As a society there are so many things we can do better. The coronavirus pandemic reminds us of the inequalities inherent in the capitalist system. Capitalism has exacerbated our health crisis. Capitalism provides what is superfluous, while socialism provides what is necessary.
In 2016, Dr. Peter Jay Hotez and his team at Texas Children’s Hospital Center for Vaccine Development created a potential vaccine for one deadly strain of coronavirus four years ago—which Hotez believes could be effective against the strain we face now—but the project stalled after the team struggled to secure funding for human trials. Commenting on the effort to resume development, Hotez told NBC News, “We’ve had some conversations with big pharma companies in recent weeks about our vaccine, and literally one said, ‘Well, we’re holding back to see if this thing comes back year after year.’ ”
A logic which reflects the belief that vaccines for recurring seasonal illnesses, like the flu, are the more attractive investment. They promise a client base that can be mined again and again. Without the pressure of competition and promise of riches, capitalists claim no one in their right mind would invest time in useful discoveries. Capitalism obstructs invention and innovation. Capitalism steers R&D toward the largest profit in the shortest amount of time.
Big Pharma focuses on short-term gains and maximizing shareholder value—there’s little, if any, gain for shareholders when companies invest in vaccine development. Many corporate firms are under the effective control of shareholders, to whom managers owe a fiduciary duty to maximize profits. Shareholders who believe this duty has been breached typically have the right to sue the corporation. Professors Chen Lin and Sibo Liu of the University of Hong Kong, and Gustavo Manso of the University of California, Berkeley, explain in a 2018 study, the threat of shareholder litigation generally discourages managers from “experimenting with new ideas.” According to a 2017 working paper by the Institute for New Economic Thinking, “Many of America’s largest corporations, Pfizer and Merck among them, routinely distribute more than 100% of profits to shareholders, generating the extra cash by reducing reserves, selling off assets, taking on debt or laying off employees.”
A number of pharmaceutical corporations reported losing money on Ebola or SARS vaccines programs, which might make them hesitant to invest again—and their track record shows it. In recent years, GSK made commitments to Ebola vaccine development and later pulled out. Sanofi did the same with Zika, and Novartis, a pharmaceutical company in Switzerland, dumped its whole vaccine development unit in 2014.
Capitalists imagine a world in which free enterprise and free markets promote a race to the top, with creators pulling the levers of innovation as they climb, but this isn’t quite how things are in practice. Though it may sound counterintuitive, capitalism deliberately restricts the movement of information and new knowledge. The phenomenon is perhaps best understood in the context of non–compete agreements and patents, both of which prevent information from circulating to maximize the profit of individual companies. 20% of the American workforce—and roughly half of all engineers—is bound by noncompete agreements as a condition of employment. These contracts restrict employees from switching jobs, preventing workers from using prior experience to make meaningful contributions at a new firm.
Patent protection allows the patent holder to charge high fees for the direct use or licensing of their discovery—and to sue anyone who doesn’t buy this permission. Patent protections can hinder development. While the patent holder can certainly improve on their own invention, they may choose not to do so for any number of reasons: perhaps lack of skill or interest, or mediocre profit potential, for example. Competitors may be discouraged from trying to innovate at all, knowing they would need patent permissions. Companies must spend considerable time and money obtaining various patent permissions. The patent system shrinks the overall pool of innovators, slowing down progress.
Open-source communities have existed since the 1980s and have contributed to a range of innovations, from the creation of the internet to cheaper prosthetics and better disaster management systems. Typically, these online open-source collectives are made up of unpaid volunteers who contribute code and features meant to be used freely. In response to the pandemic and the scarcity of official information, “a group of coders, analysts, scientists, journalists and others are working to follow coronavirus testing across the country through an open-sourced database called the COVID Tracking Project.” The European Organization for Nuclear Research in Switzerland, known as CERN, has long adhered to an “open-source” philosophy, the belief that “the recipients of technology should have access to all its building blocks … to study it, modify it and redistribute it to others.”
Rather than causing the imagination to stagnate, the adoption of socialistic principles benefited all involved. Those in power stand to benefit from sowing fear around socialism, but the rest of us would be better off in a society reorganised around democracy, equality, solidarity, and common ownership. It would mean more development, unimpeded by shareholder interests and disputes over intellectual ownerhip.
It would mean life-saving drugs being available for all, rather than all who can afford them. It would mean economic democracy that allow workers to shape their working conditions and turn workplaces into places where ideas can thrive. It would mean an expansion of the open-source philosophy to promote free knowledge and perspectives, with common ownership of the discoveries without a constant eye toward financial return. It would mean developing vaccines against a diseases before it could become a global pandemic.
An alien looking down from space on our planet could quickly spot what has so far eluded us. That the economic system of competing interests bears responsibility for and is incapable of dealing with problems in a way that meets the basic needs of all the world’s inhabitants. You cannot declare yourself a world socialist or even describe yourself as a citizen of the world, without drawing suspicion. A world socialist? No loyalty to your nation? No patriotism? It is sufficient grounds for you to be called a subversive.
We need a world based on socialist principles of worker emancipation with goods produced for social usefulness instead of profit. It is illogical to think that growing world problems such as spreading diseases, global warming, pollution and war can be properly addressed by our current capitalist system.
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