Big State, small State, middling State

The Wuhan virus will not only change the world, it is set to provide evidence for scholars of social and economic theories for the next century. How many times have you heard economists say in the past “Haha yes it’s only theoretical – we can’t know for sure unless we experiment on an entire national economy”? Well, now we can. One of the glories of the diversity of national responses across the world is that they range across the entire spectrum.

At one end we have the big State authoritarianism of China and North Korea – curfew breakers shot, an iron fist of State control, people walled up in their dwellings, total command of the economy and no role for private enterprise in solving the crisis. At the other end we have the US, a nation whose collective mistrust of the State and federal structure together with a loosely regulated economy and patchy coverage of the healthcare system has meant a massive and immediate economic impact – and to Trump’s chagrin, he doesn’t have the power to control the Covid measures. Under the US constitution, public health measures are the responsibility of state governors. The federal government has issued ‘guidelines’ but they’re not compulsory. Then we have Sweden, now far less certain about its laissez-faire approach to the virus as the bodies pile up. And between the extremes we have the mass of middling-State nations, including most of Europe.

Comparisons are not just body counts, of course. Economies will have various degrees of resilience, flexibility, responsiveness, survivability and agility, different patterns of trade, different mixes of manufacturing and services, differing resource supply patterns and the impact of the recession and recovery from it will also depend on the same social and economic systems.

And then of course there’s demography. Young nations with educated, mobile, deployable workforces and low proportions of unproductive olders to be cared for as fragile and vulnerable porcelain, against those with less capable workforces, older populations, lower educational and trade knowledge infrastructures.

So which nations will win out? Which countries are the future? Where will the young be best placed to create a stable, secure and prosperous future for themselves and their family? Will it be authoritarian China or chaotic America?