The Consequences of the Pandemic – Part I

21CQ Topic President's Blog

 

Irvin Studin

Started

2 weeks ago

It was the strangest of modern times. Tout court.

Consequence 1 – The Rapid Destitching of Global Order

The COVID-19 pandemic marks the end of the post-Cold War interregnum – a 30-year period that witnessed a general, if uncomfortable, peace among the great powers, huge (if uneven and unequal) growth in global output, the rapid globalization of commodified consumer products and services, the boilerplate standardization and proliferation of regulatory regimes across borders, easy international and intercontinental travel – personal and commercial alike – by all modes, and, of course, the emergence of the internet, e-commerce and social media as dominant forms and platforms for business, politics, information exchange and, to be sure, ideological combat over the look and feel of the post-pandemic world.

This list of the trappings (and even pathologies) of the global order of the last three decades is manifestly incomplete. That is not my project here. But what is clear is that this international order and its consolidation since the end of the USSR in 1991 have been facilitated and lubricated by the growth of international trust across borders, the general (if de minimis) legitimacy of international institutions across the board, and the critical role of American (and Western) power, economics (and liquidity), constructs and example – good or less good – as the leading, if highly imperfect, guarantor of regularity and consistency in the international order of things. Even China’s return to the centre of international action has, as my colleague Bilahari Kausikan has pointed out on several occasions, taken place on the back of a global order underwritten first and foremost by American leadership in the world.

The pandemic puts a harsh end to this dynamic. It does not, in my estimation, exacerbate or consolidate dynamics that preceded it. Nay, it presents a far sharper psychological and objective break in the international order – less like the 2007-08 financial crisis and more like World War One, specifically in respect of the near-instantaneous destitching of the ex ante international architecture, the sudden arrest in international and even intranational movement (temporary borders erected across Europe, and even within and across advanced federations like Canada and Australia), travel and physical contact, and, perhaps most signally, a steep drop in international trust between countries and societies (and, in many cases, within societies). Indeed, one might say that the global public health crisis launched by COVID-19 has spawned a series of similarly critical parallel systemic crises around the world – an economic crisis (commercial, fiscal and supply chains), education crises, institutional crises of multiple descriptions, and national unity crises in numerous countries. Other crises, including possible banking, state-stability in many countries, and strategic-military crises in multiple theatres surely await in the coming months and years.

The intra-pandemic rise in anti-China sentiment, given the Chinese genesis of the COVID-19 pandemic, in North America and many parts of Europe saw a mirror opposite rise in anti-American dismay (or a net drop in trust in American wisdom and example) – including in the West, where America’s clumsy handling of the pandemic has been on hourly display. (The US border with Canada closed for the first time in post-First World War history, and Americans were largely banned from travel to Europe.)

Coming out of the international coronavirus emergency, the world’s three major, “indispensable” powers – the US, China and Russia – will almost certainly fail to cooperate among themselves in restitching the world in any foreseeable future. This is a function of deep mutual distrust and the consolidation of ideological “belief” within the leaderships of each of Washington, China and, to a lesser extent, Moscow.

The near-term consequence of such trilateral discord will be an acceleration and deepening of parasitic regulatory competition between American-led or affiliated commercial and trading spaces and Chinese-led spaces, with Russia, by far the weakest economic player, tilting ever more intensely toward the Chinese spaces and attempting to exert, with growing ferocity, regulatory control over at least twelve of the fifteen post-Soviet states.

On this logic, regulatory control over a specific territory and population becomes the equivalent of military victory and territorial acquisition, occupation or annexation in conventional war. If such behaviour was arguably anticipated by the 2014 “regulatory conflict” or “collision” over Ukraine between the European Union and Russia (and the Eurasian Economic Union), and exacerbated by the subsequent proliferation of sanctions and counter-sanctions that succeeded in creating “sticky” bottlenecks and contradictions across the various regulatory regimes of a largely globalized world, then the regulatory competition that awaits after the COVID emergency will be all the more formidable in “destitching” the various geographies of the world.

Who will regulate – that is, set the economic rules for – the Middle East? Who will regulate major parts of Africa? Will the unified, post-Brexit regulatory space of Europe dissolve or crack under pressure? And the big prize – who will regulate the 600 million-person market of Southeast Asia? The outcome will most likely be a hodge-podge of regulatory regimes, straddling different countries and sectors, making it extremely difficult for countries, companies and people to navigate and negotiate across borders. This is not, in the net, a recipe for great global growth.

As for war – direct or indirect, deliberate or accidental – this is, by some margin, the least probable scenario in the near future, but clearly the one with the most catastrophic aggregate effects for the world entire. It is doubtful that any of the leaders of the US, China or Russia would consciously and frontally target one of their opposite numbers, but this is not to be excluded should there be an existential political threat to any of the leaders. Accidental entanglement in war is far more likely, either in false anticipation of attack from the other side or through miscalculation or incompetent appreciation of the already tangled nature of the extant conflicts and tensions in Eastern Europe, the Middle East and the South China Sea. (Venezuela and the Caribbean Basin are also candidate theatres in this regard.)

Proxy war is more likely than direct war, and direct war could be total war, causing near-total destruction.

 

Consequence 2 – The Asian Century Begins, Even if by Paradoxical Means

Barring another deux ex machina, China, the source country for the COVID-19 virus and pandemic, will emerge from the pandemic period as the strongest country, in economic and strategic terms, in the world (de facto, at least).

The Asian century, a century and a half after the Opium Wars, starts with the return of China to international strategic and economic centrality in the international system and order. This is not a fact subject to moral interpretation, as per Western popular analyses – it is an empirically verifiable fact of international life: China, whatever its domestic pathologies (to which we return later), is the most domestically stable of the major powers, the most analytically and administratively competent of the great powers, has the most developed networks of international diplomatic relationships and levers of influence of the great powers, and enjoys the most liquidity of these same powers (despite obvious fiscal contraction and pivots, post-pandemic). This sits in stark contrast with the US, which emerges from the pandemic period not only significantly weakened in economic terms, but critically, less trusted, respected or feared on all continents, having withdrawn from several key international structures and having eroded several key alliance structures – including in Europe and Asia.

If China is the motor of the Asian century, then its centrality, as with its rise, will have direct strategic and economic consequences for all of Northeast and Southeast Asia (ASEAN), South Asia, West Asia, Oceania, North America (particularly at its western flank, right at the doorstep of the Asian theatre), Europe, Africa and South America. If the strategic competition and complexity of this theatre will take centre stage in global analytics, displacing Europe and the Middle East, then economic dynamism will make the companies, supply chains and microeconomic structures of East Asia, by some margin, the most interesting in the world.

The Chinese and Singaporean systems of government will also have gained currency – in the Chinese case, again, paradoxically – among “voyeur states” in the aftermath of the pandemic, albeit with a significant deflator given that Wuhan was at the heart of the pandemic and Chinese management of the pandemic, while superior to that of many leading Western countries, was far from perfect, and far from best-in-Asia. As I note below, the algorithmic model, based on plans and a technocratic elite, today looks far more favourable to uncommitted states in Asia, Eastern Europe, the Middle East and Africa than Western argumentative models of governance in the context of national emergencies like the pandemic.

Having said this, as I explain below, both the argumentative and algorithmic models have, post-pandemic, transformed into degenerate idioms of their pre-pandemic forms, and so there will have to be a measure of improvisation among voyeur governments in respect of what they privilege, reject or otherwise re-engineer as between these two dominant forms of early 21st century governance. Bref, post-COVID governance models in much of the world have yet to be divined.

 

Consequence 3 – The Consolidation of the Big Three Powers as Veto Holders

If the three great powers of the early 21st century – China, the US and Russia – will fail, in the early going, to cooperate on major post-pandemic moves, they will each still maintain a strong veto on the ability of each or both of the other two to make major restabilizing or renovational moves in the international system. (These three countries are not only the most powerful strategic, military and, in two of the three cases, economic players of our time; they are also countries whose leaderships think and operate in “rule-setting” ways.) In other words, China cannot make comprehensive international systemic moves to resuscitate the international economy and international governance if the US counters such moves, and vice versa – just as Russia cannot, say, move to build a security framework in the Middle East, even if China is sympathetic, without active American support. The same applies, for instance, in the Arctic space or in respect of restabilization of the Eastern European space – destabilized since 2014.

If such veto power arguably acquires even more formidable force in the post-COVID order than it did prior to it, it is also true that each of the great powers – and especially Russia and the US – faces serious post-pandemic destabilization risks on the home front. (As I have explained in past interventions, I calculate that the modern state last about 60 years, after which it collapses or transforms unrecognizably due to constitutional and/or strategic shock.)

Russia is the leading candidate for such destabilization, not only because of the absence of clear and legitimate succession arrangements within Russia (despite the recent national vote to allow President Putin to run again in a succession of presidential elections), but also because of the collapse in oil prices and revenues and the ever-growing pressure on Russia’s fiscal resources to spur an already anemic national economy across a large population and vast territory, as well as the generally poor performance of Russia’s obviously weak national and regional institutions in reckoning with the coronavirus emergency.

Any deep destabilization of Russia would obviously reverberate well into Europe, the Mideast, all of Asia, and into the Arctic space.

The United States is the second leading candidate for domestic destabilization, leading into and coming out of the November presidential election. Could the US collapse within the next year or two? I do not know, in truth. Ever-rising political radicalization between the two major political tribes and between and within blue and red states could easily see a rise in political violence, militia activism and delegitimation of central authority and government. Weak public institutions – well exposed over the course of the COVID-19 pandemic – coupled with ramped up ideological extremism would easily spill over, with radicalizing consequences, into neighbouring theatres like Canada, Mexico and the Caribbean Basin.

A path to Chinese domestic destabilization is far less predictable, but the pressure on Beijing from domestic destabilization in major neighbouring states like North Korea would be formidable.

If the US today has, by far, the most capricious leadership, China’s is the least transparent and Russia’s the most unstable. On the other hand, the US still enjoys the world’s most formidable economic resources, large companies and innovative class (including in respect of the science to solve the coronavirus problem), while China has the most coherent and cohesive machinery of state power (domestically and internationally) and Russia the most crafty, with the most eclectic mental map and significant ramp-up or “mobilization” capacity.

Ideologically, the anti-Chinese posture of the US, already strong since the advent of President Trump, has only intensified as the corona emergency has evolved. American calls for a “reckoning” with – or aggressive “decoupling” from – China will only grow once the dust settles. (Witness Japan’s latest push to reshore its companies away from China.) In China, distrust of the Trump administration is at an all-time high and the sense of national survival and resilience triggered by the national effort to fight the pandemic will have become ever acute. Russia’s pivot toward China will have been solidified by this emergency, but it remains a partial one, as the Russian psyche is endurably European in orientation and the bilateral relationship with Beijing is plagued in the medium run by a fundamental asymmetry in capabilities – typically in Moscow’s disfavour.

Still, stranger things have happened than that Trump (or a Democratic successor), Xi and Putin (or a near-term successor) should sit around a table in, say, Singapore, Australia or Canada to solve some pressing post-COVID problems in tactical terms or, better still, to invest in a strategic “rebuild,” “refurbishing” or “restitching” of international institutions and the international order.

FDR, Stalin and Churchill distrusted each other greatly – to say nothing of their respective teams, bureaucracies and societies. So too did Nixon and Mao. Or, more recently, Trump and Kim Jong-un.

What would they discuss? Answer: First and foremost, a revitalization or recreation of international health and emergency management institutions – to ensure that the next international pandemic (even if it is imminent) has maximum transparency of information, sufficient resourcing in microbiological talent, pharmaceuticals, medical and logistical assets. Concurrently, they must draft the architecture of a world-historical international economic package – including massive joint projects and ventures, public and private alike – to restart broken economies around the world. To which we now turn…

 

Consequence 4 – The Inadequacy of Global Institutions

No complex of present-day international institutions can, in all probability, have made the management of the current pandemic considerably better. This was a historical international crisis that followed the path of many past historical crises, including pandemics – except that this one was properly global but with far fewer deaths than most major wars and most pandemics or epidemics over the last two centuries. Perhaps the WHO could have been stronger (and may one day, with US reintegration, so become), but the deep entanglement of countries around the world over the course of the post-Cold War order means that the same positive spillovers that came from the economic rise of China or the post-Soviet democratic bump or the creation of an information commons online has finally found its negative analogue in the rapid, globalized spillover of coronavirus infections starting from China.

To the extent that globalization returns to its erstwhile intensity, and this time with China and Asia more generally at its core rather than at its periphery, there will certainly need to be new institutions in place to manage international pandemics and public health, along with the information space and information-sharing (professionally and for the public at large). But there will equally need to be new institutions to restitch the global order, doubtless on revised terms, in the context of the deep crisis in international trust and confidence among the leading powers, vis-à-vis global institutions more broadly, and in the context of rapidly changing power relationships.

If core institutions like the UN will, as I have argued in past blogs and GB articles, continue to be de minimis in nature – that is, while they will not and are not, by design, meant to guarantee optimal outcomes (e.g. full peace or amity) in all parts of the world, they are, as with the UN Security Council, essential in promoting worst-case scenarios or global cataclysms like great-power wars, nuclear wars, and so on – they will surely need to cover 21st century topics for 21st century realities.

Brand new institutions need to be created in cyberspace (free speech versus reasonable national control over internet infrastructure), refugee management, space, energy and renewables, as well as “interstitial” theatres like the Arctic and the peripheries connecting the former Soviet space to Europe and Asia. The Middle East lacks a core regional security framework (see 21CQ’s world-leading work on this front), and so too does East Asia. Multiple failed or highly weakened states in Eastern Europe (Ukraine and Belarus), Central Asia (Kyrgyzstan), South Asia, Southeast Asia (Indonesia and Philippines), Africa, Latin America and the Caribbean will desperately need economic and administrative help to restabilize – and to avoid destabilization of larger states and systems.

We at 21CQ have proposed that the first major international institution be a new Arctic League. This new Arctic League should connect, in peaceable economic and regulatory intercourse, Canada, the US, Russia, several Northern European states (if not the entire EU) and, from Northeast Asia, China, Japan and the two Koreas. Major trading nations like Indonesia, Vietnam, Singapore and India will also surely need to be incorporated into the framework before long.

We have proposed that the Arctic League be headquartered in the north of Canada – I suggest Whitehorse (Yukon) or Yellowknife (Northwest Territories). Indeed, I would submit that Canada, as one of the Arctic giants, could lead the brokering of this new institution, working from a founding document we might eventually call the Whitehorse Treaty.

The new Arctic League would provide an organizing framework and thick “rules of the game” for peaceful international commerce, transport, travel, science, culture, people-to-people, energy and environmental relations across the vast Arctic theatre that is opening up rapidly because of climate change and the melting of permafrost and sea-ice. Once it opens up, this Arctic space – via land, sea, air and space – suddenly becomes an intense thoroughfare for at least three continents (North America, Europe and Asia) and leading (nuclear) countries representing almost three billion people.

At present, the mechanisms to bind these continents, major states and significant populations in sustained, productive, peaceful coexistence across the Arctic do not exist – the light-touch Arctic Council notwithstanding. A new Arctic League, negotiated and launched with speed and purpose shortly after the coronavirus emergency, would serve the dual purpose of bringing Washington, Beijing and Moscow under a common regulatory umbrella while bringing a governance regime to a new “interstitial” geopolitical space that finds itself at the crossroads and mercy of several competing (often contradictory) international structures – NAFTA 2.0 (USMCA), the European Union, the Eurasian Economic Union (much of the former Soviet space), and Asia’s various economic structures.

Instead of the US and China escalating in information warfare, economic recriminations and a mutually targeted military buildup after the COVID emergency, the Arctic League would create a new plane, logic and imagination for bilateral and multilateral coexistence. Let us imagine joint Chinese-American-Russian infrastructure, scientific and environmental projects on the Arctic Archipelago, a proliferation of new transpolar air routes connecting major Canadian northern cities like Inuvik, Iqaluit and Churchill with northern Russian cities like Murmansk, Yakutsk and Norilsk, and regular travel and trade by sea between the ports of northern Europe and Asia via both the South Sea Route and the Northwest Passage.

Embed the great powers in a “sticky,” predictable regulatory structure whence they will not generally wish to escape – that is the genius of today’s European Union (and ASEAN, to a lesser extent) as a peace project masquerading as a colossal economic project. Turn the manifest imminent battlefield of the Arctic – the biggest new battlefield in the world, by sheer territory – into a theatre of geopolitical amity masquerading as a post-COVID association for trade, tourism, scientific and pedagogical exchange, and we might save the world entire.

To be sure, such international architecture would require heroic leadership from several capitals, including Ottawa, and strategic and political forbearance from Beijing, Moscow and Washington. But the Arctic for now presents a reasonably unthreatening and even “friendly” image to most of the world – even if out of a basic naïveté concerning the huge stakes at play. The obverse, of course, is a world in which the great powers pivot kinetically out of the coronavirus emergency, having lost complete confidence in each other and general confidence in international law and institutions, with precious few touchpoints among them, and with war preparations in the air.

The Arctic, as one of the world’s great still-ungoverned theatres, will be a prime candidate for such war preparations – regardless of its present-day peaceable integument. Or it may be the locus of one of the great peace projects of this early new century. To be determined.

Beyond just the new Arctic League, let the revised post-pandemic order and complex of international institutions, rules and norms still be called the “liberal international order” – or, better still, “liberal international order – take two.” For the international order and logic that preceded the pandemic, for all its imperfections, inequalities and pathologies, was, as intimated at the start of this blog, still the most peaceable, productive and organized order in human history, having connected humanity’s billions of people through communications, transport, trade and learning, and having drawn billions – starting in Asia – into the good life. The stabilizing achievements of the United Nations, European Union and ASEAN in this respect cannot be understated, and must be consolidated and amplified in a revised global order.

Increasingly interlocking conflicts in Northeast Asia, the former Soviet space and the Middle East could still tear the world further asunder. The three great powers would be wise to settle one or more of these conflicts en route to bigger achievements in the post-COVID world.

Finally, let this revised order profit from more Asian and African input – that would be all for the good. But let it also be more humble, recognizing the limits of human choreography, construction and genius, the dangers of very human mistakes, and the fragility of the civilized condition.

 

Consequence 5 – The Unravelling of 20th Century Ideologies

The pandemic marks the end of the end of history. At least in their post-Cold War idioms, ideologies like democracy and capitalism, along with sub-ideologies like ‘small government’ and the presumption of ‘free speech’ as untouchable by principle online, lose much of their connection to practical and practicable reality. In most countries, state intervention to combat the pandemic and economic crises has been massive, and deference to state leadership has been largely uncontroversial. Governments have, in the context of country-wide quarantines and lockdowns, become the chief providers of liquidity for many businesses and many citizens. They have typically done so in emergency mode and under expansive emergency powers, formal or implied, with parliaments and legislatures either falling into line or playing suppressed roles.

Not only did the democratic framework, in operational or executive terms, not prove convincingly effective, in many cases (and especially in leading Western democracies like the US, UK, Italy and Spain) in dealing with the pandemic, but the critical “atout” or differential advantage of democratic (or argumentative) systems over non-democratic systems – that is, the feedback mechanisms to power – chiefly from opposition parties, but also from media institutions and the public – has proven largely moot or otherwise impotent in shaping national pandemic responses in emergency conditions, or correcting major mistakes of pandemic strategy, policy and administration. If the feedback to power in the democratic structure fails under pressure, then the legitimacy of the structure, while compromised, may still endure, but the content of the power exercised, especially in the absence of professional planners or technocrats that are proper to the algorithmic model, is blind or simply dumb – bref, legitimate government, but terrible results.

Putative feedback mechanisms like Twitter and other social media platforms, too, have not, in terms of accuracy, urgency and scale, provided adequate correctives to the use of emergency power, other than to confuse, excite, distract or even scare. (I elaborate on the pandemic and “epidemiological” consequences of Twitter in my next blog – to wit, on its deleterious effects on national political debates and, more surgically, on the capacity of political and decision-making classes to “think.”)

If the democratic model has, in the extreme case of the pandemic, in many cases proven degenerate, the algorithmic model of government in countries like China and, on a far smaller scale, Singapore, has also betrayed degenerate tendencies, with the professional planning machinery, already largely devoid of reliable feedback mechanisms or electoral legitimizers, but otherwise with the help of AI tools to facilitate contact tracing and other information collection, assuming a quasi-totalitarian character.

Indeed, the pandemic has produced, contra Isaiah Berlin’s famous “two concepts of liberty,” two concepts of totalitarianism. In the argumentative space, it has produced episodes of totalitarianism by stupor, while in the algorithmic space, it has produced totalitarianism by AI. Both totalitarian forms are, by definition, apolitical – that is, there is no politics involved.

Economic ideology – supply-side, neoliberal, conservative, etc. – relating to the inherent need for a small state, non-intervention, not picking winners, balanced budgets, etc. – the so-called “Washington Consensus” of the post-Cold War period – also now ends. How can it be otherwise in the context of national and international economic depression, huge state intervention in supporting critical businesses and citizen welfare and basic liquidity, and intensified economic warfare between the major powers and the key economic blocs? What comes next is far from clear, but the state will be a conspicuous motor for any foreseeable future, as with central banks and, I suspect, a host of 21st century hybrid corporations – even in leading democracies – that combine state interests, scale and backing with predominantly market behaviour and private-sector leadership.

A new entrepreneurial class and vocabulary will arise from this transition, in the West as in the East, in the North as in the South, selling many of the traditional goods and some new services under significantly revised rules and terms, and necessarily navigating, often promiscuously, not only market forces and economic regulation, but huge inconsistencies and nuances – formal and informal alike – across borders, trading spaces and geopolitical gravities.

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