The pandemic will change everything, or at least most things. This much we know. A lot has changed already. Even if we were to go back to business as usual when the pandemic is over (if it is ever fully over), that would not be a return to the status quo ante — a year of far-from-usual business cannot be forgotten and unlearned.
What we do not know is how things will change. That will in part depend on whether vaccination defeats the pandemic for good, so that restoring the pre-pandemic economic practices are at least theoretically conceivable. Even then, past income losses and debt overhangs will make a difference. But the much bigger question is what politicians, and the voters on whose support they rely, will want to achieve. The rhetoric of “building back better” points clearly to an ambition of ending up somewhere else than where we were a year ago.
Are we at one of those hinge points in history, like the Great Depression, the second world war, the monetary chaos of the 1970s or the fall of communism, where the citizenry’s political preferences take a big turn in a new direction? The former two produced widespread support for more collectivist policies, the latter two a swing to individualism and globalisation. As I have argued, there is a good case to be made for expecting just as deep a change of heart today, both among citizens and among politicians.
To date, we have mostly had to make do with speculation. So it is useful that data are beginning to trickle in. Two new surveys suggest that there is indeed a big change under way in attitudes, favouring more collectivist policies.
A survey of people in 24 countries led by Ronald Inglehart (one of the world’s leading scholars of postmaterialist values) and Martijn Lampert asked the same respondents about their values, emotions and policy preferences in the first and last quarter of last year. While the changes from the first to the second round are not big — most people are reasonably consistent over the course of a year — the direction of change paints a consistent pattern.
Unsurprisingly, more people than before are concerned about health and about classic economic issues such as growth and employment. But there is also a clear progressive tilt behind these material concerns: worries about inequality have intensified, especially among the young. In addition, the values that are now more strongly expressed include typically liberal (such as rejecting traditional gender stereotypes, embracing different outlooks on life and tolerating sexual and domestic freedoms) and communal ones (such as a preference for sharing or feeling involved with one’s community). Some traditionalist values (importance of manners, law and order, and that fathers should be the heads of households) have weakened — as have, surprisingly, some expressions of hedonism. (So much for my arguments why we could be entering a new Roaring Twenties.)
Another study, this one from the IMF, investigates directly how the pandemic has affected attitudes to more progressive tax policies. In a survey of US respondents, Alexander Klemm and Paolo Mauro observed that those who had been personally affected health-wise or economically by Covid-19’s (directly or through friends or family) were more likely to support one-off solidarity taxes or a permanent progressive shift in the tax structure. This seeming effect of being struck by the pandemic was stronger among people who expressed more conservative values, even though they were overall less supportive of progressive tax reform than liberals.
These are straws in the wind, but important ones. If they reflect a real shift in opinion, it means two things. One is that life will change significantly after the pandemic, both socially and politically. The other is that there is an opportunity for equally big changes in policy. An opportunity to “take all the faffing out of it”, to borrow the words of Louise Casey, the homelessness “tsar” to several UK prime ministers who led the effort to provide accommodation to every rough sleeper in the first lockdown. In an interview with the Guardian, she says: “This is the moment . . . we have to grasp it. Are we ever going to create a Britain that’s for everyone? And if not now, then when? We’ve shown we don’t have to have rough sleepers, which means that we could now decide as a country that this is it. That we will not have rough sleepers ever again.” What goes for homelessness goes for other social ills: “We can do some really clever, different things. The pandemic has changed attitudes.”
Big policy changes are, of course, risky. Joe Biden has started his presidency with the experiment of a big fiscal push. We cannot know the outcome without trying. But if not now — when public opinion seems readier for change than in a long time — then when?
Other readables
The need for change is the theme of several of my reading recommendations this week. I recently interviewed Harvard economist Dani Rodrik who, among many interesting things, said we could do with a dose of leftwing populism.
Europe should think as big as Biden, I argued in my FT column last week, for the moment of greatest economic danger will be when the recovery takes off.
The Resolution Foundation tells the UK government to follow Biden and “go big” with a £100bn stimulus in next week’s Budget.
A UN high-level panel on financial integrity today publishes a punch report, with the right ambitions for transparency, tax reform and stronger enforcement to stop illicit financial flows.
Adam Michnik, the one-time leader of Poland’s Solidarity movement, explains why the Polish government’s new advertising tax is designed to stifle media dissent.
Continental Europe is no one’s idea of the world’s most dynamic market — but there are changes afoot that can leave rich pickings for the investors able to distinguish the winners from the losers those changes will create.
Numbers news
The EU has published monthly excess mortality data for all its member states, the European Economic Area countries and Switzerland. The patterns show the two peaks in spring and late autumn 2020 — and reveal a very small group of countries that managed to keep excess mortality within 20 per cent of the 2016-19 average in every month of last year: only Finland, Estonia, Denmark and Cyprus in the EU, and Norway and Iceland outside it.
A useful infographic from the Delors Institute shows how much each EU country can expect to receive from the bloc’s pandemic recovery facility and traditional sources — and also how much we should worry in each member state about the risk that funds are misappropriated or simply not fully utilised.
Source: Economy - ft.com
