Lionel Barber

How will the world be changed by the war against coronavirus?

Conventional wisdoms have been shattered

The world as we have known it for the past 40 years has come to a stop. We have a supply chain crisis, a demand crisis, a labour market crisis and an oil price crisis. The second crash that people were long predicting has arrived — but against the backdrop of the Covid-19 threat, it seems like a second-order story. The pound has already hit its lowest rate for decades, and more shocks may occur in the bond and currency markets. How long the disaster will last — or how much worse it will get — is anyone’s guess.

Thanks to the virus, events which earlier this year would have been scarcely conceivable have come to pass. A Conservative chancellor calmly pledged hundreds of billions of pounds to support working people — sums on a scale that would make even John McDonnell gulp. California is in lockdown, as is the Indian subcontinent. France, Italy and Spain are imposing the kind of confinement rules one might have expected during a medieval plague.

We are in the middle of a pandemic but not on a war footing — at least not yet. With time on our hands, whether in self-isolation or queuing outside Tesco, we might care to consider the question: how is our history being made? Will March 2020 be remembered like the Great Crash of 1929 or the end of the second world war in 1945, events which catalysed radical changes in the way economies and societies were organised across the world?

The Great Depression led to Roosevelt’s New Deal and the age of Big Government in America — a precondition, incidentally, for victory in the second world war. That war led to Clement Attlee’s modern welfare state, embodied by the National Health Service as Labour also nationalised huge sections of the economy.

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