Until the coronavirus is defeated, the state will need to be much more active
It seems strange now to look back on New Year’s Eve, enjoying sociable drinks with friends, all of us unaware that in a Chinese city called Wuhan our future was about to be dramatically changed. That day health authorities had been alerted to a cluster of pneumonia cases in one part of the city.
Everything has changed now, and we find ourselves in an unreal international emergency; an unknown period of isolation for many, death or intensive care for some, and afterwards a probably quite devastating recession in which thousands of businesses will go to the wall and millions thrown out of work.
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I wonder what the long-term effects will be. The only pandemic which really changed society in a big way was the Black Death but even the Spanish Flu — which, touch wood, was worse than coronavirus — left little lasting social effect. People just forgot about it afterwards.
The obvious medium-term likelihood is that we’re going to become more socialist. Only the state really has the capacity to deal with a crisis of this magnitude, although it will probably be more like a war economy with large manufacturers going into partnership with the authorities. On top of this, things like the US healthcare system or Britain’s zero-hours contracts are not well-suited towards periods of mass sickness and some more extensive welfare intervention may be required.
During the Second World War Britain went from being historically a laissez faire country where thirty years earlier an Englishman’s only interaction with the state was posting a letter, to history’s most successful authoritarian socialist regime. It took over 30 years for that to change after Hitler was defeated, but to those of us who grew up in Thatcher’s Britain the idea of such state involvement in the economy now seems bizarre.
But at least until the coronavirus is defeated, the state will need to be much more active, especially as countless businesses will depend on state support and the government may even need to get involved in the supply chain.
This war socialism might also coincide with the return of the nation-state, which will probably prove to be the most effective mechanism for dealing with the virus. Although global supply chains will contract, and we may be more reluctant to rely on China for manufacturing, I don’t think it will mean the end of globalisation. I probably won’t leave the country this year but the one thing I want to do when this horror is over is take the kids to Italy.
And what about Brexit? The transition period ends on December 31 this year, by which time we may still be on an emergency footing. There are no plans to extend it, for now, but do we want to be fighting a battle on two fronts?