0959 GMT July 06, 2022
Wolff, who believes climate change, inequality, racism, instability and the COVID-19 pandemic have converged to make the global economic crisis more acute and long-lasting, said India’s anti-pandemic programs should not just involve funding but also focus on constructing social distancing protocols for rural conditions, ptinews.com wrote.
“In predominantly rural economies like India, lower (nonurban) population densities should be made to work against the viral (coronavirus) spread and likewise a stress on building up food security should be more manageable," Wolff, professor emeritus at the University of Massachusetts, Amherst faculty, told ptinews.com in an email interview.
Elaborating, he said, India’s anti-pandemic programs should involve funding but also systemic assistance in two key areas – to construct social distancing programs and protocols for rural conditions and to prioritize the creation of growing, processing, and storing food across the country for a “secure food system".
The economist was skeptical whether large emergency stimulus packages, including India’s 20 lakh crore rupees ($267.27 billion) that is equivalent to the 10 percent of its GDP, would help sustain economically backward classes and “offset historically accumulated social deficiencies and exclusions”.
"In many countries, including India, mass poverty for a long time has undermined the health, housing, education, and related conditions of huge populations. They consequently suffer more than the average from both viral pandemics and economic crashes.
“Even large emergency stimulus packages like that of India’s package (10 percent of its GDP) and the US (considerably larger) cannot offset historically accumulated social deficiencies and exclusions. It would take both much more money and a willingness to undertake major structural changes if today’s response to the crisis is to better protect societies from repeated crises in the future," Wolff said.
In his view, governments reemploying workers who have lost their jobs in the private sector and retraining them to contain the pandemic, should be part of the roadmap for countries trying to stem the economic slide.
"The logical response to this crisis would have been to keep all workers employed doing all that was necessary to contain the pandemic. This means, for example, governments rehiring those fired by private employers, massively training them to test entire populations, to take care of the sick, and to otherwise build what society needs (infrastructure, education, housing, etc.) under pandemic conditions of social distancing, masks, gloves," he elaborated
The 78-year-old and author, whose most recent book is ‘Understanding Socialism’, predicted that the current global recession due to COVID-19 may go deeper than the ones earlier this century.
"We need to remember that it is the third capitalist crash in this century. The first one was the “dotcom crisis'' in early 2000 and then the one triggered by widespread subprime mortgage default in the US in 2008. The crash was one of the worst in capitalism’s history, second only to the crash of the 1930s. And now, in 2020 and we have a far deeper crash than in 2008," he said.
Capitalism’s periodic downturns (such as crashes, recessions, depressions, crises, business cycles and busts) occur on average every four-seven years, Wolff said, attributing each one to a different trigger that has the effect of distracting attention from the system’s inherent instability.
“It also distracts from other basic problems that global capitalism has never solved. Those have now exploded together converging on this capitalist downturn to make it extreme," he added.
"The five converging crises of climate change, inequality, racism, instability and the ongoing viral pandemic persuade me that today’s global crisis will cut deeper and last longer than most current predictions."
According to him, small and medium businesses with limited resources are more vulnerable compared to larger corporations that will gain the most from bailouts and stimulus programs.
"As happens in most capitalist societies, the bigger the enterprise the greater its resources to cultivate political friends. The current crises find small and medium businesses more vulnerable and with fewer resources to enable survival than large corporations usually possess.
“That is why, despite the World Economic Forum’s and many governments’ statements on the importance of maintaining and supporting small and medium enterprises and despite stimulus programs aimed at them, the systemically unequal competition between big business and other businesses will dominate the situation. Thus the bailouts and stimulus programs benefit large corporations at the expense of medium and small businesses everywhere," he elaborated.
The post-pandemic world, the economist cautioned, has to face the need to not return to the pre-pandemic ''normal''.
“Instead, major structural changes in national economies, world trade, and finance need to be decided and implemented. Chief among these is a much less unequal global distribution of wealth and income," he suggested.
Wolff, also a visiting professor at New School University, NYC, held the US government responsible for not adopting the policy of reemploying workers leading to the massive unemployment, economic losses in that country.
"This is not the policy adopted in the US where instead massive unemployment of tens of millions was allowed. That quarter of the labor force has suffered massive economic losses, is now agonized over whether their former jobs will be available and under what wages and conditions. Massive unemployment invites every employer to recoup losses by cutting wages, benefits, job security," Wolff said.
"That has already gotten well underway across the US. The suffering is greatest for the poorest, exacerbating already extreme inequality and aggravating racist tendencies to socially explosive levels," he added.