CORONAVIRUS | WHERE’S THIS HEADING (PART 2B)?


This is Part 2B of what will now be a four-part series of posts; things are changing rapidly. We’re interested in the extraordinary impact of governments’ reactions to the Covid-19 pandemic. Some of us consider that, as grim as Covid-19 could be (and for now that remains arguable without meaningful data and in the context of other pre-existing pandemic diseases), the mind-boggling situation in which we now find ourselves provides an opportunity to address the risks and failures of globalisation. Meantime, in real-time, the UK National Health Service (NHS) structure – which is a massive, centralised bureaucracy – is proving to be, shall we say, sub-optimal in the face of this pandemic. Sure, NHS front-line staff are working heroically, but the NHS management system is now being exposed for what it is: unfit for purpose. I can say this with a certain amount of inside knowledge having worked in the past for two years as an NHS Health Board director and being married as I am to an NHS doctor. However, the pros and cons of the NHS is a story for another day. For now, we’re investigating the imminent collapse of the global economy and what should emerge from that.

All Warfare is Based on Deception

We’re told that the fight against the Covid-19 virus is a war. Sun Tzu was a Chinese general, military strategist, writer and philosopher who lived at the time of the ancient Chinese Eastern Zhou dynasty, in the first century BC. Sun Tzu said, ‘All warfare is based on deception’. It’s perhaps fitting then that the most serious threat to our lives – emanating from China – is not Covid-19; it’s the forthcoming outright tanking of the global economy. Covid-19 has deceived us into thinking that, metaphorically, we’re all going to die from coronavirus. Indeed, some of us could be hit by Covid-19, but the chances of that happening are relatively low, accurate data notwithstanding. On the other hand, a damn sight more of us are now almost guaranteed to be hammered by the trashing of the global economy taking place before our very eyes. That’s not my assessment. Please take a little time to read and digest the following observations because they’re fundamental to the arguments I’m going to make in this post about our future prosperity:

McKinsey & Company

The shock to our livelihoods from the economic impact of virus suppression could be the biggest in a century

Global supply chains face disruption in multiple geographies … [we’re looking at] the end of supply chain globalisation

The coronavirus is not only a health crisis of immense proportion – it also signals an imminent restructuring of the global economic order

Emmanuel Macron, President of France

Globalisation faces a major crisis

Kate Andrews, Economics Correspondent, The Spectator

All economic indications suggest that we’re midway through the sharpest economic contraction in history

It seems likely the Covid-19 virus will have a long-lasting impact, marking a turning point in globalisation. The status quo has run out of political capital

Fraser of Allander Institute, University of Strathclyde

Covid-19 represents the greatest public health crisis in a generation [and] a massive shock to the global economy

Jeremy Warner, Economics Assistant Editor, The Daily Telegraph

The immediate and no doubt lasting economic costs of Covid-19 are out of all proportion to the distress of the disease itself. We are doing ourselves untold economic damage

ING Bank

A recession is not the correct word for what we are currently witnessing. It is an abrupt stop of economic activity, from 100 to zero in just a few days or weeks. A virus-driven ice age

Gail Tverberg, Our Finite World

My analysis indicates that now, in 2020, the world economy cannot withstand long shutdowns. One very serious problem is the fact that the prices of many commodities (including oil, copper and lithium) will fall far too low for producers, leading to disruption in supplies. Broken supply chains can be expected to lead to the loss of many products previously available. Ultimately, the world economy may be headed for collapse

Economics

My purpose here is not to scaremonger; rather, I want to raise awareness and illuminate readers from the perspective of people whom I refer to as ‘alt-economists’ and to whose ideas and predictions I’ll refer presently.

Meantime, here’s one from the ‘Department of Sweeping Statements’: orthodox economists will tell you that the gloomy observations above are largely hyperbole. They’ll tell you that the laws of supply and demand will prevail, national economies will adjust and Adam Smith’s ‘invisible hand’ will work its magic worldwide. In other words, many will predict what they assert will be the economic outcome of the Covid-19 pandemic, namely we’ll eventually pick up from where we left off vis-à-vis the globalised economy and everything will be alright on the night. Politicians will ride this bandwagon. The underlying mantra will be that, whatever happens, we must strive to return to global, industrialised economic growth. We need to challenge that view.

For the purpose of this post, there are two particular shortcomings with economics:

Forecasting. First, as the erstwhile Governor of the Bank of England, Mervyn King (himself an economist), has noted, economics is great at explaining what’s happened in the past, but struggles to explain what might happen in the future.

Truth. The second problem relates to the first: whilst economics uses mathematics to convey ideas and explain empirical data, economics is not science. The best we can do in this respect is to refer back to the Victorian historian Thomas Carlyle’s description of economics as ‘the dismal science’. There are no irrefutable truths in economics in the same way that, say, Newton’s Laws of Motion are truths and can predict unfailingly the motion of objects etc. In fact, as UCL’s Peter Antonioni explains, ‘economics is all about humanity’s struggle to achieve happiness in a world full of constraints’. In similar vein, in his book ‘50 Economics Ideas’, Edmund Conway, Sky News’ Economics Editor, tells us that ‘economics is, at its very heart, the study of people’.

Not only are there shortcomings with economics – being as it is, at best, pseudo-science – there’s also a specific shortcoming with economists themselves: they can get shirty when scientists (eg a physicist like me) or other non-economists stray into the world of economics. Three alt-economists’ names come immediately to mind in this respect: Chris Martenson, Gail Tverberg and Dr Tim Morgan.

Energy

Before I distil the thinking of these three alt-economists into where they argue we’re heading in terms of the global economy, we need to consider the words of the theoretical physicist, Dr Michio Kaku (City University New York); here’s what he has to say about energy:

Energy is vital to civilisation. In fact, all of human history can be viewed through the lens of energy. For 99.9% of human existence, primitive societies were nomadic, scratching a meagre living hunting and scavenging for food. Life was brutal and short. The energy available to us then was one-fifth of a horsepower – the power of our own muscles … [today, thanks to the Industrial Revolution] the energy available to a single individual is now measured in thousands of horsepower

Another physicist, Professor David MacKay (University of Cambridge) in his book, ‘Sustainable Energy – Without the Hot Air’ (2009) makes the point that in the near future – if indeed the time has not already arrived – mankind will need to figure out how to power civilisation without ‘the benefit of two billion years’ worth of accumulated energy reserves’. The point which both Dr Kaku and Professor MacKay make is that the reason so much of the world enjoys extraordinary prosperity (financial and non-financial) – certainly compared to 200 years ago and more – is because man discovered cheap energy in the form of fossil fuels and in the form of cheap oil in particular.

Economics as we know it today emerged with the Industrial Revolution and has its roots in Adam Smith’s seminal work, ‘An Inquiry into the Nature and Causes of the Wealth of Nations’ (1776). Since then everything else is history. Look at the extraordinarily beneficial effect on the world-as-a-hundred-people over two centuries which has arisen from mankind having discovered how to release two billion years’ worth of accumulated energy reserves, ie releasing sunlight energy from fossil fuels:

Covid-19

Oil and Commodities

What’s all this got to do with Covid-19? Well, economists and politicians will be desperate to see a rapid recovery from the state we’re in; indeed, won’t we all. Quite what recovery will look like in terms of the alphabet (V-shaped, U-shaped, W-shaped …) doesn’t really matter much. What does matter is that there will be an unholy scramble for economic activity. Bear in mind that ‘economics is all about humanity’s struggle to achieve happiness in a world full of constraints’. And therein lies the rub. Gail Tverberg points out that ‘one very serious problem is the fact that the prices of many commodities (including oil, copper and lithium) will fall far too low for producers, leading to disruption in supplies’.

In other words, our ‘world full of constraints’ is going to take on huge significance post-Covid-19. Nations around the world will be looking to hoover up resources to get us back to industrialised rates of economic growth from what could turn out to be the most precipitous, synchronised decline in global economic activity in all history.

Resource constraints were increasingly evident anyway pre-Covid-19. Post-Covid-19, commodities’ producers will find it extraordinarily difficult to supply our basic industrialised requirements of oil, copper, lithium etc. For example, today oil is languishing at $25/barrel. Oil producers are unable to sustain their operations with oil at that price. Normally, shale oil costs at least $40/barrel to extract and can cost more than $90/barrel. The cost of conventional oil varies significantly: Saudi Arabia can produce oil at less than $10/barrel; however, worldwide oil extraction costs range from $30 – $40 per barrel. The Guardian newspaper reported a few days ago that ‘North Sea oil and gas is in a paper-thin position as prices plunge’.

If they’re not doing so already, around the world oil producers will be downsizing (again) rapidly; some of the smaller players will perish. Once producers’ capabilities to discover, extract and refine oil to bring it to market are lost, it will be near-impossible to recover those capabilities rapidly, if at all. The point is that the post-Covid-19 oil price will be a critical constraint to recovery, not to mention other industrial raw materials’ price constraints. Analysts are already predicting that the oil price will soar back towards $100/barrel on the back of any recovery, and could continue to rise beyond that in the medium-term. Our complex, globalised society is unsustainable in the long-term with oil at $100/barrel plus.

Other Relevant Issues

There are four other critical issues arising from the Covid-19 epidemic which are relevant to life after Covid-19 and whether or not we choose to return to the globalised status quo ante, as follows:

Fear. Henceforth, and for perhaps a generation or more, people around the world will fear another globalisation-fuelled pandemic. Some epidemiologists say that the risk of an unstoppable virus is growing all the time and that Covid-19 represents a warning as much as anything.

China. The role and behaviours of China are in the spotlight for these reasons: China was unquestionably the source of this new coronavirus which almost certainly emanated from one of its appalling wet markets; China’s systematic abuse of human rights; China’s unscrupulous trading behaviours; China’s flagrant disregard for the environment. One could go on, but China is on notice in terms of its global role in the post-Covid era.

Global Debt. The global debt situation merits a post in its own right. The last time I looked at The Economist’s Global Debt Clock, total government debt stood at $58 trillion, and climbing. If you then add in corporate debt and household debt you find that between us, the world and his wife owe somebody/somewhere something like $188 trillion. Here’s the thing, though: in 2018 the global average debt-to-GDP ratio (debt as a proportion of the value of all of a nation’s goods and services produced in a given period) stood at 226%. An economist would lambast me for saying this; however, that’s like you earning £25,000 per year and owing £56,500 on your credit card, with the debt growing by the month. It’s a simplistic analogy, but it makes the point that we’re living way beyond our means. If you now factor in the extraordinary amounts of fiat money governments are throwing at the Covid-19 pandemic (US $2.2 trillion; Germany $815 billion; UK $405 billion; France $375 billion and so on), it doesn’t take an archbishop to figure out that global debt is heading off the Richter Scale. Does it matter, you ask? After all, world governments owe the money to their own citizens, not to the Martians. However, the rising total is important for two reasons. First, when debt rises faster than economic output (as it has been doing in recent years), higher government debt implies more state interference in the economy and higher taxes in the future. Second, debt must be rolled over at regular intervals. This creates a recurring popularity test for individual governments, rather as reality TV show contestants face a public phone vote every week. Fail that vote, as for example various eurozone governments have done, and the country (and its neighbours) can be plunged into crisis. We need to be very, very concerned about the impact of global debt on our lives in future.

Environment. Last but not least, globalisation has been a disaster for the Earth’s environment. Let me quote here ‘Peak Prosperity’s’ Chris Martenson: ‘the environment – meaning the world’s resources and natural systems on which we depend – is exhibiting clear signs that we’re approaching its limits. We’re finding ourselves in the position of needing to exploit the poorest-quality mineral ores. Peaks in critical resources are being noted at a faster and faster pace. We’re scouring the globe for the last few concentrated sources of primary wealth. We’re depleting water in fossil aquifers at unsustainable rates. Farmers are mining soils of essential nutrients, and our oceans’ rich ecosystems are suffering’.

Taken together, all these factors count against us pursuing a wholesale return to a globalised economy; they signal to us that we can’t go on like this, ie we really should not be busting a gut to recover globalisation. Globalisation is killing us; literally.

What’s the Answer?

The answer is not mercantilism. The answer lies in shifting the world economy away from globalisation towards localisation with international trade; shifting politics from centralisation to decentralisation; shifting society to valuing ‘somewhere’ (one’s mother country) from valuing ‘anywhere’ (a largely abstract idea of worldliness). Here, David Goodhart explains what I mean about the Anywhere/Somewhere issue:

Here’s a summary of where the alt-economists and others think we should be heading post-Covid-19:

In my next and final post (honest) on this topic of life after the Covid-19 pandemic, I’ll put flesh on the bones of the image above and explain how we could make life much better for ourselves in a post-globalised economy. After all, ‘economics is all about humanity’s struggle to achieve happiness in a world full of constraints’.


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See you down the pub – post-lockdown …

22 comments

  1. Wolfy · ·

    Thank you, Moraymint, all good stuff.

    I was particularly struck by David Goodhart’s piece. I now realise that my nomadic career has led to me insidiously becoming an ‘Anywhere’, and he has crystallised my understanding of the majority ‘Somewheres’ that I now find myself living amongst.

    Thanks again

    Liked by 1 person

    1. moraymint · ·

      Yes, in theory I should also be an ‘Anywhere’; I have all the qualifications. However, for reasons I don’t understand (nature or nurture?), I’m a card-carrying ‘Somewhere’. For me, there’s some justice unfolding at the moment as all of the Anywhere stuff seems to be disintegrating. I don’t mean that in a vindictive way. The global Anywhere way we were going until the end of last year was – in my opinion – inherently doomed. The leading indicators were Trump in America and Brexit in Europe. Italy’s the one to watch now. I’m not a fan of Donald Trump; however, in his own extremely weird way, he touches nerves and challenges what I – like millions of others – think are unacceptable and/or unsustainable features of our globalised way of life. I certainly don’t advocate nationalism, but I do want to see the end of globalisation: it’s good only for a minority of mankind.

      Like

  2. Martyn Edwards · ·

    MM,

    My business as a freelance translator of German into English, set up in 1992, has collapsed. Working as a freelancer is a precarious business, consequently I have planned accordingly. No mortgage. No debts. No TV.

    I really, really enjoyed reading what you had to say and most of the comments especially that from Reallyoldbill. In my case you are preaching to the converted: I only have a few minor riders to add.

    Yesterday I listened to Steve Bannon’s Warning on China Trade War (with Kyle Bass) in Youtube. It was compelling listening. Another Youtube recording worth listening to is Sir Jimmy Goldsmith expounding on the evils of globalism. Given that the recording was made in the late 1980s /early1990s he demonstrates considerable prescience.

    Secondly, I share your reservations about Economics as a subject. I studied Economics at A level in 75/77. The entire course was predicated on J M Keynes’ Theory of Employment. It was taught as gospel. The teacher /syllabus/examination brooked no dissent. There was no mention of alternative economic schools of thought (Austrian/Monetarist school). A levels are supposed to be all about teaching students to think, reason and argue, not one-sided brainwashing. It is entirely possible that the syllabus has become more balanced in the interim period but I doubt it somehow.

    Reallyoldbill made some excellent points. But one vital factor was missing: the cost of housing/rent. This is what drives up wages. I cannot forgive the politicians responsible for the increase in house prices from 2000 – the present.

    Lastly, I note your points about the uncertain future of small oil firms. In recent weeks Tullow Oil has gone up from 7p to 25p. Had I had the cojones to risk my pension fund on it I could have retired now.

    All the best,

    Martyn Edwards

    Liked by 1 person

    1. moraymint · ·

      Great to hear from you, and thanks Martyn. You make some good points. You may well be interested in the synthesised works of the alt-economists that I shall be sharing in the next post in this series. Reallyoldbill is usually worth listening to …

      Like

  3. flyer · ·

    After just two weeks of lockdown, the signs are emerging quickly now:

    “Air New Zealand to lay off 387 pilots: union”

    That’s a lot of pilots from one airline already and of course the service industries will be hit. Air NZ can hardly be expecting to get back to normal anytime soon after the lockdown ends. The strategic implications of all of this just don’t look too good.

    The NZ government (I can’t find the article at the moment) are wondering what they can do to replace tourism, a large part of the NZ economy, they’re not expecting tourism to return anytime soon.

    Of course the airlines and tourism are just the early casualties, I’m thinking that you’re right, localism is something that we going to have to adapt to but perhaps it’s not a bad thing.

    Strangely enough, today I noticed some field mushrooms growing on my lawn, if it wasn’t for the lockdown I’d have been too busy to notice them, they made a really delicious meal. It’s amazing what nature will provide if you care to look, perhaps localism really is the answer.

    Liked by 1 person

  4. I think the pressures on globalism which have been unleashed will only grow. Brexit was the assertion of control by a people who refused to be governed by a system over which they had no control and which was ultimately unanswerable to them. This genie is out of the bottle now. Our Italian friends will get it next, hopefully.

    Technology is huge part of this. Technology is largely not subject to control by central authority (OK maybe the anti gravity and zero point energy stuff is controlled by the guys in Nevada or wherever) but the everyday stuff is tumbling from the future into our lives. Technological advance has already created the conditions for localism; enhanced communication enabling instantaneous peer to peer communication, enhanced technology such as 3D printing putting vast capability into the hands of more and more of the population increasingly cheaply. These open the way for a resurgence of ‘cottage industry’ and micro societies, only on a far more efficient level. #WuFlu could just be the catalyst.

    As our grasp of the bigger picture and our role within it becomes more comprehensive, consensus is emerging that in order to preserve civilised society we cannot treat people as being economically expendable and outsource their livelihoods based solely on a narrow measure of profit (ie one which ignores certain costs), such as importing cheap labour under free movement or by offshoring to a mafia run state like China.

    I believe we will eventually start to evolve a theory of organisation where we ‘think as a species’.

    Each of us is voluntarily and individually responsible for adopting behaviours that promote overall wellbeing without the requirement for centralised coercion. Individual self interest is not incompatible with this, since causing harm to our neighbours is harmful to the environment of which we ourselves are a part. If a new economic model is to emerge in keeping with this strain of thought, people in the UK will start to act with ‘economic localisam’ in ways that reflect these ideas.

    The UK (our ‘somewhere’, the one we can influence) is big enough that we can viably operate all areas of the economy. We can have all kinds of industry. We can have a thriving agricultural sector. We can provide enough fish from our waters etc. We can be self sufficient. But we can also continue to trade globally within this framework. But further, the damage to the financial system required by the suspension of the pre-existing economic model, as evidenced by ‘Rishi’s splurge’, will wake people up to alternatives. These include blockchain based distributed monetary systems as opposed to ‘fiat money as debt’. Money is nothing but ‘effective demand’ thus this technology will also impact political interactions; collective ‘centre of opinion’ will eventually come to be arrived at by blockchain token voting, i.e. true verifiable consensus, supported by digital IDs, with anonymity secured by cryptography.

    The old pre-digital world ended probably about 20 years ago. A lot of dead wood will be razed by this pandemic. Scarcity will decrease and economics (the science of scarcity) will also change irrevocably.

    @inv6949

    Liked by 1 person

    1. moraymint · ·

      Great comment, Ronin, thanks very much. Some good stuff for me there for my next post on this topic, the third/final part. I’m here at the moment listening to LBC Radio as we get news about the Prime Minister’s condition. I’ve opened a Black Bottle (recommended blended whisky) and am toasting his health …

      Like

    1. moraymint · ·

      Yes, my outlook is not one of optimism or pessimism, per se. What I’m saying is that post-Covid-19, economics needs to shift from globalisation to localisation, but with international trade. Localisation + international trade doesn’t mean globalisation; it means a change of economic and social emphasis. Life could be good post-Covid-19 without the hyper-globalisation which his proved just how fragile and inter-dependent we are. I’m a defensive pessimist by nature, but my outlook for the future is optimistic. One has to be wary of the Panglossians in situations like this methinks …

      Like

  5. Sean Stanley-Adams · ·

    Succinct and persuasive

    Liked by 1 person

    1. moraymint · ·

      Thanks Sean. Preparing these posts help shape my own understanding of the madness …

      Like

  6. Stuart Tyson · ·

    This post and the previous one I shall have to read again. Some of the more detailed points you make have not sunk in.
    While I am of the same opinion as you regarding where we are and the risks to society of where we may be going, I am not getting yet a sense of how the risks might be mitigated.
    The vast majority of Western nations have no plan for what might come next and I simply do not believe China when it says its C19 problem is resolved, a line many media outlets are pushing.

    Liked by 1 person

    1. moraymint · ·

      Excellent point, Stuart. I agree that there is a profound question here: how do we mitigate the risks of what we’re now confronting? Namely, a disease pandemic and a collapse in the global economy. I’m hoping to propose some answers in Part 3 of this series of posts. I shall be drawing on the work of others better qualified and more experienced than me on these matters, and then sharing them here on my blog …

      Liked by 1 person

  7. The Golden Horde · ·

    A: “For example, today oil is languishing at $25/barrel. Oil producers are unable to sustain their operations with oil at that price.”

    B: “Our complex, globalised society is unsustainable in the long-term with oil at $100/barrel plus.”

    I’m confused.

    Which is bad and which is good?

    A or B?

    Liked by 1 person

    1. moraymint · ·

      Neither observation was supposed to be either good or bad, if that makes sense. All I was doing was pointing out that an exceptionally low oil price (broadly speaking lower than the cost of oil) makes it difficult and, ultimately, impossible for oil companies to produce oil. I suppose one could, therefore, call that a ‘bad thing’ because the future supply of oil is jeopardised. However, from the perspective of an environmentalist, jeopardising the future supply of (nasty, polluting) oil would be a ‘good thing’.
      My assumption of a future exceptionally high oil price (ie three or four or more times the current low price) reflects the views of oil analysts who foresee oil quickly going back to $100/barrel and more as/when we emerge from the Covid-19 strictures. This is a ‘bad thing’ for anyone who sees globalised business-as-usual as desirable, but a ‘good thing’ for the aforesaid environmentalist who wants to see the end of oil and the end of fossil fuels.
      Perhaps what we need is some form of Oil Depletion Protocol? https://richardheinberg.com/odp

      Like

      1. Oil producers have a vested interest in supplying the demand for oil, which will return possibly to previous highs. The market, one way or another will function so that consumers and producers will trade.

        Liked by 1 person

  8. Moraymint

    Interesting post.

    I could quibble a little with the oil section analysis – for example on the shut in/can’t get back point, one of the (few) advantages of shale oil is it is very quick to get in production.

    But the broad point on the unsustainable basis of the existing order is well made.

    BUT

    Toward the end you say this

    “shifting society from valuing ‘somewhere’ (one’s mother country) over ‘anywhere’ (a largely abstract idea of worldliness). “

    Shouldn’t this have been

    “shifting society TO valuing ‘somewhere’ (one’s mother country) over ‘anywhere’ (a largely abstract idea of worldliness). “

    I didn’t watch the video so maybe the point is made there differently. We certainly saw the somewhere v anywhere divide played out during Brexit. I think we are both “somewheres”…?

    Cheers

    M

    Sent from my iPhone

    Liked by 1 person

    1. moraymint · ·

      Thanks Mark – and I’ve amended the Anywhere/Somewhere typo; you were right, of course. Yes, I agree with your point about oil, but the general point stands as I think you’d agree. The whole Peak Oil thing hasn’t gone away, but the phenomenon has changed. Gail Tverberg covers it well over at Our Finite World. We may see Peak Demand before Peak Oil, but the implications will be much the same: a profound change to how we live our lives …

      Like

  9. reallyoldbill · ·

    Another good analysis, MM. It is hard to comprehend the scale of the economic damage that is being risked by shutting down globally the way in which our leaders have done. There is no precedent for it ever, even during a period of world war when at least some nations remained open for business as usual. Unless the politicians know something about this pandemic that they are not sharing, which would itself require a rock solid conspiracy of silence amongst every government on the planet, then it is hard not to see the scale of what is being done as either gross over-reaction (possible but not yet proven) or a classic case of herd instinct with, at this moment, only Sweden among developed nations resisting the urge to copy everyone else; how that works out for them remains to be seen. Clearly there is a risk to health posed by Covid 19 and it is certainly not something to be dismissed as just the same as seasonal ‘flu, but does it really justify the collapse of the global economy? The jury for me is still out on that question. Time as ever will tell us one way or the other.

    What is not open to doubt in my opinion is the perilous position in which nearly every developed nation has allowed itself to be manoeuvred in pursuit of cheap labour, putting the vast majority of its eggs in one basket called China. The reasons for that are many, not just the seemingly insatiable appetite for the latest gadget at affordable prices, or the belligerent demands of unions that effectively priced home production out of contention, nor even the unhealthy growth of vast multi-national corporations that owe loyalty to nothing bar the bottom line for their executives and shareholders. A country with an almost limitless supply of cheap labour that is willing to ignore the health, welfare and dignity of its workforce was always going to present an irresistible temptation to companies and even governments around the world to exploit. How many people even give a fleeting thought to the conditions suffered by the workers in China who produce those goods when they pluck them off the shelves in their local stores; clothing for less than the price of a round at the pub; electronic gadgets for less than a good meal out? Not many I suspect.

    The morality of that situation is, however, only one side of the coin. It is clear that China, run as it is by a single party government which controls every aspect of its citizens lives, has been playing a long game, steadily cornering a key market position in the global economy. It also owns a sizeable chunk of the national debts of many other nations. Is there any wonder that so many governments have been so reluctant to challenge the direction of travel? Covid 19 has brutally exposed just how beholden the world is to China and it should act as a wake-up call. Relationships with it will have to be re-considered when the world finally emerges from this lockdown and given that the global economy will have to be reset anyway that may well present an opportunity to start the process of disengagement. There is little doubt that China is not to be trusted, as evidenced by the original attempt to cover up the outbreak of a new and highly transmittable virus onto the world stage, something that alone merits international condemnation and sanction, and it is madness to involve them in the creation of a 5G network in the UK. If the government wanted a fig leaf to justify reversing that decision one has just blown into its hands.

    If, however, globalisation, which largely means in manufacturing terms contracts with China, is to be reversed, then there will have to be cooperation on many fronts. Firstly unions will have to stop pricing local producers out of contention. Secondly consumers will have to accept that prices cannot be kept artificially low by using what is in effect slave labour. Thirdly governments must remove the obstacles that have been placed in the way of industry, whether under the guise of Health and Safety or unnecessary environmental “protections”; many of both have been not because of justified need but lobbying (particularly in Brussels) by large multi-nationals in order to protect their market share. For the UK, leaving the EU offers the ideal opportunity to repeal many of these unnecessary barriers to effective manufacturing and encourage the repatriation of industry to these shores. We have to hope somebody is listening.

    Liked by 1 person

  10. James De Burghe · ·

    This really is a poor article, predicated on results from countries that failed to prepare properly for this pandemic and blamed on the country that was it’s first victim. You overlook the fact that a very large part of the world is already getting back to normal with minimal economic disruption.

    Like

    1. moraymint · ·

      Thanks James. I’ve avoided deliberately discussing the ins and outs of Covid-19, whether countries were prepared or not and how dangerous the disease is, either at the national or global level. The virus will do what it will and countries will do what they can to mitigate its effects. If, as you say, ‘a very large part of the world is already getting back to normal‘, then we’ll see that reflected in national and global economic indicators soon enough. The points I was making in this post were twofold: is it achievable to get back to ‘normal’ (globalisation) and do we want to get back to ‘normal’ (globalisation)? I assume – but you can correct me if I’m wrong – that you’ll be of the view that a return to the globalisation status quo ante is both achievable and desirable. We shall see …

      PS This is the beauty of freedom of speech. I’d like to see the arguments set out in full to support the suggestion that either there isn’t, or there won’t be any significant economic impact from the Covid-19 pandemic, and that there’s every reason to expect that the globalisation bandwagon will be up and running again before we know it. Again, we shall see …

      Like

    2. Martyn Edwards · ·

      James,

      It is quite clear from your comment that you are attempting to create a moral equivalence between China, the country in which Wu Flu originated, and the rest of the world by claiming joint victimhood. You overlook the following:

      Firstly, after sealing off Wuhan from the rest of China, international flights were still allowed out of Wuhan for at least a month, therefore exporting the virus. This is irresponsible and unethical.

      Secondly, in January when China was already aware of the severity of the outbreak, it instructed its nationals in Australia to buy up as much PPE as they could, The result was that 2 million items were shipped to China, leaving Australia with insufficient levels of PPE for its own needs. This is unethical.

      Thirdly, China was an established track record for being the source of pandemics, notably Asian Flu in 1957, Bird Flu in 1996 and SARS in 2002. It is also entirely possible that the Black Death had its origins in China.

      It is a protectionist, mercantilist, expansionist, and aggressive regime asserting an illegal claim to the South China Sea in contravention of international law.

      Your reasoning that China is absolved from blame since the other countries are responsible as they should have been prepared to deal with a pandemic is facile, since it is akin to shooting someone and then exculpating yourself on the basis that if the victim had been wearing body armour they would not have died.

      Your view that the world has suffered “minimal economic disruption” is quite simply not true. It simply demonstrates a total ignorance on your part of how commerce works. Business relationships can take a great deal of time and effort years to build up, are tenuous, subject to constant review, and are easily severed, never to be restored. Many sectors of industry, the hospitality trade in particular, have high fixed costs and low margins. A 3-month hiatus is a commercial catastrophe, all the more so since the economy was already in dire straits in 2019, and has never really recovered since 2008.

      Liked by 1 person

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