All 2 entries tagged Coronavirus

COVID–19: When This Lousy War is Over

Writing about web page https://www.mirror.co.uk/news/politics/coronavirus-what-happens-war-won-21852580

Nigel Nelson, political editor of the Sunday Mirror, was kind enough to quote me at the end of his article Coronavirus: What happens when war is won as UK stands on crossroads as in 1945, in this morning’s paper. Here’s the notes I sent him last week.

Do you think Boris Johnson will come out of this crisis as the hero of it or could he go the same way as his great hero Winston Churchill?

World War II fuelled a desire for change in British society, with more social provision for those people who faced the greatest risks that no one could control – sickness, old age, and unemployment. Churchill was (and for many still is) the hero of the war, but the voters still tossed him out afterwards because he did not sufficiently identify with the turn to a welfare state. Attlee and the Labour Party went that way and took the voters with them.

In a time of national crisis, it’s natural that people rally round the leader, and the polls suggest a degree of rallying around Boris Johnson right now. That may not last. Whether Boris keeps hold of the halo afterwards depends on whether he “gets” the swing of the popular mood and is able to go with it.

How are British values changing (clearly we put a new value on the worth of NHS staff and key workers who have been undervalued for so long)?

Our society is going through a severe shock. Lots of things we took for granted have suddenly been taken away: jobs, schools, incomes, easy shopping, foreign holidays, contact with friends and family. There is risk to life – of our parents and friends. There is fear of a rather cruel way to die. It’s natural to suppose that we will come out of this with a much greater desire for security against these risks. We will look to the government to “do something” to give us that extra security, so we will have greater expectations of the government than before.

There were signs of this before the coronavirus struck. The new Johnson government already did not look like an old-style Conservative free-market austerity administration. Whoever won the election was going to pay more attention to public services, infrastructure, and levelling up. These trends will be reinforced by the coronavirus emergency.

If that is correct, then we should expect that key workers and care workers will be paid more, social security will become more generous, and public services like the NHS will be allowed to build a margin of spare capacity in order to be able to respond better to emergencies. So cost-cutting and “efficiency gains” will go out of fashion. Meanwhile the taxpayers will be under much greater pressure to pay for all this – as well as for servicing our much larger public debt. Putting it all together, there will also be some levelling of inequalities.

Once we come through the crisis, not everything will go right. Mistakes will be made, and some measures will be taken too far. Some people will find they enjoy bossing others around in the name of the community, and they will find ingenious ways of defending their authority. Efficiency will be neglected in public services, even when it would benefit everyone. This also happened after World War II. Britain did not have to have food rationing for nine years after the war, but that’s what happened.

And more broadly will our attitudes to what is important be permanently changed by what we've been through in the way they were after the war?

The crisis has already shown that most people are thoughtful and sensible, they balance self-interest with concern for others, and they put a high value on community. Three quarters of a million of them have already volunteered to help with the NHS and care support. There are other people who might try to be like that, but they are also thoughtless or behave in ways that are divisive. A tiny minority are selfish and take advantage of the situation to exploit others. This won’t change.

What seems likely is that for most people community will feel a lot more real than before. We don’t have a foreign enemy, but we do have a common cause. Faced with the coronavirus pandemic, none of us can be excused. Those who serve in health care are in deadly danger. To help protect them, others stay home. The sacrifices may not be equal, but everyone contributes something. We all depend on each other for survival. These are important lessons, and they could last for a generation.

After that, it will probably be time for another change of direction.

Mark Harrison : 12 Apr 2020 10:28 |  Tags: Coronavirus Politics War |  Comments (0) |  Close comments |  Report a problem

The War on COVID–19: Lessons from Wartime

Writing about web page https://www.bbc.co.uk/news/topics/c8nq32jw8r1t/boris-johnson

Many people have likened the war on COVID-19 to World War II. Those I've noted range from US Senators Bernie Sanders and Lindsey Graham to the head of Britain's Office of Budget Responsibility Robert Chote. Our own Boris Johnson says it is as if we have a wartime government.

I have some sympathy with this view. The time we are going through will be seen as an historical watershed, like the two world wars. The reason is that it is changing the way of life of every family worldwide, in a way quite unlike 9/11 or a financial panic. Moreover its effect will be persistent, at least for several years. Our world after COVID-19 will be more nervous, more prepared, and less globalized and interlinked for some time to come.

When historical novels are written about our time, every author will have choose the setting: before, during, or after the coronovirus epidemic?

Yesterday I was interviewed on this subject for a radio programme. Understandably, I think, the interview was spiked in favour of more practical and pressing concerns. Beforehand I made some notes, based on questions I was given. Below, I'll share my notes.

Was there any similarity in the challenges facing governments now and at the start of World War 2?

There are several similarities, although not a perfect fit. As in WW2, we face a clear enemy: a disease.

It is a surprise attack – even more than in WW2. In 1941 the Soviet Union suffered a surprise attack by Germany and the USA suffered a surprise attack by Japan, but still most people had seen a war building since the 1930s, so just about all governments had incorporated war into their thinking. This is not the case today: we are at a standing start.

Resistance requires resources to be mobilized urgently into the medical sector: people, equipment, power supplies and provisions.

At the same time the enemy is striking at our supply chains – it attacks economic cooperation and the division of labour. It is forcing us into isolation and self-sufficiency and isolated, self-sufficient people are very unproductive, so our economic capacity is falling. This is what bombing and invasion did in WW2, but the coronavirus is doing it much more efficiently. It is already among us and it is unseen.

There is fear and anxiety. Before WW2 many people feared a bombing apocalypse, which did not actually happen until 1945. A similar fear is present today.

Were there bailouts and nationalisations of businesses and industries disrupted by WW2? What about coronavirus?

World War II brought an explosion of demand. Rather than people losing their jobs, they were called up to serve in the military or in war production. Schools, shops, and pubs did not close but their staff of working or fighting age did. The war economy still required films and entertainment. As for business, most businesses repurposed their production for the war effort. The government paid for the building or converting of factories to war production. There was very little nationalisation. There were very limited bailouts (money for nothing) because the government was primarily spending money to pay people to do something else.

It is true that some small businesses lost out, but most people understood the needs of the war and complaints were muted. I have a letter of 1942 from the wholesale cocoa distributors to the London Chamber of Commerce. They complain that the government has taken over the distribution of chocolate. They no longer have a business. Milk wholesalers have been compensated: what about us? Will we not be needed again after the war?

So some suffered financially. Wealthy people took a hit. But everyone had a role. The war killed, injured, and bereaved millions, but no one was cast into destitution because everyone had a role and could find a job. Old people (fewer than now) benefited from a widening social safety net. After the war, British society was a lot more equal than before.

How did governments manage shortages and supply chain disruptions?

The main tools were licensing and rationing. These converted our market economy into a command economy. There were still markets and money and prices, but for the most part you could not spend money on anything without a government license. The most important exception was bread: through the war you could always buy as much bread as you wanted, so no one went undernourished. This made Britain different from many other countries at war.

But to buy steel or components, a business needed a license. To import materials, you needed a license. To borrow for investment, you needed a licence. You got this licence only if you were on the government’s priority list: important for the war effort. In this way the government could protect the essential industries and the inessential parts of the economy withered.

The problem was inflation – not price inflation, but priority inflation. At first, a few things were seen as crucial – priority A1. As the economy became more and more stretched many other things competed for top priority. When everything was top priority, the priority system stopped working, and government committees had to set limits even on top priorities. You’d think you could never have enough soldiers in a war, but in 1942 the government had to cap the armed forces at 5 million in order to keep enough workers in the war factories and other essential industries.

How was production of munitions (then, medical equipment now) ramped up, and how were people recruited for the war effort (then, for intensive care units etc. now)?

I read today that the government is hoping to find British manufacturers of a basic ventilator – 30,000 in two weeks. Here the standing start is important. For years before WW2, the governments of all the major powers were ordering new weapon designs and thinking about the industrial capacities that the next war would require. Nearly all the major aircraft types of WW2 were designed before the war broke out. Here we are in the middle of our war with a blank sheet of paper.

War preparations made it possible to boost war production to peak levels within one or two years of the outbreak. One or two years, not two weeks.

Market economies do have great flexibility. If the government throws enough money at it, I am absolutely sure that something will be achieved, although not necessarily on the timescale that is demanded, because of our unpreparedness.

My guess is that ECMO machines will be the tip of the iceberg. We have a £2 trillion economy. If we pay the top rate for ventilators, which is £50k, and buy 100,000, they will cost us only a fraction of a percent of national income. BUT in addition to producing them, you have to build the new infrastructure.

Again, I read that a bed in intensive care costs £15k a day – that’s staffing, maintenance, paying off the building. Keeping 100,000 of these beds open for a year would be a big slice of Britains’s GDP, maybe a quarter. And we are a rich country. No doubt we could do it for less by makeshift building and cutting back on training and standards.

And at the same time, we will be having a big recession: output might fall by 10, 20, or 30 percent, so the burden could be even greater. That’s more like Russia in 1942 than Britain or America.

Uncertainty: Did governments have to make things up on the fly?

To some extent. But most governments had spent a long time thinking about how the next war would go, and this helped. It was only 20 years from WW1 and every government had tried to learn the lessons. WW1 was much more improvised than World War II. In WW1 it took years to learn how to get out of the trenches and move on the battlefield. It took years to learn about the public-private partnership and the public finance necessary to ramp up production. So, in WW2 governments generally made fewer mistakes than in WW1.

That’s also probably why Japan, Taiwan, and Hong Kong are having a better time today. They had the experience of SARS in 2003, and they were determined to learn from it.

What were long term effects on how the government ran the economy? And on society?

I think we are going to see a lot more compulsion in a short time. Certainly, compulsion in terms of quarantine. Everyone needs to understand there’s no such thing as a public health measure that doesn’t end up infringing on someone’s rights. The clue is in the name: public, not private health.

Compulsion in rationing basic supplies? Maybe. But my instinct is that we will soon all be making do with less.

Compulsion in service? Medical service, like military service in a war, is going to be dangerous. I hope there may soon be a pool of young, willing volunteers who have survived exposure and been immunized by it.

The persistence of these regulatory changes may be for years after, but not for decades after. The war gave Britain a much larger state and food rationing and food subsidies lasted for years after. The war essentially created the basic elements of a national health service, formalized after the war. But the war did not create nationalized industries. It was postwar socialism, not the war, that led to nationalization. If you look at the share of the state in economic activity in neutral Sweden over the long run, it follows a similar course as in Britain. There were deeper forces at work than the war. The war just brought things a forward a bit.

The same may be happening now. Before we were struck by the plague, things were already changing. Austerity was already ending, the government was already set to throw money at the police, the health service, infrastructure and the regions. That had already begun; maybe now it will be reinforced. There’s visible pressure in society for government to do the right thing and be accountable for it.

I would like to live in a free society and in most settings, it seems to me, free markets will do the best job. But in the present setting I would support a little more of the clarity that comes from compulsory rules. How do I reconcile these things? You can think about compulsion in two ways. One is the Chinese way: do as the unelected party tells you or fear the consequences. But there is also a British way, which is different: when the elected government tells you it’s your turn to do the right thing. It’s your turn to serve in a hospital, or stay at home, or go out to buy the goods you need. There’s a line: don’t step out of it.

That’s how it worked in Britain in WW2. There were lots of rules, which most people accepted, and the few that didn’t were vigorously pursued, with the support of most people. It did continue for too long after the war; that’s something we should aim to avoid.

Mark Harrison : 18 Mar 2020 17:53 |  Tags: Coronavirus Economics Politics War |  Comments (6) |  Close comments |  Report a problem