Over the past two years, as the pandemic has taken millions of lives and disrupted the lives of everyone else, a silent revolution has taken place. Western capitalism suddenly found itself usurped; replaced by an even more oligarchic and authoritarian mode of capitalist rule – what we might call neo-feudalism. Even if restrictions are lifted in the UK and other countries, the consequences of these changes will be felt for a long time.
On the one hand, hundreds of thousands of small and medium-sized businesses were forced to close, triggering one of the worst jobs crises since the Great Depression. In 2020 alone, workers around the world lost a total of $3.7 trillion in income, a drop of 8.3%.
On the other, a handful of mega-corporations, particularly in the Big Tech and Big Pharma sectors, have wreaked havoc, raking in hundreds of billions more in “pandemic super-profits” than compared to the average of the previous four years. Topping the list are behemoths such as Amazon, Apple, Microsoft, Alphabet (Google), Facebook, Pfizer, Johnson & Johnson, AstraZeneca and Merck.
The success of the Tech giants – Amazon, Apple, Microsoft, Alphabet, Facebook – is easily explained. As people have found themselves confined to their homes, they have turned to the internet for just about everything: shopping, eating, working, going to school, having fun, socializing and even having sex. In other words, what was a curse for countless traditional small and medium-sized businesses was a blessing for a handful of behemoths.
The golden egg for pharmaceutical companies, however, came later with vaccines: The companies behind two of the most successful Covid-19 vaccines – Pfizer, BioNTech and Moderna – made combined profits of $34 billion in 2021. And if the “new normal” ends up including permanent booster shots, such super-profits will become the norm. Basically, those profits are then distributed to shareholders who are majority owned by the top 1% It’s no surprise, then, that billionaires around the world have seen their wealth increase by $3.9 trillion in 2020 alone. the wealth of the 10 richest men has doubled, while the incomes of 99% of humanity are worse”.
To see what this means in practice, just look to Latin America, whose billionaires have increased their wealth by 52% during the pandemic. In Mexico, meanwhile, multi-millionaires saw their wealth increase by 31.4% in 2021 alone. On the other hand, in the past two years, 78 million people in the region have been plunged into the extreme poverty, while 13% of children have completely dropped out of education.
In Africa, where low-income countries predominate, the picture is just as grim. A report this month noted that not only had GDP fallen by 7.8% in some cases, but remittances from abroad had fallen by 25%. In a context where remittances from rich countries accounted for more than half of private capital flows to Africa shortly before the pandemic, this had a devastating effect on the daily economy, with more than 40 million additional people in extreme poverty.
Add to that a debt crisis, and it’s no surprise that the impact on daily life has been devastating: in Angola, a recent report describes how youth unemployment doubled to almost 60% over of the past two years. Meanwhile, the continent’s billionaires have seen their fortunes increase, as elsewhere; a January report from Nigeria found that Africa’s 18 billionaires saw their wealth increase by 15% in 2021 alone.
Yet in many ways it is a global phenomenon; on all continents, there has been a hyper-concentration of wealth, and the poorest communities have suffered. Wealth has been further racialized, with minority communities suffering the most in rich countries and poorer continents most affected.
Why, then, have left-wing commentators supported the policies that led to these terrible results?
The usual explanation is that these impacts were an unavoidable impact of the pandemic. And yet, the evidence for this is weak, not least because most of those affected by the virus are older people, often beyond the age of active employment. In Africa, a 1% increase in Covid mortality in a country like Nigeria cannot explain the 20% collapse in formal employment. In fact, Tanzania – one of the very few countries that did not impose Covid restrictions in 2020 – was also almost the only country in Africa to see its GDP increase, up to 5% according to some reports. Meanwhile, in Sweden, where restrictions were much milder than in the rest of Europe, the country returned to pre-pandemic production levels in mid-2021, unlike many other European countries (all registering lower per capita death rates than many other countries).
And so it seems that the dizzying increase in inequality, and the concentration of capital, must be the consequence of Covid response measures, not Covid-19. What then are some of the likely consequences of this massive accumulation of capital by a small number of people, expropriated from SME owners and the global working class?
A dystopian future seems to be emerging from the ashes of the pandemic – a future in which not only is wealth more concentrated than ever in the hands of a small elite, but in which virtually every sector of the economy is dominated by a handful of all-powerful mega-corporations. It is therefore perhaps unsurprising that those who have benefited the most from the pandemic response, such as Bill Gates and Mark Zuckerberg, also supported this response and removed information from their portals that criticized it.
However, there is another element that makes this scenario even more worrying, if possible, and that is the increasing consolidation not only within, but also between sectors. This becomes apparent when we look at the investment funds that actually “own” these companies. BlackRock and Vanguard are the two largest asset management companies in the world, managing $10 trillion and $8 trillion respectively. That’s 3.7 and 3 times more than the UK’s annual GDP. These two funds are the first “owners” of all the big Big Pharma (Pfizer, Johnson & Johnson, Merck), Big Tech (Facebook, Twitter) and Big Media (New York Times, Time Warner, Comcast, Disney, News Corp) companies. Even more worrying is the fact that despite having “only” a 5-7% stake in these companies, there is growing evidence that institutional investors such as BlackRock and Vanguard are trying to influence management and strategy boards.
It would seem that these funds also coordinate with each other. When analyzing voting behavior at board meetings of the two funds, the researchers found that they coordinated it through centralized corporate governance services. This is hardly surprising considering that BlackRock and Vanguard are also each other’s major institutional investors: in other words, they partially “own” each other through of cross actions. We are therefore effectively in the presence of a single super-entity which “owns” and controls a large part of the Western economy. While this was already the case before the pandemic, the latter has accelerated this trend. More importantly, he highlighted how these funds, through their cross-industry corporate oversight, can “harmonize” the behavior of these companies to serve their interests.
We see it in the case of the debate around pandemic strategies on social networks, and the censorship exercised today by social network platforms against any critical voice, however qualified it may be. A good example might be the removal from YouTube of a video of an editor of the British medical journalPeter Doshi, discussing the Pfizer Covid vaccine trial during a US Senate hearing – in which, among other things, Doshi questioned the accuracy of Pfizer vaccine efficacy reports.
This is disturbing in itself. But it becomes even more worrying when you consider that the companies selling the vaccine, the media that shape the mainstream narrative of the vaccine, and the social media platforms that enforce that narrative are, to a large extent, “owned” and controlled by the same two funds: BlackRock and Vanguard, which, by the way, raise billions from vaccines. This harmonization between sectors (and between them and governments) portends the rise of a new, ultra-powerful complex — the techno-media-pharma (TMP) complex. This translates into increased “synergies” between these sectors: take for example Google’s increasing investments in the health, pharmaceutical and pandemic prevention sectors, or Amazon’s investment in research on the Covid-19.
Of course, none of this would be possible without the active support of governments, which create an enabling environment that rewards participants in the TMP complex. This is evident, for example, in the secrecy, excessive pricing, cronyism and inefficiency that have characterized Covid supply deals: Covid testing, PPE, vaccines and now vaccine passport technologies have all been distributed among transnational corporations without proper bidding processes or oversight legislation. In other words, this is not a scenario in which governments disappear, but rather one that relies on increasingly powerful and authoritarian state apparatuses serving the interests of big capital.
This is hardly surprising considering how well these corporate giants have integrated into our political systems. The United States is a good example. Obama was very close to Eric Schmidt, CEO of Google, who later became a close associate of the Pentagon in the development of military applications of AI. Today, Biden’s economic policies are heavily influenced by National Economic Council Director Brian Deese, a former BlackRock executive. This ultra-elite is now able to shape every aspect of our lives – and it’s frankly terrifying.
If the left is to recover from the catastrophic policies it has supported during the pandemic, it must start by acknowledging that it is lazy and inappropriate to expose those who point the finger at these inconvenient truths: that wealth is hyper-concentrated as never before, that it was as a result of political choices during the pandemic, that those choices were unprecedented, and were supported by those who enriched themselves enormously along the way, and censored any alternative viewpoint.
If we do not want a world dominated by a very small number of ultra-rich people, and their vision to retain that wealth, an unprecedented collective effort will be needed to fight for a different future. The huge TMP conglomerates will have to be broken up and their profits used for the benefit of all humanity, not just their shareholders. It will be the fight against the post-pandemic capitalist nightmare – and we are already losing.