by Andreas Nölke
5th May 2022

After two years of the pandemic, we are able to take stock of its effects. It has changed our lives as no crisis before. Even as the health hazard slowly becomes less prominent, we still need to address the long-term economic, political and social challenges caused by the crisis.

These days, the Russian war against Ukraine is dominating headlines. Still, we should not forget that another event has been challenging our societies far more comprehensively. True, there may have been deeper economic crises (think 2007/2008) and more far-reaching political events (the 1989 fall of the Berlin Wall, for example), but no crisis has affected our modern society as thoroughly as the coronavirus pandemic. It has not only left traces in our economy and politics, but also in various other aspects of our social order. Even more importantly, the crisis has opened spaces for political reform that were absent before.

Fundamental crises always lead to a situation where major changes are feasible, in contrast to periods of great economic, political and social calm. Think of the expansion of the welfare state after the major crises of the 1930s/1940s, or the rise of neoliberalism after the turbulence of the 1970s. Change, however, will only come about if citizens are aware of the alternatives at hand. Otherwise, policy makers may be able to resort to technocratic and conservative politics as usual.

Let us look at some of the challenges that lie ahead. In society, the crisis has demonstrated many shortcomings in our health systems. Should we continue to rely on the private sector for significant contribution or is it time to rebuild public health provision? In the welfare system, furlough schemes have increased the attractiveness of ideas such as a universal basic income. Is this the way to go, or should we continue to build on active labour market policies? During the pandemic, the vital importance of reproductive labour – overwhelmingly performed by women – has become more obvious. Nevertheless, will this appreciation become durable? Moreover, what are the options for a more equitable distribution of reproductive and care work across gender lines?

In terms of the domestic economy, central banks have once again prevented deep recession and high unemployment. However, can we tolerate that these overly powerful institutions continue to be run as independent technocracies or do we need to bring them back under democratic political control? Furthermore, the pandemic has led to the massive increase of state activity in the economy. Should the state retain this capacity after the end of the crisis – for example with a focus on industrial policy – or should it return to its previous, more limited role? The coronavirus crisis has also intensified the ‘arms race’ towards economic concentration. Competition policy has relegated to the background concerns about economic concentration, collusion between companies for market manipulation and unfair state aid to selected companies during this period. Should we now return to policies supporting small companies and consumers, or do we need to cultivate ‘national champions’ in order to face global developments?

In the international economy, the coronavirus crisis has demonstrated the vulnerability of global value chains in a very convincing way. In response, companies and governments are seeking ways to reduce this vulnerability in the future. Should we reshore production or rather diversify global production networks? In terms of foreign direct investments, many governments introduced screening policies during the crisis, with a special focus on acquisitions by Chinese companies. Should we retain these policies or move back to a world where foreign investments are unconditionally welcome? The pandemic has also reminded us that the pharmaceutical industry works on a system of strong protection of intellectual property rights. Still, it has relied on massive subsidies by governments in order to fight the pandemic effectively. Should we continue to operate in this way or should we rather run vaccine production for communicable diseases as a global public good?

In the realms of politics, we are witnessing a continuing competition between democratic and authoritarian ideas. Does the pandemic strengthen a tendency towards authoritarianism or does it provide a way of rejuvenating democracy, for example via a politicisation of societal debates? How does the pandemic affect the longstanding tug-of-war between communitarian and cosmopolitan ways of organising our political systems – does it strengthen the nation state or rather the institutions of global governance?

This is only a small selection of the political challenges and alternatives that lie ahead. Two years after the outbreak of the pandemic, we are able to formulate an initial assessment of its implications based on empirical research in various fields of society, economics and politics. Now is an opportunity for citizens to familiarise themselves with the diverse political avenues the crisis has opened. Otherwise, we will waste an important window of opportunity for wide-ranging social reform.

Andreas Nölke is Professor of Political Science at Goethe University and Senior Researcher at the Leibniz Institute for Financial Research SAFE. He has published widely in the fields of Comparative and International Political Economy.


Post-Corona Capitalism cover.

Post-Corona Capitalism: The Alternatives Ahead by Andreas Nölke is available on the Bristol University Press website. Order here for £24.99.

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