14 May 2020

Why it’s wrong to blame ‘Anglo-American capitalism’ for the ravages of coronavirus

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It’s possible to see a trialling, even a trailing, of a certain narrative out there. The UK and US have uniquely bad outcomes from the coronavirus and the reason is – wait for it, wait for it – neoliberalism! Of course, the idea that perhaps the state isn’t the correct method of dealing with everything must have been killing people, right? 

The Guardian’s Nesrine Malik offered a fine example of this logic in a recent poiece, but it’s not a story limited to that paper or author. It’s actually fascinating to see the various struggles to make the idea of a ‘neoliberal virus’ the standard interpretation.

There are two fairly big problems with the thesis, however. The first is that, as Malik says: “The world’s highest coronavirus death tolls belong to two countries“, the two neoliberal bully boys, the US and UK.

Of course the US will have a high number of deaths. It’s by far the world’s largest rich country. We tend not to trust the numbers from poor places or China so, given its population is well over 320 million people, the highest death toll by nation was always liable to be the US. And if we look at the Johns Hopkins data on deaths per head of population, the US and UK are not exceptional at all. It’s actually that hotbed of neoliberalism, Belgium, which has fared most poorly so far, followed by Spain and Italy then us. The US comes seventh. Try picking the Anglo-Saxon distrust of the state out of that.

As to why it should be neoliberalism that is at fault, apparently it’s because successive governments have decided to use markets, not the state. According to Malik:

“Anglo-American capitalism, pursued by both right and centre-left parties, rooted in small government and powered by exceptionalism, had dismantled the state. No notice or warning could have refashioned the machinery of government quickly enough to save lives. An economic and political model that hinges on privatisation, liberalisation and the withdrawal of labour rights created a system prone to regular crises, despite such shocks being framed as one-offs.” 

This brings us to the second problem with blaming Maggie, Reagan or whoever for coronavirus – just look at the parts of the UK response that didn’t work.

Take NHS procurement, an entirely centralised process run by ministers. Public Health England, the recipient of more than £4 billion a year, insisted that it alone should be in charge of our testing. It was a similar story across the pond, where the Federal Drug Agency insisted that the only test to be used was the one from the Centre for Disease Control. The CDC first managing to design a test that didn’t work, then cross infecting it with coronavirus in their own labs, then still insisting, as did the FDA, that all testing must still be done in CDC labs. Hundreds of state, university and private labs wanted to test but weren’t allowed to. Heck, the FDA even declared the taking of swabs at home to be sent in illegal.  

Centralised bureaucracy of this sort is not usually thought of as part of the neoliberal revolution. 

And what about those places generally thought to have got things right? In Germany they eschewed the centralised testing approach and used 400 different labs spread across the place. In the Faroes the guy running the salmon testing lab – yes, a vet – repurposed his chemicals to test the people. Both of these successes sound rather more free market than not, don’t they?   

So we have an initial claim that isn’t true – that the US and the UK have been the countries worst affected by the virus – followed by an argument about political ideology that doesn’t stand up to the most cursory scrutiny.

For even if the US and UK had stood alone among developed nations, pandemic response, disease testing and so on are exactly the parts of both states that have not been sold down the neoliberal river. This, incidentally is why they don’t work terribly well – they’re still centralised, unwieldy government bureaucracies. If anything this crisis has shown it’s the private sector that is far more agile, more able to adapt to the very different needs of the moment than the parts of the economy run by the government.

Nonetheless, in certain circles the idea that dastardly privatisation is behind our current woes will be impossible to shift. Worse still, this dubious argument will doubtless be used to claim that we need ever more collectivism and state control. Untruths are often the most useful propaganda, and who needs reality when you’ve got that?

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Tim Worstall works for the Continental Telegraph and the Adam Smith Institute.

Columns are the author's own opinion and do not necessarily reflect the views of CapX.