Economic-Political Analysis In The Light Of The Covid-19 Pandemic

Prof.Dr.Mustafa Kaymakçı¹

1-INTRODUCTION

Challenges faced by our world are gradually increasing. Besides increasing problems, differences are also deepening between rich and poor nations as well as social classes in terms of access to food, health care and a healthy environment. What we have is a socially divided world.

At least one billion people live under the hunger threshold. Children pay the highest price in this crisis. Even problems experienced in terms of nutrition strategy create gaps between the rich and the poor. The poor mostly suffer from malnutrition and infectious diseases, while rich countries are affected by chronic diseases caused by overnutrition. The healthy environment is gradually disappearing. Environmental pollution, for example contamination of water, paves the way for human deaths. Over a billion people lack access to clean water. Rising global temperatures threaten nature’s water reserves. Underground water levels decrease and rivers dry. Lakes are disappearing. Glaciers are melting. Global water level and carbon levels are rising. Devestating storms are increasing. Pastures are turning into deserts. Forest lands are shrinking. Agricultural lands are gradually becoming inefficient due to soil erosion. Plant and animal diversity is declining day by day. Farmers are forced to abandon agriculture. Millions of people are perishing due to increasing regional wars.

Besides, the industry, agriculture and even the service sectors, which are the products of capitalism, has caused an unprecedented coronavirus outbreak, also known as the Covid-19 pandemic. The virus has led to global destructions, revealed future uncertainties and created a chaotic environment. What is worse, the process is still continuing.

All these issues indicate that humanity has also collapsed with the collapse of the earth. It can be simply said that two concrete factors are responsible for this situation.

First of these is capitalism, which sometimes displays signs of collapse and which is imposed on the world under the name of globalization², as well as the big capital behind it.

The second factor is the science and scientists dominated by this system.

In order to plan the future with the help of science or to make use of science for the benefit of humanity at a higher level than now, it is necessary to make a situation analysis first. Socioeconomic planning can be based on these determinations using science. Of course, the first of the fundamental conditions for the solution of existing problems or issues will depend on the limitation and eventual elimination of the demands imposed by imperial capitalism. To put it in very general terms, the only power to achieve this is the dominant force of workers.

The article entitled “Economic-Political Analysis in the Light of the Covid-19 Pandemic” written in consideration of the above-cited perspective, constitutes the first section of a broad study entitled “Economic-Political and Scientific Analysis in the Light of the Covid-19 Pandemic”. “Economic Policies Implemented in the World and Turkey” and “The Economic Policy of the Future” will be addressed in this section.

2-ECONOMIC POLICIES IMPLEMENTED IN THE WORLD AND IN TURKEY

2.1. Economic Policies Implemented in the World

Partial implementation of social justice policies in the world as of 1970s has fallen under the yoke of the free market theory. This process gained momentum with the disintegration and collapse of real socialism after the 1980s.

The transformation of the world into unipolarity with the collapse of real socialism was also regarded as the success of the liberal-capitalist system. In this connection, liberal capitalism was the most perfect system the world had reached. It would no longer be possible for another system to replace it. In this regard, history had come to an end³. Thus, capitalism was transformed into a major world religion. Some philosophers(!), especially in the USA and Britain, played an important role in this transformation process⁴. With the support of the monopolistic companies (MCs), they established a network of foundations, institutes and communications to disseminate their ideology.⁵ Thanks to these ideological endeavors, liberal capitalism was accepted by large classes as a part of a normal and natural process. In summary, substantial cultural sovereignty was achieved in this respect. It was the realization of Antonio Gramsci’s statement, “If you can occupy people’s brains, their hearts and hands will follow.” ⁶

Economic policies implemented during this period paved the way for radical financial liberalization, new financial inventions and globalization of finance. Markets exhibited unprecedented growth. On the other hand, market transparency decreased, global financial integration increased and devestating bonus systems in financial institutions became widespread. Secondly, sustainable economic growth could only be achieved through increased consumption expenditures. Therefore, significant incentives with uncertain outcomes were provided, especially in the housing sector.⁷

For instance, when house prices began to drop in the USA at the end of 2006, prices of home loans, movables linked to these loans and derivative instruments collapsed. A global financial crisis became inevitable, as those who held these instruments were in large amounts of debt and scattered worldwide.

Prospects of economic growth in Europe brought weak countries to the verge of bankruptcy by undermining the implementation of savings policies on the one hand, and destroying demand on the other.

As the economic stagnation continued, public debts also exhibited an unprecedented increase and solution was sought in savings policies.

In brief, the continuing crisis once again demonstrated that privatization of public services, especially healthcare and education, was at a level that would put human life at risk. It was demonstrated that the global neoliberal regime could not produce adequate prosperity and security for humanity. Also, income inequality visibly escalated all over the world.

Nevertheless, dominant monetary powers of the world came out ahead from these practices with excessive profits. Famous billionaire Warren Buffet once said: “There has been class warfare going on for the last 20 years, and my class has won.“

However, the ideologists of capitalism ascribe current negativities to the fact that practices of the capitalist economy do not have a full global control. According to these ideologists, “The crisis, experienced in peripheral countries in particular, arises from failing to fully adhere to the teachings of liberalism. Therefore, the pioneer dominance of the US, the main implementer of capitalism, is both irresistible and essential for the advancement of humanity. So, there is no ‘American Imperialism’. In this context, the economic, social and political occupation of the world market, privatization policies, and shrinkage of the state in the peripheral countries are all natural extensions of the above-cited policies and are for the good of humanity”⁸ This approach was transferred to people’s brains with neo-liberal policies under the name of globalization policies.

The above-cited arguments did not prove to be right. It was revealed that capitalism did not do good to humanity and paved the way for hunger, poverty, bloodshed and death. Aren’t we experiencing all these in our day? However, the capitalist mode of production and relations impoverish and alienate not only third world countries but also the working classes of the Nordic countries. As a result, in addition to xenophobia, racism is also escalating in the Nordic countries.

2.2. Economic Policies Implemented in Turkey

The neo-liberal approach was transferred to the peripheral countries such as Turkey. These policies gained momentum with the 12 September 1980 military coup d’etat. For neo-liberal policies, the public was subjected to massive brainwashing first and media power was used very effectively. For this purpose, some scientists, writers and politicians were funded. Lies and deceptions were generated by the so-called scientists who were defined as “Reality TV Showmen” ⁹. In this context, fake ideas such as “The more we liberalize the economy, the more spontaneously we can develop by means of market dynamics. If there is no liberalization, no foreign capital will come to the country,” were pumped to the public. Almost everyone became liberal.

Neo-liberal policies in Turkey led to the following:

• Restrictions imposed on the flow of capital, goods and services by the peripheral nation states have been relaxed and reduced.

• Instead of import-oriented economy-policies, an economy-policy based on exports and imports started to be implemented, which enabled the economy to be brought under stricter control of MCs.

• Restrictions on hot money flow have been done away with.

• Out-of-date technology and production units were transferred to other low-wage peripheral countries as well as Turkey.

• Stock exchanges were established..

• Momentum toward deunionization was increased.

• Privatization of public industrial, agricultural and service companies (Public Economic Enterprises -PEEs)¹⁰ started through different means, and the process still continues.

• In order to differentiate society, “sub-identity” and even “individual logic” were put forward instead of class consciousness and these identities were reflected as a form of freedom.

2.3. Negativities Generated by Capitalism

• Monopolization and subsequent growth of capital gradually upset income distribution. Excessive wealth concentrated in the hands of a few, but this led to the impoverishment of the vast majority.

• The deepening of income inequality created gaps between theNordic countries and the Southern countries. The aforesaid inequality is also true for the central countries. However, as things stand now, the working segments of the central countries and their political organizations cannot demonstrate adequate social opposition as they also receieve a share from international exploitation.

• Capitalism leads to chronic instability. This instability has emerged not only in the Southern countries but also in the Nordic countries. Isn’t the current instability experienced in European Union countries an example of this?

• Capitalism alienates people and makes them egocentric; for example, living freely, enjoying the day, complying with the authority, refraining from discussing the quality and problems of the system, not questioning or avoiding problems, approaching relations from the point of interest.

• The process of alienation leads to new quests in certain cases,. Instead of questioning the system, solutions are sought in ethnic or religious structures, xenophobia and racism. It creates artificial problems that do not question the system. Capitalism promotes all these quests.

• As capitalism fueled unemployment and poverty in the industrial and service sectors, it also left billions of farmers landless, impoverished rural areas and destroyed the environment.

For that reason, small and medium-sized agricultural businesses based on family workforce were replaced by giant enterprises and contracted agricultural production models; in other words, the death of the peasantry was intended. In this respect, especially the third world countries opened doors widely for imports of metropolitan agricultural products based on extraordinary supports; besides, restrictions were imposed on all public supports and interventions in the national agricultural markets. In this connection, only nominal support was provided to family-oriented agricultural businesses, while giant agricultural enterprises received significant supports. Unlimited commodification of agricultural lands as well as freedom of trade for foreign capital was also introduced.

Consequently, those who flocked in to the cities after the death of peasantry were unemployed, as the industry and service sectors could not satisfy all job demands , which further fueled total unemployment¹¹. Since the existing agricultural production is not based on equality, billions of people in the world live under the hunger threshold and billions of them starve to death.

One of the most stunning predictions and evaluations on this matter was made by Samir Amin. He asked, “Are there jobs in the cities for about three billion people who will remain unemployed by the death of the peasantry?” He answered the question as follows; “… Even if a fanciful hypothesis that a constant growth rate of 7 percent per year will occur in a fifty year period (in the world) comes true, it cannot even absorb one third of this reserve (that is, three billion people coming to cities). In other words, by the nature of capitalism, the peasants cannot solve their problems, and the only perspective it presents is slumification of the world and additional five billion people. ” ¹².

3- ECONOMİC POLICIES OF THE FUTURE

3.1-Future of the Economy in the Central Countries

It is observed that the capitalist economy is unlikely to bring more justice and freedom to the central countries in the future. However, it is not likely that capitalism will disappear spontaneously.

Furthermore, in view of the Kovid-19 pandemic, it should be expected that there will be a serious economic stagnation in parallel with a decline in domestic demand in the economies of the USA and European countries, and consequently a significant decline in tax revenues is foreseen. This will give rise to budget deficits. Depending on the duration of the economic chaos, the global recession¹³ and then the subsequent restoration of global capitalism may be experienced with the addition of the slowing economies of the peripheral countries to the Chinese economy.

After the Covid-19 pandemic is finally over, countries dominated by global capitalist companies (MCs) will have to revise their economic policies against a “Black Swan”¹⁴ event like Kovid-19.

On the other hand, those who will be most affected by the deteriorating state of the global economic crisis will be blue and white-collar workers as well as small and medium sized farmers engaged in agricultural production.

In order to ensure that future developments will bring more justice and freedom to the above-cited social classes, there must be strong social and political movements that will demand this and force existing political and economic elites to make concessions.

Expansion and strengthening of the opposition against global capitalism will probably be inevitable; however, it doesn’t seem likely to predict how this will take shape in the future or whether its impact will be progressive or retrogressive.

In this context, implementation of Keynesian Policies initially seems to be the only solution in the central countries¹⁵.

As is known, Keynesian Economy is a macroeconomic theory based on the views of British economist John Maynard Keynes in the first half of the 20th century. The Keynes economy advocates a mixed economy, predominantly private sector, but with a significant role of government and public sector. The “Keynesian Economy”, which can be defined as an “Demand-Oriented Economy”, was developed to eliminate unemployment and insufficiency of total demand caused by the depression that constituted the 1929 “Great World Crisis”. The theory was especially in its zenith between 1950-1970. With these policies, “Social State” practices came to the fore in central countries.

Secondly, the central countries can take necessary precautions related to nation state.

However, while these measures are being taken, practices related to authoritarian governments in power may come forth; in other words, the possibility of authoritarian consolidation may emerge.

This state of affairs will also be affected by the economic-political developments in the peripheral countries. The first of these effects will be the reduction of resource transfers caused by the economic slowdown in the peripheral countries. The second is the possibility of the emergence of governments that will implement more independent and statist economic politics in the peripheral countries.

3.2- Future of the Economy in the Peripheral Countries Like Turkey

After the Covid-19 pandemic is over, it is obvious that a serious economic slowdown will be experienced, significant decline will be observed in tax revenues, budget deficits will emerge and eventually an economic recession will occur in the peripheral countries like Turkey as will be the case in the central countries.

However, unlike the central countries, economic recession will be felt more severely in the peripheral countries.

The main causes of the severity of the economic recession are obvious. The industrial, agricultural and service sectors in these countries are largely dependent on the central countries. Their imports and exports depend on them. Their external payments run continuous deficits. Moreover, the economic policies implemented in the vast majority of these countries are the most brutal of the capitalist modes of production. Some describe it as “Untamed Capitalism” as if there is a tamed form.

As a consequence of all these, unprecedented growth in industral, agricultural and service sectors will fall behind population growth, income distribution will severely deteriorate and unemployment will reach a peak. Qualified access to education and health in the service sectors will be even more in-demand than ever.

As a result, the question “Who Is Going to Undertake the Burden of Overcoming These Negativities in the Near Future? “ is the most important issue on Turkey’s agenda.

The answer to this question is evident; the vast majority of employees will be impoverished and the income distribution will deteriorate further due to increasing unemployment.

It is not possible to predict the political consequences at this time.

In the face of potential negative consequences, there is also the possibility of puting forward more equitable propositions for new political-economic solutions in Turkey.

Policies to be implemented in the peripheral countries like Turkey rely on prerequisites such as interpreting globalization correctly, opposing privatization policies, and defending statist / social economies¹⁶.

Some, more precisely political elites, dominant figures of the industrial, agricultural and service sectors as well as scientists under their control, interpret opposition to neo-liberal policies, which are implicitly hidden in the term ‘globalization’, as opposition to activities aimed at grabbing a share from the world trade.

Advocates of globalization are also considered as a danger of marginalizing the idea of independent development. They claimed that: “independent development initiatives in the economy will even deprive Turkey of contract manufacturing orders articulated by MCs and will eventually lead to further impoverishment. ” However, it is possible to enter the world market with the help of national and statist planned economies without accepting neo-liberal policies. These two issues are constantly and intentionally mistaken for one another.

On the basis of statist planned economies, it is possible to embrace all segments of society and to eredicate unemployment, poverty, income inequality, social and regional inequalities so as to meet the basic needs of workers, primarily for education, nutrition, shelter and culture.

In order to achieve this objective, it is necessary to make the best of institutional structures to develop trade, investment, regional development and technology policies with well-specified, short, medium and long-term priorities at macro and sectoral levels.

Priorities should be determined and implemented in a democratical manner with the extensive participation of all social segments. The role of the state should be redetermined according to the targets that have been set.

The functions of the state, the efficiency criteria of the public sector and how a capitalist firm should base its criteria on different efficiency criteria should be determined, and investment, employment and technology policies to be implemented should be developed accordingly.

Short-term objectives should be to clear the way for physical investments that have reached a standstill, to ensure effective operation of the PEEs that have been left for dead under the supervision of workers, and to guide them through a bottleneck with the help of appropriate technological innovations.

The reason for this is that “Public Economic Enterprises (PEEs)” can be used as useful tools to resist potential political, social and economic blocades to be initiated by the central countries. PEEs are very important tools of short, medium and long-term industrial, agricultural and service policies.

The economic policies to be followed in this context need to be based on “Public (Social) Ownership and Planning“¹⁷. The production-consumption relationship should depend upon the democratic decisions and preferences of the people rather than market criteria. For this purpose, employees need to be organized as both producers and consumers. This process will progressively open the way for the organization of politics in a redefined state-society relationship axis.

Social Economic Policies

Two outcomes will emerge if social economic policies are pursued in peripheral countries like Turkey.

The first is the advantages this will bring to the vast majority in the peripheral countries.

The second is the reflections of social economic policies in the peripheral countries upon the central countries.

This is at least as important as the first one. As stated above, if social economic policies are pursued in peripheral countries, the share the workers of these countries get from imperial exploitation will decrease when the resources transferred from peripheral countries to central countries dwindle. Besides, this will reveal their quest for a more equitable political power or lead to emergence of an authoritarian rule.

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