# It was the virus that did it - Michael Robert's Blog

-   [source](https://thenextrecession.wordpress.com/2020/03/15/it-was-the-virus-that-did-it/)
-   [[covid-19]] [[political economy]] [[capitalism]] [[capitalist crisis]]


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## Notes

-   like in 2008, Roberts expects mainstream economists to blame the crisis on exogenous factors
-   stock markets have plunged as much as 30% in the span of weeks
-   economic activity was already slowing leading up to the pandemic
    
    > COVID-19 was the tipping point. One analogy is to imagine a sandpile building up to a peak; then grains of sand start to slip off; and then comes a certain point with one more sand particle added, the whole sandpile falls over. If you are a post-Keynesian you might prefer calling this a ‘Minsky moment’, after Hyman Minsky, who argued that capitalism appears to be stable until it isn’t, because stability breeds instability. A Marxist would say, yes there is instability but that instability turns into an avalanche periodically because of the underlying contradictions in the capitalist mode of production for profit.
-   back in 2018, the WHO coined the term &ldquo;Disease X&rdquo;
    -   they predicted this disease would arise from animals
    -   they predicted it would come from a place where economic development drives people and wildlife together
-   Rob Wallace (author of _Big Farms Make Big Flu_) argues that pandemics are caused by our culture
    -   a whole host of diseases can be linked to animal cultivation: SARS, Ebola, MERS, the Black Death, and now, COVID
-   the COVID recession isn&rsquo;t a supply-side or demand-side shock: it&rsquo;s a consequence of capitalism&rsquo;s drive for profit
-   it starts with supply, not demand
    -   demand is downstream of supply
    -   &ldquo;if people cannot work and businesses cannot sell, then incomes drop and spending collapses and that produces a ‘demand shock’&rdquo;
-   mainstream economists think the recovery will bounce back like it did in 1987
-   global profitability is low
-   [[Malthus]] argued that surplus populations could be eradicated by plagues. This, he argued (incorrectly) would make the economy more productive
-   for a brief period of time unemployment in the US was 50%. This isn&rsquo;t comparable to 2008
-   Much like the pandemic curve, economists must also &ldquo;flatten the curve&rdquo;
    -   their approach so far has been to have central banks provide emergency liquidity
-   Financial crisis is still high risk
    -   Looming debt bomb: corporate debt is higher than ever
-   The worst is yet to come


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## Commentary

Note that this article was written in March, and much of it is still relevant as of 6/23.

Many of the things referenced in this article are also mentioned in [[Mask Off]].

The point of this article is to show that crises of capitalism are not exogenous to the system, but endogenous (this point is also made in [[Capital]]).


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## Backlinks

-   [[Deficits, debt and deflation after the pandemic | Michael Roberts Blog]]