• Saturday, Jul 04, 2020
  • Last Update : 01:55 am

The end of progress (and the return of Keynes)

  • Published at 02:20 pm April 11th, 2020
wuhan coronavirus covid-19 suits baby family station masks
We are all Wuhan REUTERS

How will the future shape up for the inherently messy, pluralist societies of South Asia?

We are all Wuhan. The world has followed inexorably in the tracks of that Chinese city since it first reported cases of SARS-CoV-2 (aka Covid-19) at the end of 2019. Earlier this week, it opened up for the first time after 76 days of stringent lockdown, and much of what’s happening there now will similarly play out everywhere else.

Wuhan reconnected railways and bus lines, and resumed air service to other cities in China. Some factories started up again. But many residential complexes remain closed off. All schools and colleges are banned, along with large gatherings of any kind. Masks are required to be worn in public at all times, and residents are strongly recommended not to leave the city or province.

If that’s the light at the end of the coronavirus tunnel in China’s exceptionally disciplined and authoritarian society, what can the rest of us hope for? More specifically, how will the future shape up for the inherently messy, pluralist societies of South Asia?  

Here, all evidence points to an unprecedented disruption, which is already locked in. Things will never be the same. 

Just over three decades ago, during another global watershed moment (the fall of the Berlin Wall in 1989) the political scientist Francis Fukuyama earned instant notoriety with an essay entitled “The End of History.” He made the case “ideological violence” was defunct, and “is evident in the total exhaustion of systematic alternatives to Western liberalism.” 

Fukuyama wrote it was “not just the end of the Cold War, or the passing of a particular period of post-war history, but the end of history as such: That is, the end point of mankind’s ideological evolution and the universalization of Western liberal democracy as the final form of human government.”

That analysis has taken considerable drubbings, most of which ignore Fukuyama’s qualification that “the victory of liberalism has occurred primarily in the realm of ideas or consciousness.” 

But when you take that into account, it’s clear the Japanese-American’s predictions actually held up very well, right into 2020. In the intervening years, most of us have lived in his predicted neo-liberal paradigm, governed by unshakable consensus about privatization, deregulation, laissez-faire economics, and above all, globalization. We have been taught that economic growth is the ultimate goal, and it’s the only way to gauge progress. 

But all of that is out of the window now, almost certainly never to return. A few days ago, the IMF Managing Director Kristalina Georgieva laid out the current scenario in unforgettably stark language: “Never in history have we witnessed the world economy come to a standstill. This is humanity’s darkest hour, a big threat to the whole world and it requires from us to stand tall, be united and protect the most vulnerable of our citizens. This is a crisis like no other.”

Both the IMF and World Health Organization are clear on the way forward from what is already being compared to the Great Depression (which hammered the global GDP down 15% between 1929 and 1932). 

Humanity must battle and surmount the coronavirus, within the family and house by house, across neighbourhoods, from city to country and regions beyond. 

In his 1963 Letter from a Birmingham Jail, Dr Martin Luther King wrote that “Injustice anywhere is a threat to justice everywhere. We are caught in an inescapable network of mutuality, tied in a single garment of destiny. Whatever affects one directly, affects all indirectly.” 

That’s the obvious conclusion of our age of contagion, because our wellbeing now resides inescapably in the collective. We will have to rearrange our countries to reflect that reality.

All this is the opposite of neo-liberalism, which espouses individual freedom as the paramount social, cultural, and economic value. Its return to relevance is an improbable plot twist to the 1930s battle of theories between the Viennese-born economist Friedrich Hayek and John Maynard Keynes of the UK. 

At that time, Keynes reigned supreme with his advocacy of managed market economies, where the government plays an essential shepherding role. 

Soon afterwards the tide shifted decisively to Hayek, who became powerfully influential at the University of Chicago in the 1950s. At least 13 Nobel Prize winners in Economics have come from its faculty, along with innumerable policy makers in finance ministries across the world (Raghuram Rajan is one recent example). 

There’s no coincidence that Fukuyama’s famed paper was first delivered as a lecture on that same campus.

Keynes once said: “The difficulty lies not so much in developing new ideas as in escaping from old ones.” But revolutions usually erupt unexpectedly. Earlier this week, the most recent Nobel Prize winner for Economics, Abhijit Banerjee recommended: “Print some money and do not think of inflation. We need to be quantitative in India and in large sums. This is a time to go wild. Go Keynesian!”

Vivek Menezes is a writer based in Goa, India. 

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