Covid-19 – The Impending Catastrophe and How to Combat It

Introduction

The title of this post in the covid-19 series here is from a pamphlet by Lenin at the end of October 1917. Lenin begins with the words “Famine is Approaching”:

https://www.marxists.org/archive/lenin/works/1917/ichtci/index.htm

We are not in that situation nor anything like it. But there is an impending catastrophe which has been thoroughly documented by the “Imperial College Covid-19 response team” in a series of technical reports:

https://www.imperial.ac.uk/mrc-global-infectious-disease-analysis/news–wuhan-coronavirus/#

The current absurd floundering will not result in famine. But it could result in more avoidable deaths from Covid-19 than the total deaths from the “Spanish Flu” which killed more people than the “Geat War” that immediately preceded it – the “War to End All Wars”.

This is very likely in countries ruled by Kleptocracies like many in Africa. But already the failure to prepare is killing large numbers in Italy, with Spain and France close behind and London less than three weeks behind Italy on the same trajectory. Lots of people will also die unnecessarily in countries that are modern industrial democracies with blithering idiots in charge of pretending the owners care about the people.

The potential catastrophe we face is much smaller than the consequences of famine. A Case Fatality Rate of 6% or so instead of less than 1% that could have been achieved if quarantine arrangements were prepared to spread out the peak case load. Say half a million avoidable deaths in the UK, 2 or 3 million in the USA, less than a hundred thousand or so in Australia. Nowhere near as bad as famine…

Most of the deaths will be the result of hospital Intensive Care Units so overwhelmed they cannot provide life saving treatment for the most severe case numbers beyond available capacity.

Figure 3 of this recent authoritative announcement has a clearly labelled graph on “flattening the curve”:

Figure 3 Flattening the Curve – Avoidable DEATHS not prevented

https://www.health.gov.au/news/australian-health-protection-principal-committee-ahppc-coronavirus-covid-19-statement-on-17-march-2020

Instead of just the usual horizontal line showing “Health System Capacity” lower than an early high peak and just above a slower spread out peak it adds a label for the very large shaded region above that line for the high peak and the smaller region still above that line, for spreading out.

The label is “Unmet Need”.

That is clear enough. A sharper version, more easily understood and acted on would be:

“Avoidable DEATHS not prevented”.

But even the milder version is omitted from more recent authoritative announcements.

Australia is on roughly the same trajectory as London, Italy and the United States. “Community Transmission” is already well under way in NSW and Queensland and has just got started in Victoria. It makes sense for the other States and Territories to close their borders to buy some more time just as it made sense internationally.

But it won’t be enough.

Update: If this sounds alarmist check out today’s Australian on what others far more qualified to express an opinion are saying:

https://www.theaustralian.com.au/science/coronavirus-tougher-measures-a-matter-of-life-or-death/news-story/fdde8510d7ebbc5b8e041f668dd6405d

Infectious disease modellers say the current round of restrictions would quarter the number of likely infections at the peak of the epidemic, but even with those social distancing measures in place, unless further measures were taken, Australia could still hit a peak of 125,000 infections a day — a level that would overwhelm the nation’s intensive care units.

Cases of COVID-19 are currently doubling every four days in Australia and heading towards a trajectory of a three-day doubling. If the epidemic were allowed to continue in this manner, University of Melbourne epidemiologist Tony Blakely said infections could climb to as many as 500,000 a day within weeks.

Under that scenario, the reproductive number of the virus is 2.5 — meaning every person infected with the virus would pass it to 2½ others. Social distancing measures are likely to reduce the reproductive number, known as R0.

Professor Blakely has modelled the impact of social distancing measures and predicts the moves to close pubs, clubs, restaurants and sporting facilities could reduce the R0 to 1.2 by the end of May. That would see the epidemic peak at about 125,000 infections a day in late May, with 60 per cent of the population infected.

Based on modelling completed by epidemiologists from Imperial College London, and adapting their model to Australia, Professor Blakely predicts that by the epidemic’s end, 165,000 ­people, or 0.84 per cent of cases, would require intensive care, ­assuming 60 per cent of people of all ages were infected.

Medium Term

Below on “How to Combat It” is mainly about short term measures. Days and weeks of “Impending Catastrophe”.

Fortunately longer term measures are already under way as explained at the end

Scientists and “nerds” are already pushing aside the barriers to effective cooperation from “Intellectual Property” far more rapidly than the rest of society is moving to push aside other forms of private property in the means of production.

The Enlightenment “Republic of Letters” is emerging again in a modern form with rapid mobilization forcing changes in public health policy as documented in earlier articles of this series:

https://c21stleft.com/2020/03/16/covid-19-over-70s-must-self-isolate-for-4-months-scientists-demand-immediate-social-distancing/

https://c21stleft.com/2020/03/13/covid-19-dont-panic-do-self-isolate/

For those who think they already understand and could not even bother to read the links in those posts there are already some excellent animated videos to explain the basics eg:

Why the actual numbers are much larger and growing faster than the statistics catching up:

Estimating actual COVID 19 cases (novel corona virus infections) in an area based on deaths

Some visualizations that are steps towards “Explorable Explanations” with sliders and other widgets to get a “feel” for what is happening and what can be changed can be found here:

https://observablehq.com/collection/@observablehq/coronavirus

Inceasing Healthcare Capacity

It also makes sense to immediately commandeer hotels as well as private hospitals for conversion into Emergency Hospitals and use entirely separate hospital buildings for covid-19 rather than attempting infection control within the same hospital buildings as wards for other patients. No doubt that will all be done along with many other things to raise capacity.

For those interested in the measures for rapidly expanding healthcare capacity a thorough current account of covid-19 for Emergency Medecine Critical Care professionals is here:

https://emcrit.org/ibcc/covid19/ (about 50pp as of 2 March)

Only the first section is likely to be of wider interest to other health workers. I think that first section is adequately summarized for a wider general audience in the public information campaigns now based on accurate advice from Centers for Disease Control etc. Note that the discussion of precautions against possible airborne transmission in above link is only relevant for those actually treating infectious patients.

No doubt surgeons no longer doing elective surgery will be taught how to do intubation procedures to provide ventilation for the vastly increased numbers of severe cases with viral pneumonia including many with further complications such as bacterial pneumonia, even though most of the teaching will be on the job assisting. Inferior split ventilators will be used and supplies will be ramped up.

Supply Chains

Naturally the main focus of the media has been on shopping. The newspapers are printed on the back of ads for shopping and the broadcast news is squeezed between ads for shopping both online and on air.

My view is that the shopping shambles is not of major signifcance and will be sorted out without major impact. Even if 80% of the workforce have mild to moderate illness lasting 2 to 3 weeks over the same relatively short period and there is disruption generally, essential services can be maintained. Most workers are employed to not do anything useful, let alone essential. Workers from large sectors shutting down now can be fairly rapidly mobilised as (unskilled and bewildered) assistants in essential areas while training on the job.

That is what I expect to happen when the blithering idiots in charge notice that funding businesses to continue trading while insolvent does not actually achieve much in the long term for a shutdown that reduces their turnover to near zero. Even the sheer idiocy of disrupting all credit arrangements by not enforcing payment terms so that deliveries will only be for cash will not be catastrophic in itself although the financial system may be fragile enough to come up with a related catastrophe.

Some fumbling and blunders are inevitable. The supply chains for groceries and pharmaceuticals will recover from panic buying without those stuff ups in emergency management causing many unnecessary deaths. The shortage of face masks and alcoholic sanitizers was avoidable but not necessarily catastrophic.

Impending Catastrophe

So what is the “Impending Catastrophe” if the Medium term is looking good, healthcare capacity can be rapidly expanded and supply chain hiccups are not especially catastrophic? Simply this.

There is no reasonable prospect of increasing the capacity of Intensive Care Units rapidly enough for a pandemic that will accelerate to double the case load every 2-3 days. A week after hospitals reach full capacity they will be dealing with a case load more than four times capacity. A fortnight later, more than 16 times. This is happening now in Italy. London is about 3 weeks behind Italy and Australia and the USA not much further behind, all on much the same trajectory that leads to catastrophe.

What cannot be fixed quickly enough for the first peak is the supply of mechanical ventilators etc for Intensive Care Units. Vastly accelerated scale up still cannot possibly keep pace as countries are now entering the period of doubled demand every 2-3 days:

Clin Infect Dis. 2015 May 1; 60(Suppl 1): S52–S57.
Published online 2015 Apr 10. doi: 10.1093/cid/civ089
Estimates of the Demand for Mechanical Ventilation in the United States During an Influenza Pandemic
Martin I. Meltzer,1 Anita Patel,2 Adebola Ajao,3 Scott V. Nystrom,4 and Lisa M. Koonin5
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4603361/

The impending catastrophe is lack of preparations for serious quarantine.

Given a shortage of Intensive Care Units and no vaccine, such measures are the ONLY way to prevent or reduce catastrophe.

Quarantine

The measures for people outside the health system to focus on are for “flattening the curve”. Spreading out the infection directly reduces the death rate by directly reducing the number of people with severe cases who cannot be treated when they all arrive at hospital Intensive Care Units at once and equipment is available for only a fraction of those who need it.

That is not something achieved by telling people to stay at home doing nothing. It requires actually building and organizing things.

We need to actively build and organize QUARANTINE facilities. This is not just passive “social distancing”.

The whole point of the “containment” phase of tracking new arrivals for a short period of “self-isolation” and closely tracking the contacts of anybody infected was only to buy time before “Community Transmission” began. Containment merely keeps the numbers of new infections “contained” at a smaller rate to delay the “local transmission” that will inevitably eventually grow at a much larger exponential rate until “herd immunity” is achieved with effective vaccination (expected 12-18 months away). Some cases were bound to get through and eventually result in enough people infected from unknown local contacts that the origin of most new infections is “the community” rather than some tracked or untracked individual cases seeded from outside. Then the pace accelerates from doubling each week to doubling each 2-3 days as in Italy and others that are near the first peak.

The World Health Organization, WHO, has recommended “test, test, test” because the surprise at the Italian hospital system being overwhelmed showed the pandemic was being fought blindfolded. Containment through border control and isolation cannot work when you do not know who to isolate from whom. It was known since late January that most people infected had only mild symtoms or none (with estimates of 86% of cases not reported in the statistics that media have been relentlessly staring at).

Even with an adequate supply of test kits there has to be somewhere to put people who test positive for the couple of weeks or so until most of them recover. Instead they are being told to stay at home and infect the rest of their household who are now (belatedly) being told to also stay at home. That will reduce the acceleration more than if they were told to just keep going out. But three very urgent measures were obviously necessary then.

Their necessity should have been announced loud and clear while rolling out implementation as fast as possible after announcement. So far not even the necessity has been announced. Here is my view of the three most urgent measures that are critically urgent now:

How to Combat It

1. Quarantine Hospitals for the mildly and moderately ill

Also separate facilities for unconfirmed suspected likely cases (eg travellers from areas with more community transmission to those with less).

I don’t know what the correct term is for what I have called “Quarantine Hospital”. People who don’t live by themselves should obviously not be told to just stay at home and infect their household while they wait to see if they are actually infected or while recovering. Nor should they occupy full hospital beds needed for people more severely ill.

The rest of their household can be told to just stay home for a couple of weeks to see if they are already infected or not, but anyone infected should be immediately separated from people who are not known to have been infected. That is blindingly obvious whether they need additonal medical treatment or not and whether any treatment they need is available or not. Any country not doing this is not seriously trying to flatten the curve.

“Quarantine Hospital” sounds better than “Quarantine barracks” but just somewhere to stay and be fed with some nursing staff is all it takes to seriously spread out a peak. It will require an enormous effort but it can be done using space that must be shut down anyway, emergency furnishings and staff from businesses that must be shut down anyway.

Commandeering hotels etc is for full emergency hospitals, not for the larger numbers of beds needed in Quarantine Field Hospitals. Lots of office space unused with people working from home and entertainment venues shut down must be converted to emergency accommodation. The kitchen facilities are available from the cafes and restaurants being shut down. The beds and bedding are available from households in proportion to the numbers moved out of households that will need those beds, and the staff are available from the huge numbers of small businesses trading while insolvent as well as from those already laid off. So far as I can see that has not even been planned, let alone started.

2. Quarantine Accommodation for the vulnerable

Older people and people with various severe health probems are especially vulnerable to being part of the less than 1% who might die before a vaccine is available or part of the additional 5% or so that are killed by government incompetence as a result of intensive care not being available for them when the hospitals are overwhelmed. No doubt local communities will get organized to help those who need help while staying isolated in their own homes but there are others staying in households with less vulnerable people equally susceptible to infection.

“Tough” restrictions on visits to aged care institutions are obviously ludicrous. These can only be intended as justification for very soon saying people had an opportunity to make their last visits immediately before an essential full shutdown until proper procedures for safe visits fully separated by glass barriers etc can be organized.

But vulnerable people currently living in households with others must also be offered accommodation separated from the rest of the susceptible population until the peak has passed and sufficient intensive care facilities are available. That will be hard for many. Many may refuse and many may die. But doing nothing to make viable separate accommodation available is criminal. That seems to be the current “plan”.

Neighborhood support groups are starting to be formed spontaneously through social media:

https://www.abc.net.au/news/science/2020-03-17/coronavirus-online-support-groups/12060530

It is important to keep them entirely separate (although overlapping with) closed small “affinity” groups of households with children discussed in item 3 below.

3. Quarantine Separation of children

Obviously schools will have to be shut at some point except for children of households working in healthcare and other essential activities. Meanwhile schools are vitally important community organizing centers for households with children.

The shutdown won’t just be for a couple of weeks. It will end up lasting for many months.

while still open, and even after closing, schools should be organizing children into small groups, much smaller than class sizes, that will be allowed to interact with each other within school and after the shutdown and prohibited from doing so between groups.

This obviously needs to be coordinated with parents because all the households with children in whatever group any child continues to interact with will tend to get infected together. It will be especially difficult for households with children in different age groups and different schools but every household with children must be assigned to a particular group of households it is permitted (not required) to socially interact with. The kids are not going to just stay at home with their parents for six months, let alone eighteen months! Humans evolved in Hominid bands of a couple of dozen, not as isolated nuclear families.

Hopefully if we move really fast the necessary interaction can be online in Virtual Reality but we don’t know how well that will work, for how long or how quickly. It still ought to be based on non-overlapping groups that should be organized now by schools.

These separate child based groups are likely to continue to mix with and infect each other and must accept that their own group of households will or may end up having the larger risk of earlier infection corresponding to an enlarged single household. They must be confined to small numbers of households who trust each other to maintain isolation from the rest of the world to the same extent as the individual households.

Households with older and more vulnerable people are a major complication as self-isolation within a household is unlikely to be effective for long.

Six months is a rather optimistic estimate of how long this crisis will last. It could “conceivably” be as short as 6 months if all goes perfectly but that is not the period to plan for now. Avoiding overwhelmed hospitals requires dragging things out longer, until an effective vaccine gives “herd” immunity or effective anti-viral drugs reduce the death rate. Even if it could theoretically be even shorter than six months most serious estimates are for 12-18 months of on and off waves.

The current authoritative recommendations are that it is still too early for school closing in Australia:
https://www.health.gov.au/news/australian-health-protection-principal-committee-ahppc-coronavirus-covid-19-statement-on-22-march-2020

But that is based on lack of positive evidence that the time is right. See below on tests.

Evidence

Evidence in support of much of the three proposals above can be found from the experience of South Korea so far:

https://www.wsj.com/articles/how-south-korea-solved-its-acute-hospital-bed-shortage-11584874801?mod=hp_listb_pos1

But even Italy where the hospital overload is currently greatest has only had 0.1% of the population as “cases”.

South Korea has a very long way to go before herd immunity and there is nothing in the lower numbers of new cases after the first peak or the success in dealing with that first peak to suggest that there won’t be many further peaks:

https://www.worldometers.info/coronavirus/country/south-korea/

Likewise for Singapore, another success being hailed as though it were not just success with the first peak.

I don’t know whether anybody has solid evidence of whether and how it may be possible to stop transmission between househods via their children during an extended shutdown. As far as I can make out there is just empty hoping that for some unexplained reason it won’t happen. This mainly takes the form of highlighting the distraction that children have much less severe symptoms (which actually enhances their role as disease vectors).

Current Plans

Compared to Australia and the USA the UK is a model of serious but still unsuccessful efforts to explain public health policy to the public via journalists in a joint effort by the PM, the Chief Science Officer and the Chief Medical Oficer.

It is worth spending the time on these two long videos less than 5 days apart to understand how rapidly the situation is changing and how uncomprehending the journalists covering the “issue” are.

Coronavirus: Boris Johnson holds press conference after Cobra meeting
308,797 views – Streamed live on Mar 12, 2020 – starts at 23’30” of 1:10’57”

Coronavirus: Boris Johnson sets out “drastic action” BBC
292,849 views – Streamed live (Mar 16, 2020)

The pandemic model that now forms the basis for planning in the UK expects multiple waves of infection each time “social distancing” is relaxed after successfully suppressing the peak rates to reduce case loads to hospital capacities. This is in Report 9 from the Imperial College team:

https://time.com/5804555/coronavirus-lockdown-uk/

A shorter Australian attempt at explaining the model to a journalist is this video from the ABC’s Dr Norman Swan on 17 March. (I watched it after having written the rest of this article). In many ways it is better than the UK and Australian official explanations but he still ends up distracted by issues of case tracking from the “Containment” phase rather than the current accelerating exponential growth on entering the “Community Transmission” phase. He simply does not get the fact that spreading out the peak necessarily reduces total deaths from unavailable intensive health care units and instead claims that a spread out peak could still have the same total deaths.

“Explorable Explanations” with widgets for people to actually manipulate the paramaters of the models themselves are really essential instead of literally hand-waving – with or without a background graph:

If any of these people trying to explain had access to such Explorables they would be using them on TV. Instead they are waving their hands.

The primary mechanism for transmission during a long shutdown might well be the overlap between different groups of children from different groups of households interacting to transmit the virus between their otherwise separated groups of households. It will certainly occur with younger children still at school.

Similar transmission will occur from the essential workforce in different workplaces also transmitting between different households, but stringent “social distancing” controls at work can reduce that far more effectively than among younger school children. Likewise smaller households without children will get infected more slowly than extended groups of households whose children infect each other.

Tests

School closure timing and arrangements is the hardest issue to grapple with and the least data is available as to transmission rates through these channels. Currently there have been no adequate systematic random samples of the population generally as test kits are only available for more urgent needs such as border control during the containment period and testing health workers.

In particular there is no blood testing yet to measure the immune system responses of people who have already had the virus without symptoms. Such testing is hoped for soon and could be a game changer for enabling decisions on the optimal timing for imposing and lifting isolation restrictions before and after hospitals are overloaded. It could also shed a lot more light on the transmission between children and between adults and children. At present decisions on how to time for less overloading of peak capacity in successive waves are being taken blindfolded.

The separation of groups of children and their households necessarily involves the widest participation in community decision making and implementation and the most discussion to come up with ideas right now. Explorable explanations with widgets are needed urgently for this.

All UK schools closed last week, very shortly after official announcements that the best “science” showed that overall effects of closing schools could be negative because of:

  1. Large effect on essential workforce diverted back into parenting and child-minding, especially from already overloaded health system. (Private schools closed earlier but essential workforce is generally lower paid with a high proportion depending on schools for childcare while working in health system).
  2. Likelihood that traditional reliance on grandparents to assist will result in more rapid infection of the most vulnerable.
  3. Unlikelihood that school students will remain socially distanced from each other while away from school, short, medium and long term.

https://www.theaustralian.com.au/world/coronavirus-boris-johnson-shuts-down-schools/news-story/b836ff32ea9571630404e563fbaf5bc0

Previous announcements were correct. So is the new decision.

What follows from the correctness of the two opposite decisions of our dearly beloved leaders both 5 days earlier and 5 days later is that urgent mitigation measures can and should be taken for all 3 issues. Others can contribute more to discussion of those measures so I won’t attempt it in this article.

All I can say on it is that school closures will happen soon whether desirable or not.

Here is some confusing advice from USA of the same sort that will dominate discussion here:

https://www.usatoday.com/story/opinion/2020/03/16/schools-closed-but-children-can-still-spread-coronavirus-column/5054108002/

In addition to the advice only now being widely disseminated by authoritative public health information campaigns, households with both children and older and more vulnerable people should carefully consider stronger advice from people who have been campaigning for full social isolation to be implemented sooner.

https://www.endcoronavirus.org/

They also have an interesting critique of the mainstream epidemiological models:
https://static1.squarespace.com/static/5b68a4e4a2772c2a206180a1/t/5e70eb32b16229792eb14836/1584458547530/ReviewOfFergusson.pdf

They cannot be considered “authoritative” but I will be carefully studying the technical background necessary to be able to understand both.

Epidemiology for the Uninitiated

Lots of people, like me, will need to acquire some basic epidemiological concepts to understand what the models are about. Studying this is very good practice for understanding the economics of the capitalist business cycle. (The Explorable Explanations will be more accessible for most people both for pandemics and for the business cycle).

I will be starting here:

https://www.nature.com/articles/nrmicro1845

Book chapters: https://www.bmj.com/about-bmj/resources-readers/publications/epidemiology-uninitiated

Another critique of earlier UK (and current Australian) policy is here:
https://unherd.com/2020/03/the-scientific-case-against-herd-immunity/

If the serious critics are right there won’t be another peak in China and Italy after full social isolation measures are enforced. If the mainstream epidemiological view is correct (as opposed to the government waffle about 6 months) there will be successive waves over 18 months or so until a vaccine is effective, possibly ameliorated by anti-viral drugs. This is because “social distancing” restrictions end up becoming intolerable and therefore ineffective and get relaxed because they cannot be maintained for long when new cases decline to near zero after dealing with each peak in the overloading of ICUs and consequent deaths from unavailable medical treatment. Transmission can be expected to resume gradually and then again suddenly as long as there are large reservoirs of people still susceptible. There will still be large reservoirs susceptible to infection after the first peak overloading the hospitals is shutdown by emergency isolation measures just as there was for the first peak.

The business press is already editorializing about not “over reacting” and the importance of quickly getting people back to work for them. Their views will eventually prevail while the owners are still in charge. Here’s a couple of the Wall Street Journal’s editorials urging that more people be killed quickly to save money:

https://www.wsj.com/articles/rethinking-the-coronavirus-shutdown-11584659154

https://www.wsj.com/articles/the-extreme-state-lockdowns-11584745130

They can rely on help from lots of people who think correct ideas fall from the sky or are inherent in their minds as “just common sense” and are simply not interested in studying the knowledge acquired from social practice and from it alone. The three kinds of social practice include class struggle, the struggle for production and scientific experiment. This is not a good time to be glued to the business channels and ignoring the political class struggle and the struggle for production being waged by workers in the relevant sciences.

Simply assuming the first peak will be the last is as helpful as the Wall Street Journal’s editorials.

The kind of mathematical modeling that is done to help inform public health policy for dealing with this pandemic is closely related to the sort that is needed for understanding the capitalist cycle and the transition from capitalism. So studying the pandemic is not a diversion from other priorities.

Long Term – the “Republic of Letters”

https://en.wikipedia.org/wiki/Republic_of_Letters

The modern form of the “Republic of Letters” is very much based on the communist mode of production and distribution already widespread in the Open Culture (eg Wikipedia) and Open Science offspring of the Free and Open Source Software movement. Such intellectual activity was not enough to produce the Enlightenment, let alone the bourgeois democratic revolution against Feudalism. Nevertheless it was a very important precursor.

Wikipedia has an impressive portal showing the current extent of collaborative effort:

https://en.wikipedia.org/wiki/Portal:Coronavirus_disease_2019

The “pirate” backbone for disseminating scientific and other knowledge from “Library Genesis” and “Sci-Hub” is being hardened against attack and is openly confronting the crisis:

https://www.vice.com/en_us/article/pa7jxb/archivists-are-trying-to-make-sure-a-pirate-bay-of-science-never-goes-down

The main scientific publishers have accepted demands to make all covid-19 research immediately open access (they were being bypassed anyway by pre-prints on community archive sites and by Sci-Hub).

Activists have organized collections of relevant non-current background material. Major Big Tech companies have co-opted the US government to neatly classify what is “Open Access” and what needs to be extracted from behind paywalls and disseminated by activists:

https://www.whitehouse.gov/briefings-statements/call-action-tech-community-new-machine-readable-covid-19-dataset/

https://pages.semanticscholar.org/coronavirus-research

COVID-19 Open Research Dataset (CORD-19). 2020. Version 2020-03-13. Retrieved from https://pages.semanticscholar.org/coronavirus-research. Accessed YYYY-MM-DD. doi:10.5281/zenodo.3715506

Game players with fast Graphics on home PCs are being enlisted for anti-viral drug research:

https://www.vice.com/en_us/article/884djz/scientists-need-your-help-to-find-treatments-for-coronavirus

https://foldingathome.org:

They have vastly more potential computing power than Big Government and Big Data combined:

https://www.wsj.com/articles/in-bid-for-coronavirus-vaccine-u-s-eases-access-to-supercomputers-11584915152?mod=hp_minor_pos4

The 34,000 GPUs mentioned in that article are a drop in the ocean compared to what mobilizing the gamer PCs can deliver.

So anti-viral drugs and vaccines will arrive a lot quicker than usual, as will saner public health policy.

Even before governments started using their powers to commandeer manufacturing resources for ventilators and other hospital supplies, people started organizing to just do it:

https://www.vice.com/en_us/article/5dm4mb/people-are-trying-to-make-diy-ventilators-to-meet-coronavirus-demand see CPAP/

As already mentioned, the Emergency Medecine Critical Care professionals took care well in advance to prepare training materials for their reinforcements before they are overwhelmed:

https://en.wikipedia.org/wiki/EMCrit

A semi-random example of the sort of highly skilled know-how that will need to be increased with extreme acceleration is:

Its interesting that a couple of possibly relevant books listed there have later editions at Library Genesis than the editions mentioned:

Tobin, Principles and Practice of Mechanical Ventilation, 3edn (1500pp)
http://gen.lib.rus.ec/book/index.php?md5=F1730DC52D2BF1A73E857691AF3858FF

The Walls Manual of Emergency Airway Management, 5edn
http://gen.lib.rus.ec/book/index.php?md5=BFA1F68808415E2FA52607AA3F17.

Unfortunately Library Genesis does not have the only book in that list with the word “Intubation” in the title, nor any others in english that look relevant:

The Airway Cam Guide to Intubation and Practical Emergency Airway Management 1st Edition, Richard M. Levitan

Presumably anything relevant wih a doi can be obtained via Sci-Hub or this can rapidly and easily be arranged by the relevant professionals if necessary. Activists are working now to make the relevant materials freely available for people who will find themselves on the front lines along with other health workers quite soon.

Anyway, people are moving way faster than governments.

A new world is being born from the ashes of the old.

Bulk Edit

Arthur

Arthur2 minutes agoUser InfoIn reply to:[…] https://c21stleft.com/2020/03/13/covid-19-dont-panic-do-self-isolate/ […]

Update: Today’s Australian (Tuesday 2020-03-24) also has confirmation from Singapore PM that further waves are expected. I did not notice it last night:

https://www.theaustralian.com.au/inquirer/singapores-prime-minister-says-earning-the-peoples-trust-is-the-key-to-fighting-the-virus/news-story/39bc4f1de8eccbc09982af49ca43d2c7

“We are under no illusions that the problem is over at all,” he says.

“If I made an analogy, it is not that the tide has turned, it is that we put the dykes up. We are watching very carefully to see where water may leak in, and if you take your eyes off it for a ­moment, suddenly I have an outbreak, like what happened in South Korea, and I will be in a perilous situation. It can happen to us at any time.

“Australia is grappling with the same problem. The countries around us in Southeast Asia are also facing the problem. It (the outbreak) is going to catch fire in many countries and is going to take a long time to burn out.”

“I would not say we have successfully prevented it,” Lee says carefully. “I think I would say so far we have reasonably successfully hindered the transmission.”

The key, Lee explains, is checking out all the people any infected person may have unwittingly infected before diagnosis.

“We work very hard to contact-trace,” he says. “Who are the people you have met within the last two weeks, where have you been, what have you done, who may have been exposed to you?

“We make every effort to trace those people down as well and put the immediate contacts either on notice or in quarantine, depending on whether they have symptoms. It is very labour-intensive. We have 300-plus cases now, but we have contact-traced several thousand people already, at least.

“It is labour-intensive but it is helpful in preventing a single case from becoming many hundreds of cases, if you catch it in time.”

“Looking at the behaviour of the disease and the way it is jumping from country to country, you can push it down within a country, but it has not disappeared worldwide,” he says.

“I think this is going to be with us for quite some time.”

“Their population is not immune to it yet, in very large numbers. Because even if a million Chinese have got the virus so far, that still leaves almost 1.4 billion people who have not yet, and are still, in immunological terms, naive and at risk.

“So, what you can hope for is that you control the spread of the disease, you hold the position, and hope and pray that the scientists come up with either a treatment or a vaccine within a year or two — and in time for us to exit this without the doomsday scenario, namely that the disease goes through the whole population, and then eventually we have herd immunity. Either it is going to leave you with huge casualties, or it is going to take forever to lock down.

“I think it is an enormous economic cost, and a human cost too.”

Note: Like South Korea the proportion of the population that remains susceptible to infection in the next wave is even higher than in China where one province, Hubei did have an initially uncontrolled outbreak so are substantial proportion of that province now does have at least short term immunity so there is a fair chance the next wave there will be smaller.

The proportion still fully susceptible in Singapore and South Korea is as close to 100% as makes no difference. So whether the next outbreak is smaller or larger depends largeely on how effectively long term “social distancing” can be maintained until a vaccine. The initial success was “containment” using tracking and quarantine. When actual “Community Transmission” develops rigorous quarantine becomes far more important as then tracking merely confirms that most of the new cases were infected from “the community” rather than from a specific known contact who can be promptly isolated.

Unlike any other statements I have seen from national governments Singapore is clearly stating what the media and pretty well everyone who thinks they don’t need to know more, does not yet understand.

But it still needs “Explorable Explanations” of the model for even a small minority to not be surprised when subsequent waves happen.

[Tried to add this update as a comment but will have to figure that out later]

Maksakovsky – The Capitalist Cycle

I still intend to write a proper review and explanation of why it is really important to study this short book, together with more recommendations for preliminary reading.

Meanwhile there is a sale ending August 23 for hardcopy paperback at $10 half price so here are the details to order RIGHT NOW.

https://www.haymarketbooks.org/books/278-the-capitalist-cycle

Amazon and Book Depository are quoting over 4 times that so get 4 copies NOW.

Seriously, also get some extra copies for future distribution to others. This book is REALLY important.

Foĺlowing is from front page of my still unopened blog.

“The Capitalist Cycle: An Essay on the Marxist Theory of the Cycle by Pavel V. Maksakovsky is also available in paperback for AUD $27.06 with free delivery. Available till 2018-08-23 for USD $10 plus shipping in half-price sale of all Haymarket books.

This site is mainly for my notes on why it is important to study this book and how to do so as well as developing the theory generally. Collaborators are welcome.

Many references to related books and papers linked from here, including the above, are for free “one-click, no registration required” downloads from Library Genesis. Naturally that is blocked by internet censorship in some countries. For details on how to gain access when blocked, click that link.

Recommendations for reading:

Postpone the long translator’s introduction until after finishing at least chapter 2 of Maksakovsky’s own work.

Short Foreword and author’s introdction are only 11 pages so much better than long translator’s introduction for a quick look immediately to decide when to read the rest.

Chapter 1 is 34pp and confirms this is not “the usual” one gets from “Marxians” nor Soviet dogmatism. Worth reading next.

The core of Maksakovsky’s theory is Chapter 2 only another 57pp. That covers the “real” side. If those 102 pages don’t interest you the rest probably won’t either. But he only deals with “The Role of Credit” in Chapter 3 on the basis of first having dealt with the underlying “real” cycle that is “amplified” by credit.

Further help with suggestions for preliminary reading will be provided when this site is ready for public use but it won’t be ready for a while. Meanwhile the blog posts available from “Blog” link are just notes to myself with no navigation structure but I can be contacted by leaving comments.

“Cyclical” Unemployment – Part 5 of ‘Unemployment and Revolution’ (by Albert Langer in 1981)

Part 5: “Cyclical” Unemployment

– Anarchy of Production
– Planning and Money
– Profitability
– Overproduction
– Are Wages Too High?
– Stimulating Demand
– Economic Crisis

5. “CYCLICAL” UNEMPLOYMENT

Well, we have established that the normal adjustment mechanisms in the labour market will not necessarily eliminate unemployment, and we have shown that the unemployment we have now is not “technological”. We have conceded that there is a “real wage overhang” but not conceded that lower real wages would reduce unemployment. We have not yet answered the question of why things have changed from the “normal” regulation of unemployment, nor what can be done about it.

We will now attempt to explain what is meant by “cyclical” unemployment and how this involves a “crisis of overproduction”. Unfortunately the explanation below is not very clear or complete. Generally a good test of whether you really understand something is how well you can explain it to others. So I guess I am not very clear on this stuff myself. Any queries and comments on the following material would be especially welcome.

First of all, what’s new? Why is the labour market not regulating unemployment like it used to? The conventional wisdoms about unemployment just take it for granted that since there is something wrong with the labour market then both the cause of the problem and the solution to it must also lie in the labour market. But in fact they do not, because unemployment and wage rates are not the only things out of kilter.

The labour market is not operating normally because forces outside the labour market have changed the way in which jobs are being created and destroyed. We must therefore look outside it to explain those changes.

Unemployment is part of the mechanism that regulates wages, prices, the rate of profit and the balance between production, consumption and investment. However it would be a gross oversimplification to pretend that it is the sole, or even the main factor.

Unemployment is not even the only factor regulating wages, let alone regulating the economy as a whole. In addition to the labour market, other markets are also out of balance.

Commodity prices are at record levels and still rising, financial markets have record interest rates, foreign exchange market are all over the place, and so on. Something has really gone quite wrong, and it is something that effects all aspects of the economy.

We will argue that what is wrong is “overproduction”. The fundamental cause is the basic anarchy of a market economy. Nothing very much can be done about it except passing through another major economic crisis – or overthrowing the system and building a new one.

Anarchy of Production

It is often assumed that the output of capitalist industry is simply divided between wages and profits.
From one side this leads to the idea that profitability can be simply restored by cutting wages. From the other side it leads to the idea that increasing wages would “stimulate demand”. Once again we have both “left-wing” and “right-wing” prescriptions resting on the same faulty analysis.

In fact only a small part of the total output of industry goes into consumption goods purchased either from wages or profits. The bulk of the output consists of means of production which are used either to replace those used up in the previous period, or for investment in expanding production in the next period.

The “Gross National Product” is not the total output, but output net of all the intermediate products produced and consumed in further production. Even the GNP includes investment as well as consumption. Cutting wages will not solve the problem of realising profits by selling the total output on the market. The product has to be sold before the proceeds can be divided up between wages and profits.

Raising wages also will not solve that problem. Most of the total output is bought by capitalists as means of production, and their ability to buy it depends critically on profits, which would be reduced further by raising wages.

For reproduction to proceed smoothly, the demand for means of production as replacement and new investment must provide a market for those means of production that have actually been produced. The profits made selling goods and services on the market must provide the investment funds to buy them on the same market. Surplus value is produced when products are made, but profits are not realised until the products are sold.

The demand for consumer goods and services by capitalists and workers must correspond to the consumption goods that have been produced. The increase in demand for consumer goods from one period to the next must correspond to the investment that has been made in the previous period to meet that demand. The investment in industries producing consumer goods depends on previous investment by industries producing the necessary means of production, and so on.

Not only the profits, but the cost of production itself, can only be realised if the products are sold on the market. The sale of each firm’s output depends on some other firm (or consumer), buying these products as inputs. The money to buy the inputs depends on the sale of the outputs.

Production has become highly socialised, with every firm directly or indirectly dependent on every other firm through the immensely complex social division of labour. The gigantic means of production operated by huge labour forces are geared to production for the whole of society. They are basically social means of production only useable in common. Yet the physical exchange of necessary inputs and outputs between different establishments is entirely dependent on free market relations.

Any disproportions will result in goods unsold, profits unrealised and investments not made – whether wages are high or low. Sever disproportions will result in suppliers unpaid, bankruptcies and market collapses. This cannot be rectified simply by cutting wages, if there is no market for what has been produced.

In a full scale crisis, products can be virtually unsaleable at any price,and may be dumped on the market by bankrupt firms unable to pay their creditors. Not only can profit margins become too small, and then disappear entirely, but the value added can disappear too, so that production would not be worthwhile even with zero wages. *In fact the value of raw materials (plant and stock) etc can also disappear so that a finished product will fetch more as scrap for its component materials than it will on the oversaturated market for that product. Whole steel plants and shipbuilding yards were scrapped in this way during the last depression.

What ensures that the proper proportions will be maintained so that exactly those goods are produced that are required? Very simple. It is a market economy, so the market regulates it. If demand for a particular product exceeds supply, the price will go up. If production becomes more profitable than average, capital will be attracted to that industry instead of others. Profit is what regulates the economy and profit is all that regulates it. The miracle is not that this sometimes breaks down in a crisis, but that it ever hangs together at all!

Planning and Money

Actually of course, things are not quite that fragile. There is a lot of leeway because firms can go on producing even at less than the average rate of profit, so long as they do not make a loss. They can even bear a loss for some time, as long as they do not go bankrupt. They can even keep trading after they have become insolvent, as long as nobody knows. Goods that are not sold to final buyers can still be sold to wholesalers, or accumulated in inventory.

The credit system is extremely flexible and can be stretched to cover disproportions in particular sectors, and also in the economy as a whole. This is a major topic in itself, quite central to understanding overproduction and crises, but unfortunately it can not be covered here.

But all this leeway and flexibility also implies that disproportions can continue developing for some time before they break out in a crisis.

It will seem to highly profitable firms that their market is still expanding, when actually the demand is coming from firms that are already operating on reduced profit margins, or are insolvent, and from wholesalers which are not actually able to sell the goods to final buyers, and so on. Faced with this apparently “expanding” market the profitable firms will expand their investment, which in turn stimulates demand in other sectors and keeps the whole boom going. But the margins get narrower, credit gets tighter and eventually the whole thing blows up *(implodes).

Another aspect is that production is far more planned than it used to be. Whole sectors of the world economy are each under the management of a single centralised transnational corporation. Governments and international organisations play important co-ordinating and planning roles. There are serious efforts to predict the demand, supply and prices of everything that is produced, and to use these predictions for quite long range planning of production and investment.

But these forecasts and plans still revolve around the market. Nobody allocates the total social product between the different sectors of industry and individual establishments. They buy and sell it from each other because they each privately own a different part of it. Their relations are money relations.

When money breaks down, the “social fabric” unwinds, because money is the social fabric of a market economy. The more large scale and long term the plans, the more fundamental the disproportions that can develop before the crisis actually breaks out.

Again, we need to study the essential nature of money to understand why it breaks down in a crisis, but that will not be gone into here. We tend to take money for granted, as though it is perfectly natural that everything produced should have a price. Yet the social relations expressed by money are extremely difficult to grasp and absolutely fundamental to the nature of market economies.

Profitability

If any single regulator can be considered decisive in a capitalist economy, it is the real average rate of profit. This is what determines the flow of investment from one sector to another and regulates a balance between production and consumption. Wages are one factor influencing profitability, but others are just as important.

In “equilibrium”, higher wages means lower profits, but we are now discussing “disequilibrium” and very often the same factors that push profits above and below their “natural” rate, will push wages in the same direction, until the underlying real movement forces a change in direction for both.

What determines the creation and destruction of jobs is the extent and labour intensity of investment. Investment depends on profitability, in which wages are only one factor. The price at which the output can be sold is just as big a factor.

Over the whole period of the capitalist business cycle we find a general trend up and down in the rate of profit with corresponding trends in employment, prices, interest rates and so on. When the business cycle lasted only five or ten years, these movements were very obvious. But since we have not had a full scale crash since the 1930’s, the changes appear to be long term secular movements rather than features of a business cycle.

Yet the usual pattern can be seen of an apparent high rate of profit with rising prices followed by overproduction, falling profit margins, increasing unemployment and so on.

A characteristic feature is the gradual stretching of credit as overproduction intensifies, until the whole structure becomes top heavy and topples over. While Keynesians are clamouring for more credit expansion, the structure of debt has already become far more top heavy than in any previous period. Most corporations now run on ratios of debt to equity in excess of 80%. There is no room for the slightest drop in prices and profitability without actual bankruptcy.

Another feature is the gradual increase in unemployment until the actual crisis breaks out and intensifies unemployment enormously. This unemployment is “cyclical” because it reaches a peak at the depths of a depression and is a minimum at the height of prosperity. It reflects an overall state of demand in the economy that moves quite differently from the “normal” regulation of wages and unemployment during the phase of prosperity.

There is not the slightest sign of a reversal in these trends and no reason to believe they can be reversed except by the outbreak of a full scale crisis. Just as the labour market is unregulated and must correct its own fluctuations, so there is no overall authority that can ensure a balance between production and consumption, savings and investment, borrowing and lending. In general terms, production creates its own market, and it is theoretically possible for capitalist production and accumulation to continue indefinitely. Theories of “underconsumption” are quite wrong.

But periodic overproduction is inevitable, for reasons explained here. It is only the overproduction itself, and its effect on the rate of profit, that can bring into play the mechanism for restoring a balance. The mechanism for restoring a balance is a collapse in the rate of profit, that is to say, the balance is restored by having an economic crisis.

Overproduction

During a boom, excess demand pulls up prices, including wages, and there is an overinvestment of capital so that more capital is being invested than can ultimately return the expected rate of profit.

More workers may also be attracted into the labour force. This may go on for a long time, with various ups and downs, as the demand for investment goods and services feeds itself, and as credit is stretched.

Each firm can only estimate its market from previous trends and price movements. It has no “guaranteed buyers” for the same reason that labour does not. Planning must proceed on the basis of an assumed expansion of markets, and generally that assumption is self-fulfilling.

The general expansion of investments itself creates a market for the goods produced and allows the expansion to continue. *Every firm is continuously engaged in a relative overproduction, producing more than it knows it has a market for. Yet while the economy is expanding generally, the consequences of a miscalculation will only be a local loss of profits and not bankruptcy or market collapse.

As long as business is brisk, capitalism hardly seems to be obstructing the growth of the productive forces at all. There is no barrier to production beyond the capacity of labour, natural resources and existing plant and stockpiles to produce more goods. But eventually the shit hits the fan and plant is installed to produce goods and services that just cannot be sold at the expected profit margins.

Then the nice “demand pull inflation” that was stimulating increased production turns into nasty “cost push inflation” with the opposite effect. It has to, since one firm’s costs are another firm’s demands. All that can postpone the equation between input “costs” and output “prices” is continued intensification of the excess demand of the boom, and the same factors that postpone it must intensify the crash when it comes.

It turns out then that there is a barrier to capitalist production, namely profitability. Goods can only be produced if they can be sold for more than it cost to produce them. When too many are produced to keep prices at that level, profits disappear and so does production.

It turns out then that for a long time investment has been taking place in the wrong proportions between the sectors producing consumer goods and those producing means of production. More should have gone to producing the means of production for producing more means of production. Less should have gone into directly producing consumer goods because the market there is mainly wages and the workers are not very rich.

But this could not have been noticed before, because production was being expanded more or less uniformly on the assumption of uniformly expanded demand. Why should anyone think that capitalist production has to produce a higher and higher proportion of means of production instead of a balanced output including the final consumer goods themselves?

When the boom stops feeding itself and stops being fed, there is a sudden collapse in the rate of profit and a “crisis of overproduction”. Consumer goods sectors crash because there is not a market for the amount that has been produced (not that we could not benefit from a higher standard of living, but we have not got the money to pay for it). Sectors producing means of production also crash because nobody is buying means of production to expand their capacity to produce goods that cannot be sold.

In the subsequent “bust”, wages are one of the things that have to come down before a new boom can begin, but a lot of other adjustments have to occur too. The crisis involves destroying or devaluing a large part of the overinvested capital and restructuring the whole economy.

When the crisis is over, capital has been restructured in favour of means of production so that much more productive techniques are used, with a higher organic composition of capital. This lays the basis for the next boom with a much higher standard of living than the last one.

Monopoly capitalism is much more flexible than laissez-faire capitalism and has mechanisms for relatively smooth variations of output to correspond to demand. Minor fluctuations will not produce large price movements or great changes in installed plant capacity, but only changes in plant utilisation, inventory levels, and credit stretching. As with the labour market and unemployment or labour shortages, these flexible mechanisms have to already be stretched considerably, before disproportions will actually show up as overproduction and reduced profits.

Even more stretching is required before overproduction could result in the sort of market collapse that used to occur quite regularly in the days of laissez-faire. But since there is no other overall regulator, that stretching is bound to occur, until it does produce the crisis needed to restructure the economy and restore a balance. Since the end of laissez-faire capitalism, crises have been much less frequent but far more devastating, when the flexible limits are eventually overstretched.

Are Wages Too High?

In the period between boom and bust, it is possible for the share of wages in GNP, and real wage costs per unit output, to be higher than usual, even while real wages are falling and unemployment is growing. Conservative economists conclude that this must be the cause of the problem, and the solution must be to push real wages down faster.

But wages appear to be “high” because profits are low. Real profits are falling because overproduction means the goods cannot be sold at their usual profit margins, even if nominal accounting profits at inflated prices are still “record”. This alone implies a higher relative share for wages. The real problem is how to raise profits, and that depends more in this case on prices than wages.

If there was simply a “fluctuation” in demand, with a smooth corresponding adjustment of production and employment, then there would be no problem. Real wage costs would not depart from their normal trend. This has been the experience in previous recessions in Australia, such as 1951-52 and 1960-61. But “overproduction” implies that the unsaleable goods have actually been produced, or the plant capacities to produce them have actually been installed, so that profit levels remain depressed and the ratio of wages to output is changed.

Overproduction implies that the prices of firms’ outputs cannot go up fast enough compared with the prices of their inputs, and this is described as “cost-push inflation” rather than the “demand-pull inflation” of the boom. But it really reflects a situation where there is not a sufficient market for the goods that have been produced. The result is excess capacity as firms cut back their production to keep prices up, and lower labour productivity since the labour force is not reduced in proportion to the restriction in production.

This lower labour productivity resulting from capitalist anarchy becomes the subject of sermons to the workers on not being too greedy. The underlying cause of changes in the relative share of labour in the GNP and the real cost of labour per unit output, is the overproduction and overinvestment, not any imbalance in the labour market. Nevertheless, the effect is similar to labour shortages having driven up wages (which indeed is one of the many things that does happen when overinvestment reaches its peak at the height of the boom),. The response is a slackening in job creating investment and increased unemployment.

One feature is that investment can become more capital intensive than normal, based on the apparently high real cost of labour per unit output. This can destroy jobs faster than they are being created. The unemployment created in this way can and does produce lower real wages since it implies a “slacker” demand for labour. The normal operation of the labour market, will bring down wages until this particular source of increased unemployment is no longer operating, even though the apparently high relative cost of labour is due to output restrictions rather than high real wages.

But the more important reason for growing unemployment is that since profit margins are not high enough on the overproduced goods, there is a lack of funds for any investment that would create new jobs at all – whether labour intensive or capital intensive.

Will Lower Wages Reduce Unemployment?

Lower real wages cannot increase employment since high wages were not the cause of investment drying up. So the apparent imbalances in the labour market continue growing and unemployment continues increasing without being able to produce any equilibrium.

Indeed it is even possible for real wages to rise during a depression, despite mass unemployment. This can occur because it is not wages, but markets, that are limiting investment and employment. Firms can continue their (reduced) production levels despite high wages, and will not expand production and increase employment just because wages come down. Unemployment exerts a downward pressure on wages, but since the employers demand for labour is not highly dependent on wage levels, that pressure can be counteracted.

Wage rates are determined far more by variations in the demand for labour with price than by variations in its supply. Thus the predictions of orthodox economists have been totally confounded by the simultaneous expansion of female employment together with equal pay, and by the trade unions present capacity to fight for shorter hours and higher wages despite more unemployment.

In both these situations we have a level of demand for labour that is not sharply dependent on its price. The first during a boom and the second at the end of one.

Even when the demand for labour is falling, it need not produce a fall in wages unless the demand depends on the wage rate. A firm that has already cut staff to reduce output and has excess capacity, will not necessarily cut staff further if wages go up. The same output will still be required to maximise profit, and the same staff will be required to achieve that output, even if profit is further depressed by increasing wages.

Thus even while the total demand for labour is reduced, that demand may become less “slack” – less variable according to wages, and the bargaining position of workers who are still employed may actually improve. Wages can still rise to the point at which it becomes more profitable to use less labour intensive techniques, or to cut back production and employment further. Given excess capacity, there may be considerable room for wages to rise before either of those points is reached.

Here the distinction between “slack demand” and “unemployment” as a cause of falling wages becomes important. Real wages actually rose at times during the last depression, despite mass unemployment. They also rose sharply during the “wages explosion” of 1974, despite increasing unemployment. They have still not fallen a great deal. The conventional conservative theory of wages and unemployment finds it difficult to account for these facts and compensates for this difficulty by hysterical attacks on unions.

Mass unemployment can compel a reduction in real wages, after working class organisation has been smashed. It can do this by compelling workers to accept wages that are less than the value of their labour power (ie less than the “marginal product” of labour they can obtain as unionists selling at a monopoly price). But that in itself is not enough to restore equilibrium. Unemployment will continue until the overinvestment and overproduction has been worked out of the system. More drastic cuts in real wages will not change the fact that goods are not being sold profitably enough for new investment to absorb the unemployment.

Further cuts in real wages will certainly increase profits, and will be welcomed by employers, but no amount of cuts can make investment profitable when there is no market for more goods. Even at zero wages, nobody is going to build new car plants, when the cars already produced are piling up unsold, or are being sold at low profit margins. More cars may be sold because they are cheaper with lower wages, but not enough more to absorb the excess capacity and encourage new investment. The lower wages will simply increase profits without increasing investment. By keeping up wages in a depression, unions are not doing the unemployed out of a job, but simply depriving capitalists of surplus profits.

Stimulating Demand

Keynesians argue that excess production capacity implies a “slack” in the economy which leaves room for employment to be increased by government action to stimulate demand, without necessarily pulling up prices. But this misses the whole point of the adjustment mechanisms that have produced the excess capacity in the first place.

Excess capacity has appeared because market demand does not allow firms to raise their output prices enough to maintain profit margins. Any stimulation of demand must therefore produce a rise in prices before it will produce an increase in output. There would be “slack” if plant was being underutilised because of a fluctuation in demand and the normal adjustment to it. But there is no “slack” when profit margins have already fallen. There is just “excess capacity”.

Once excess capacity has appeared, attempts to stimulate demand by extending credit with the budget deficit, amount to buying up the overproduced goods on the “never-never”. Extending credit means extending debt. Ultimately there has to be a real market or the postponement of bankruptcy by extending credit only adds to the size of the crash when it finally comes.

That of course may not be such a bad thing. There is no harm in demonstrating what heights of prosperity could be achieved by the permanent boom of socialism at the expense of a deeper crash by capitalism when it fails to maintain that prosperity. But we are already at a stage where the credit has been rather fully extended. While governments should and will continue to extend it as long as they can, that may not be all that long. Governments go bankrupt too.

Economic Crisis

The next phase of the business cycle, which we have not seen yet, involves market collapses to restructure production and get rid of the overinvestment. This is not the place to enter into a detailed analysis of the nature of capitalist crisis, and the particular characteristics and timing of the coming one. This would also involve considering the expansion and contraction of credit, the operation of financial and capital markets and so on. It would also be necessary to explain inflation and the real and apparent movements of relative prices. In any case I do not understand it well enough to say much more.

But the implication of all this for unemployment is simple. The whole world economy is out of balance and only an overall crisis will restore that balance. It is not just a matter of pushing down wages until the labour market is back in balance. Nor are there any other easy solutions.

At the moment we have both rising prices and growing unemployment and that is seen as a unique phenomenon different from any previous cycle of boom and bust. But in fact it is simply a more long, drawn out version of the usual pattern. The boom has basically ended and unemployment has started to grow. But the “bust” has not happened yet and we have not yet got a real crisis or massive unemployment. There is still real economic growth and rising prices and even room for some renewed mini-booms because the next phase of the business cycle has not yet begun. During the late 1920’s unemployment also started to rise while prices were still going up and before the actual crash.

The “price mechanism” we learn about in orthodox economics textbooks does work. A market economy, a capitalist economy, can develop the productive forces to higher and higher levels without central planning. But a pool of unemployed fluctuating between small and large is an essential part of how it works. The price mechanism does not prevent market collapses and economic crises. Crises are an essential feature of the way it works. Booms end in busts and busts pave the way for booms because there is no other regulatory mechanism in a market economy.

The “balancing mechanisms” and regulators of a market economy all sound quite neat and clever. But they are proving extremely destructive. What an incredibly archaic way to regulate an economy in this day and age!

The Great Depression of the 1930’s was the only way that the “roaring twenties” could end. That depression and the Second World War paved the way for unparalleled prosperity in the 1950’s and 1960’s. The post war boom was longer and reached greater heights than any previous boom in the history of capitalism. The period of teetering on the edge between boom and bust has been longer than any previous such period in history. We can reasonably expect that the coming crisis and depression, which is certainly not here yet, will be very much deeper than the 1930’s.

(Next instalment: ‘Solutions’)