This lengthy essay begins by painting the economic background of this crisis, covering the weaknesses of the globalised system and its over-dependence on government stimulus post-2008. There were detractors though. ‘True conservatives, as distinct from those merely wedded to the religion of the stock market, welcomed the prospect of a shakeout. It was time for a purge, time to slim down the businesses that had gorged on too much cheap funding, time for a return to discipline." However, as we know, it was not to be.
When Covid-19 hit, the three main economic blocs responded, strapped to the underpinnings of their own socio-economic systems. Many East Asian countries, notably China, South Korea, Hong Kong, Taiwan and Singapore, employed ‘the hammer and the dance’ by hitting the virus hard and fast. Europe ended up in an uncoordinated and dispiriting stalemate. ‘From the point of view of the wider world, what matters is that Europe does not unleash a sovereign debt crisis.’ In the US, ‘more than the flame-out of Trump, is the gulf between the competence of the American government machine in managing global finance and the Punch and Judy show of its politics. That tension has been more and more glaring since at least the 1990s, but the virus has exposed it as never before.’
‘If you swiftly declare an emergency and are prepared to interrupt business as usual, both the medical and economic costs of confronting the virus appear more reasonable, and the conventional priorities of modern politics remain basically in place... As the Europeans and Americans have discovered, once you lose control all the options are bad: shut down the economy for an unforeseeable duration, or hundreds of thousands die.’
Tooze concludes that ‘for those of us in Europe and America these questions [about opening up] are premature. The worst is just beginning.’
Read here (London Review of Books, April 3, 2020)
