The impact of Covid-19: The pandemic’s effects on progress toward a more cooperative world society in 2020 and 2021

The Cooperative Society Newsletter
May 2021, Issue 28
by E.G. Nadeau
, Ph.D.

We have been writing about whether or not humans have been moving toward or away from a more cooperative society since 2016. The pandemic, which began in December 2019, has had a profound effect not only on our health and mortality, but on the world’s economy, political landscape, social well-being, and the environment. That impact is continuing in 2021, and very probably will have significant consequences in subsequent years.

We will talk about the effects of Covid-19 on our lives in three installments of The Cooperative Society Newsletter, beginning with this May issue and continuing in July and September.

First, a little background on The Cooperative Society Project.

There are three core premises to the Project:

  • We have reached a point in human history at which there are adequate resources for all human beings to experience a decent quality of life. Similarly, humans are now able to establish and maintain a sustainable relationship with nature. The problem is: We are not yet achieving these goals.
  • It is important to measure the extent to which we humans are moving toward a sustainable quality of life for all and a sustainable environment, and, when we are falling short, to take corrective action.
  • Achieving these goals does not depend on forces outside of our control. We have the power to shape the conditions of our lives and those of future generations. We are the agents of history, not its powerless subjects.

The 2018 edition of The Cooperative Society: The Next Stage of Human History and “The Cooperative Society 2020 Report” both review progress (or the lack of it) related to seven measures: economic power, the distribution of wealth, conflict, democracy, population, quality of life, and the environment.

Following is an update on the first two of these variables – economic power and wealth distribution. The other five measures will be addressed in the next two newsletters.

Economic Power

Key questions
To what extent has the pandemic affected the concentration of corporate and country-related domination of the world’s economy in 2020 and so far in 2021? Are checks and balances, along with alternative forms of business, being applied and planned to reduce the nega­tive consequences of this concentration?

Importance of this measure
As long as economic decision-making is dominated by the few, the rest of us are dependent on the choices that they make. This concentrated economic power is the primary cause of periodic, large-scale disruptions to the economy (for example the Great Recession of 2008-2010). It also has a significant impact on how we deal with crises such as those precipitated by the pandemic and global warming.

Major trends in economic concentration in 2020 and 2021:

  • The largest, publicly traded corporations in the world increased their combined market value by 47% between mid-April 2000 and mid-April 2021 – from $54 trillion to $80 trillion.
  • The United States and China are headquarters for the world’s corporations with the largest combined market values. As of April 2021, the U.S. accounted for 35% and China 7% of the market value of the top 100 corporations in the world.
  • Due to the pandemic, the world gross product (WGP) – the combined value of the goods and services produced by all countries – declined by a little over 4% in 2020. The only other time in the last 50 years there has been a decline in WGP was in 2009 during the Great Recession, and the drop that year was only .1%.
123RF.com: Fabian Plock

Analysis

These data indicate that the world’s most powerful corporations and the countries in which they are located became even more powerful during the pandemic. This was at a time when the rest of the world economy made a significant downturn.

Corrective action

The biggest factors that would reduce the power of these corporations are changes in the policies of International bodies such as the United Nations and the world’s most developed countries toward them. Tighter international anti-trust policies and enforcement of these policies, concerted efforts to thwart tax evasion by large companies, and progressive corporate taxa­tion systems could reduce their inordinate influence on the world economy. Taking actions to strengthen small- and medium-size businesses, and including cooperatives and social enterprises, would also make a huge difference. These approaches to creating a fairer world economy in the post-pandemic era are increasingly being discussed by world leaders, including President Biden, but so far, there has been little action.

Wealth distribution

Key question
Is the distribution of wealth becoming more or less unequal around the globe?

Importance of this measure
The concentra­tion of wealth has consequences for everyone’s economic and social well-being. Large differ­ences in wealth and income mean that many of us earn less, receive fewer social benefits, and have less influence over the political decision-making that affects our day-to-day lives than we would have in a more equi­table society. Inequality also leads to social unrest and conflict.

Major trends in wealth inequality during the pandemic:

  • According to Oxfam:
    • We could face the greatest rise in inequality since records began, with the pandemic increasing economic inequality in almost every country at once. 

    • It could take more than a decade for billions of the world’s poorest people to recover from the economic hit of the pandemic while the 1,000 richest people recouped their COVID-19 losses within just nine months.

    • Just 10 people – the world’s richest billionaires, all men – have seen their combined wealth skyrocket by half a trillion dollars since the pandemic began. That’s more than enough to pay for a COVID-19 vaccine for everyone and to prevent the pandemic from pushing anyone into poverty.
  • The World Bank estimates that the number of people living in extreme poverty – defined as $1.90 per day or less – increased by between $119 and $124 million in 2020 because of the pandemic. This is the first increase in extreme poverty in 20 years.

  • The World Food Programme estimates that the total number of acutely food-insecure people increased to 272 million in 2020, compared to 149 million people in 2019.

  • According to the United Nations, the pandemic could force almost a billion people into destitution by 2030 “unless nations introduce energy, food and climate reforms.”
123RF.com: takkuu

Analysis

The above data clearly indicate that the pandemic has “made the rich richer and the poor poorer.” Although there has been a long-term pattern of increasing concentration of wealth around the world, the level of extreme poverty had been dropping dramatically during the two decades prior to 2020. But the pandemic reversed the long-term trend in the decrease of extreme poverty.

Corrective action

This projection of widening inequality in the decade ahead is not a foregone conclusion. It can be addressed in two primary ways: by increasing taxes on the wealthy, and by implementing reforms to drive down the poverty rate.

Along with an increase in corporate taxes, President Biden is proposing more progressive taxes on individuals and families that would particularly focus on the very wealthy. Other developed countries have instituted such tax reforms, or are considering doing so.

International economic reforms could get the world back on track in reducing extreme poverty between now and 2030. According to the United Nations Development Programme,

“These measures include investments aimed at changing patterns of food, energy, and water consumption and increasing internet access as well as supporting low-carbon economies.    

Rich nations also face calls to look beyond their own economic woes and support developing countries by increasing foreign aid, cancelling debt, and financing affordable vaccines.”

123RF.com: Herman Lumanog 

Conclusion

Both the trends of increasing economic power of large corporations and increasing inequality between the wealthy and the rest of us accelerated as a result of the pandemic in 2020 and the first half of 2021. In addition, the progress that had been made in reducing extreme poverty during the past 20 years suffered a significant reversal.

But, progressive policies during the next decade can reduce the power of large corporations and decrease the wealth gap between the rich and the poor.

Beware of “isms”

The Cooperative Society Newsletter
September 2019, Issue 18
by E.G. Nadeau

Far too often, people use the same words, but mean very different things. This can be confusing, even dangerous, especially in the world of politics. With the lead-up to the 2020 presidential and congressional elections in the United States, it is particularly timely to take a close look at some of the major “isms” being bandied about by politicians, journalists, and pundits.

What does “populism” mean?
The word can apply to “a range of political stances that emphasize the idea of ‘the people’ and often juxtapose this group against ‘the elite’.”[1] But, right off the bat, use of the P-word runs into big trouble. You can have right-wing populists, left-wing populists, and demagogues like Rodrigo Duterte in the Philippines and Nicolas Maduro in Venezuela who claim to be populist, but have questionable popular support.

populism

So, ultimately, the word populism has become meaningless. To use it spreads confusion and disinformation rather than political understanding.

How about “socialism”?
Socialism is another word that has become a lightning rod for mystification as we approach the 2020 elections. Although running as a Democrat for president, Bernie Sanders refers to himself as a socialist. Alexandra Ocasio-Cortez and Rashida Tlaib, both members of Democratic Socialists of America, were elected as Democrats to the House of Representatives in 2018.

So, what is socialism? The classic definition with origins dating back to Karl Marx and others in the mid-1800s is, “Economic and political theories advocating collective or governmental ownership and administration of the means of production and distribution of goods.”[2]

But, these three self-proclaimed “socialists” sound much more like Northern European-style social democrats, who favor mixed economies that combine elements of both regulated private enterprise and a public sector that limits economic inequality and attempts to provide a minimal quality of life for all citizens.

To further complicate the meaning of socialism, President Trump and other Republicans accuse progressive Democrats of being out to destroy the US economy by nationalizing corporations and turning the US into an economic backwater like Cuba or Venezuela.

We would all be better served by dropping the word “socialism” from the rhetoric of the 2020 campaigns and focusing on the specific positions that candidates take related to healthcare, climate change, gun control, and other issues.

capitalism or socialism

What does “capitalism” mean?
A typical dictionary definition of capitalism is: “An economic system characterized by private or corporate ownership of capital goods, by investments that are determined by private decision, and by prices, production, and the distribution of goods that are determined mainly by competition in a free market.”[3]

The problem with a definition like this is that it doesn’t reflect the reality of the contemporary world economy, in which government regulation, taxation and incentives, and international trade agreements (and trade wars) play major roles in shaping the market in which corporations operate.

Virtually every country in the world – including such outliers as North Korea and Cuba – has a mixed economy, which combines private enterprise and public involvement in the market.

For example, Forbes’ Global 2000, the world’s largest publicly traded corporations, includes the four largest Chinese banks in its Top Ten list. These banks are predominantly government-owned, but also have limited investor-ownership.[4] The phrase “state capitalism” is often used to characterize the Chinese, Russian, Vietnamese, and other national economies in which the government has a major, direct involvement in the market.

The purpose of corporations is also being redefined by some of the largest publicly traded companies in the world. CNBC recently reported that the Business Roundtable, comprised of almost 200 CEOs of major U.S. corporations, stated that the foremost function of their companies should not be to “serve their shareholders and maximize profits.” Instead it should be “investing in employees, delivering value to customers, dealing ethically with suppliers, and supporting outside communities.”[5]

Conclusion
Thus, as with populism and socialism, capitalism is not a useful term to describe a national economy, or a political ideology. The reality is that in different countries and in the international arena, there is a wide range of ways in which private enterprises, public enterprise, mixed enterprises, and various forms of public intervention interact to shape economic activity. The word “capitalism” is useless in capturing this diversity.

Thus, as we consider candidates for public office and the track records of those who already are in office, it’s not the “isms” we should be looking at, but the specific actions they have taken or propose to take to improve our social, economic, political, and environmental well-being. For more on what The Cooperative Society Project perceives as major components of a better society, please click www.thecooperativesociety.org

 

[1] https://en.wikipedia.org/wiki/Populism

[2] https://www.merriam-webster.com/dictionary/socialism

[3] https://www.merriam-webster.com/dictionary/capitalism

[4] https://www.forbes.com/global2000/#68933a01335d

[5] https://www.cnbc.com/2019/08/19/the-ceos-of-nearly-two-hundred-companies-say-shareholder-value-is-no-longer-their-main-objective.html

Is Repression an Inevitable Part of China’s Domestic Rule? Not Necessarily.

The Cooperative Society Newsletter
July 2019, Issue 17
by E.G. Nadeau

A friend and I visited China as tourists in April of this year. Our itinerary included the south-central part of the country, Hong Kong, Tibet, Beijing, and a hike on the Great Wall.

China is impressively modern in many ways – shiny new airports, attractive hotels and restaurants, a well-constructed road system, electric mopeds that have mostly replaced bikes in larger cities, and, at least in tourist sectors, well-kept-up streets, buildings, parks, and gardens.

china cooperative society
The Chinese flag flies everywhere in Lhasa, Tibet, a constant reminder of who’s in charge.

A darker side of China
But in Lhasa, the administrative capital of “the Autonomous Region of Tibet,” we saw another, darker side of the Celestial Empire that was the opposite of autonomous – a strong police and military presence, including occasional snipers positioned on rooftops; and many Han Chinese, the dominant ethnic group in the country, imported to dilute the percentage of Tibetans in their own region.

There continues to be controversy over the historical relationship between China and Tibet, the number of Tibetans who have died in the aftermath of China’s invasion of Tibet in 1950 (500,000 seems to be about right), the number of Han Chinese living in Tibet, the extent to which Tibetan Buddhists are allowed to practice their religion, and many other issues.[1]

tibet cooperative society
The Potala Palace, shown above, located in Lhasa, Tibet Autonomous Region, China, was the residence of the Dalai Lama. The palace became a museum and World Heritage Site after the 14th Dalai Lama fled to India during the 1959 Chinese invasion.

Although the large majority of Buddhist monasteries was destroyed in the 1950s and 1960s, those that we visited in Lhasa were beautiful and well-maintained. Buddhists appeared to be able to practice their religion freely. At the same time, however, we had the sense that the traditional culture of Tibet was gradually, but inexorably, being subsumed into a monolithic Chinese society.

cooperative society tibetan buddhists
Tibetan Buddhists at prayer.

Tibet is just one example of the Chinese government’s drive to homogenize the diverse cultures and beliefs of its citizens, crush dissent, and snuff out expressions of democratic values. The brutal crackdown on the Tiananmen Square protests in 1989, the current suppression of the religious and cultural identity of 11 million Muslim Uighurs in northwestern China, the ongoing attempts to restrict civil rights in Hong Kong, and the ever-present threat to the autonomy of Taiwan are all manifestations of authoritarian rule by China’s political leaders.[2]

In many ways, Tiananmen Square marked a decisive turning point in recent Chinese history. As one author commented: “When China’s moment of reckoning came, Communist Party leaders chose bullets, not ballots. And they made a long-shot, long-term Faustian deal to guarantee economic development in exchange for continued party control that has lasted ever since.”[3]

Another example of oppression
The current plight of the Uighurs represents a doubling down on the repressive side of this “Faustian deal.” There are up to two million Uighur adults in detention centers. Many of their kids are required to attend state-run schools intended to mold them into compliant Chinese citizens while stripping away their religious beliefs, language, and culture. On top of this indoctrination, the Uighur homeland, the Xinjiang Autonomous Region (note again the irony of this province’s name), may be the most concentrated police state in the world, with sophisticated electronic surveillance, facial recognition profiling, apps inserted into phones to track potential dissidents, and, believe it or not, the required boarding of Han Chinese in many Uighur households.[4]

But there is nothing immutable about the current paranoia of China’s leadership toward diversity and dissent.

There have been major shifts in China’s politics and economics since the beginning of Communist rule in 1949 – some disastrous, such as the Great Leap Forward in which an estimated 45 million people died (mostly of starvation) between 1959 and 1962,[5] and the Cultural Revolution in which up to 2 million more people died between 1966 and 1976 – mostly as a result of violence by the Red Guard.[6] On the positive side, Deng Xiaoping, Mao Zedong’s immediate successor as Chairman of the Communist Party, shifted away from a tightly controlled, state-run economy to a mix of state and private enterprises, beginning in 1976. This change brought rapid economic growth, which has mostly continued to the present day.[7]

A democratic foothold
Most people are unaware that there is a democratic side to Communist China. In 1987, the national government instituted a reform in which village leaders were to be elected by residents and others affiliated with each village. With a few interruptions along the way, this local-level democracy is still in effect. Thus, electoral democracy already has a foothold in almost all of China’s 900,000+ villages.[8]

Just as there have been major changes in China over the past 70 years, it would be imprudent to dismiss the potential for future significant reforms, including ones toward less repression and greater democracy, in the next couple of decades.

[1] History of Tibet (1950-present), last edited on July 9, 2019, Wikipedia, https://en.wikipedia.org/wiki/History_of_Tibet_(1950–present)

[2] Miscellaneous sources.

[3] Zegart, Amy, June 8, 2019, “Decades of Being Wrong About China Should Teach Us Something,” The Atlantic.
https://www.theatlantic.com/ideas/archive/2019/06/30-years-after-tiananmen-us-doesnt-get-china/591310/

[4] See for example:
Gershman, Carl, July 4, 2019, “The world knows about Uighurs. There should be a rallying cry to save them.” Washington Post,
https://www.washingtonpost.com/opinions/global-opinions/chinas-repression-of-the-uighurs-began-10-years-ago-now-their-survival-is-at-stake/2019/07/04/3b568470-9daa-11e9-85d6-5211733f92c7_story.html?utm_term=.3172f04b850a;
Sudworth, John, July 4, 2019, “China Muslims: Xinjiang schools used to separate children from families,” BBC News, https://www.bbc.com/news/world-asia-china-48825090;
Buckley,  Chris and Paul Mozur, May 22, 2019,How China Uses High-Tech Surveillance to Subdue Minorities,”
https://www.nytimes.com/2019/05/22/world/asia/china-surveillance-xinjiang.html;
Withnall, Adam, November 30, 2018, “China sends state spies to live in Uighur Muslim homes and attend private family weddings and funerals,”
https://www.independent.co.uk/news/world/asia/china-uighurs-muslim-xinjiang-weddings-minority-communist-party-a8661006.html;
Zhong, Raymond, July 2, 2019, “China Snares Tourists’ Phones in Surveillance Dragnet by Adding Secret App,”
https://www.nytimes.com/2019/07/02/technology/china-xinjiang-app.html.

[5] O’Neill, Mark, September 5, 2010, “45 million died in Mao’s Great Leap Forward, Hong Kong historian says in new book,”
https://www.scmp.com/article/723956/revisiting-calamitous-time

[6] “Cultural Revolution,” Wikipedia, last edited on July 5, 2019, https://en.wikipedia.org/wiki/Cultural_Revolution

[7] “Deng Xiaoping,” last edited June 28, 2019, Wikipedia, https://en.wikipedia.org/wiki/Deng_Xiaoping

[8] See for example:
Babones, Salvatore, October 14, 2015, “Country Lessons: A Rural Incubator for China’s Political Reform?” Foreign Affairs,
https://www.foreignaffairs.com/articles/china/2015-10-14/country-lessons;
He, Baogang, 2007, Rural Democracy in China: The Role of Village Elections, Palgrave McMillan US, https://www.palgrave.com/gp/book/9780230600164;
Gannett Jr., Robert T., April 2009, “Village-by-Village Democracy in China,” American Enterprise Institute.
http://www.aei.org/wp-content/uploads/2011/10/Village%20By%20Village%20Democracy%20in%20Chine.pdf