Four ideas damaged by Covid-19

MOISÉS NAÍM
Source Link

Covid-19 kills not just people, it also kills ideas. And when it doesn’t kill them, it discredits them. For example, received ideas about office work, hospitals, and universities will not be the same when the dust settles from the pandemic. Nor will some of the more universal ideas about economics and politics. Here are four cases in point:

1. The United States is a source of global stability. False. The truth is that Washington has become an epicenter of geopolitical instability. The Bush administration’s response to the 9/11 terrorist attacks, for example, sparked long and costly wars. In 2008, the US exported a serious financial crisis to the rest of the world. But no war or economic crisis has so eroded America’s influence in the world as the deeds of Donald Trump’s administration. Since his election in 2016, the president has shown, almost daily, that instead of calming the world and his country, he prefers to set off conflict and stir discord. America’s reaction to the pandemic has only confirmed that the White House is a volatile, accident-prone and unreliable ally.

That the United States now radiates instability is particularly ironic because the greatest beneficiary of the international order that Trump is unraveling is the very nation that he presides.

2. International cooperation. The pandemic has also shown that the international community is incapable of coming together to respond effectively to global threats. The tragedies of Syria, Yemen, Venezuela, and the Rohingyas are just some examples of the ineffectiveness of the international community. Covid-19 has demonstrated conclusively that a strong international community that works in coordination with its member nations does not exist. The response of most countries to this health emergency has not been to act jointly, but to entrench themselves behind their borders. The pandemic, for example, should have strengthened the World Health Organization (WHO), a flawed but indispensable multilateral entity. Instead, the White House – convinced that the WHO had been co-opted by the Chinese government – said it would withdraw from the organization. This came at the very moment that the Trump administration should have been leading an international coalition to support and reform the organization. Distrust of international cooperation has also contributed to ineffective coordination between countries with regards to safety standards as well as the production and distribution of medicines and medical supplies. And this is another irony: the rejection of international collaboration has led to an essentially local and inadequate response to a global threat.

3. Fiscal austerity. This idea, once the obligatory remedy for dealing with a financial crisis, is now toxic. Before, when faced with an economic crash, the government moved to severely restrict its spending and lower its indebtedness. Now it’s the opposite: spending more and increasing debt is the latest macroeconomic fashion. Everywhere you look, governments are increasing public spending to unprecedented levels. The fiscal deficit, which is the difference between tax collection and other government revenue and public spending, has shot up to levels that have never been seen before outside of war time. In the US, for example, this year’s fiscal deficit will reach a sum equivalent to 24% of the total output of the entire US economy. The indebtedness of almost all countries has also increased. Japan has the world’s largest debt relative to the size of its economy. But the United States is the world champion in absolute numbers: it owes $20 trillion (€117.8 trillion). In the coming years, deciding when and how these debts will be paid (and by whom!) will surely spark a fierce and furious global debate.

4. Globalization. This is another idea that was previously lionized and is now demonized. As is often the case, the idea wasn’t so great before, nor is it so bad now. For many, globalization is expressed in terms of the flow of products and money between countries. For others, its main and most worrying manifestation is immigration. In practice, globalization is much more complicated. It includes, of course, the enormous increase in the international flow of products, services, money and information. But it also includes the activities of terrorists, traffickers, criminals, scientists, artists, philanthropists, activists, athletes and non-governmental organizations. And, of course, it also includes the diseases that can now move at great speed across the globe.

Governments can hinder some of these manifestations or stimulate others. What no one can do is completely end the multiple ways countries intertwine. The pandemic and its economic consequences will encourage the adoption of policies that cushion the external shocks that periodically shake countries. There will be more protectionism. But the advantages and attractions of some facets of globalization will not disappear.

What do these discredited ideas have in common? All four are important pillars of the world order that emerged after World War II. Although all four pillars are damaged, it is possible to repair and improve them. This will be a major challenge in the years to come.