'Open the Economy'? The Pandemic, Costs, Benefits, Capitalism

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A Socialist Project e-bulletin ... No. 2120 ... June 11, 2020

‘Open the Economy’? The Pandemic, Costs, Benefits, Capitalism

Harry Glasbeek

It is mid-June 2020. Everywhere there is a push to ‘open the economy’. What is meant, of course, is to bring back, as soon as possible, the profit-seeking activities of capitalist firms. It is an unchallenged assumption that the return of normal capitalism, that is, the ceaseless drive for the private accumulation of socially produced wealth, is crucial to overall welfare. But even as the push seems irresistible, there are murmurings of concern. What if the virus is not as beaten as the policymakers think it is? What if, like Rocky, it makes a stunning comeback? Should we not be more certain ere there is a return to full-blooded capitalist activities? After all, it requires a balancing of lives against economic welfare. Should that be even contemplated?

Weighing lives against the potential to gain material wealth is a norm. Indeed, the legal system repeatedly endorses that kind of balancing. As Richard Posner, a highly regarded legal scholar (now a senior federal US judge) observed:
"Only the fanatic refuses to trade off lives for property although the difficulty of valuing lives is a legitimate reason for weighing them heavily in the balance when only property values are in the other pan."

He was stating the obvious. We know that we live with risks that will result in the loss of lives. Although we call the materialization of such risks ‘accidents’, they are actually and actuarially foreseeable. For instance, we know that if we put automobiles on the road, then, given a certain number of drivers, a known state of roads, climatic conditions, the thoroughness of licensing and monitoring systems, and the like, we can expect a certain number of injuries and deaths. Insurance companies set their policy rates using such data, including personal characteristics of owners and drivers. Manifestly, the risks tolerated can be changed by changing some of the things that set the level of risks. For instance, changes to the design of a car, the way in which roads are banked, the resources spent on the education of drivers, the banning of the use of electronic devices when driving, all would have an impact on the outcomes of driving automobiles. Risks are inevitable. We can, and do, manipulate the frequency and gravity of their materialization.

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