Published in Larry Summers
4 months ago by kfriendly
The Covid-19 crisis is the third major shock to the global system in the 21st century, following the 2001 terror attacks and the 2008 financial crisis. I suspect it is by far the most significant.
Although the earlier events will figure in history textbooks, both 9/11 and the Lehman Brothers bankruptcy will fade over time from popular memory.
By contrast, I believe, the coronavirus crisis will still be considered a seminal event generations from now. Students of the future will learn of its direct effects and of the questions it brings into sharp relief much as those of today learn about the 1914 assassination of the Archduke, the 1929 stock market crash, or the 1938 Munich Conference. These events were significant but their ultimate historical importance lies in what followed.
This crisis is a massive global event in terms of its impact. Take an American perspective. Almost certainly more Americans will die of Covid-19 than have died in all the military conflicts of the past 70 years. Some respectable projections suggest that more may die than in all the wars of the 20th century. This spring’s job losses have come at a far faster rate than at any point in history and many forecasters believe that unemployment will be above its post-Depression high for two years. As I write this from a small town I have not left in two months, I suspect that no event since the civil war has so dramatically changed the lives of so many families.
A month ago it would have been reasonable to suppose that the deaths, the economic losses and the social disruption would be transitory. This looks much less plausible today. The US has given its best shot (though certainly not the best possible shot) at locking down for two months now and it has not brought daily fatalities below 1,000 a day. Much of the country is now letting up isolation policies. Similar things are happening in much of Europe and new outbreaks have been reported in success-story countries including Singapore, South Korea and Germany. It now looks very plausible that there will not be an enduring improvement on the current situation in the west.
As significant as these events are, what they portend may be even more important, in two respects.
First, we appear to be living through a momentous transition in what governments do. Historically the greatest threat to the lives and security of ordinary people has come from either failures of domestic governance — disorder or tyranny — or from hostile foreign powers. This reality shaped the design of domestic and international political institutions. Progress has been made. Not only have we avoided a repeat of the world wars, but the chance that an individual on our planet will die a violent death is now about one-fifth of what it was a half century ago.
At the same time, threats that are essentially external to all countries have risen in significance and now exceed traditional ones. Over time, climate change threatens to engulf us. Aids, Ebola, Mers, Sars and now Covid-19 suggest that pandemics will recur with some frequency. Then there is terrorism, upheavals that cause mass movements of refugees, and financial instability. We also face challenges coming from new developments in artificial intelligence and information technology. Coronavirus is helping to usher in a world where security depends more on exceeding a threshold of co-operation with allies and adversaries alike than on maintaining a balance of power.
The second way in which Covid-19 may mark a transition is a shift away from western democratic leadership of the global system. The performance of the US government during the crisis has been dismal. Basic tasks such as assuring the availability of masks for health workers who treat the sick have not been performed. Medium-term planning has been conspicuous by its absence. Elementary safety protocols have been ignored in the White House, putting the safety of leaders at risk.
Yet, For all of the Trump administration’s manifest failures, the US has not been a particularly poor performer compared to the rest of the west. The UK, France, Spain, Italy and many others all have Covid-19 death rates per capita well above the US. In contrast, China, Japan, South Korea, Taiwan, and Thailand all have death rates well under 5 per cent of American levels. The idea that China would be airlifting basic health equipment to the US would have been inconceivable even a year ago.
If the 21st century turns out to be an Asian century as the 20th was an American one, the pandemic may well be remembered as the turning point. We are living through not just dramatic events but what may be well be a hinge in history.