World in View: World economy falls

August 28, 2020

From the September-October 2020 issue of News & Letters

by Gerry Emmett

As a result of the COVID-19 pandemic, for the first time on record all sections of the world economy are expected to contract in 2020. In June, the World Bank forecast declines of 8% or more in the U.S. and Canada; 9% or more in Latin America; and double digit declines (10.2% to 12.8%) in the UK, France, Italy, Spain, and Europe as a whole.

The only comparable crises, historically, have been the Great Depression of the 1930s and the crisis following World War I and the Spanish Flu epidemic.

This will fall most brutally on the poor, and in particular those in Third World countries where food and other necessities become less available.


Even as millions of jobs and small businesses have disappeared, there has also been an immense transfer of wealth upward. Billionaires like Jeff Bezos (Amazon), the world’s richest man, and Bill Gates (Microsoft) increased their personal wealth by $565 billion between March and June.

State intervention has also kept stock markets artificially (and unsustainably) high.

This pandemic is uniquely a product of state-capitalism. Most of the 803,000 deaths must be attributed to state actions—like the cover-up by authorities in Wuhan, China, that unleashed it, or the malfeasance of state officials in the U.S. who sent those infected into nursing homes.

Militaries will also be studying all this closely as a dress rehearsal for future biowarfare.

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