by Scott Nelson
History accelerates in times of crisis (and during elections, which are always the most important elections we have faced in years). Covid-19 was only one of several news items on people’s radar in the West until it began to spread rapidly in Europe. According to the World Health Organization, the old continent is now the epicentre of the virus; meanwhile the Chinese government is set to relax travel restrictions to and from Hubei province, the virus’ point of origin. As the Western world struggles to formulate adequate policy responses, commentators scramble to provide up-to-date coverage and analysis. Much of this analysis is patchy and rendered obsolete the next day in light of multiple unknowns: how many people are infected in each country? How are the different health systems coping with the outbreak? How are our economies holding up due to the quarantine? How long will the quarantine last in various countries? A change in the answer to any one of these questions will force us to re-evaluate our answers to all of the other questions.
Taking a step back to try to decipher meaning in the whole thing is therefore difficult. The crisis has presented an opportunity for everyone to blame their favourite bugbear, whether it be the governing party, the opposition party, nationalism, globalism, or what have you, some accusations more valid than others. For such commentators the crisis is a convenient moment to advocate the usual positions that they had already been putting forth absent the crisis. There are even some who maintain that the crisis will be over sooner than we think.
Still others are focused on the world post-coronavirus. Yuval Noah Harari has written recently in the Financial Times that we must make two choices: one between totalitarian surveillance and citizen empowerment, and the other between nationalist isolation and global solidarity. Harari’s concern with the first set of options is that the surveillance measures we enact during this time of crisis might all too easily be imported into normal times. Devices intended to measure our body temperature could just as easily measure other biological phenomena, such as anger or fear, in response to a politician’s speech, for example. Our biological response would be recorded before we even became cognizant of it. Harari is opposed to the government having access to such data; he would prefer that individuals themselves collect the data on their own medical condition and use such information to make informed decisions.
The missing ingredient, he argues, is trust. “When people are told the scientific facts, and when people trust public authorities to tell them these facts, citizens can do the right thing even without a Big Brother watching over their shoulders…But to achieve such a level of compliance and co-operation, you need trust. People need to trust science, to trust public authorities, and to trust the media.” Harari attributes the erosion of this trust over the past few years to irresponsible politicians. While some politicians have been far from innocent of this charge, I cannot help but feel that science, public authorities, and the media have also played their part amidst the hyperpoliticization of our culture.
Everyone sees in this crisis an opportunity. For Harari it is an opportunity to pull together and rebuild our trust in each other. Perhaps. Although it remains to be seen whether we will “discover a hidden reservoir of trust and amity, and…rush to help one another” or rediscover all of the reasons why we distrusted others in the first place. Trust requires something of a leap of faith, and if it should turn out that that faith was misplaced, then it will be very difficult to rebuild any form of trust not based on naked power politics or self-interest.
For the time being, Western governments have responded to the crisis by taking their own initiatives in accordance with the status of their own economies and the severity of the virus within their borders. As businesses go broke and unemployment rises, especially, e.g., among lower earners in retail, the pressure to do something builds. Central banks have done what they can in an already low interest rate environment. The real action has been in fiscal policy, where there has been a smattering of approaches aimed at boosting healthcare services, propping up businesses (social-security payment deferrals, interest free loans, cash grants for SMEs, etc.) and/or helping people stay employed (e.g., government stepping in to pay a portion of the wages of laid off workers) or gifting them directly with a cheque.
What has been lacking is a globally coordinated response. Harari would like to see global solidarity win out over nationalist isolation. But where he was correct in rejecting privacy vs health as a false dichotomy, he has bought into the standard nationalism vs globalism narrative and the inadequacy of that debate. It behooves countries to learn from one another, true. But why does Harari assume that we can extend trust to China, or that China’s shipments of personnel and medical equipment to Italy come without strings attached or without consequences for Europe? These are not the disinterested actions of countries that firmly support globalization, at least not as it is understood in Western media. When Harari writes that the current US administration “cares about the greatness of America far more than about the future of humanity”, he is probably right. But how can he be so certain of China’s devotion to the future of humanity?
Lacking in many discussions of the present crisis is an appreciation of the role of the Middle Kingdom in it all. Some might tout the supposed virtues of China’s authoritarian system in dealing with the crisis (to what extent can we believe their data?), but it was China’s misinformation that let the mess spiral out of control in the first place. Amongst other dubious acts, for weeks it had denied the human transmissibility of the disease, barred WHO officials from entering the country, and a week ago it expelled journalists from Wall Street Journal, New York Times, and Washington Post. These are hardly the actions of a trustworthy devotee of globalization and humanity.
Global cooperation is a fine position to uphold, but it must be balanced against the national interest and other nations’ self-understanding. China will not be expelled from the community of nations. Indeed, the nature of the recovery in other countries may also depend on how China recovers. Currently, its growth is projected at below 5% this year, which means it will not meet its goal of doubling its GDP from the beginning of the decade, which would have required at least 5.5%. It is slated to recover to above 6% next year, according to the OECD. So far its business activity has been negative on home sales (34.7% decrease in January-February), fixed asset investment (24.5% decrease), real estate construction (44.9% decrease), retail sales (20.5% decrease), and factory output (13.5% decrease). Its jobless rate as of last month was 5.7%. Doubts have been expressed as to whether lower taxes and increased government expenditures could create enough of a rebound for the rest of the year to offset this first quarter. Since 1976 (the death of Mao Zedong) China has had an average annual growth rate of 9.4%.
That we must interact with China is obvious. That it is more desirable to have friendly relations than hostile ones is also true. But we must not let our disappointment with the current politics in Western democracies and economic preferences alone blind us to the real differences between our political regimes, much less deceive us with the false allure of authoritarianism. Economics, meet geopolitics.
Scott B. Nelson is Research and Strategy Advisor at the Austrian Economics Center as well as an independent writer and political thinker. He has several publications listed on his website, The Vienna Symposium, where he regularly blogs. He is presently co-authoring a book on Cicero and modern politics.