Steering the Narrative of the Virus Economy

Key highlights:

• How are economic thought leaders espousing the effects of the pandemic?
• What can we learn from the resilience of China's stock market?
• How have these market developments affected the lives of workers?

Ray Dalio and the changing world order

The recent collapse of the stock market has led to massive unemployment and general panic surrounding the state of the economy. In times of panic and uncertainty, investors turn to large financial institutions and famous investors for advice. However, we must consider the motivations of people who seek to guide investment and steer the economic narrative. What do these thought leaders have to gain from the advice they give? Can we trust advice from investors who stand to gain or lose millions from their advice?

One such billionaire, Ray Dalio, is publishing a series on history in the context of economics titled The Changing World Order. A central point is elaborated upon extensively with historical analysis. Charts with rough estimates on subjective and qualitative measurements are used to illustrate the main points. It doesn't take long to realize the central message of the text, and the opening chapter revolves entirely around it: The United States is the economic successor to the British Empire, the United States is facing overall economic decline, and China is quickly emerging as its successor.

Before we take the musings of a billionaire at face value, we must first consider how the ultra-wealthy are impacted by the economic crisis. The ultra-wealthy do not need to sell their labor, the ultra-wealthy have profited greatly from the economic crisis, and the ultra-wealthy are not tied to any one nation in particular. The most powerful owners of capital do not have to worry about missing payments or losing their jobs, they collect the payments and own the livelihoods of the people who need jobs. Awareness of one's relationship to the dynamics of their economic system is often referred to as class consciousness. Those with class consciousness can understand that ultra-wealthy investors have global financial interests beyond the livelihoods of their nation's workers.

Looking at the history of American recessions

Domestic stock markets in China have witnessed record jumps in late February and early March. The Shanghai Composite Index handles shares in some of the largest Chinese financial firms. Contrast these jumps with the massive and simultaneous drops in the NASDAQ, drops that have been pinned on the virus economy.

Anyone familiar with famous investors like Ray Dalio are likely familiar with other famous investors who made fortunes by successfully predicting crashes in the stock market. Anyone familiar with the history of industrial nations is familiar with the fact that this mode of production is subject to recurring crises. When it comes to economic collapse, it's not a question of if but a question of when.

Arguably one of the most crucial laws of the modern political economy is the theory of crisis. Are economic crises a product of irresponsible investors with unscrupulous character flaws, or are they an inherent product of cycles in the economic system? Improved technology leads to a drop in the profitability of labor-intensive systems. In short, capital renders labor redundant. The old systems of production are replaced by innovations in technology, but workers rely on the productivity of their labor to make a living. The result is a deceleration of profit growth and economic collapse.

The economic crisis is inevitable. Unemployment rates are rising in a sharp and sudden fashion. Just as they did in the American economic recessions of 2008, 2001, 1990, 1981, 1980, 1973, 1969, 1960, 1957, 1953, 1948, 1945, 1937, and the infamous Great Depression of 1929 following the sudden collapse of the stock market. This list is generous but far from complete, a similar pattern exists throughout the 19th century and the entire history of any industrialized nation. There is no question of crisis theory, we have mountains of empirical evidence that display recurring crises. It's reasonable to expect that this is only the beginning of the sharp upward movement in unemployment.

Democracy in Taiwan and Hong Kong

The economic effects of the virus economy are inseparable from the political realities of Taiwan and Hong Kong. The United Nation's World Health Organization (WHO) is widely considered to be an international authority on the pandemic. Why does the WHO not recognize the independence of Taiwan? Taiwan has managed to maintain stunningly low numbers on the spread of COVID-19, but the WHO has bowed to the People's Republic of China's (PRC) demands to not recognize the sovereignty of Taiwan. This scandal has revealed a clear political bias in the WHO. 

The WHO has an extreme influence on world economies. Their advice has given nations the impetus to shut down businesses and restrict the movement of their citizens. State and municipal governments are adopting PRC policies for their citizens. This is very evident in nations such as the USA, but what can we learn from Hong Kong?

Hong Kong has been at the center of a global media frenzy on protests over democracy and the PRC's extradition of Hong Kong citizens to their infamous detainment centers. How has the pandemic affected these protests? According to Austin Ramzy and Elaine Yu of the New York Times, the virus has been used as cover to crackdown on pro-democracy protests. The economic effects of the pandemic are fundamentally intertwined with the human rights of workers in countries affected by the virus.

The unfolding effects of the virus economy

Citizens in Western nations often refer to their rights of free speech and ability to criticize their governments publicly or in the press. They often decry the censorship and thought control of more authoritarian governments such as the PRC. Now that Western nations are facing another economic recession and the rise of PRC style policies, how many citizens are willing to give up their rights? Historically, every economic recession has opened the gates for fascism.

Many ultra-wealthy leaders in economic thought will advocate submission. They do not have to forfeit their rights, they represent the forces in control of the working people. Every worker in every nation must survive by serving the capital owned by these ultra-wealthy figures. In this way, every worker is united in their struggle for survival and basic human rights. Even media and financial businesses must toe their line or be eliminated. The pandemic and shifting world order has awakened many to the reality of their role in the global economy. Fortunately, this has brought people together from every corner of the Earth. The question we must face now is this: As the crisis has brought unity to consolidate our collective power, in what direction will we steer our future?