Coronavirus and Globalization

Mar 31, 2020

The following article is taken from Lutte de Classe (Class Struggle), #207, April-May 2020, the magazine of Lutte Ouvrière (Workers Struggle), the revolutionary workers group active in France.

Although the 2019 coronavirus pandemic (or COVID-19) is not the first one with which humanity has had to deal, the speed at which this virus has spread out of China across the entire planet has broken all the records. Attaching itself to one of the 130 passengers in the world who took a plane every second before the crisis, the virus has reached every region of the globe in under 3 months. The maps showing coronavirus outbreaks and intercontinental flight patterns correspond perfectly.

The economic crash caused by quarantines, factory shutdowns and border closings, starting in China and then extending to the rest of the world, has made concrete the degree to which the economy has become globalized and the different countries have become interdependent. Factories all over the world have ground to a halt for lack of parts made in China or elsewhere. This crisis has shed a light on the fact that 80% of the active ingredients of drugs produced in Europe are manufactured in India or China, as opposed to 20% in the 1990s. It has also revealed that 60% of the world’s acetaminophen and 90% of all penicillin is produced in China. Due to the spread of just-in-time production and the sharp reduction of inventory over the years, the closing of borders has caused supply chains to snap in many industries.

In France, all of the cuts made to public health budgets, coupled with the political choice made in 2013 to stop maintaining a strategic reserve, explains the initial shortages of masks, screening tests, and ventilators. These shortages were worsened because the government did not enact an emergency production plan at the beginning of the pandemic. The dispersion of the production chains of all of these materials across several countries—due to the spin-offs, closings, and offshoring of factories—made the shortages even more dire.

The oxygen cylinders used in certain mechanical ventilators were made in Auvergne by Luxfer, until a British company bought it in 2018 and shut the factory. They are now imported from Britain and Turkey. The breakdown of the supply chain has delayed the production of screening tests, which, if systematically applied, could slow the disease’s spread and bring the quarantine to an end sooner. The government is claiming to implement widespread testing, but it is leaving it up to an array of competing private companies, ranging from small businesses to the giant BioMérieux, to develop and market their own tests. Rather than centralizing resources and expertise, even if only at the level of Europe, private companies are locked in relentless competition. The active ingredients of these tests, and their components and reagents, come from all over the world. Global quarantine measures have slowed down production, and certain governments, like that of the United States, are blocking them from being exported, out of protectionist concerns with protecting their own companies.

The spread of COVID-19, like its initial appearance, was accelerated by the globalization of the economy, but the fight against the virus is being waged at the most strictly national level. Even within the European Union (EU), which was established as an economic free-trade zone and thought of as a space of liberty and cooperation, the crisis has revealed the narrowest national egoism. At the beginning of March, when the pandemic reached Europe, the first reflex of the French and German governments was to issue decrees forbidding the export of the protective equipment they held to other countries in the EU. Italy received more aid from China—and even from Cuba—than it did from France or Germany.

This pandemic has revealed the failures of the existing economic and social organization. The moving testimonies of healthcare workers faced with supply shortages have made concrete to millions of people how absurd it is to have an economic organization that produces masks in China which factories made in Europe not so long ago. This questioning of capitalist globalization has been translated politically through various currents. From trade union, environmentalist, and anti-globalization militants, who have long been opposed to globalization, to politicians tasked with defending the short-term interests of their capitalist companies, besides economists worried about dependence on the Chinese economy, all are calling for a change in the model. But which model are they talking about?

Competition, Anarchy, and the Law of Profit

When the heads of Apple rely on 200 suppliers in 43 countries across 5 continents, when they arrange for the iPhone to be assembled in China before selling it all over the world, their goal is to profit from the low wages of Chinese workers, from the fall in transportation costs, and from the developments in communications which have characterized the past three decades of globalization. Their central motivation is the search for maximum profit. At each stage, they researched the lowest costs of production, trying to exploit as much as possible the unequal development between countries, the trade agreements signed between governments and the most permissive social, financial and environmental laws.

The pharmaceutical industry follows the same insane logic. Most of the laboratories that make up “Big Pharma”—Merck, Novartis, and Johnson & Johnson—have gradually stepped back from the primary production of the active components in drugs, in order to have them made at low cost in India or China. They have sub-contracted secondary production, which consists of adding excipients and making capsules or pills, to manufacturers like Famar, Delpharm, and others. These manufacturers, which produce for several different pharmaceutical laboratories, are regularly bought up and sold by investment funds or speculators who shift from supermarket chains to pharmacies. As in every industry, their facilities are becoming obsolete due to lack of productive investment. Their owners do not hesitate to close useful factories.

The Famar factory in the Lyon suburb of Saint-Genis-Laval has 250 workers who produce Nivaquine for the pharmaceutical corporation Sanofi. Nivaquine is a medicine used to treat malaria and is made from chloroquine and azithromycin, an antibiotic prescribed against respiratory infections. The factory was slated to be closed before summer 2020. Sanofi has its Nivaquine produced in India and had planned to abandon its production under the pretext that the drug was losing momentum. The research and press releases from French scientist Didier Raoult claiming that these treatments can be used to fight the coronavirus might change this. The Minister of the Economy, Bruno Le Maire, invoked national sovereignty to demand that the heads of Sanofi continue to produce chloroquine in this factory. If they do so, it will obviously not be in the name of national sovereignty, but because there is a lot of money to be made, using new subsidies and other credits for research.

All taken together, the concentration of the worldwide production of certain active ingredients in a few factories, subcontracting, just-in-time production and the absence of stockpiles combine to create breaks in the supply chains of drugs, even outside of pandemics. Over 10 years, the number of ruptures increased twenty-fold. In 2018, 870 drugs and vaccines ran out of stock, including treatments which are of major therapeutic interest, indispensable for sick people and irreplaceable. Besides the risks caused by globalized production, the big pharmaceutical companies also make the choice to voluntarily stop producing drugs or vaccines which they deem not profitable enough. These accidental or consciously chosen shortages of drugs, vaccines, equipment and medical tests can be explained by the fact that this industry is in the hands of private companies constantly on the lookout for profit, locked in fierce competition with one another, with no plan to control them.

Capitalism means anarchy in production. Making ventilators, for example, requires raw materials, metals, electric cables, plastic tubes produced from petroleum and various spare parts, not to mention the machine tools needed to mass produce them and the electricity to power them. To make a ventilator, one must have each of these components in the right time, the right place, and the right proportion. Some components are available locally, while others need to be imported. But all of them are made by other private companies, each one trying within its own sector to sell the most it can in every market, hoping to do so before the others. This causes the breaks in the supply chain and the dramatic delays in production. The invisible hand of the market, to use the expression of the defenders of the capitalist economy, means the egoism and the individual action of each capitalist and each banker on the hunt for the best deal.

Inventory and Planning

The pandemic, quarantine, and shutdown of many factories in the world are revealing the absurdity of capitalist globalization. But between these two terms, it is capitalism, not globalization, which threatens humanity. This crisis shows, once again, the need to plan and rationalize the production of all the goods which humanity requires.

Planning is not a synonym for centralization. First of all, it requires inventory: of everyone’s needs, of resources available and of production capacities. It requires that production be organized, at the local level as much as possible, and at a larger continental or global level depending on the industry and the state of its resources, while minimizing human labor, movement and extractions from nature.

Humanity possesses all of the tools it needs for inventory, forecasting, and organization in order to set this production in motion to feed, house, educate and care for all of its members. But today, these tools are in the hands of the big industrial corporations and banks that control the economy and the governments that defend their interests. They use these tools to oppress, spy on, and worsen the exploitation of workers, all while waging ferocious wars against each other, and not only trade wars. These tools allow them to systematically bleed the planet, to destroy ecosystems and to cut down primal forests and replace them with intensive agriculture and industrial livestock farming, which all accelerate the transmission of viruses between species and makes them more dangerous.

Changing this model and putting an end to the ravages of capitalist globalization require a social revolution, in order to expropriate the capitalists and overthrow the states that serve them. To make such a revolution, a powerful social force must act, present all throughout the world, with everything to gain from overthrowing capital’s dictatorship over society. Such a social class exists—it is the international proletariat, those whose work is now being discovered to be essential for the daily functioning of society, united and numerically reinforced by the international division of labor. What this social class lacks is the consciousness of its collective power, of its common interests and of the fact that it holds society’s future in its hands. The workers should certainly not expect the bourgeois states will draw the lessons of this pandemic in ways that are beneficial to their collective interests. And all those who suggest the opposite are making themselves accomplices for the attacks being prepared.

States in the Service of the Capitalists

An appeal entitled “Never Again! We Must Prepare for the Day After” was recently published, notably co-signed by Philippe Martinez, the president of the CGT trade union federation, Cécile Duflot, the general director of Oxfam, and Aurélie Trouvé, the co-president of the anti-globalization group ATTAC France. It denounces “a neoliberalism which bit by bit has reduced the capacity of our governments to respond to crises like that of Covid.” It calls for “the re-localization of economic activity, in industry, agriculture, and services, to allow for greater autonomy from international markets, taking back control over the modes of production and engaging in an ecological and social transition of these activities.”

This entire appeal consists of urging the state to put this policy into action. Its signers, who naively observe that “too few lessons have been learned from the economic crisis of 2008,” call on the bourgeois state to “disarm the financial markets by establishing control of capital and banning the most speculative operations, taxing financial transactions….” They wish for “an international regulation founded on cooperation and a response to the ecological crisis, within the framework of multilateral and democratic authorities.”

Another appeal, published in the newspaper Le Monde on March 22, signed by various members of ATTAC, drives home the same point: “Relocalizing is no longer an option but a condition of survival for our economic and social systems, and for our populations.” It makes a demand to “cut back the flows of capital and goods and to reduce the role of sectors which are toxic to the biosphere (fossil fuels, chemicals, industrial agriculture, electronics, etc.).” And like the others, those who signed this appeal call for public regulation, and therefore on the state, to put this program into practice.

But it is a dead end to denounce liberal globalization without challenging the capitalism that drives it to an absurd extreme. These appeals call for a re-localization of production by addressing national governments or hypothetical international regulatory bodies. This means binding the poor and working classes of each country hand and foot, before delivering them to a capitalist class greedy for profits, linked in a thousand ways to a state apparatus created to defend their interests.

The COVID-19 crisis will be like the 2008 financial crisis and all the previous ones: governments and states will enact massive emergency plans to save the immediate interests of the capitalists and financiers. An early proof of this is the nearly unlimited lines of credit which the central banks and governments of all the rich countries have opened without delay. No more in 2020 than in 2008 will the banks and the big companies use this credit to make productive investments or to advance low-interest loans to small businesses and artisans. Just the opposite! Bruno Le Maire, French Finance Minister, criticized a few big companies, like Vinci, Printemps, and MMA Insurance, for choosing to delay payments to their suppliers in order to accumulate cash, even though they can borrow without limit. However, this does not prevent him from continuing to wait on them hand and foot. In mid-March, the satirical newspaper Le Canard Enchaîné revealed how Bernard Arnault, the third richest person in the world, profited from the fall in the price of stock in his company LVMH in order to buy it up at low prices, boosting his fortune just a little more. While the hotels and resorts of the hospitality multinational Accor have been shut down, its CEO and many of its founders and executives did the same thing. Behind all of these giant international corporations, there are flesh-and-blood bourgeois. For these war profiteers, this health crisis, like all crises and wars, is an immense opportunity to enrich themselves a little bit more. This crisis will allow the big ones to eat the little ones and for capital to become a little more concentrated.

As for the governments, they will adapt their economic policies to suit the new relations of force between countries and between capitalist companies in various sectors, and to deal with the state of the world economy coming out of this crisis. If this, as is likely, accelerates the tendencies toward protectionism which have been at play for several years and are symbolized in the tariffs and import restrictions which Trump established in 2018, all governments will follow. One after the other, they will enact protectionist measures and push for the re-localization of production. But the re-localization which they will promote will be no less harmful for the poor and working classes and for the environment than is the current globalization. The capitalists will continue to produce what they deem strategic for their interests and, no more than they do today, will they produce the goods required by the working classes—housing, means of transportation, and others.

At War against the Workers

On March 16, in his televised speech, President Macron declared: “Tomorrow we must take the lessons from the moment we are passing through, and we must challenge the model of development in which our world has been engaged for decades and which is revealing its faults in broad daylight.” On February 28, Bruno Le Maire, his Minister of Finance who is putting all his weight into forcing workers to go and be exploited despite the quarantine, promised that “the first task post-crisis will be to reorganize the scale of production sector by sector … in order to achieve economic sovereignty.” He added: “The re-localization of certain strategic production must be implemented and will be implemented.” Among the priority sectors, he named defense, food, health, energy, and transportation. In the mouth of Le Maire, if there will be any re-localization, it will aim to secure the supply of raw materials, spare parts, and various components for Dassault, Danone, Sanofi, Total, Engie, and other giant corporations. The government may encourage the re-localization of the production of the active ingredients in drugs. But to do this, it will lower the taxes and Social Security contributions paid by these companies in the name of competitiveness. It will impose new sacrifices on workers in the name of national sovereignty.

Under the pretext of a health war against the coronavirus, the government and bosses will wage this war against the workers. The nurses, hospital and nursing home workers, personal caregivers, delivery workers, truck drivers, cashiers, custodians, security guards, and garbage collectors are being sent to the front with no protection. But the industrial capitalists in all of the non-essential sectors are maneuvering to get their operations up and running again as quickly as possible, revealing their disdain for workers’ health and lives. Dassault, Airbus, PSA, and other companies are making their workers and all of their subcontractors assemble airplanes and cars regardless of the quarantine, even though everything is suspended, in order to be in the best position to flood the market when the economy starts up again. They are lining up in battle array to brave the global market, using workers as cannon fodder.

What is happening during this period of quarantine gives us a glimpse into what will take place as the economy opens back up. The violent attacks against workers, the ban on strikes during quarantine in Portugal, the legalization of 60-hour workweeks and layoffs in France—all of these clearly demonstrate against whom the governments are waging their war. If they let them do this, workers who are today being made to risk their lives to produce no matter the cost, will pay the bill for the crisis twice over. They will pay for the hundreds of billions lent to the capitalists with new deep cuts to those services useful to the population. They will pay for the economic war and the defense of national sovereignty with reduced wages, eliminated time off, and extended workweeks. To save their conditions of existence, they must refuse any national union and start defending themselves right now.

The COVID-19 crisis and the forced quarantine of humanity will push workers and young people to pose questions about the way society runs. We must fight so that this new generation does not find national isolationism and sovereignty as the only response to its questions and to its revolt. “National sovereignty” is a dead end, whether it is openly in the service of the capitalists, like that embodied by Macron and Le Maire, whether it stinks of xenophobia, like that of Le Pen and Asselineau, or whether it claims to be environmentalist, social, and progressive, like that of Martinez and Duflot. We must allow this new generation to reconnect with the perspectives defended by the socialist and then the communist movement—the need all across the planet to expropriate the bourgeoisie and destroy its state.

March 31, 2020