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The free market will only deepen the coronavirus crisis

21 0 0
10.04.2020

It has been clear for more than 150 years that the free market creates substantial inequality and destruction even in the best of times. But when it comes to a crisis, reliance on the market can cause unimaginable devastation.

Today, in the middle of a coronavirus crisis, the richest countries in the world are claiming wartime powers to direct economic activity, and control markets. They will need to, if we are to have any hope of containing coronavirus, spare millions of lives and prevent complete economic collapse. But sadly, these powers are largely unavailable to developing countries, which have been told for four decades that they do not need any control over their economies, and they cannot afford to build welfare states. Not to worry, international institutions like the International Monetary Fund advised, the market will deliver what you need.

Even in the West, years of austerity combined with "market knows best" ideology has hollowed out our ability to deal with coronavirus. The US is suffering greatly, not only because of the narcissism of President Donald Trump, but because its market-driven healthcare system, controlled by big business, is the most inefficient in the world. In the richest country on earth, a teenager suffering from COVID-19 died last week after being turned away from a clinic because he did not have insurance.

But for many countries in the world, stripping away the public sector, that bit of our economy which provides safety from the whims of the market, was not a choice. It was imposed ruthlessly from outside. On the back of the "third world debt crisis" in the 1980s, a crisis fuelled by irresponsible lending by Western banks, the IMF and the World Bank forced "structural adjustment" policies on dozens of countries in Eastern Europe, Africa, Asia and Latin America.

They effectively bailed out the banks, and insisted that the price was going to be paid by further impoverishing the countries concerned, demanding they carry out harsh austerity, sweeping privatisation, and give up on any attempt to manage their economies in the interest of their own people.

These policies created a permanent crisis in many countries, which were unable to build, for instance, the sort of public, universal healthcare systems that you find in the West. Just look at the number of doctors different countries employ, clearly something key in dealing with the coronavirus crisis. The United Kingdom has 28 doctors per 10,000 people. That is actually low for a developed country. Germany has 42, and Denmark has 40. Even relatively rich developing countries have a small fraction of that number: nine doctors........

© Al Jazeera