Coronavirus: The state is strong where it should be weak, and weak where it should be strong
After politicians in countries all around the world – including political leaders in the United States and Europe – initially ignored and massively underestimated the dangers associated with the coronavirus, it is now clear that huge numbers of people will sooner or later become infected.
Even with decisive action, hundreds of thousands will die worldwide. The economic impact will be massive, despite gigantic government programs and politicians in many countries having created the illusion that the state will be able to minimize the economic consequences for most people.
The Fantasy Of The Omnipotent Welfare State
In mid-March, Germany’s Federal Minister for Economic Affairs, Peter Altmaier, went as far as to declare that the government would ensure no worker would lose their job and no healthy company would go bankrupt as a result of the corona crisis.
It is an absurd promise to make – based on the fantasy of the omnipotent welfare state. Altmeier’s words serve as a clear warning to Americans: a welfare state along the lines Bernie Sanders and other left-wing Democrats are striving to establish creates expectations and illusions that can only ever lead to disappointment and, ultimately, anger and civil unrest.
It used to be no more than common sense to store adequate provisions for times of crisis and natural disasters. Stories of shortages and famines triggered by crop failures, natural disasters or even wars, were passed from one generation to the next. Although people had much less money than today, they soberly anticipated future droughts. They perceived the course of history more as a series of ups and downs than as a perpetuation of the status quo. The idea of an end to history, in which the essential struggles have been fought and won, and the greatest threats have been averted, was completely alien to earlier generations.
People Have Forgotten To Provide For Times Of Need
The European welfare state, a model also for many Democratic politicians, has created the illusion that people no longer need to take responsibility for themselves, no longer need to store provisions for times of hardship and no longer need to provide for their own retirement.
Politicians repeatedly promise: “Don’t worry, the state will fix it.” And their promises have convinced large swathes of the population. Whether poor, rich or middle class, everyone has come to expect the state to solve problems and fix every situation. At the latest since the global financial crisis of 2008, stock market investors have known that if push really comes to shove, central banks will take aggressive action, including cutting interest rates to zero and launching unlimited bond purchase programs, to prevent stock prices from collapsing.
Central banks are coming out with all guns blazing, but the impact of their barrage of interventions is getting smaller and smaller. It’s like a drug addict chasing an ever-bigger fix. Banks expect to be “bailed out” by the state anyway, and even the smallest bank is now considered “systemically important.” Large corporations also assume that the state will step up to rescue them; and small companies and the self-employed understandably join in, shouting to the heavens, “What about me?”
And if someone has the nerve to ask whether a self-employed person might not have acted irresponsibly by not building up two or three months’ worth of reserves during better times, they are treated as if they had just told a loud joke at a funeral.
But we are all much better off today than we were 50 or even 100 years ago. The only difference is that back then, people still had a sense of personal responsibility. When life got tough nobody called for the state’s help first, they turned to their families, helped each other and drew on their moderate savings.
However, for years now the state has made saving difficult by taking too much out of citizens’ pockets through taxes and because interest rates have effectively been abolished by central banks’ zero interest rate policies. As a result, people have become increasingly dependent on the state.
Bill Gates Warned That A Pandemic Was Coming
Like a glaring spotlight, the corona crisis is illuminating everything that has gone wrong in our society: the state is weak where it should be strong and strong where it should be weak. The state’s fundamental tasks include health care and functional crisis mitigation programs – for example, in the event of a pandemic. And anyone who claims that there were no warnings is living in a fairy tale world.
Bill Gates issued a stark warning of a corona pandemic five years ago, but politicians failed to take any notice. With the gift of hindsight, Bill Gates’ 2015 TED talk is striking for its downright frightening predictive power: “If there is one thing that will take more than ten million lives in the coming decades, it is more than likely a highly contagious virus rather than a war. Not rockets, but microbes,” warned the entrepreneur and philanthropist before adding: “We are not ready for the next epidemic.“ His TED talk attracted more than 23 million views.
The Microsoft founder gave his talk in the wake of the 2014 Ebola epidemic, which had killed 10,000 people in three West African countries. According to Gates, mankind had got off lightly for a number of reasons.
First, Ebola is not an airborne virus, it is only contagious when people are already bedridden. Second, Ebola reached only a handful of large cities at the time and thus remained regionally manageable. The most prophetic passage of Gates’ talk is the following: “The next virus can make people feel good enough, while they are contagious, to get on a plane or go to a market.”
Government Incompetence
Only a small handful of countries, including Taiwan, Singapore and South Korea, reacted quickly and adopted highly effective measures to battle the virus. Politicians should have known that a pandemic would occur sooner or later, but they preferred to spend their time focusing on other issues.
Under Barack Obama’s presidency, for example, politicians fervently debated transgender bathrooms and similar “important” issues. And today everyone is left to wonder why there is such a shortage of ventilators.
In the best case, the lessons people will learn from this crisis are that the state should focus on its fundamental tasks – and finally carry them out properly. It is the state’s job to protect its citizens from pandemics, and the 2020 coronavirus pandemic will certainly not be the last. But the government will only be able to do its job effectively if it stops devoting all its energies to redistribution and interfering in the economy. It is just like running a company: If you get bogged down and expend all of your energy fighting on lots of different fronts rather than focusing on your core tasks, you will end up failing.
Long-Term Risks Of Current Crisis Mitigation Measures
Unfortunately, it is by no means certain that people will end up learning this lesson from the current crisis. In fact, there is every chance that the 2020 pandemic will lead to state’s tightening their grips on national economies. After all, there have already been a series of massive interventions in the economy, in both the United States and Europe. Some of these interventions are certainly useful – on a temporary basis. But caution needs to be the order of the day.
As the saying would have it, “There’s nothing more permanent than a temporary solution.” This is a massively underappreciated danger of the current corona crisis, although there are countless examples throughout history of how “temporary” measures adopted in times of need quickly turned into permanent changes. Every citizen needs to be aware of the lessons history teaches and be vigilant.
As panic spreads and more and more measures are introduced in response, there is a significant risk that the governing classes will use the crisis as an excuse to permanently eliminate fundamental freedoms. If Donald Trump decides he wants to dictate to companies and order them to divert production to specified goods, the state could find that it enjoys exercising its new powers so much that it wants to keep on using them, even after the corona pandemic has been consigned to the pages of history. Ultimately, there is a very real danger that the measures taken to overcome the current crisis end up being worse than the crisis itself.