The rich could have saved the world. Instead, they hesitated
Shutdown: How Covid rocked the global economy
Alle Lane, $ 35
To close is best grasped from behind. The index lists 111 countries and regions, from Australia (nine mentions) to Zambia (two). Economist John Maynard Keynes (seven) rubs shoulders with Saddam Hussein (two) and philosopher Thomas Hobbes (one). Even Elon Musk notes a mention. Central banks are listed 62 times, 17 more than President Donald Trump. At a time when most Australians only venture to the supermarket, Adam Tooze’s COVID-19, Shutdown: How Covid Shaken the Global Economy, is a welcome, albeit dizzying, dose of perspective.
Tooze is an economic historian by trade. His previous book, Crushed, presented the financial crisis of 2007/08 as a global saga stretching from the 1970s to Donald Trump. To close is an equally ambitious adventure across borders and through history.
It traces the Wuhan pandemic – “the size of a large European country” – to the world. These first days are painful to relive. South Korea had approved two tests on February 14, eight days before Lombardy was first locked out. At the time, President Trump boasted “that we will soon be down to just five people.” Boris Johnson cautioned against overreacting. The Tanzanian president simply promised divine assistance.
Tooze confronts us with the inequalities uncovered by COVID-19. While many Westerners have migrated their working lives to the convenience of Zoom, for the less well off it was a radically different story. Two-thirds of young children worldwide did not have access to an Internet connection. In the United States, only 11% of those earning less than $ 25,000 ($ 35,000) can work from home, while for 75% of those earning more than $ 200,000, working from home has become the norm then a right.
In May, the governor of New York, Andrew Cuomo, would declare that “a human life is priceless”. In October, the IMF estimated that vaccinating the world would add $ 9 trillion to global GDP. Bitcoin-like returns given the $ 25 billion price tag. But when the begging bowl went around the West accumulated a few billion and accumulated vaccines.
The austerity contrasts with the deluge of spending unleashed in response to the pandemic. Tooze is on familiar ground to demystify how trillions of dollars have been pumped into the economy by central banks and governments. Alphabet Soup programs used by the US central bank to save the financial system — TALF, PMCCF, SMCCF, MMLF, CPFF — are translated into English. The now ubiquitous term “supply shock” is explained with the example of the “crowded economy class cabin” we all remember.
To close shines most when Tooze inserts the pandemic into a longer crisis genealogy. The neoliberal order was shaken by the financial crisis, but it was COVID-19 that “completed the dissolution of the framing assumptions of the time” – most dramatically, its budgetary logic.