Might COVID Cause the Collapse of Global Capitalism? With Any Luck, Yes

Photo by Sunyu Kim on Unsplash

The COVID-19 (“Coronavirus”) pandemic is clearly tragic. There is absolutely no denying that. However, I bring a slightly different perspective to this tragedy than most. I’ve been a disaster researcher for more than 15 years now, ever since Hurricane Katrina made landfall in 2005 and catastrophically flooded New Orleans — my city and my home at the time. Like COVID, Hurricane Katrina resulted in widespread loss of life, that was both predictable, and for which much could have been done to minimize the loss of life. Both events have exposed glaring gaps in leadership, at the highest levels of government.

But as impolitic as it might be to say, both of these tragedies have silver linings. Katrina served to reinvigorate national discussions about racial inequality, prompted much-needed legislation to ensure Louisiana received its fair share of oil royalties, and at the local level, prompted a resurgence in urban agriculture and community gardens — an important development in a city known for its unhealthy lifestyles and food-desert lower income communities. And, as I will argue below, COVID-19 will be no different and, indeed, it carries even more revolutionary potential than any other disaster or crisis in our lifetimes.

The key point here is that crises are opportunities for strategic and directed change. This, you see, is my hope for the COVID pandemic: While people are surely losing loved ones in this horribly tragic event, it has also exposed flaws in our economic system which might be — and perhaps should be — fatal. As I will argue below, it is important that we seize the momentum currently underway, wrest power and control from the wealthiest 1 percent, allow fossil fuel companies to shutter their operations, re-localize our economic arrangements, and work to protect our natural environment. And, I believe that COVID is already showing us how to do this.

Economic Crisis and Environmental Opportunity

As North Americans are told to physically distance, to stay at home, quarantine, and isolate, our economy has been thrown into a tailspin. People are travelling less (both by car and by airline) as planes sit in hangers and employees are laid off. Meanwhile, we are shopping less, consuming less, and having less impact on the planet. Cities and countries all over the world report that pollution levels are noticeably improved[i] and 2020 looks to be the first year in recent memory in which carbon emissions are down relative to the previous year.[ii] But all of this lack of movement has profound consequences for our capitalist economic system.

Current projections estimate that the US economy will contract by 8.3 percent in 2020[iii], and the Canadian economy by a very similar figure,[iv][v] each shedding millions of jobs in the process. The International Monetary Fund now projects that COVID will usher in the steepest economic recession since the Great Depression.[vi] Nowhere has this been felt more than where I live — Calgary, Alberta —economic hub for Canada’s tar sands. Since COVID came on scene a few weeks ago, the price for a barrel of Alberta’s oil fell below $5 and is now selling for less than a Happy Meal or a pint of craft beer. In a boon for the environment, worldwide demand for oil recently fell below 1995 levels[vii] and the industry is warning that these low prices could put oil companies out of business entirely. As you might imagine, this worried fossil fuel executives. The President of the Canadian Association of Petroleum Producers, an industry lobby group, said that COVID19 is “having a devastating impact on Canada’s oil and natural gas sector.”[viii] Given that impact, oil and gas CEO’s have said publicly they are “on pins and needles” awaiting government bailouts.[ix] At the same time, Alberta’s public sector is also reeling as the provincial budget was based upon projections that oil would hover at around $60 per barrel this year. As you might imagine, March 2020 saw six-digit job losses in the province[x], unemployment claims are at an all-time high, and as many as 60 percent of people are within $200 of not being able to pay their bills.[xi]

Already grappling with low oil prices since 2015, the oil industry seems on the brink of collapse. In fact, the CEO of Texas-based Pioneer Natural Resources, Scott Sheffield, recently warned that without significant government help, “we will disappear as an industry.” Perhaps meant to frighten governments into offering cash handouts, the specter of this disappearance can also be viewed as an opportunity. And I would argue that we take the opportunity, resist bailing out the fossil fuel industry, and let it perish. The oil industry is responsible for funding climate change denial,[xii] pipeline spills that pollute waterways,[xiii] ignoring critical environmental regulations,[xiv] and of course, it is the very the industry produces the commodity largely responsible for fuelling the climate crisis. Perhaps its time has come.

But won’t people working in the energy industry lose jobs? Yes. And those out of work will need to be supported by their communities and neighbours, and by robust social programs that will help to retrain and reinvent the very skilled workers on which the fossil fuel industry currently relies. So, nobody should be left to fend for themselves as we make this transition, but at the same time, we must not ignore the opportunity to put this problematic industry under.

Letting Capitalism Self-Destruct

In fact, COVID presents us with a tremendous opportunity to re-envision our entire economic system, not solely our dependence on fossil fuels. Right now, the majority of North Americans live in financial precarity, subsisting paycheck to paycheck, while the robber barons who make up the top 1 percent of earners and the corporate CEO’s live lives of luxury. Enough; No more bailouts. When airlines fail, we must let them. When large food-service conglomerates fail, we must let them. When energy companies fail, we must let them.

As these economic arrangements change, we will find that we are abandoning capitalism itself — at least the sort of global neoliberal capitalism which dominates today. This is the same economic system that handsomely rewards investment bankers while allowing housekeepers, farmers, and janitors to live in poverty. It is a morally bankrupt system.

It’s also the type of capitalism that has run roughshod over the environment. Here I take my cue from environmental sociologists who for decades have argued that under capitalism, we may never solve the environmental crisis. Chief among these thinkers is John Bellamy Foster, who has argued provocatively that capitalism and environmentalism are fundamentally incompatible. Capitalism requires constant economic growth, but that in turn means that each year we must extract, process, ship, buy, and consume more and more stuff than we did the previous year — lest we allow the economy to slip into a recession which would punish the most vulnerable members of our community first.[xv] This continual need to produce more, buy more, consume more, is known by those in my field as the “Treadmill of Production” theory.[xvi]

But unlimited resource extraction and unlimited economic growth are simply not possible in a world of finite biophysical resources. As Karl Marx himself pointed out 170 years ago, capitalism is inherently crisis-prone, containing the seeds of its own destruction, and one day it will implode.[xvii] That day might very well be today.

Allowing capitalism to fail is scary. What will follow? The unknown is far scarier than the status quo, and current economic arrangements have a certain comforting predictability. But at the same time, these arrangements are so deeply problematic, extracting resources — trees, oil, minerals — from many regions of the world, leaving only poverty and toxic waste behind. They’ve handsomely rewarded executives while consigning hourly employees to scarcity. They’ve exacerbated the climate crisis through their global distribution networks. And now is the time to say that enough is enough.

As Foster presciently pointed out “It is commonly said today on the left that it is easier to imagine the end of the world than the end of capitalism. As a result of climate change, COVID-19, and the developing financial crisis of global capitalism, this is now finally being reversed. It has suddenly become easier to imagine the end of capitalism than the end of the world.”[xviii]

Living More Locally and Interdependently

If the current system of global, neoliberal capitalism — with its focus on privatization, tax cuts, and the “free” market — were to collapse, what replaces it may very well prove more durable, egalitarian, and humane. Here is what I envision:

I envision a world where we all live more locally. We travel less. We work closer to where we live. We reinvigorate local networks of interdependence — the very networks that the Walmarts and Amazons of the world have so successfully obliterated. Through these local networks, we can trade and barter necessary skills and products, forging our social networks — or what we sociologists call “social capital” — as we go.

Disaster sociologists have repeatedly demonstrated that disasters and crises give rise to emergent social networks — contacts and organizations that arise from the ground-up[xix] [xx], strengthening communities by building what journalist Rebecca Solnit dubs “A Paradise Built in Hell.”[xxi] These networks will leave us more prepared and more resilient the next time a crisis happens. At the same time, I am hopeful that governments will take a leading role in providing for the people — particularly in the realms of healthcare and education — nationalizing critical industries and operating them for the common good.

Only a few weeks into COVID-19, I already see the seeds of this new localized economy. Here in Canada, there is a nationwide shortage of yeast and of spices and herbs,[xxii] as people have begun cooking for themselves, as well as sharing their various baked goods with their neighbours. At the same time, companies that sell and ship seeds are backlogged with orders, as seed sales have more than tripled,[xxiii] as more and more people plan to grow gardens this summer, providing food for their families and communities. What I envision moving forward are communities who use their skill-sets to provide for one another, who eschew reliance on huge international corporations, choosing to live locally, produce their food locally, invest their energy locally, and spend their money locally.

And thus, we arrive at my key point: As oil and gas prices crater and as the economy falters, I would argue that we should……. Let them. We, the people, have the skills to create value and reinvigorate our communities after this disaster — not multi-national corporations or our employers. They need us, but the dirty little secret is that we don’t need them. We are all perfectly capable of living fulfilling, satisfied, joyous lives without global, neoliberal capitalism, without billionaire CEO’s, without for-profit healthcare, without huge energy conglomerates. Let them perish — and let our communities live.

Timothy J. Haney is Professor of Sociology at Mount Royal University in Calgary, Alberta, Canada, as well as Board of Governors Research Chair in Resilience and Sustainability. His email is: thaney[at]mtroyal[dot]ca and his website is www.timhaneyphd.com

[i] Pathak, Sushmita. 2020. “With Coronavirus Lockdown, India’s Cities See Clear Blue Skies as Air Pollution Drops.” National Public Radio. Link: https://www.npr.org/sections/coronavirus-live-updates/2020/04/10/831592401/with-coronavirus-lockdown-indias-cities-see-clear-blue-skies-as-air-pollution-dr

[ii] Watts, Jonathan. 2020. “Coronavirus Could Cause Fall in Global CO2 Emissions.” The Guardian. Link: https://www.theguardian.com/world/2020/mar/10/coronavirus-could-cause-fall-in-global-co2-emissions

[iii] Bachman, Daniel. 2020. “United States Economic Forecast: 1st Quarter 2020.” Deloitte. Link: https://www2.deloitte.com/us/en/insights/economy/us-economic-forecast/united-states-outlook-analysis.html

[iv] Tencer, Daniel. 2020. “Canada’s Economy Shrank 9% in March Largest Decline on Record: StatsCan.” Huffigton Post Canada. Link: https://www.huffingtonpost.ca/entry/economy-canada-coronavirus_ca_5e961a91c5b6fb2e004ea796?ncid=fcbklnkcahpmg00000001&fbclid=IwAR0aP0AE4rf0DzV8LkPwcTJnb2GJWJSeXTn3NeUTQLw98YHuwD-Zn3UO7zk

[v] Sharp, Alastair. 2020. “Canada’s Economy Likely Facing Years’ Long Recovery, Economists Say.” National Observer. Link: https://www.nationalobserver.com/2020/03/25/news/canadas-economy-likely-facing-years-long-recovery-economists-say

[vi] Horsley, Scott. 2020. “IMF Warns of Steepest Recession Since the Great Depression.” National Public Radio. Link: https://www.npr.org/sections/coronavirus-live-updates/2020/04/14/833995714/imf-warns-of-steepest-downturn-since-the-great-depression?utm_term=nprnews&utm_source=facebook.com&utm_medium=social&utm_campaign=npr&fbclid=IwAR1pP52ePgqNeMthw_1_qi2c3BR_9Ba-KtZBpNoYUu8h9yPAai8kQTtdnrY&fbclid=IwAR0FEc7oV6QhgW3oGye7oL0Xoujsx6cbaRnDsAB1qILqIEiZ6d78xco8K0A

[vii] Domonoske, Camila. 2020. “Oil Prices Keep Slipping As Demand drops by Record Amounts.” National Public Radio. Link: https://www.npr.org/sections/coronavirus-live-updates/2020/04/15/834868805/oil-prices-keep-slipping-as-demand-drops-by-record-amounts?utm_medium=social&utm_term=nprnews&utm_source=facebook.com&utm_campaign=npr

[viii] Thomas Stephanie. 2020. “Oil Market Crisis Hammers Alberta Energy Sector.” CTV News. Link: https://calgary.ctvnews.ca/oil-market-crisis-hammers-alberta-energy-sector-1.4858608

[ix] Bakx, Kyle. 2020. “Oilpatch on ‘pins and needles’ waiting for aid, while Calgary Stampede uncertain.” CBC News. Link: https://www.cbc.ca/news/business/alberta-oilpatch-stampede-pandemic-1.5531006?__vfz=medium%3Dsharebar

[x] Stephenson, Amanda. 2020. “’Shocking to See’: Alberta Loses 117,000 Jobs In March Amid COVID-19.” Calgary Herald. Link: https://calgaryherald.com/business/local-business/albertas-economy-loses-117000-jobs-in-march-amid-covid-19/

[xi] Boothby, Lauren. 2020. “COVID-19: Nearly 60 Percent of Albertans $200 or Less From Being Broke: Poll.” Edmonton Journal. Link: https://edmontonjournal.com/news/local-news/covid19-nearly-60-per-cent-albertans-unable-pay-bills-poll/

[xii] Thacker, Paul D. 2019. “Fossil Fuel Giants Claim To Support Climate Science, Yet Still Fund Denial.” Huffington Post. Link: https://www.huffingtonpost.ca/entry/climate-denial-energy-in-depth_n_5df7eff6e4b0ae01a1e59371?ri18n=true

[xiii] KATC News. 2020. “Lafayette oil company, owner plead guilty to environmental violations.” Link: https://www.katc.com/news/lafayette-parish/lafayette-oil-company-owner-plead-guilty-to-environmental-violations

[xiv] Johnson, Tracey. 2019. “Supreme Court Rules Energy Companies Must Clean up Old Wells — Even in Bankruptcy.” CBC News. Link: https://www.cbc.ca/news/business/supreme-court-redwater-decision-orphan-wells-1.4998995

[xv] Foster, John Bellamy. 2002. Ecology Against Capitalism. New York: Monthly Review Press.

[xvi] Gould, Kenneth A., David N. Pellow, and Allan Schnaiberg. 2008. The Treadmill of Production: Injustice and Unsustainability in the Global Economy. New York: Paradigm Publishers.

[xvii] Prychitko, David. “Marxism.” The Library of Economics and Liberty. Link: https://www.econlib.org/library/Enc/Marxism.html

[xviii] Foster, John Bellamy. 2020. “Catastrophe Capitalism: Climate Change, COVID-19, and Economic Crisis.”Monthly Review. Link: https://mronline.org/2020/04/01/catastrophe-capitalism-climate-change-covid-19-and-economic-crisis/?fbclid=IwAR0uZmZ7ryfeJ0CrLDgnBDcKHiAYSJ_dL4Z_rPiyeTxVHrObKIEDoa9pk90

[xix] Kendra, James and Tricia Wachtendorf. 2016. American Dunkirk: The Waterborne Evacuation of Manhattan on 9/11. Philadelphia: Temple University Press.

[xx] Haney, Timothy J. 2018. “Paradise Found? The Emergence of Social Capital, Place Attachment, and Civic Engagement After Disaster.” International Journal of Mass Emergencies and Disasters 36(2): 97–119.

[xxi] Solnit, Rebecca. 2020. A Paradise Built in Hell: The Extraordinary Communities that Arise in Disaster. New York: Penguin.

[xxii] Davis, Stefanie. 2020. “High Demand for Baking Ingredients Amid COVID19 Putting Pressure on Local Grocery Stores.” CTV News. Link: https://regina.ctvnews.ca/high-demand-for-baking-ingredients-amid-covid-19-putting-pressure-on-local-grocery-stores-1.4881406

[xxiii] Kost, Hannah. 2020. “Seed Sales Skyrocket As Calgarians Seek Plant-Based Solutions for Food Panic, Malaise.” CBC News. Link: https://www.cbc.ca/news/canada/calgary/seeds-plants-planting-food-shortage-growing-garden-covid-19-quarantine-1.5512125



Timothy J. Haney is Professor of Sociology at Mount Royal University in Calgary, Alberta + Board of Governors Research Chair in Resilience & Sustainability

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
Timothy J. Haney

Timothy J. Haney is Professor of Sociology at Mount Royal University in Calgary, Alberta + Board of Governors Research Chair in Resilience & Sustainability