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The likely origin of the coronavirus in a Chinese wet market, but also food shortages during the crisis have led to additional attention to the global food system. Many observers criticize the latter severely, because its expansion has led to a loss in biological diversity and has brought people too close to wildlife, thereby increasing the risk for zoonotic diseases in the future. Were the developments in Wuhan an isolated accident or is the systemic criticism of the international agricultural and food system warranted? At stake is not only the increased risk of zoonotic diseases, but also widespread hunger. According to the World Food Programme, the pandemic has increased the number of people with acute hunger by more than 80 per cent, towards 270 million people (WFP, 2020: 6). Should we take this observation as an indication to focus agriculture upon local community support or should we further its integration into global supply chains?
Political economy scholarship can assist us in dealing with these questions by highlighting a number of structural features of contemporary agriculture and food production. Put very simply, scholars working on the ‘international political economy of food and hunger’ (Balaam and Dillman, 2014: 460) distinguish between transnational agribusiness and its global supply chains on the one hand and local agricultural production for local needs on the other. Which of the two fundamental alternatives gains support through the coronavirus pandemic?
Issues of agriculture and food are not only important to Political Economy because of continued hunger crises and the role of agricultural exports as major problem for the conclusion of global trade negotiations, but also because the economic features of food production changed very dynamically during the last decades.
From the start, the coronavirus crisis was a propaganda contest between democratic and authoritarian capitalist regimes: who is better equipped to fight against the crisis? Authoritarian countries such as China and Singapore were lauded for their draconian and successful measures against the spreading of the crisis, but also detested for their lack of transparency. Later in the crisis, other authoritarian countries such as Russia, in contrast, suffered more from infections than democratic ones. Which type of capitalism will win the propaganda contest?
Whereas regime types do not matter much in International Political Economy, they are a very established topic in Comparative Political Economy. A core question is whether capitalism and democracy are closely connected. Among the most well-known claims is that liberal capitalism and democracy are the ‘end of history’ (Fukuyama, 1992). While this claim has been cast into doubt via the rise of China, important recent scholarship still claims that capitalism and democracy mutually support each other, particularly during turbulent times (Iversen and Soskice, 2019). Even during a situation of crisis, democracy reinforces capitalism and capitalist economies remain democratic, the argument goes. While it is based on comprehensive historical evidence on developments in the OECD, it may be less convincing with regard to the current populist backlash. Other perspectives in Comparative Political Economy rather assume that the marriage between capitalism and democracy is nearing its end (Streeck, 2016). Moreover, all of these works focus on the OECD. Given that the centre of capitalism increasingly moves to East and South Asia and that these regions are not known for a prominent role in liberal democracy, we may wonder whether the assumption of a close connection between capitalism and democracy holds globally and in the near future.
The coronavirus pandemic emerged in a historical situation where the political relations between China and the US, not only the two largest economies, but also the contenders for global economic hegemony, grew increasingly tense. The pandemic has put fuel onto the fire of this rivalry. While the US blamed China to be responsible for the emergence of the pandemic and for undue influence in the WHO, China used its early economic recovery to strengthen its ties to countries globally. How will the pandemic influence the balance of power between these two economies?
During the last two decades, much International Political Economy scholarship has studied the emerging economic rivalry between China and the US, even if it did not yet find much reflection in the major textbooks. While the discussion during the 2000s mainly focused on the question whether the rise of China would be aggressive or peaceful, it increasingly turns to the question of the stability of the US-led liberal global order during the 2010s. During the first debate, the core contenders were ‘power transition theory’ and ‘offensive realism’ on the one side, arguing that the rise of China would lead to military conflicts, and liberal as well as constructivist scholarship on the other side, predicting that this conflict can be avoided, due to economic interdependencies and the socialization of China into a cooperative behaviour (Nölke, 2015: 657–8). The second debates focused on the challenges that China poses for the US-led ‘Liberal International Order’ (LIO).
During the coronavirus crisis, the use of disposable gloves and plastic containers for goods surged. In the mindset of many people, the war on the environment took the backseat for a while. But will it return to the front seat in the era of post-corona capitalism? Among environmental activists, the coronavirus crisis gave rise to hope, that this crisis is an ‘opportunity’, a trigger, for change. But will it be a change in the ‘right’ direction? Work on global environmental change in International Political Economy helps us to answer these questions in an informed and structured manner (for discussions in Environmental Studies with relevance for Political Economy, see Chapter 25).
In contrast to other issue areas in International Political Economy such as trade and finance, the epistemic authority of scientists is particularly relevant with regard to climate change. It took not only this authority to get the topic of climate change onto the international agenda at all, but this authority became to a surprising degree contested. The questions whether climate change exists, whether it is dangerous and whether it is man-made still are contested by sizeable minorities, in spite of the overwhelming scientific evidence that answers these questions affirmatively (O’Brien and Williams, 2016: 250–1, 256). As we shall see, this problem returned during the coronavirus pandemic. When people agree on the highly dangerous and man-made nature of climate change, this leads to the question where it exactly it is coming from. From an International Political Economy perspective, the role of economic globalization for the causation of climate change is particularly relevant (Dauvergne, 2020: 386–9). How did the temporary retreat of globalization during the pandemic affect climate change?
Within days after the first victims of the coronavirus were identified, governments took decisions on a comprehensive closure of national borders and restricted flights. Particularly striking was the closure of borders within the Schengen Area of the EU, within which people were used to move freely on a daily basis for work and leisure. Accordingly, the ban on travelling freely within the Schengen Area had a radical impact not only on the EU economy but also on its identity. It was as if the pandemic pushed Europe back to its past: an area constructed of small nation states divided by real geographical borders (see Chapter 6 and Chapter 28). The ban on the freedom of movement of people within the EU was only the most extreme measure taken by governments that reminded us that the world is still made of territorial states and that the primary responsibility of governments usually is perceived to be towards the domestic population. Related measures included the ban on exports of coronavirus-related health products (see Chapter 2) or the focus on the rescue of national enterprises (see Chapter 12). We can order all of these observations by locating them in the struggle between communitarian and cosmopolitan ideologies of capitalism. Which of the two conceptions will have the upper hand in post-corona capitalism?
Like the immigration crisis in Europe and the US beforehand, the pandemic deepened the tensions between two sets of modern values. On the one side, we can find the cosmopolitan set of values, which is based on universal human rights, supranational integration and open borders.
Next to the tendency towards digitalization, the coronavirus crisis also has led to increasing concerns about economic concentration. This pertains to not only the strengthening of major digital companies such as Alphabet (Google holding company), Amazon and Facebook on the one side, but also the destruction of many small companies (for example, in retail) on the other. Is this an inevitable development or should governments interfere? Moreover, most competition authorities liberalized their usual cartel laws in order to allow companies to cooperate intensively for the production of scarce goods, particularly in the health sector. Will this lead to intensified cartelization in the future? Finally, the massive size of some governments’ stabilization policies for domestic business have led to concerns about unfair competition; for example, vis-à-vis companies based in fiscally less well-off economies. Shall we interdict rich governments to support their companies during the pandemic and the related recession, in order not to bias economic competition?
Most observers of modern economies agree on the usefulness of competition for economic well-being. They assume that competition in the market safeguards efficiency and innovation. Lack of competition, in the form of monopolies and cartels, in contrast, often is perceived to lead to wasteful behaviour and the unjust collection of rents (Büthe, 2019). Competition policy traditionally is a topic mainly studied in Economics and Law. Economists, for example, study the effects of economic concentration on consumer prices. Law scholars, for example, establish whether certain forms of inter-company cooperation have to be qualified as an unlawful cartel. More recently, however, competition policy has become an increasingly prominent topic in Political Economy.
What will post-corona capitalism look like? We don’t know. It is the core contention of this book that important political choices about the future of capitalism lie ahead. It has described some 30 of these choices and the alternatives available. The next years will demonstrate which of the alternatives will be realized and which not. This will be the outcome of political struggles and the book hopefully can contribute towards making these struggles more democratic, by highlighting the alternatives at hand. Still, this book has also assembled empirical evidence with regard to the likelihood of these alternatives, based on developments during the first two years of the crisis. While this is still very early in the process, we can nevertheless summarize broad tendencies.
In order to reduce the complexity of a long list of individual observations, this chapter will allocate the latter to a small number of alternative visions of future capitalism (see also Dummer and Neuhäuser, 2020). The identification of these visions follows the alternative options discussed in some individual chapters. The book distinguishes five different options for the near future of capitalism.
During the coronavirus crisis and the related recession, many governments have initiated massive public rescue operations for business, given that the latter was collapsing in sectors such as tourism. A prominent part of these operations was the increase in public control over companies. Increasing public control took different forms. Often, this meant increasing public (partial) ownership, directly via state bodies or indirectly via public banks or sovereign wealth funds. In other cases, governments introduced regulations with regard to preventing the takeover of prized companies by foreign investors. Government financial support measures during the crisis sometimes have led to controversial discussions about the behaviour on the side of business, in particular when the latter at the same time have used share buy-backs, provided dividend payments to shareholders or paid a massive bonus for top management. Critics argued that companies were using taxpayers’ money for the enrichment of company owners and top management. Companies, in turn, defended the practice by highlighting their obligations towards shareholders or the need to retain top talent. Will post-corona capitalism focus on shareholder value or on the public responsibility of companies?
We can explain the competing rationales behind this controversy by linking them to various themes in Comparative Political Economy; namely, the discussions on financialization and on corporate governance in different types of capitalism (Clift, 2014: 230–56; Menz, 2017: 146–77; Vermeiren 2021: 118–46). The process of financialization of capitalism has unfolded since the late 1970s.
