Eight months after the novel coronavirus burst out of Wuhan, China, it has created unprecedented economic and social disruption, with economies cratering across the globe and more destruction to come. Tens of millions have lost their jobs, and millions more have seen their life savings disappear as governments forced restaurants, bars and other small businesses to shut their doors.
Wealthy societies are able, for now, to print and pump money in hope of limiting the social and economic damage, but such measures cannot be extended forever. For the first time since the 1940s, political authorities around the world face a flood of economic and political challenges that could overwhelm the safeguards built into the system.
In poorer countries, the situation is worse. The pandemic rages unchecked through countries like South Africa and Brazil, where low commodity prices, falling remittances and falling demand for industrial products are intersecting with capital flight to create an unprecedented economic shock. Countries like Lebanon and Ethiopia, facing grave crises before the pandemic, struggle to maintain basic order.
Science will, we must hope, come to the rescue with a vaccine or a cure before our resources are exhausted. But as the world wrings its hands and waits for a deus ex machina, we must recognize that the end of the pandemic does not mean a return to the relatively stable world of the post-Cold War era.
Governments and other institutions have always had to deal with difficult challenges that they couldn’t predict. Disease, famine and barbarian invasions fell unexpectedly on societies that often struggled merely to survive. The Industrial Revolution brought new perils like financial panics, the business cycle and social upheavals. Millions left the land and learned to depend on the modern economy for sustenance. Revolutionary political movements that challenged the old order could be as destructive and mysterious as the plagues and famines of earlier times.
After World War II, as the threat of nuclear war glowered in the background, the assumption that humanity could deal with most natural disasters, health problems and the business cycle took hold. It wasn’t utopia, but life seemed more predictable than in the past. With the fall of the Soviet Union, the threat of nuclear war receded into the background and Western self-confidence reached new heights. Over the past 30 years, the world has developed an intricately organized, massively complex, extraordinarily effective and extremely dynamic global civilization.
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SOURCE: Wall Street Journal, Walter Russell Mead