fabric of (nearly) every nation on Earth, it will take more than a pandemic to shake it off.
Capitalism is necessary for stability, Covid-19 will not change this
A country's economic institutions are a key indicator of its social and political instability. As society readjusts and seeks normalcy after the pandemic, overhauling these would only serve as another source of uncertainty.
