New York – Much maligned in recent years, big government will come back — and with it, the potential for both greater good and evil.
Threatening the world with a long recession, the new coronavirus looks set to inaugurate a turbulent new political and economic era. Its main tendencies will become visible over the months and years to come. But the most revolutionary shift is already in sight.
The state, much maligned in recent decades, is back, and in its fundamental role: as Leviathan, the preventer of anarchy, and the ultimate insurance against an intolerable human condition in which life is “solitary, poor, nasty, brutish and short.”
In all countries where the coronavirus first spread — China, South Korea, Iran, Singapore, Thailand, Taiwan, Hong Kong and Italy — the state leads the war against it, imposing draconian lockdowns on entire populations, ruthlessly sacrificing personal liberty to security.
Whether such heavy-handed interventions will eventually succeed — they seem to be working for now in Singapore and China, countries with great state capacity — is still unclear. Nevertheless, in many other countries, ruling politicians seem to realize that they will be judged by their administrative capacity to check the spread of the virus.
Hence, U.S. President Donald Trump’s fumbling responses, which attest as much to the American state’s incapacity for mass-testing as to his much-noted personal inadequacies. Britain’s Conservative government recently announced a massive upgrade of public services, radically breaking with Anglo-America’s libertarian orthodoxy of recent decades.
Italy has asked the European Union for more leeway as it prepares to disregard the latter’s fiscal rules in order to shield its aging population from the virus. Even Germany, the EU’s inflexible enforcer of austerity, seems ready to trash its dogma of keeping the budget balanced as more than two-thirds of its population confronts the possibility of infection.
It has taken a disaster for the state to assume its original responsibility to protect citizens. It is time to remember that another calamity, easily the biggest of the last two centuries, was what first established the modern state as an able-bodied protector of the population.
After World War II, governments trying to restore economic and living conditions and fight off mass unemployment boosted their intervention in the economy and accelerated their building of social insurance systems and public services in health, education and housing.
The state’s planning capacity had been enhanced during the extensive conflict. Afterward, such newly developed powers were reoriented from war-making to the realm of social security, to the building of large-scale relief and compensation systems. As free markets suffered broader discredit after the Great Depression, the warfare state mutated faster into a welfare state in European countries on both sides of the war.
There was a corresponding intellectual and ideological shift, best signaled by British economist John Maynard Keynes. As this former partisan of free markets put it in 1933, “the decadent international but individualistic capitalism” inherited from the past is “not intelligent, it is not beautiful, it is not just, it is not virtuous — and it doesn’t deliver the goods. In short, we dislike it, and we are beginning to despise it.”
Even in the United States, where hostility to Keynes-style state intervention was deeply ingrained, social policies during the war created the basis of the New Deal’s path-breaking protections for labor.
In our own era, we have been stumbling, from crisis to crisis, toward an enhanced savior role for the state. Back in the 1990s, the debate about the state’s correct role and size appeared to have been settled. Centrist leaders such as U.S. President Bill Clinton and British Prime Minister Tony Blair did not fundamentally depart from U.S. President Ronald Reagan’s conviction that government is a “problem” rather than a solution as they hectically privatized and deregulated.
It was also easier back then to trust in the wisdom of the markets. Innovatively locating different parts of the process of production, and the gains from it, among citizens of many different countries, and making quick decisions on the basis of financial calculation, the market seemed smarter, more agile and resourceful than the old deliberative state.
As before, some unexpected calamities undermined its hegemony. U.S. President George W. Bush presided over a massive expansion of government bureaucracy in response to the 9/11 attacks.
In 2008, as global markets collapsed, the U.S. as well as communist-ruled China injected liquidity into national economies on an unprecedented scale. The American government controlled, albeit briefly, General Motors as well as Chrysler.
After the financial crisis, quasi-Keynesian doubts about economic internationalism began to surface among even such architects of globalization as Larry Summers, who exhorted politicians to recognize that “the basic responsibility of government is to maximize the welfare of citizens, not to pursue some abstract concept of the global good.”
Today, the coronavirus has elevated that responsibility into a life-or-death imperative. And, as happened in the interwar era, the state’s deep penetration into economic and social life to counteract a disaster is likely to endure.
For the popular tendency to regard, at times of extreme vulnerability, the state as a savior won’t disappear in less perilous times. Nor will politicians forget to base their appeal on a promise of collective security.
But there should be no illusions about the dangers in the profound transformations ahead.
In the interwar era, an expanding state assumed unprecedented powers over its citizens, metamorphosing in some countries into outright fascism. The history of war and genocide in the first half of the 20th century tells us that the accumulation of biopower — the technology of control and manipulation over large groups of human beings — can enable horrific crimes.
Certainly, the techniques of surveillance available to the contemporary state, starkly evident in China today, can only further restrict human rights and liberties. The Leviathan is back, in a stunning revolution hardly anyone foresaw, and, though undoubtedly welcome in the short term, it should be feared in the long run.
Pankaj Mishra is a Bloomberg Opinion columnist.