Covid-19 is certainly not going to change the world forever but it is going to change quite a few things and for the better in some cases
They teach you in journalism school never to use the phrase “...X has changed the world forever.” Or at least they should. Covid-19 is certainly not going to change the world forever but it is going to change quite a few things, in some cases for a long time. Here are a few of them, in no particular order. First, the clean air over China’s cities in the past month, thanks to an almost total shutdown of the big sources of pollution, has saved 20 times as many Chinese lives as the Coronavirus has taken as air pollution kills about 1.1 million people in China every year. People will remember this when the filthy air comes back and want something done about it. India too, would see the same changes in its air and I am certain that there, too, the citizens will want some things to change on the ground.
Next on the list is online shopping which was already slowly killing the retail shops. The lockdown will force tens of millions who rarely or never shop online to do it all the time. (Yes, a lot of the websites have crashed or booked until mid-April now but there will be lots of time to scale them up to meet the demand.) Once customers get used to shopping online, most of them won’t go back to brick and mortar stores, so retail jobs will be disappearing twice as fast.
There won’t be such a radical change with restaurants but basically it will be the same story: More takeaways and home deliveries, fewer people on the seats. Habits will change and a lot of people won’t come back afterwards. Food sold out the door generates much less cash flow than food served at the table and half of the waiters’ jobs will be gone. There will be a severe cull of restaurants across the world, resulting in more job losses.
Once it becomes clear that working from home is actually possible in most jobs, it will start to seem normal for people not to go in to work most days. So a steep drop in commuting, lower greenhouse-gas emissions and eventually a lot of empty office space in city centres is what the future after the Coronavirus will be like.
There will be a recession, of course but it probably won’t be as bad or as long as the one after the financial crash of 2008. It isn’t a collapse of “the market” that has cost people their jobs this time. It was a virus that made them stop working and governments are doing far more than ever before to sustain working people through what will probably be a long siege as the world tries to beat this deadly Coronavirus. When the virus is finally tamed, as it will be eventually, and they can go back to work, the work (in most cases) will still be there. Although there will also be a few trillion dollars of extra debt.
Don’t worry about the debt. Banks have always created as much money as the Government requires. Put too much money into the economy and you’ll cause inflation, which is bad, but just replacing what people would ordinarily be earning so that the economy doesn’t seize up, is good. So President Macron can tell the French that no business, however small, will be allowed to go bankrupt. Prime Minister Johnson can tell the British that the Government will pay them 80 per cent of their normal income, up to a limit of £2,500 ($3,000) a month, if their work has vanished. And President Trump can talk about sprinkling “helicopter money” on the grateful masses.
What is being revealed here is a deeper truth. “Austerity” — cutting back on the welfare state to “balance the budget” — is a political and ideological choice, not an economic necessity. What Governments are moving into, willy-nilly, is a basic income guaranteed by the State. Just for the duration of the crisis, they say and it’s not quite a Universal Basic Income but that idea is now firmly on the table. However, whether the Governments of South Asian countries, which have a much-higher population density, can follow the Western example in this, is anybody’s guess.
Another good thing to come out of the outbreak is that collective action and Government protection for the old and the poor will no longer be viewed as dangerous radicalism, even in the US. Welfare States were built all over the developed world after the Second World War. They will be expanded after the Coronavirus ends. Indeed, if Joe Biden were to drop out of the presidential race tomorrow for health reasons, Bernie Sanders would stand a fair chance of beating Trump in November.
Decisive action on the climate crisis will become possible (although not guaranteed), because we will have learned that “business as usual” is not sacred. If we have to change the way we do business, we can. So it’s an ill wind that blows no good (a saying that was already old when John Heywood first catalogued it in 1546). Some of the anticipated changes are definitely good but we are going to pay an enormous price in lives and in loss for these benefits. It could have been dealt with a lot better. And the West should learn a little humility. Taiwan, South Korea and China (after the early fumble) have handled this crisis far better than Europe and North America. These are already more dead in Italy than in China, and America, Britain, France and Germany will certainly follow suit.
(Gwynne Dyer’s new book is Growing Pains: The Future of Democracy and Work)