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The World Post-Covid

by Michael Carberry

Photo: Markus Spieke, Unsplash

The term ‘long Covid’ usually refers to the long-term physical impact of the disease on the health of some of those who have contracted it. But the pandemic has had a much wider impact. The question is if and when the pandemic is ended, or at least brought under control, will it be business as usual or can we expect to see significant changes in way we live?

It is inconceivable that a global pandemic which has affected almost every inhabited region of the world with very significant levels of mortality should not have profound and lasting consequences. We know that much from previous pandemics, most notoriously the Black Death in the 14th century. Then the loss of population in Europe (up to 50% in some areas) and the decline in the workforce saw much arable land reverting to waste, whole villages being wiped off the map and many towns going into decline. And there were many associated social changes. If we are less conscious of the social and economic consequences of the 1918 global ‘flu’ pandemic it is simply because if followed immediately on the First World War, which itself provoked massive societal change. The impact of the pandemic was to a very large extent subsumed into the changes attributed to the War as whole. So, what changes might we expect this time around?

The biggest will be economic, resulting not just from the disease itself but even more so, from the measures taken to tackle it, like lockdowns and curfews. These measures on top of the numbers of people unable or unwilling to work, shop or travel because of sickness or fear of catching the disease, have resulted in a greatly reduced level of economic activity in the UK in particular. As with the 1918 ‘flu’ pandemic, other factors have also played a part. The long-term effects of the financial crisis and years of austerity and under investment have arguably hollowed out the UK economy making it particularly vulnerable to the challenges posed by Covid.

We have all seen or directly experienced the consequences. UK businesses in sectors like retail, hospitality, the arts and entertainment, travel and transport had to cease or greatly reduce their activities. Many have already failed. Others, weakened terribly by the lack of income during the pandemic, then impacted by the catastrophic Truss/Kwarteng budget last autumn, the rise in energy costs resulting from the war in Ukraine, soaring inflation, and rising interest rates, may soon follow suit. The corollary has been a reduced tax intake and hugely increased social security costs. Coupled with the cost of measures to support companies and individuals like the UK’s furlough scheme, the result has been a massive increase in government indebtedness . At around 100% of GDP UK Government debt is higher than at any time since 1962/63, when the country was still paying down the debt from the Second World War.

During the pandemic many employees in the UK who had been laid off or furloughed took the opportunity to leave the labour market altogether. Meanwhile European migrant workers returned to their homelands and, thanks largely to Brexit, will never come back to the UK. Economists calculate that post-Brexit immigration rules have led to a shortage of around 330,000 workers in the UK. At the same time the number of people economically inactive for reasons of ill health, whether from long covid or other conditions has risen by 15% since the start of the pandemic. Overall, the number of people economically active in the UK is around one million lower than if pre-pandemic trends had continued. The historically low unemployment figure, much vaunted by Prime Minister Rishi Sunak, is in fact indicative of the severe labour shortage which is hampering recovery and is a major reason why, unlike most Western European countries, the UK has not seen GDP growth return to pre-pandemic levels and is teetering on the edge of recession.

Are these changes temporary or will there be permanent effects? There is a temptation to see this in purely negative terms: that the fall in economic activity and the elimination of many jobs and businesses will represent a permanent loss and that even if economic activity recovers to pre-Covid levels (as it will) it will still be less than it would have been but for the pandemic.

But the fact is, that, even at the height of the pandemic, some businesses were booming, notably those making their money from on-line sales. Not just companies like Amazon but all their myriad suppliers as well. The Home Entertainment sector, including companies like Netflix, has seen a 40% boom in sales. And while the hospitality sector has taken a major hit, it is likely to recover very quickly as soon as it is safe to do so. My son, who works in the UK’s pub-trade, remarked that while many businesses may have failed the pubs, restaurants, hotels and entertainment venues will still be there and will be snapped up by new entrepreneurs. People are social animals and despite current difficulties he believes the sector will bounce back as the climate improves and remains confident about the medium-term future.

Perhaps more interestingly, the Black Death showed us how even a globally catastrophic pandemic, could result in very positive changes such as the disappearance of serfdom and the creation of a free and much more flexible labour market, paving the way for the extraordinary growth of capitalism in the centuries which followed. And that is perhaps the key impact of the pandemic - it accelerates changes that are already in hand; changes which cannot always be measured in terms of GDP.

For example, we have seen a huge reduction in work travel as teleworking has become the norm. This does not mean everyone is now going to work from home, even if they can. The convenience and social aspects of working with colleagues are very important. But it does mean that people are not obliged to commute on a daily basis to overcrowded cities on overcrowded transport. Similarly, the decline in air travel has demonstrated that much of the kind of work travel which many of us engaged in is no longer necessary and that huge polluting airliners have had their day. All this will give a huge boost to the green agenda because people have experienced the benefits of clean air and less noise pollution. A Barcelona firm of architects foresee one of the main effects of the pandemic as the transition to much greener cities in a much shorter time-span. We are also seeing a move away from large metropolises towards the countryside or more remote parts of the country. France has already seen a marked shift in young families away from the overcrowded and expensive Ile de France region around Paris to the coastal areas of the North and West. England may also see a population shift of economically active young people away from the overcrowded South-East to the less populous parts of the country; this would assist in re-balancing the economy and help with the ‘levelling-up’ promised by the Conservative government. That can only be a good thing. The pandemic has also obliged us to re-focus on buying local products and services. And I believe this will accelerate the shift away from a consumerism based on ever-increasing quantity at ever-cheaper prices towards quality and sustainability. Again, an improvement in general welfare not easily measured in GDP.

The pandemic will also have an impact in the political sphere, and not necessarily a negative one. It has underscored the fact that Governments have a pivotal role in public health to cope with not just the pressure on hospitals and medical services but also in supporting the economy and preventing the spread of infection through movement restrictions, vaccination campaigns and public health education. In the Americas, the failure of Donald Trump in the US and Jair Bolsonaro in Brazil to take effective action to deal with the pandemic was certainly a factor in their defeats by Joe Biden and Lula da Silva in the respective Presidential elections. In China, the reaction to the draconian and prolonged ‘zero covid’ policy has shaken the once seemingly untouchable Communist government, forcing them into a sudden reversal of the policy. This action has, in turn, proved to be catastrophic for public health. The episode shows just how important the role of government is in managing such a crisis and how getting it wrong can be a real political threat. The last few years have also shown the benefits of international cooperation in the development, production and distribution of vaccines. This may help reverse recent tendencies towards populism and nationalism in favour of more international collaboration.

Whether for good or ill I believe it has also accelerated the fragmentation of the UK. The differing response of the devolved administrations have highlighted the separateness and increased confidence of national governments in Scotland, Wales and Northern Ireland. On top of the tensions already provoked by Brexit, which are again coming to the fore, this would suggest that the pressure for constitutional change in the Kingdom is growing. If some of the steam has gone out of the case for Scottish independence (exemplified by the resignation of Scottish First Minister Nicola Sturgeon), at the very least we can expect a move towards a more federal structure rather than the current unitary state dominated by England.

For me, one of the most striking effects of the pandemic has been the general wariness of physical contact. In France, where I live, the almost overnight disappearance of the “Bise” (kissing on both cheeks) and the handshake whenever you meet friends, both such an integral part of French social culture, was quite extraordinary, although they appear to be slowly creeping back. In the UK too, hugging and kissing by adults outside the immediate family circle has almost disappeared in a striking reversal of the tendency in recent years where British people had become much more touchy-feely than was the norm when I was young. That is perhaps because in previous generations physical proximity was a fact of life. In working class homes three or more in a bed was normal; social distancing was a luxury of the better off. It would seem that as enforced proximity has declined so the need for some kind of social substitute has grown. During the pandemic it was remarkable how many people said they missed physical contact; so hugging and kissing probably will come back quite quickly. But it is equally true that many more of us will wear masks to limit the spread of infection when we have colds or ‘flu’ as has long been the case in Japan and Hong Kong.

One undeniable impact of Covid has been has been the boost to on-line social interaction. I personally was able to re-join a discussion group I had belonged to in Paris, over 900 kilometres away from where I now live, when the meetings moved on line (also to attend Civil Court hearings in the UK without leaving my home in France!). It is probably true that most of us have re-connected or had more contact with friends and family in far-off locations directly as a result of the pandemic – and that must surely be a good thing.

So, on the whole, I remain bullish about the future. I firmly believe that in as little as five years’ time, we in Europe shall not merely have recovered to pre-pandemic levels of economic activity but in terms of overall welfare will be in a much better place than we might have been otherwise.

Whenever that might be, I certainly hope I will still be around to enjoy it!


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