I increasingly find James Meadway the most insightful analyst of the political economy of Covid-19. He explores the epochal transformation which this crisis has the potential to bring about but does so in a way which is grounded in the identification of existing socio-economic mechanisms, in many cases ones which preceded the current crisis. In his recent writing he has stressed the significance of supply shocks (unexpected events which impact the supply of a product or service) and the central role of labour in capital accumulation (without which capital cannot, well, accumulate). He observes that control over labour is sought by capital to an extent which can often transcend short-term concerns of profitability, with this control being a precondition for the exploitation of raw materials in pursuit of profit:
There is hierarchy of its domination: first control labour, then use the control of labour make use of cheap raw materials. And as Michal Kalecki perceptively argued, way back in 1942, “business interests” will prefer greater control over labour to a situation of less control, even where the situation of less control actually produces more profits. Business interests, as a result, later lobbied hard against full employment, even when full employment conditions actually meant higher profits.
The problem for capital is that the pandemic has shifted power back towards workers, at least to some degree e.g. it has generated labour shortages and decreased the possibility for situational control with the mainstreaming of remote work. The point Meadway makes is that the state will play a central role in reestablishing this control, as well as to buttress processes of capital accumulation which are being disrupted by pervasive supply shocks:
This suggests a likely future dynamic, as we move into a world with endemic covid: that capital will sacrifice profitability for a higher degree of control; but whilst some of those costs of control will be borne by individual capitals, the need to still save costs will push it into a reliance on the state, which is a lower-cost option of managing surveillance and control. Covid gives an extreme version of this dynamic, since it hits the labour process directly, but it’s certainly possible to envisage a future in which more generic environmental shocks, like extreme weather events, or rising costs of production in general also provoke a retreat by private capital to state support. This isn’t a greatly novel argument for political economists, incidentally: Rudolf Hilferding offered a version of this capital and state fusion long enough ago. Similarly, the costs of this process of retreat are likely to be pushed, as far as possible, away from capital and back onto labour – whether in the form of generally rising prices, or through an increase burden of taxation.
If we are leaving neoliberalism and entering something worse, we cannot assume the familiar political coordinates of late neoliberalism (particularly vis-a-vis the state) will remain salient. What I take from Meadway is the imperative to be attentive to the changing role of the state in the economy, particularly with regards to the pervasive disruptions of Covid-19 (viz supply shocks and empowered labour) which are likely to be reinforced by the mounting effects of climate breakdown.