“The Coronavirus is a 9/11 moment for politics”, writes Daniel Finkelstein in his recent article for The Times on the Covid-19 outbreak. This thoughtful piece is an arresting commentary on the possible long-term ramifications of the spread of the coronavirus. In his view, it is likely to be a watershed moment on the scale of the 9/11 terrorist attacks, facilitating a fundamental shift in our collective social-consciousness. The full consequences of a global pandemic of Covid-19 are still extremely unclear, and estimates about the short to medium-term impact on societies around the world widely differ from source to source. Estimated death rates and the number of new cases are similarly fluctuating daily, with 1543 cases so far confirmed in the UK at the time of writing. But what is becoming clear already, and what Finkelstein alludes to in his article, is that questions are being raised over the great ‘-ism’ of our day – globalism.
Ever since Thatcher and Reagan unleashed the power of open financial markets in the 1980s, the unfettered rise of globalism has shaped, and largely continues to shape, every aspect of modern life. However, the financial crisis in 2008 provided a spectacular and ferocious wake-up call. Whilst in many respects the lessons of this crisis went unheeded, it began to highlight some cracks in the system. It demonstrated how interconnectedness, over-reliance on financial markets and deregulation could cause shocks on a never-before-seen scale and at a never-before-seen speed. Alongside the extensive economic costs of this crisis, many argue that this crash contributed to political events many years later like Brexit and the election of Trump. A central aspect of both of these events being a nascent distrust of the ostensibly unassailable rise of globalism.
Despite some political events alluding to the fallibility of globalism, it has continued to heighten the levels of systemic risk present in many facets of our society. Finance, travel, trade, cyber, internet and other networks continue to grow in scale and ubiquity, which means that they become more complex and more at risk of intricate but far-reaching shocks. Again, we saw in the 2008 financial crisis how a collapse in the US housing market became a global contagion that sent shockwaves around the world and led to the worst recession since the 1930s. Likewise, we are seeing now how the coronavirus is wiping billions off of the value of public companies around the world as uncertainty and panic lead many away from equities and into safe haven assets. Since the coronavirus crisis has started, the S&P 500 has recorded a fall of over 20%, which officially signals the end of the longest bull-run in US stock market history.
When it comes to financial markets and the economy overall, greater levels of globalism have led to a greater level of centralisation among fewer financial centres. Wall Street and the City of London increasingly dominate the financial world, which means that if events like the coronavirus pandemic lead to large scale closures of financial hubs then the impact on the worldwide economy will be far greater. We need to ask serious questions about the way in which out interconnectedness and reliance on fewer and fewer centralised institutions in many aspects of our society is heightening levels of systemic risk and could pose further and more serious threats in the future. This is certainly not to say, however, that we need further barriers and less and less international cooperation, but that we need to thoroughly examine these networks and systems so that they adequately support our modern society.
The outbreak of the coronavirus is also raising some narrower questions about globalisation. The most glaring question raised by the sheer velocity of the spread of the virus is how ease of travel around the world, particularly our addiction to business and leisure travel in the West, can impact our society. Questions over this reliance on air travel and ease of movement are already being raised due to climate change fears, but the alacrity with which this virus has spread around the world is starting to make many consider how this travel could continue to impact our health in the future. Do businesspeople and executives need to incessantly travel the globe when videoconferencing technology is of the quality that it is today? Does every family need to take so many flights each year for holidays? The current health crisis and overarching climate emergency are undermining this travel, which for many years has simply been the norm.
The second significant question that many are posing in the wake of the outbreak of the coronavirus, is if our worldwide dependence on China has gone too far. What started as a way of outsourcing the production of cheap goods in a country replete with inexpensive labour and lax regulations, has become a dependency that is effecting every aspect of our society. Many businesses have already been trying to reduce their dependency on certain supply-chains or producers in order to minimise risks and this is only likely to increase in the wake of Covid-19. Now, while it is imperative that these questions do not become tinged with xenophobia and ill-feeling towards China, it does raise important doubts about our reliance on China as the factory of the world.
Moreover, with unprecedented measures taken in China to forcefully quarantine millions of citizens to stem the spread of the contagion after reports of the new virus were initially suppressed, there are question marks about the extent to which governments could and should use their powers to impose restricting measures on their citizens to prevent further spread of the virus. Much like in the aftermath of the 9/11 terror attacks, the balance between security and liberty is increasingly unstable. To what extent should we praise China’s draconian measures used to prevent further spread of the virus, measures only really possible in such an authoritarian regime? Are western democratic societies inevitably unable to stem the flow of contagion on such a scale as China? How far should public health take precedence over personal liberty in times of global pandemic? At the moment at least, our government seems to be avoiding imperative language, favouring more ambiguous terms like ‘advise’ and ‘suggest’ when it comes to implementing social distancing measures. The efficacy of these more tentative measures remains to be seen. It is also still unclear whether current suggested measures will become enforced measures in the UK.
At such a fascinating and worrisome time, it would be easy to go on and on about what the virus could mean for our society as a whole. However, it seems that the key question here pertains to the extent to which globalisation continues on its current trajectory in the future. As Robin Niblett, director of Chatham House, writes, the rapid spread of this virus from Asia “is another straw on the camel’s back of globalisation” and, initially, it seems that this sudden spread will become another weapon in the arsenal of those who seek to build barriers between countries and undermine some of the fundamental tenets of globalisation. However, others expect this crisis to have a largely positive effect on globalisation. “Coronavirus won’t end globalisation, but change it hugely for the better” Will Hutton exclaims in The Guardian recently. Similarly, Robert Armstrong argues that “this is a global crisis, not a crisis of globalisation”. No matter your standpoint, it seems to me that the coronavirus is likely to be a decisive moment for the dichotomy that dominates our geopolitical landscape today – the extent to which our world separates or integrates.
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