
THE impact of the Covid pandemic on many capitalist economies has had the effect of masking and disrupting their increasingly synchronised economic cycle. Growth rates in the major economies (the US, Germany, Britain, France and Japan) were stagnant or declining in 2019 and almost certainly heading for recession. Covid plunged them into deep decline in the course of 2020.
Thus, a virus — rather than capitalism — is being held responsible for the steep downturn that might well have happened anyway. And the fact that the downturn was so extreme means that the recovery looks all the more impressive — in mathematical terms at least — when coming up so quickly from such a deep trough.
Yet the speed and extent of the recovery — funded by state spending — is such that the major central banks are now worried about inflation and its impact on economic stability and currency values.



