The time for platitudes is over. The time for serious thought is here. If your thoughts are not challenged by COVID, you've not thought hard enough. Here is a useful heuristic for thinking about what the possible longer term impacts of the pandemic might be :
If you list say ten and the majority are things you always wanted to see happen, then you're almost certainly on the wrong track. I'd add that even major events like this seldom actually 'change the course of history'. What they usually do is enormously amplify and accelerate trends that were already underway. So in that light here's my ten - made me feel quite depressed as most of them are things I really don't like as prospects - I hope his heuristic works in reverse as well.
- A big increase in nationalism, both in politics and at the policy level, most notably in trade but elsewhere as well.
- A marked decline in international travel and movement. I think the controls in place at the moment will stay in place for a long time and I think a lot will become permanent. The airline industry, which was already very fragile, is going to take a permanent hit I fear. Same for cruise holidays.
- A pronounced move away from single-supplier and just-in-time delivery and production systems. Who knew before this that most of the world's condoms came from just one place? This will have much bigger and more far-reaching effects than people realise, above all a pull back from the current levels of economic integration - how far depends on the politics of 1 basically.
- A serious weakening of international institutions. So far they are taking a terrible beating and it is national states that people are turning to. The Chinese State is going to be in seriously bad odour with quite a few governments.
- A massive debt crisis as a lot of debt simply becomes unpayable and even unserviceable (and so worthless). The epicentre of this is most likely to be shale oil paper but it will be more widespread than that.
- In the medium term a significant decline in the importance of the financial sector in several parts of the world (the US and UK most notably).
- Big reforms to welfare systems. Not clear what will replace existing ones but I think we will see, in the Anglo-Saxon countries, a clear move away from means tested income supplements. No idea if we go for completing the logic of those systems and have a UBI or go for something else.
- MMT will become alarmingly respectable as a policy tool.
- There will be a big comeback for the idea of state ownership of key infrastructure and strategic assets but at the same time a lot of regulations will go.
- A lot of intellectual frivolity will simply stop.
Of these the only one I have always wanted is 10. I'm indifferent about 7 in many ways. I have thought 5 was coming for a long time and I think that is definitely in the 'would have happened anyway' category. The rest I think are bad, and are things where the world was already moving in that direction but not as fast or to the degree I now expect to see.
I should add that there are other things that may well happen but which I left off because I wanted to stick to ten. These include:
(A) an acceleration in the transformation of the centre right away from economic liberalism and towards national collectivism - clearly happening in the UK.
(B) possibly a big increase in home and distance working. This will have bigger effects than people expect if it does happen because of the implications for the property market.
(C) some big disruption to sport - I'm not sure if this will have a lasting effect though. Ditto education.
