Paul Krugman: Covid's Economic Mutations

[ancianita]

Last edited Sun Feb 20, 2022, 12:51 PM - Edit history (1)

from the March 10 2022 issue of The New York Review of Books

https://www.nybooks.com/articles/2022/03/10/covids-economic-mutations-krugman/

The argument of Adam Tooze and Bruno Maçães’s recent books, that the pandemic was best handled by societies with top-down social control, hasn’t aged well.

...At this point anyone making confident predictions about the course of this crisis should slow down and think about how well past predictions have panned out. Still, 2021 seemed to teach us one new lesson and remind us of two important older truths.

The new lesson is that the twenty-first century economy, which until recently seemed like a marvel of organized complexity, is a lot less robust than anyone realized. Much of the recent surge in inflation seems to reflect a shift in demand away from consumption of face-to-face services that seemed risky toward goods like household appliances. My guess is that if you had asked economists three years ago how the world would respond to such a shift, they would have predicted an efficient, fairly smooth reallocation of resources. What we actually got was clogged ports, factories idled for lack of crucial parts, and plunging confidence.

The first of the two older truths we've had to relearn is what Thomas Hobbes tried to tell us: To succeed, society must be a "commonwealth." Letting people put others at risk by refusing to wear masks, to practice social distancing, or tp get vaccinated, is qualitatively the same as letting individuals use the threat of violence to get what they want; in both cases, government has a crucial role -- it constrains destructive individual behavior.

But the other truth we've relearned is that while autocratic governments may initially seem highly effective at providing security, they eventually suffer from their lack of openness: nobody dares tell their leaders when they're wrong, or can force them to change policies that aren't working, whether it's the use of inferior vaccines or an unsustainable policy of repeated lockdowns.

So if, like Tooze and Maçães, you want to view the pandemic through the lens of great-power rivalry, you need to accept that the simple criteria that seemed to make sense a year ago no longer do. “Disciplined China does better than the disorganized West” has stopped working as a story line. At this point some of the best performers in both fighting the coronavirus and recovering from its economic effects are Western democracies with relatively high levels of public trust in science—not just small nations like New Zealand, but bigger nations like France.

And if America is in deep trouble—which it is—it’s not because we allow too much freedom, but because our society is being threatened by deep currents of hostility and irrationality that won’t go away even if Covid-19 recedes.

[stopdiggin]

1. Krugman almost always makes cogent

and important points.

The danger to the U.S. lies not in it's inability to pivot quickly to face new market forces (the economy, despite some pangs and dislocation, is actually doing fairly well - which is not to say that the government did everything exactly right), but the far greater danger the pandemic exposed in our 'system' is a pronounced strain of uncivil behavior practiced, and to some extent approved, both by its citizenry and its leadership.
i.e. Many of our loudest 'patriots' seemingly care little about what befalls their fellow citizens.

[ancianita]

2. He does, now. He didn't used to, though.

You're right. Yes, the uncivil behavior culture that its armed and violent wing emerge from, are the greater danger that we need to expose, with its ugly criminal drive to destroy what its corporate funders tell it is 'evil.'

Thanks for posting.