Coronavirus has shattered the myth that the economy must come first

Since the 1990s, faith in ‘the market’ has gone unchallenged. Now even public shopping has become a crime against society

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The coronavirus shutdown of 2020 is perhaps the most remarkable interruption to ordinary life in modern history. It has been spoken about as a war. And one is reminded of the stories told of the interruption of normality in 1914 and 1939. But unlike a war, the present moment involves demobilisation not mobilisation. While the hospitals are on full alert, the majority of us are confined to quarters. We are deliberately inducing one of the most severe recessions ever seen. In so doing we are driving another nail into the coffin of one of the great platitudes of the late 20th century: it’s the economy stupid.

Once upon a time we thought we knew what was up and what was down. According to the lingua franca of the 1990s, in the wake of the cold war, it was obvious that the economics were the fundamentals, and the rest followed. It was the west’s economic success that felled communism. And the economy ruled not only over creaky communist dictatorships, it defined the scope of possible politics in democracies. Arguing against globalisation, Tony Blair insisted, was as absurd as arguing against the seasons.

Then came 2008 and we were left wondering who the economic masters of the universe actually were. It was followed by the extraordinary, politically induced catastrophe of the eurozone debt crisis, in which conservative fiscal populism and dogma – disguised as expertise – ruled over the need to ensure employment and grow the pie. Then in 2016 the UK referendum delivered a majority for Brexit in the face of predictions of economic disaster. Months later, Donald Trump, a narcissistic billionaire, was swept to power by working-class votes in the face of opposition by the great and the good. Both the UK and the US have since pursued policies of spectacular economic irrationality without fear of a crushing veto by the markets. Liberal elites waited in vain for the market vigilantes to arrive.

And now Covid-19. Imagine if blunt economic interest was, in fact, dictating our response. Would we be shutting the economy down? What we know about the virus tells us that it most often kills what are by the numbers the “least productive” members of society. The majority of the working population experience symptoms barely more significant than a regular flu. Unlike regular flus it does not threaten children, the future workers. The virus may be bad, but simplistic economic logic would dictate that until we have a vaccine it would be best to keep life going, because, you know, “it’s the economy stupid”.

That was indeed the first reaction of the British government. The headline was that Britain was staying open for business. Journalists with good memories dug up Boris Johnson’s fondness for the mayor in Steven Spielberg’s Jaws who insists that despite the fact that a sea monster is eating his constituents the beach should stay open. The higher wisdom of public health, we were told, was that the productive workforce would acquire immunity. We know how that bold experiment in heroic economism has ended: a panic-driven withdrawal in the face of the disastrous scenario of hundreds of thousands of excess deaths, overwhelmed NHS hospitals and a crisis of political legitimacy.

It suddenly became obvious that when matters of life and death are concerned the calculus is different. Of course, old and sick people die. We all will in due course. But it matters fundamentally how and under what circumstances. A huge surge in mortality, even if it is limited to “vulnerable” populations with pre-existing conditions, is existentially unsettling. So too are the apocalyptic scenes that will unfold in our hospitals. In an earlier age, they might have remained behind a decent veil of obscurity. (No doubt the NHS and the BBC will work out the protocols for “embedded” reporting from the clinical frontlines.) But the words and images that have already come to us from northern Italy and Wuhan are bad enough. Faced with all of this, the stupidity lies in not recognising promptly that we must act, that we must shut down, that even the most essential individual activity of the market age, public shopping, has mutated into a crime against society.

This is not to say that economics is not shaping the crisis. It is the relentless expansion of the Chinese economy and the resulting mix of modern urban life with traditional food customs that creates the viral incubators. It is globalised transportation systems that speed up transmission. It is calculations of cost that define the number of intensive-care beds and the stockpiles of ventilators. It is the commercial logic of drug development that defines the range of vaccines we have ready and waiting; obscure coronaviruses don’t get the same attention as erectile dysfunction. And once the virus began to spread, it was the UK’s attachment to business as usual that induced fatal delay. Shutting down comes at a price. No one wants to do it. But then it turns out, in the face of the terrifying predictions of sickness and death, there really is no alternative.

It is once you have overcome that political, intellectual and existential hurdle – to realise that this is a matter of life and death – that economics enters back in. And it does so with a vengeance. The logic revealed by the well-organised Asian states is that it is best to conduct a severe quarantine regime in the hope of being able to return to normal activity as soon as possible. The Chinese economy is already resuming step by step.

In the west, the scale and breadth of the epidemic is such that our response now will have to be a blanket shutdown. And that begs gigantic questions of economic management. Even conservative governments on both sides of the Atlantic are pulling every lever of monetary and fiscal policy. In a matter of weeks they have embarked on gigantic interventions on a scale comparable to those in 2008. They may be able to soften the blow. But it is an open question how long we will be able to persist, how long we will be able to freeze the economy to save lives.

In making the difficult choices that lie ahead we have at least gained one degree of freedom. The big idea of the 1990s that “the economy” will serve as a regulating superego of our politics is a busted flush. Given the experience of the past dozen years we should now never tire of asking: which economic constraints are real and which imagined?

• Adam Tooze directs the European Institute at Columbia University and is the author of Crashed