The price of a leaderless world
In times of great crisis, there are always those trying to leverage suffering for personal gain. It is the job of government to try to prevent that from happening as much as possible. In the 1918 flu epidemic, the United States put an 80 percent tax on all profits above 8 percent to prevent war profiteering.
It is very dispiriting to see that not only is that same United States government not leading the world through our current crisis, they are guilty of trying to profit from it. There are some very overt signs of this. The website of the U.S. State Department, for example, is asking for medical professionals to apply for visas at their nearest U.S. embassy, “particularly those working to treat or mitigate the effects of COVID-19.” While some countries are sending doctors to their neighbors, the Americans are trying to take them away from us.
President Donald Trump also attempted to buy a successful German company working on a vaccine for COVID-19. He probably had a fantasy of the world-saving vaccine coming out of his country, helping him establish a contrast to China, where the virus originated. German Economy Minister Peter Altmeier understandably warned hedge funds by saying “make no mistake, we’ll protect our own companies.” The German cabinet earlier on Monday passed a draft law which sets up a 100-billion-euro economic stability fund that can take direct equity stakes in German companies.
Without the leadership of the most powerful country in the world, we are left to compete against each other. The problem of course, is that uncertainty scrambles price signals, and the market can no longer guide decisions about resource allocation. That’s when circuit breakers stop trading at exchanges, as we find ourselves witnessing these days. Social distancing is another similar attempt: We are all trying to buy time, but the “invisible enemy” is gaining speed exponentially.
This is a war between the human sphere and “virusland,” said Yuval Noah Harari in an interview on CNN. I think that species-level analysis is a good way of thinking of it. As I write, there are more than 650,000 patients and more than 30,000 deaths, but those numbers are already going to be outdated by the time you read this. This pandemic requires coordinated global action, not only to fight the virus but to control its devastating impact on the economy, to protect jobs and growth everywhere. In short, we need something to organize the human sphere. The G20 saved the world economy once in 2007-2008, the year the G20 turned itself from a meeting of finance ministers and central bank governors to a summit with leaders coming together. Can the G20 save the world once again?
That unity is still nowhere in sight. The world’s leaders, trapped into their national systems, are trying to decide between human death and economic disaster. Trump is merely the most explicit in his caution against letting the “cure be worse than the problem.” It’s a false dichotomy, mark my words, but by the time he understands that, it will be far too late.