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ECONOMICS

Looking back, looking forward

  • 30 June 2020
A commonly heard phrase, or rather media cliché, is that after the COVID-19 crisis ‘things will never be the same.’ It is an understandable sentiment, given the seemingly unprecedented nature of recent events. But how novel is what happened, and how much will actually change? 

The creation of what have effectively become police states (in Victoria the army was briefly called in) to counter the effects of a perceived health threat is historically not unique, although the fact that it was implemented across most of the world is novel. That the response was based on modelling projections was also new. Nevertheless, the willingness to sacrifice economic and social stability for a pandemic has happened before; it was common during periods when the Bubonic Plague ravaged populations, for instance. 

What about the future? Futurist Phil Ruthven has concluded, after looking at 200 years of crises, including the World Wars, that economies typically return to how they were before. Crises can, however, accelerate trends already occurring. 

Differing versions of capitalism are emerging. The contrast between America’s response to the virus and the measures taken in Australia, Europe and Britain has been stark. America gave its corporations an eye-watering $US5-10 trillion bailout but did next to nothing for its workforce and small businesses, resulting in extraordinary unemployment and impoverishment.

Other countries, including Australia, spent heavily to protect those adversely affected, especially workers, so as to limit damage to the economic and social fabric. It is a very different conception of how capitalist societies should function, and suggests a significant divergence is occurring.

Another potential trend is a politicisation of health that could undermine basic rights and protections. Health was already out of control in a financial sense. Just the profiteering element in American health is almost the equivalent to two per cent of the global economy and those parasitic practices, fuelled by hyper greed, have spread around the world. 

 

'It is a very different conception of how capitalist societies should function, and suggests a significant divergence is occurring.'  

The danger is that the next step will be to replicate what banks have been doing for decades: turning the industry into a system of control. Just as financiers, justified by the circular arguments of neo-liberal economics, have gleefully converted citizens into little more than consumers and debtors, the COVID-19 crisis has revealed a propensity for a biosecurity governance structure that turns citizens into patients, or threats to patients. Any system that does not put the whole
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