Post COVID-19, How Will We Be Better?

Upfront And Personal

The key feature of the COVID-19 outbreak is how it engages individuals in global society at a real, personal level. In this pandemic, ordinary people see palpable risk exposure for each of themselves: they know they will die or become gravely ill, unless they behave a certain way. Each individual is empowered to take actions that can forestall their personal sickness and mortality. People can, of course, choose to act otherwise, but retribution-whether it’s legal sanction, debilitating illness, or death from disease-is both swift and likely. With COVID-19 individual mechanisms of cause and effect are made transparent and immediate.

Economic Life — The Tradeoffs

Post COVID-19 societies will realise why it is important to focus on the really big tradeoffs in life, and not sweat the small stuff. In Singapore there has long been a narrative on how simply getting richer should no longer be the goal of that population that is already middle-class. Here is the opportunity to act on that.

The Weightless Economy

Across the world, cities and other urban agglomerations are dense with humanity and value creation. No humanity-constructed economic scaffolding but cities light up the night-time sky when you view our planet from outer space. The greater the concentration, the higher are population and economic densities, and thus the higher is efficiency in producing material wealth. That higher efficiency from concentration makes for inequality across space, regions, geographies. But that higher concentration also makes for speed in transmitting viral infection. Post COVID-19, social and economic systems will learn not to be maximally efficient in producing material wealth through urban concentration, when doing so only makes your society ever more susceptible to epidemic transmission.

Hedging Anchors

Maximal global efficiency in production calls for cross-country specialisation. Post COVID-19 societies need to balance off global efficiency with local resilience. As a proposition in logic alone, not every nation can be the best in the world at producing medication, personal protective equipment, rice and instant noodles, eggs, or toilet rolls. A lesson from COVID-19 is that societies will want to have some production capacity in all these. But nations need not refer to these industries as strategic-suggesting something geopolitically sinister-but instead simply as hedging anchors. Every nation should foster their own hedging anchors: It is OK to tolerate a bit of global inefficiency if doing so raises local resilience. A cross-nation network of semi-independent hedging anchors is no longer a supply chain and is not globally efficient, but will make the entire world more resilient.

The State and Market Shortcomings

Finally, COVID-19 has made clear how economic externalities are more widespread than previously thought. The key implication from this is that public policy needs to look out for and repair market shortcomings. Two cases illustrate this. First, in a world of externalities, you help yourself by helping others, because spillovers are rife. In Singapore many foreign workers live in crowded dormitories because these workers are poor. COVID-19 cases in these clusters have accounted for over 70% of all new cases in the past fourteen days. A national health system is strained the same way from an additional patient-regardless rich patriarch or poor construction worker-taking up a hospital bed and receiving intensive care on a ventilator. Isolating infections in vulnerable concentrated groups would have gone a long way to helping the entire nation in its COVID-19 battle. We help ourselves by helping others, through alleviating crowded unhealthy accommodations and lifting the vulnerable. For COVID-19 those vulnerable can be rich seniors living in crowded nursing homes; vacationers holidaying on a cruise ship; detainees cramped together in prisons; poor families densely huddled in shanty-towns, slums, decrepit public housing, and favelas; or, in Singapore’s case, foreign workers jam-packed in dormitories.

Bottom Line

What will the post COVID-19 world look like? I have focused on just economic life in this article, but even just here there are already clear fault-lines that need repair. I have told a story about a fast car and a sturdy car: you can guide your economy to become the speedy, finely-tuned machine that on a clear road comes in first every time; but if it hits a bump, it’s dead in its tracks. Or, you can ask that your economy be sturdier, able to take unexpected knocks, doesn’t have to top league tables in normal times, but always crosses the finish line.

--

--

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
Danny Quah

Danny Quah

22 Followers

Danny Quah is Dean and Li Ka Shing Professor in Economics at the Lee Kuan Yew School of Public Policy, NUS.