Entering a Post-Corona World—What Will Global Economics Look like in the Future?
The ways in which the global political order has handled the coronavirus epidemic points out some glaring loopholes in the way governments have run societies so far. Healthcare facilities around the world are overrun because there aren’t enough medical resources to fund them, the Chinese government dealing with a second wave of the coronavirus and the US government’s continual denial of the epidemic.These events have only highlighted how badly prepared the governments are at having to deal with near existential threats to our existing way of life.
Interestingly enough, all the world’s governments are acutely aware of their economic and political shortcomings—which, I think, spells bad things in the future. This sudden lack of control over the situation is going to inspire massive structural changes indicative of greater totalitarian control over the people of the world and particularly the wealthy who have the resources to support the state in these times. If we were to pinpoint the exact problem of the pandemic, it’s this—there is no way to control the disease and it’s gone far beyond just a health crisis to a socioeconomic and political one.
The Impacts of the Coronavirus on the World Order
Let’s rewind for a second and take account of all the things that have gone wrong with the pandemic in the world so far. With a clear picture of all the events that have occurred, we’ll be in a better position to make claims about how the world will respond to these changes in the future.
The Huge Death Toll
When the SARS came out in 2003, it killed about 800 people throughout the course of the pandemic. That’s nothing compared to the 349,094 deaths from the Covid-19 pandemic as of May 27, 2020—it was important that I emphasize the fact that this number is yet to go even higher over the next few months. Suffice to say that the coronavirus is one of the most lethal pandemics that we have seen in modern history. The fact that it showed up in an era where we felt that human knowledge and science can counter any possible threat—the Covid-19 outbreak has brought out an existential threat that only highlights the shortcomings of our existing advancements.
Major Economic Instability
By now, everyone’s aware that the outbreak has been an absolute nightmare for the global economy. 2020 is definitely going to be a recession year with an estimated 3% shrinkage in the global economy because of the impacts of the coronavirus. With disrupted manufacturing and supply chains, massive global unemployment and with an ever-present threat from the coronavirus, this instability is quite likely to continue for the next couple of years at least.
The global economic response to the coronavirus economic crisis has so far been unsuccessful as global markets remain unresponsive to these expansionary monetary policy measures. While everyone is applauding the US’s efforts to introduce a fiscal stimulus, I don’t know how effective these measures will be because how exactly will a stimulus get people out of the house and into the workplace to raise production or how will it fix broken supply chains? Government’s around the world are using prescriptions for economic crises that don’t even apply to our unique problems thus far. The coronavirus is not your average recession that’s common with a usual economic cycle—it has broken the cycle completely and introduced an economic environment with potentially no returns on investment.
Uncertainty with The Vaccine
The only way we can ever return to normal is if we find a miracle cure for the coronavirus that can introduce some semblance of normalcy to our lives and economic environs. So far, the earliest projections for a vaccine put it down to mid-2021—effectively a fully year away from now. The fact that its taking so long to devise a vaccine has reasserted our limitations and the sense of urgency only showcases how much work is needed to improve existing healthcare infrastructure.
What Does This Mean for the Future?
Everything I’ve said so far is evidence of the fact that the global political order is slowly losing its control over the economy and society. The rising death tolls, the economic instability and with no vaccine in sight—world leaders from around the world really have no fix in sight which only emphasizes how little control they have. Considering the shortcomings that I’ve also spoken of—the shoddy healthcare systems and rocky financial systems—modern day, populist, socialist politics only prescribes one solution for these: Greater Government Intervention.
Massive Increase in Public Spending
Now that the catastrophe’s struck, governments around the world will increase public spending to focus on improving healthcare infrastructure and research in the medical industry. They will intervene in markets through subsidies, introduce new regulations in running healthcare facilities, introduce nationalized insurance schemes and other healthcare “fixes” to prevent future pandemics.
Income Redistribution and Higher Taxes
While the governments look to increase public spending in healthcare infrastructure, much of the funding will be expected to come out of the wealthy people’s pockets. They will put down the pandemic and the lack of health infrastructure to income disparities, to create a case for progressive tax systems that take the most money from the wealthy.
Considering how the US government has taken on massive debt in the past few days, we’re likely to see high tax rates no matter who wins the elections in 2020. Joe Biden has already promised high taxes and there are hints that Trump might follow suit as well. They need money to fund their activities and this is usually the path most governments take to raise capital.
In times of crisis, most people believe that governments should take charge of the situation to fix whatever problems seem the most severe at the time. While there is no denying that it is the government responsibility to ensure the liberty and safety of all people within the society, the question of whether they will not overstep their authority is one that all libertarians worry about.
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The coronavirus outbreak has presented a situation that might be used by the global political order to impose greater restrictions on how the wealthy spend their money. Driven to increase their tax revenues and exert greater control over the economy in the aftermath of the coronavirus—all of us really need to watch out for possible coercion by the state to take control of our finances.
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