COVID19: Banks and Big Business Profit from Scarcity & Price-Gouging

The US government’s response to COVID-19 has been a Kafka-esque circus of incompetence and greed from the moment the virus popped up within American borders. One of the massive blunders was the CDC’s unfathomable decision not to repurpose the testing kits already developed in Germany, South Korea, or China and instead opting to develop a test from scratch.

However, perhaps the most nefarious element in all of this are the actions of those seeking to make top dollar from the artificial scarcity and oligopoly of the American healthcare system in this time of massive need. Last week, The Intercept published an article by Lee Fang, and the headline really says it all: “Banks Pressure Health Care Firms to Raise Prices on Critical Drugs, Medical Supplies for Coronavirus.”

The article points out that while social and mainstream media outlets leveled blistering criticism against individual “petty thugs” who bought now-scarce medical and hygiene supplies to resell at higher prices, the real criminals can be found in Washington’s revolving door to and from the private sector. Investment bankers and life sciences corporations’ CEOs are licking their chops over how to make a killing from the pandemic—pun, unfortunately, intended.

Of course, they seek to hide the blood on their hands with the saccharine innuendo of the boardroom, but their intentions are patently clear to anyone who pays attention. They assure us they must use “commercial opportunity/strategy,” to “create a business” and maintain “consistency of the overall profit matrix,” with “sell aside adjustments,” involving “rational and responsible pricing” of potentially life-savings drugs—at the height of the pandemic.

Alex Azar sworn in as US Health and Human Services Secretary with Donald Trump and Mike Pence
Donald Trump and Mike Pence congratulate newly sworn-in U.S. Secretary of Health and Human Services, Alex Azar / Image: Wikimedia Commons

And they have a friend in Health and Human Services Secretary, Alex Azar, former president of drug giant Eli Lily and former board member of the drug-dealers’ lobbying group, the Biotechnology Innovation Organization. He recently remarked in a congressional hearing that, “We can’t control [any COVID-19 vaccine or treatment] price because we need to get the private sector to invest. The priority is to get vaccines and therapeutics. Price controls won’t get us there.”

So far, the “private” side of the much-touted public/private partnership has, predictably, come out on top. In the initial $8.3 billion emergency coronavirus spending bill, all language threatening intellectual property rights was removed while defending any firms against government intervention that would delay development over attempts to control the pricing.

Imperialism trumps workers’ health

And of course, the profit system’s artificial barriers to greater public health don’t end with drugs. A recent Washington Post headline is stark: “More lifesaving ventilators are available. Hospitals can’t afford them.”

As the article goes on to point out, “Hospitals are holding back from ordering more medical ventilators because of the high cost for what may be only a short-term spike in demand.” Translation: the market fails those in need just when it matters most.

And 3M’s hoarding of N95 masks hasn’t gone unnoticed even by members of the ruling class. In an interview with Fox News, arch capitalist Mark Cuban lambasted the conglomerate for restricting their supply to “licensed distributors” by using “onerous credit requirements.” The result? Third-party resellers marking them up nearly tenfold while US hospital workers make masks from office supplies!

This comes at a time when the government’s national stockpile is running short, with over three billion N95 fewer masks than are needed to handle the crisis. But the perverse context is that the US will spend $738 billion on munitions this year while the cost to fully stockpile the proper number of N95 masks (not just an emergency portion) would be $1.75 billion—the price of a single Littoral Combat Ship! And they would be even cheaper if manufactured at cost by the government itself.

Automotive news site The Drive called the current situation: “So astonishingly nearsighted it seems criminal … the worst example of absolutely broken fiscal priorities I have ever seen, and it could cost you your life.”

It is indeed the “perfect crime” for the capitalists, who profit off of the untold deaths and misery of millions with no reprisal. From a rational standpoint the fiscal priorities of capitalism are beyond broken. But tragically this is a “feature” rather than a “bug” in the system!

The war against COVID-19 is a war against capitalism!

Trump claims the US is now on a “war footing” to combat COVID-19. At the height of the great imperialist slaughter of World War I, Lenin had a scornful response to the cries of the pacifist crying about what a “terrible thing” war was. “Yes,” he responded. “Terribly profitable.”

We can see that COVID-19 is indeed “terribly profitable,” as well. But Lenin also advanced the perspective of, “Turn the imperialist war into a civil [i.e., class] war.” Applied to today’s context and situation, it is clear idea that workers must conduct a thorough and determined “war” against the capitalists and bankers who seek to profit off of this pandemic disaster if we are to defeat COVID-19 with as few casualties as possible. But in order to conduct such a war, we need the right weapons to fight back.

Our socialist program to fight COVID-19 and the economic crisis forms the basic plan of attack, starting with the demand for workers’ control to suspend all non-essential production to stem the spread of the disease. Where possible, we must retool production toward essential services and healthcare needs.

We call for immediate price controls on all essential items, to be enforced by elected committees in working-class neighborhoods. Anyone caught speculating on the misery of others should be immediately relieved of their goods—to be distributed to those in need.

We also call for the expropriation of the major banks and corporations to eliminate all parasitism and replace it with a democratically administered rational plan to meet the needs of society, starting with workers on the front line providing care and stemming the spread of the disease.

If the big banks and corporations are brought under collective ownership and the democratic control of the working class, we could deploy the huge resources and technology held back by the profit motive to rid society of this plague. We can shift production from weapons and luxury goods to food, safety, and medical equipment—not to mention, housing, infrastructure, education, and more. In doing this, we could also start to take on the many other pressing problems face by working people.

COVID-19 shows us daily that the struggle for socialism is a question of life or death for millions. Bailouts and half measures don’t even come close to addressing the absolutely dire future facing millions of people. We invite you to support us in the struggle–or better yet–join us on the front lines in the most important struggle of our lifetimes.

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