Active Stocks
Fri Sep 29 2023 15:59:14
  1. Tata Steel share price
  2. 129 1.78%
  1. NTPC share price
  2. 245.65 3.3%
  1. Power Grid Corporation Of India share price
  2. 199.85 -0.45%
  1. State Bank Of India share price
  2. 598.7 1.48%
  1. Wipro share price
  2. 406.25 0.11%
Business News/ Opinion / Columns/  Opinion | The coronavirus outbreak is a crisis of globalization

Opinion | The coronavirus outbreak is a crisis of globalization

If normalcy does not return, the global political economy could fall victim to malign forces

Photo: ReutersPremium
Photo: Reuters

Our current era of globalization has survived the horrors of 9/11, the great global financial crisis, and, so far, an attack on its institutions from nativist, unilateralist and populist leaders the world over. But can it survive the onslaught of a global disease?

The recent outbreak of novel coronavirus, Covid-19, has led to draconian measures by the world’s major governments—measures that were believed to be unthinkable except in times of war. Thus, for example, not only has India suspended visas, it has barred the entry of everyone, including Indians, from designated countries. Likewise, Canada has barred the return to Canada of anyone, including Canadians, who show symptoms of the disease.

The right of a citizen to enter his or her country had been thought sacrosanct. Yet major governments have now abrogated it, ostensibly in the interest of public safety. More broadly, the worldwide trend now is of governments at the helm once again suspending civil liberties and curtailing market forces, and operating by decree if necessary. Covid-19 is the perfect opportunity for authoritarians, and would-be authoritarians, to ratchet up surveillance on their citizens and simultaneously tighten their grip on power.

But is the Covid-19 crisis a result of globalization, or rather a global crisis occurring in the era of globalization? This is not a matter of splitting hairs. In a carefully argued column in Financial Times on 11 March, titled Coronavirus Is A Global Crisis, Not A Crisis Of Globalisation, columnist Robert Armstrong is at pains to point out that the fracturing of global supply chains had begun well before the crisis. Further, he argues, globalization makes the world safer, not more dangerous, as nations are ever more closely bound together and thus have a mutual self-interest in keeping the system afloat.

Does this mode of argument not have a familiar ring?

In 1909, British writer and politician, Norman Angell, argued that international interconnectedness through the movement of people, goods, capital and ideas made war between nations impossible—every nation would realize the folly of war, as it would make everyone infinitely worse off, and so no nation would take the risk of going to war. Just five years later, after the assassination of an Austrian prince by a Serbian terrorist triggered a chain of apparently unstoppable events, World War I broke out. As though in an ironic and belated tribute to Angell’s optimistic but flawed vision, he was awarded the Nobel Peace Prize in 1933, the same year that Adolf Hitler and the National Socialists came to power in Germany.

It is foolish to promulgate a cyclical theory of history, but it is at least noteworthy that the first era of globalization, which was blown up by World War I, bears considerable resemblances to our present age. Some feared that 9/11, and later the global financial crisis, would topple our current global order. More recently, the rise of nationalist politicians across the advanced and emerging world re-awakened the fear that global institutions would be torn asunder in the pursuit of myopic national self-interest. Yet, even under the most extreme provocations, the institutions held out even if they buckled a little.

The onslaught of global disease, and the spectre of global illness and death on a mass scale, has managed to do what US President Donald Trump could not—induce other world leaders to raise the proverbial drawbridge, just as he has been attempting to do in his country. Thus, during his televised remarks to the nation on 16 March, Canadian Prime Minister Justin Trudeau urged Canadians not to travel abroad, and, to those still abroad, his advice was, “It’s time to come home". In also barring visitors from entering Canada, the message was not intended to be nativist, but the import was clear. The world at present, Trudeau seemed to say, is not safe for the sort of benign and cosmopolitan globalism exemplified by all those Canadians travelling in far flung corners of the world with maple leaf pins on their backpacks.

At some point, the current crisis will pass. The question to which no one, your columnist included, has a credible answer is: Will things go back to normal? Instead, will the world change forever, as it did in 1914? Or, will we settle into an uneasy “new normal", as we did for some time after 9/11? As a matter of economics, a world in which everything from restaurants to theatres and malls to offices are in lockdown, and in which everyone except frontline workers stay at home, is unsustainable. Some privileged white-collar workers may be able to continue working from home indefinitely, but, eventually, everyone else, from factory workers to teachers and technicians, will have to return to on-site jobs. For instance, restaurants will need to reopen dine-in service, and theatres as well as concert halls will need to sell tickets, rather than stream live performances free from empty halls, if they are to remain economically viable.

Failing a return to normalcy, we may see further pauperization of an impoverished working class, whose lives have already been remade through technology and the gig economy. The resulting social tensions, coupled with a resurgent will to use the power of the state, will lead to turmoil at home and a further closing of borders. This is a nightmare scenario that the world must avoid. Else, Covid-19 may yet fell its greatest victim: the global political economy itself.

Vivek Dehejia is a Mint Columnist

"Exciting news! Mint is now on WhatsApp Channels 🚀 Subscribe today by clicking the link and stay updated with the latest financial insights!" Click here!

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Updated: 22 Mar 2020, 10:13 PM IST
Next Story
Recommended For You
Switch to the Mint app for fast and personalized news - Get App