The Covid

Photo: Standing Rock solidarity march protesting the Dakota Pipeline in San Francisco, November 2016, Pax Ahimsa Gethen, 2020.

The Covid-19 Shock Doctrine

written by Josephine Münch and Benjamin Smith

In 2007, Canadian author and activist, Naomi Klein published a novel that is crucial to understanding the notion of the Shock Doctrine. Her novel ‘The shock Doctrine: the Rise of Disaster Capitalism’ brings forward the theory of disaster capitalism, which proposes that specific political or economic agendas are furtively introduced by governments and corporations during a disaster. This theory suggests that during a disaster, whether it be an economic crisis, a conflict or a natural cataclysm, specific political or economic agendas that tend to predominantly prioritise corporate interests are introduced by capitalist corporations and neo-liberal governments. Klein demonstrates that these decisions harness the population’s confusion and disorientation caused by the shock of the event, to implement their political or economic interests.

The Covid-19 crisis is the perfect example of ‘disaster capitalism’ at work. Politicians and corporations have put forward their interests under the guise of recovering their political economy. Governments and businesses from all sides of the political spectrum are already using recovery packages, budget reforms, environmental deregulation or democratic backsliding to enhance their political and economic autonomy that stems from the Covid-19 health crisis.

This crisis has enabled countries to have better control of their macroeconomic approaches. While Germany has become renowned for its “black zero” commitment to budgets balanced between fiscal spending and tax receipts; the country abandoned this more fiscally conservative approach and implemented one of the most radical relief packages in response to the pandemic. The state allocated €350bn, roughly 10% of its GDP, to support the Eurozone’s largest economy. These funds are directed at struggling businesses and include unlimited loans. When Chancellor Angela Merkel proclaimed that ‘we won’t be asking every day what it means for our

deficit’, it was simultaneously a proclamation of Germa- were able to assert their economic autonomy. ny’s economic autonomy and intention to break away from the European Union’s neoliberal macroeconomic considerable economic bargaining power. On the conpractices. Furthermore, the pandemic allowed the different governments to amplify their policies of work-place

Following the shock of the pandemic, countries have deregulation. Early into the pandemic, the French progressively implemented relief packages to keep parliament passed the emergency measures declared their economies afloat. Yet, in the E.U, even in situa- by Emmanuel Macron. These included necessary and tions where states have collaborated, the competing understandable measures, such as temporary banpreferences of individual states have remained prev- nings of large-scale public meetings and the closure alent throughout the pandemic. While EU executives of certain venues. Yet, these emergency measures had initially proposed a coronavirus recovery package also included the power for employers to force overof €500bn, the more ‘frugal’ EU states were instead op- time work, reduce pay and delay payment for relatively posed to any grants at all. The ‘frugal five’ states (made low-paid workers. This is significant, as it is a suspenup of Finland, Denmark, The Netherlands, Austria and sion of the thirty-five-hour-maximum working week Sweden), delayed this negotiation process by insisting and the right to vacation pay that make up France’s on their economic autonomy. renowned workers’ rights or “acquis Mark Rutte, the prime minister of sociaux”. Even in countries that the Netherlands, ‘demanded the “it is easier for govern- have remained firmly aligned with right of a single member state to veto the disbursement of the ments to deregulate neoliberal economics, the pandemic has still amplified the dismoney’. Similarly, the Swedish prime minister, Stefan Löfven, without consulting the tributive significance of the state. ‘criticised the proposal and population.” While the pandemic shakes nationclaimed that it would indebt fu- al economies and amplifies governture generations.’ ment political and economic autonomy, the Covid-19 crisis is also Although these states did eventually concede to an EU ronmental changes that have been previously met with recovery package, they did so at a significantly lower public opposition. While the world witnessed massive €390bn. This meant that the frugal states were able drops in carbon emissions, cleaner air and the return of to compromise the commitment to a shared EU relief nature in urban areas, neo-liberal governments seem package to their economic interests. Thereby, the disar- to be prepared to turn the tide by giving up environray caused by the pandemic enabled these frugal states mental laws in order to rebuild their industries. an opportunity for states to implement social and envitrary, India pursued its own idiosyncratic economic In the U.S for example, President Donald Trump anapproach and did not follow a normative internation- nounced changes to the National Environmental Polal standard. Although the Indian central government icy Act that plans on easing infrastructure investment did commit to relief packages, they were considerably while deregulating environmental laws. Slashing ensmaller than those provided in other states. The first vironmental legislation that works against polluting announced relief package consisted mostly of existing companies is a strategy that Trump’s government has public spending and additional expenditure amounted always supported. Yet, it is even more prominent now only to 0.5% of the GDP. By the end of May, the total that the public’s ability to contest such deregulation additional public spending in India amounted to only has been diminished because of global lockdowns. 1% of the GDP and much of this ‘had not yet reached Despite Trump’s disregard for climate change, counpeople’. This shows that the shock of the pandemic al- tries that originally claimed to be environmentally lowed the Indian government to break away from any friendly seem to be using the same strategy to rebuild international standard of relief packages. Instead, they their economy. In Canada, despite the public’s relent-

less demonstrations against Alberta’s oil and gas pipeline, a federal package of almost 2$ billion was granted to Alberta under the grounds of coronavirus. Similarly, the air-quality monitoring was amended by the local government to ‘alleviate pressures on industrial operations.’

Targeting environmental laws is key to disaster capitalism. With Covid-19 and half of the planet’s population stranded at home, it is easier for governments to deregulate without consulting the population. In India, the government has designed a new draft of the Environmental Impact Assessment proposing to legitimise operations currently filed as violations, such as construction and infrastructure projects. In the previous draft, the public’s consultation was a key component under which the concerns of a population affected by a project would be taken into account. On the other hand, the new draft proposes an expanded list of projects that do not require the population’s concerns to be given environmental clearance.

Environmental commentators have suggested that the aftermath of the health crisis could be an opportunity to redesign the current liberal economic system towards a more sustainable one. Yet, the GHG emission reduction resulting from global lockdowns will most likely have no long-term effect as states appear ill-prepared to implement institutional change. Indeed, the Covid-19 crisis is a timely moment for countries to downgrade their environmental policy ambitions. Already in 2007, following the subprime crisis, the E.U had drastically weakened its environmental legislation through deregulation and weaker environmental policy density. In 2020, the €750bn recovery package voted in July by the E.U member states raised backlash from scientists on its efficiency on tackling climate change. Undermining environmental protection policies is one way to exploit the Covid-19 crisis and enforce government agendas. Still, specific groups and minorities are also being targeted through their government’s disaster politics. In March, soon after the coronavirus outbreak, Hungary’s president Viktor Orban was handed the power to rule by decree. Human rights experts are worried this amount of power would allow Orban to push an anti-democratic agenda, despite Orban assuring that the decree ‘poses no threat to democracy’.

As economies have collapsed, following strict lockdown measures, and the public has been in disarray, national governments have used this opportunity to expand their economic autonomy promoting economic, social and environmental agendas that suit their interests. Differently from what neo-liberal theorists like Robert Keohane and Joseph Nye have argued on the demised economic autonomy of states, many countries, because of the Covid-19 crisis, will most likely control their political economy, shifting the International Relations’ focus to states’ plural and differing economic approaches. This is even more relevant as countries have used this crisis to promote their economic interests, pulling away from regional bodies, undermining labour rights, deregulating environmental policies, and, sometimes, ignoring international organisations’ recommendations. Thus, the Covid-19 crisis is not only a way to revise the global economic order, but it is also a way for IR theorists to review their field and turn their focus to a new form of states’ anarchism, where states have greater power on their own economic, social and environmental policies.