Monday, May 11, 2020

After Pandemic, Radical Changes Less Likely in Near Term than Most Now Assume, Inozemtsev Says

Paul Goble

            Staunton, May 9 – Both because the response to the pandemic has adumbrated what a very different world could be created and because past pandemics have in fact radically changed the world, many commentators today are suggesting that with the end of the coronavirus threat, the world will change quickly and radically.

            But while it may ultimately lead to radical shifts, Russian economist Vladislav Inozemtsev says, there are compelling reasons to believe that in the short term, powerful interests will work to ensure that the old world is restored rather than an entirely new one created in its place (

            Indeed, one can say, he concludes, that the pandemic has changed the world “more mentally than materially,” more in terms of how people see the situation around them and its possibilities than in terms of how those circumstances can be transformed immediately. And that is likely to become a focus of politics in the coming months and years.

            Inozemtsev points to five ways in which the world after the pandemic is likely to remain “hostage to the excesses” which characterized it before the coronavirus arrived.  First, the world is and will remain dependent on natural resources. Those dependent on exports of these like Russia may see prices fall but they won’t see demand disappear.

            Second, the pandemic has shown to many that they can get along without many of the products that in fact are unnecessary; but dispensing with these creates a problem few want to face: “hundreds of millions of people throughout the world … will remain without work” if others make that choice. There will be powerful efforts to prevent that from happening.

            Third, the service economies of Europe and the United States have infrastructure that they won’t want to see idle – hotels, restaurants, and transport just to name three. Some may want to do video conferencing but many will want to go back to the way in which they did business before, travelling and meeting face to face.

            Fourth, there is an important aspect of the service economy that will also work in that direction, Inozemtsev says. Only about 10 percent are traded internationally while 90 percent are produced and consumed locally within nation states.  Governments won’t want this sector to simply disappear.  That would lead to disaster: they won’t even send migrants home.

            And fifth, “one must understand that the extraordinary consumption [of the recent past] has an important demographic aspect” that isn’t going to change overnight and thus will act as a constraint on radical changes in the immediate future. 

            “The contemporary economy is oriented toward the possibility of living alone: families have become less stable, people more mobile, children less numerous, and attention to them in developed countries has grown,” the economist points out.  Reversing any of that will take decades if it can be done at all, and hence the economy won’t change that much.

“The epidemic came to a world which imagined itself not simply as a comfortable place for life but also as a sufficiently highly organized system,” he says.  It could be liquidated and a new world built but only if people were prepared to destroy far more of its infrastructure and integuments than they are.

“Therefore,” Inozemtsev says, “the world of the beginning of the 2020s will be little different from that of the end of the 2010s.” Of course, “that doesn’t mean that people will not draw lessons from the crisis,” something that reflects the fact that “the world is changing but more mentally than materially.”

According to Inozemtsev, “the pandemic has shown us many aspects of that world which could be put in place in the distant future.”  But the desire to go back to normalcy and thus the past will continue and will be supported by the structures and interests that earlier world has on its side and will use to block radical change in the near future.

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