The scenes currently being witnessed in India are truly horrifying. Yesterday, the number of confirmed cases in the country passed 20 million. The country’s health infrastructure is stretched to breaking point. Doctors and nurses report a crippling lack of basic supplies and dramatic overcrowding in ICUs across the country.
With the health system collapsing, the bodies are piling up. Crematoriums are overflowing with bodies, which can’t be burned fast enough to keep pace with the rising number of deaths. Almost everyone in the country has lost someone; many have barely had time to grieve before losing someone else.
Up to now, the rest of the world has looked on with a combination of shock and apathy. It took weeks for countries like the US and the UK to offer support: the UK government has recently pledged to send 1,000 ventilators to India, on top of a shipment last week which included 200 ventilators and 500 oxygen containers. The US has provided $1.4 billion in emergency aid, along with ventilators, other supplies, and personnel support.
But these displays of generosity from the India’s former coloniser and the world’s foremost imperial power are too little, too late. What India needs are vaccines; and for India to acquire vaccines, vaccine manufacturers need to waive their intellectual property rights.
Pharmaceutical companies like AstraZeneca and Pfizer are not, of course, voluntarily going to give up their intellectual property – even if it means watching idly as hundreds of thousands of people die. Morality doesn’t figure in the logic of big business – the imperative is, as Marx once wrote, ‘accumulate, accumulate!’
Even if one of the big pharma companies wanted to waive its intellectual property rights to support India, doing so would set it back against its competitors, invoking the ire of the all-powerful shareholder. Either every pharma company is forced to waive its IP rights, or none of them will – as is often the case during crises of capitalism, it is up to the state to solve capital’s collective action problem.
The response—or lack thereof—of the world’s richest states to this crisis will have far-reaching implications. It is now becoming very clear that there will be no localised recovery from the pandemic until there is a generalised recovery from the pandemic. The rich world cannot escape this disease unless the poor world does too.
This is true for both logistical and macroeconomic reasons. Politicians in the rich world can try to keep the borders completely shut but—as Harsha Walia told me eloquently in last week’s episode of A World to Win—territorial borders were never designed to be completely impermeable. They always have and always will be porous for particular bodies – whether those of the very wealthy, or those of the migrant labourers required to keep the economies of the rich world going.
While imposing restrictions on travel as variants of the virus surge around the world has helped to slow down their spread, shutting the border entirely is impossible. Even as extremely harsh restrictions on international travel remain in the UK, the Indian variant has already reached us. In London, the B.167 variant is growing ‘rapidly’, quickly displacing the now-dominant Kent variant.
The success of the vaccine rollout and ongoing lockdown restrictions have resulted in a remarkable fall in the prevalence of the virus in the UK, but as one scientist remarked on Twitter, ‘we’ve seen rising variants masked by overall case drop before’. The virus is too contagious to remain isolated to one corner of the world – if its somewhere, then eventually it will be everywhere.
Even if it was possible to ‘contain’ the virus in the poorest parts of the world, sacrificing the lives of perhaps millions of people in the process, the economic impact would be disastrous.
First, many of the poorest states in the word are already in the midst of a profound debt crisis. As the pandemic hit, capital flooded out of the poor world and into the safe haven of the US dollar. With the Fed pumping seemingly endless amounts of money into US financial markets, much of this capital has ended up in US equities, boosting the wealth of private investors as states in the Global South desperately struggle to meet their obligations to creditors.
If they fail to meet these obligations, the world’s poorest states face being locked out of financial markets, being sued by creditors, and having their economies taken over by international financial institutions bent on introducing neoliberal economic ‘reforms’ that will only increase inequality and poverty over the long term.
As the Indian variant spreads throughout south Asia and sub-Saharan Africa, many states may find themselves in even more dire economic straits, exacerbating this already substantial challenge for the world economy. A debt write-off is clearly required to bring some level of stability to this situation, but again the most powerful governments in the world are failing to act.
Second, the economies of the Global North rely on labour and other exports from the Global South simply to function. As we saw very clearly when China was forced to shut down its economy at the start of the pandemic, the world economy is far too integrated for one part of it to fall out of action without anywhere else being affected.
If manufacturers and consumers in the Global North suddenly found themselves without access to imports from the Global South, the results would be disastrous. Even if demand in countries like the UK continues to hold up as the recovery gains momentum, supply-side challenges resulting from the ongoing spread of the virus in the rest of the world would generate the kind of inflationary pressure not seen in decades.
With working people in the Global North already facing unemployment and a concomitant fall in their already weak bargaining power, rising inflation would be likely to erode wage increases—particularly for those at the bottom of the income spectrum—and compromise the recovery here.
Whether we’re talking about financial markets, labour markets, trade, or almost any other variable, the ongoing crisis in the Global South will have huge implications for the rest of the world. There can be no recovery in the Global North without a recovery in the Global South.
If the Biden administration—currently being praised by social democrats around the world for its progressive domestic economic agenda—does not listen to the 100 US lawmakers urging the President to waive intellectual property rights through the WTO to support India, then even the US’s economic recovery will be ephemeral.
The logic of capital is competition, not cooperation. The logic of the capitalist state is to solve capital’s problems for it. It remains to be seen whether the leader of the world’s foremost imperial power will be farsighted enough to realise that India’s problems are his own problems.