Covid-19 and the return of the nation state

When you are in the middle of a crisis it is difficult to lift your eyes to the horizon and contemplate how things will look once it has passed. But there are three elements to consider: the expansion of government; the re-assertion of the nation state; and the long-term social implications.

We are currently witnessing the largest growth of government power since the Second World War. In the space of a few weeks the government has had to manage a public health emergency and the concomitant impact on the livelihoods of millions of people. The scale of state support for workers and the businesses affected is unprecedented.

This level of state intervention is unlikely to sit well with the free-market DNA of the ruling Conservative Party. Back in the halcyon days of December, following his thumping majority, Boris Johnson himself lauded the virtues of splashing cash to fund major infrastructure investment in the north. But with debt predicted to rise to at least 100 per cent of GDP, already reflected in the downgrade of the U.K.’s sovereign credit rating by one notch to AA-, the costs will be painful.

How this will be paid for is a question that will eventually have to be faced, but it has not stopped those who opposed the austerity measures following the financial crisis in 2007, from taking this as vindication that they were right all along.

What is clear is that this pandemic will ignite a debate about the optimal size of the state that has not seriously been had since the election of Margaret Thatcher in 1979 and her programme of rolling it back, despite Jeremy Corbyn’s efforts to do so during his tenure as Labour leader.

The gargantuan challenge confronting the country is to get the state to mobilise resources quickly in an emergency. The transformation of the NHS in little over a week has been astounding, with major incident plans invoked involving the cancellation of elective surgery and the freeing up of 30,000 beds for Covid-19 patients. The commandeering of an exhibition centre in London, which has been turned into a makeshift hospital in nine days with others being rolled out in other cities, including Birmingham and Manchester, is a case in point. The appeal made to business for ventilators, which has led companies such as McLaren and Dyson to alter their production lines in response, could only have come from the government.

This growth in government power has in turn seen the nation state make a comeback as the primary actor in international relations. Talk of multilateralism and cooperation between countries has been conspicuous by its absence. EU member states were publicly reprimanded last month by the President of the European Commission, Ursula von der Leyen, for their selfishness in refusing to “share their umbrella”.

The resignation of Mauro Ferrari, president of the European Research Council, citing the failure to establish a large-scale programme to combat the virus, underlines the lack of a co-ordinated response. Some progress has been made with the announcement on Friday of a €500bn package of economic measures to support businesses and workers, but the dispute over how to fund economic reconstruction post-crisis continues.

A pandemic tends to turn attention inwards to what is needed at home. If there are insufficient supplies of protective equipment for front-line medical teams and the government is having to inject billions to support people who cannot work, the capacity to attend to the suffering of those in other countries is limited.

The globalisers argue that the race for a vaccine requires more co-operation between states to pool resources and convene the brightest scientific minds to accelerate its discovery. That may be so, but it would be inconceivable to imagine that when the crisis has passed, the public would continue to accept over-reliance on international supply chains. The ability of countries to produce medicines and food domestically, if they need to, will be expected.

There are also likely to be longer-term social implications. As well as the potential impact on civil liberties to mitigate the risk of a second wave of the virus through the tracking of the movements and interactions of citizens, it may also prompt a reappraisal on the part of society as to what is considered valuable.

The lockdown has laid bare the essentials a country needs to operate including hospital staff, supermarket shelf-stackers, delivery drivers and rubbish collectors. Management consultants or globetrotting advertising executives are not much use if you are in hospital gasping for breath or cannot buy bread.

Whether support for key workers moves beyond a weekly clap, to calls for an increase in the salaries that they earn remains to be seen. But there will be zero tolerance for companies that fail to pay their fair share of tax accompanied by calls for the wealthy to contribute more.

The crisis has paused business as usual. The question now is when the play button is pressed again, whether the track resumes from where it was stopped or if the tune has changed completely.