<nettime> The coming battle for the COVID-19 narrative

[nettime's avid reader <nettime@kein.org>]

voxeu.org /article/coming-battle-covid-19-narrative

Abstract:

Like the Great Depression and WWII, the COVID-19 pandemic (along
with climate change) will alter how we think about the economy and
public policy, not only in seminars and policy think tanks, but
also in the everyday vernacular by which people talk about their
livelihoods and futures. It will likely prompt a leftward shift on the
government-versus-markets axis. But more important, it may overturn
that anachronistic one-dimensional menu of policy alternatives by
including approaches drawing on social values going beyond compliance
and material gain to include ethical motivations of solidarity and
duty that underpin community.


The coming battle for the COVID-19 narrative

The COVID-19 pandemic is a blow to self-interest as a value
orientation and laissez-faire as a policy paradigm, both already
reeling amid mounting public concerns about climate change. Will
the pandemic change our economic narrative, expressing new everyday
understandings of how the economy works and how it should work?

We think so. But it will not be simply a shift to the left on the now
anachronistic one-dimensional markets-versus-government continuum
shown in Figure 1. A position along the blue line represents a mix
of public policies – nationalisation of the railways, for example,
towards the left; deregulation of labour markets, for example, towards
the right.

Figure 1 The government–market continuum for policy and economic
discourse

https://voxeu.org/sites/default/files/image/FromMay2014/carlin10aprilfig4.png


COVID-19, for better or worse, brings into focus a third pole in the
debate: call it community or civil society. In the absence of this
third pole, the conventional language of economics and public policy
misses the contribution of social norms and of institutions that are
neither governments nor markets – like families, relationships
within firms, and community organisations.

There are precedents for the scale of changes that we anticipate.
The Great Depression and WWII changed the way we talked about the
economy: left to its own devices it would wreak havoc on people’s
lives (massive unemployment), “heedless self-interest [is] bad
economics” (FDR),1 and governments can effectively pursue the public
good (defeat fascism, provide economic security). As the memories of
that era faded along with the social solidarity and confidence in
collective action that it had fostered, another vernacular took over:
“there is no such thing as society” (Thatcher)2 – you get what
you pay for, government is just another special interest group.

Another opportunity for a long-needed fundamental shift in the
economic vernacular is now unfolding. COVID-19, along with climate
change, could be the equivalent of the Great Depression and WWII in
forcing a sea change in economic thinking and policy.

And the battle for the COVID-19 narrative is already underway. The
Economist sounded the alarm: “Big government is needed to fight the
pandemic. What matters is how it shrinks back again afterwards. ...
A pandemic government is not fit for everyday life.”3 Government
overreach, we hear, led to America being unprepared. “Stringent and
time-consuming FDA requirements are preventing academic and clinical
labs around the country, with capacity and willingness to develop and
deploy testing within their communities, from being able to do so.”4

But many Americans, Britons, Italians, Japanese and others probably
wish that, like South Korea’s, their governments had done more not
less at the outset, and that their fellow citizens had the civic
mindedness that made the South Korean government’s policies so
effective.

South Korea will be a major theatre in the battle for the COVID-19
narrative. We will hear a lot about how their success in containing
the pandemic was due to their long experience with SARS, H1N1,
and other epidemics in the region. Or is it the history of
authoritarianism in South Korea’s politics? Or that South Koreans
are, well, just more cooperative than, say, Americans?

We are not convinced. According to the authoritative Polity IV data
set, South Korea is as democratic as the UK or the US.5 The US has had
ample experience with epidemics. A never-released government report
half a year ago simulated a hypothetical pandemic almost exactly
anticipating what is now unfolding. Residents of Seoul are not, in
fact, distinctive in their cooperativeness, at least not compared with
people from Bonn, Boston, Zurich or Copenhagen in experiments about
contributions to public goods (Herrmann et al. 2008).

Others will point to the immediate and massive testing, tracing and
social distancing (all for the most part voluntary) that the South
Koreans adopted, their quick mobilisation of expertise bearing on
the outbreak, the extraordinary number of intensive care unit beds
that were available, and their comprehensive health care system that
facilitated and reduced resistance to these measures. South Korea has
avoided extreme personal travel or movement restrictions and closure
of airports.

But the struggle for the COVID-19 narrative need not rehearse the
“more government versus more market” battle lines. Two snapshots
of the unfolding pandemic explain why.

In the UK, the National Health Service asked on 24 March for 250,000
volunteers to assist them. Recruitment to the scheme was temporarily
halted five days later so that the initial 750,000 applications could
be processed.6

As of 9 April, 494,711 South Koreans have been tested for the virus, a
level of participation that would have been impossible to enforce on a
recalcitrant citizenry by governmental fiat.7

The COVID-19 narrative that emerges in the aftermath of the pandemic
will have to embrace two truths. First, there is no way that
government – however well organised and professional – can address
challenges like this pandemic without a civic-minded citizenry that
trusts the public health advice of its government and is committed to
the rule of law.

Second, people facing extraordinary risks and costs have indeed acted
with generosity and trust on a massive scale.

However, another snapshot is a cause for alarm: attacks on people
of Asian descent are mounting around the world, encouraged, some
think, by President Trump’s continued reference to the “Chinese
virus”. The post-COVID narrative will have to embrace a third truth.
People may care about others in negative as well as positive ways; the
frightening upsurge of xenophobic attacks is a warning.

A consequence is that we have no choice but to reconsider the liberal
creed that philosophers call preference neutrality, or what in
economics is associated with the title of a famous paper, “De
gustibus non est disputandum" (“There is no arguing about tastes”;
Becker and Stigler 1977). The liberal creed and its economic variant
effectively place the idea of better-or-worse values out of bounds
for public debate and policy. But because the nature of our values is
essential both to combatting the COVID-19 epidemic and to preserving
a democratic society, we will have to get used to “arguing about
tastes”, however uncomfortable that will be.

Among our values, fairness will be something that we will argue about
a lot. We are now facing decisions daily – everything from grading
students who are learning remotely with differential patchy internet
connectivity, to triaging access to ventilators. Compliance with
lockdown regulations will fray if they unfairly penalize those unable
to work from home. The result will be to place ethical considerations
at the centre of our national and global deliberations. These include
but go considerably beyond placing a value on human life. And their
intrusion into our daily conversations will enrich our economic
vernacular.

No combination of government fiat and market incentives, however
cleverly designed, will produce solutions to problems like the
pandemic. What we call civil society (or the community) provides
essential elements of a strategy to kill COVID-19 without killing the
economy.

The dual elements of the new theory – the limits of private contract
and governmental fiat, along with a new view of a (sometimes) socially
oriented economic actor – open up a space in which economic
discourse can engage with the pandemic, as illustrated in Figure 1.
The blue line at the top is the left-right (government-versus-market)
continuum of choices that has dominated policy debates for a century.
We develop these ideas further in a related paper (Bowles and Carlin
2020).

Figure 2 An expanded space for policy and economic discourse

https://voxeu.org/sites/default/files/image/FromMay2014/carlin10aprilfig3.png

Note: the green arrows place COVID-19 related policies in the space; the
black arrows are other examples.8

A point in the space opened up by the third pole, which we label
civil society, has a similar meaning to a point on the bipolar blue
government-versus-markets line. It represents how solutions to
societal challenges can be implemented through a weighted combination
of government fiat, market incentives, and civil society norms.
(Coordinates of a point sum to one. The weight of each of these is
the shortest distance of the point from the edge opposite the vertex
in question. So, a solution represented by the vertex itself, such as
“mandatory risk-sharing (transfers)” in the figure has a weight of
1 on government and zero weights for market and civil society.)

We characterise the motivations central to the workings of civil
society by a series of other regarding or ethical values including
reciprocity, fairness, and sustainability. Also included is the term
identity, by which we refer to a bias in favour of those who one calls
“us” over “them.” We draw attention to this aspect of the
civil society dimension to stress that in insisting on the importance
of community in fashioning a response to the pandemic, we recognise
the capacity of these community-based solutions to sustain xenophobic,
parochial, and other repugnant actions.

Figure 2 illustrates the location in “institution-space”
of different responses to the epidemic. At the top left is the
government as the insurer of last resort. Neither market nor
household risk-sharing can handle an economy-wide contraction of
activity required by containment policies; and neither can compel the
near-universal participation that makes risk pooling possible.

Closer to the civil society pole are social distancing policies
implemented through consent. The triangle opens up space for
modern-day analogues of the so-called Dunkirk strategy – small,
privately owned boats took up where the British navy lacked the
resources to evacuate those trapped on the beaches in 1940. An example
is the public-spirited mobilisation by universities and small private
labs of efforts to undertake production and processing of tests and to
develop new machines to substitute for scarce ventilators.

These examples underline an important truth about institutional
and policy design: the poles of the institution space – at least
ideally – are complements not substitutes. Well-designed government
policies enhance the workings of markets and enhance the salience of
cooperative and other socially valuable preferences. Well-designed
markets both empower governments and make them more accountable
without crowding out ethical and other pro-social preferences.

Much of the content that we think is essential to a successful
post-COVID-19 economic vernacular is present in two recent advances in
the field.

The first is the insight – dating back to Hayek – that information
is scarce and local. Neither government officials nor private
owners and managers of firms know enough to write incentive-based
enforceable contracts or governmental fiats to implement optimal
social distancing, surveillance, or deployment of resources to the
health sector, including to vaccine development.

The second big change in economics gives us hope that non-governmental
and non-market solutions may actually contribute to mitigating
problems that are poorly addressed by contract or fiat. The
behavioural economics revolution makes it clear that people – far
from the individualistic and amoral representation in conventional
economics – are capable of extraordinary levels of cooperation based
on ethical values and other regarding preferences.

As was the case with the Great Depression and WWII, we will not be the
same after COVID-19. And neither, we also hope, will be the way people
talk about the economy.

The pandemic of that era – massive unemployment and economic
insecurity – was beaten by new rules of the game that delivered
immediate benefits. Unemployment insurance, a larger role for
government expenditures and, in many countries, trade union engagement
in wage-setting and new technology reflected both the analytics and
the ethics of the new everyday understanding of the economy. The
result was the decades of performance referred to as the golden age of
capitalism, making both the new rules and the new vernacular difficult
to dislodge.

The mounting costs of climate change and recurrent pandemic threats
could support a similar symbiosis between a new economic vernacular
and new policies and institutions yielding immediate concrete
benefits. A first step will be to reject the economists’ fiction
that a liveable future can be based solely on the pursuit of material
self-interest. We will need to cultivate and empower the civic virtues
that have underpinned many of the successes in battling COVID-19.

References

Becker, G S and G J Stigler (1977), "De Gustibus Non Est Disputandum",
American Economic Review 67(2): 76-90.

Bowles, S and W Carlin (2020), "Shrinking capitalism", American
Economic Review, Papers and Proceedings 110(5).

Herrmann, B, C Thoni, and S Gaechter (2008), "Antisocial Punishment
Across Societies", Science 319: 1362-1367.

Kolm, S-C (1984), La bonne economie: La reciprocity generale, Presses
Universitaires de France.

Ostrom, E (1990), Governing the Commons: The Evolution of Institutions
for Collective Action, Cambridge University Press.

Ouchi, W (1980), "Markets Bureaucracies and Clans", Administrative
Science Quarterly 25: 129-141.


Endnotes

1 From his second inaugural address on 20 January 1937.

2 Keith Joseph Memorial Lecture, 1996.

3
https://www.economist.com/leaders/2020/03/26/the-state-in-the-time-of-
covid-19


4
https://elemental.medium.com/the-science-behind-coronavirus-testing-an
d-where-the-u-s-went-wrong-7920c3fb5049

5 https://en.wikipedia.org/wiki/Polity_data_series (data for 2018).

6
https://www.england.nhs.uk/participation/get-involved/volunteering/nhs
-volunteer-responders/

7 KCDC, Updates on COVID-19 in Republic of Korea 5 April 2020

8 Similar tri-partite representations of the regulation of social
interactions, broadly construed, have been suggested – for example,
plan, market, reciprocity in Kolm (1984), or bureaucracy, market and
clan in Ouchi (1980). For Elinor Ostrom, the third dimension was
local, informal self-government (Ostrom 1990).


#  distributed via <nettime>: no commercial use without permission
#  <nettime>  is a moderated mailing list for net criticism,
#  collaborative text filtering and cultural politics of the nets
#  more info: http://mx.kein.org/mailman/listinfo/nettime-l
#  archive: http://www.nettime.org contact: nettime@kein.org
#  @nettime_bot tweets mail w/ sender unless #ANON is in Subject: