Can Europe Make It?

Covid19: a checkmate of the West?

This is a radical challenge. The West is certainly going to lose if its politicians, academics and civil servants continue to take for granted a superiority in tatters.

Francesco Grillo
28 April 2020
The Military Sealift Command hospital ship Comfort heads to New York City, March 26, 2020.
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SMG/PA. All rights reserved.

It is the “third world war”, the first world war of the twenty first-century and the first of the Internet era.

It is a global war because its economic and political impact is going to transform the old-world order. And it is an Internet era conflict because it will be decided entirely by the capacity of different states to gather and analyze data in order to minimize the spread of the invisible enemy.

The paradox, however, is that the West appears to be about to lose this war, after having triumphed in the conflicts of the twentieth century. As a result, a massive redistribution of resources will follow and will dramatically shift the balance of power towards the East and away from the West of the world, in a way which would have been unthinkable only a few years ago.

The paradox is evident in the official numbers of the pandemic, as well as in the forecasts of its economic impact on 2020 and 2021. The West – by which we mean the US plus western Europe – accounts for 80% of the cases due to COVID19 and, even worse, 90% of the deaths due to the outbreak. In the first six positions of the grim ranking of worst hit countries, there are the USA, Italy, Spain, UK and Germany (with the latter, however, controlling the pandemic much better). These six nations account for two thirds of the 3 million people who have been infected and three quarters of the casualties. While it is true that official statistics may be underestimating true data in the countries of Asia and Africa, studies (such as the one published by the Financial Times and the one developed by the think tank VISION in Italy) show that this is true also for countries like UK, Italy, France, Spain and the USA.

While it is true that official statistics may be underestimating true data in the countries of Asia and Africa… this is true also for countries like UK, Italy, France, Spain and the USA.

The magnitude of the differences between how deeply Covid-19 has hit various parts of the world and its comparison with the results of past pandemics (SARS, EBOLA, even HIV, whose tolls were concentrated in Africa or Asia) does, indeed, indicate that something has profoundly changed. The virus is haunting with surgical precision the countries which have been the founders (and largest shareholders) of the institutions (IMF, the NATO, the European Union) around which the twentieth century global order has been organized, and the costs in human lives is paralleled by a proportionate economic damage, as the USA economy is projected to shrink by 6% in 2020, and the Euro area by 7.5% in 2020 (IMF).

Conversely, the rest of the world seem to be doing much better. India and Africa seem to have been largely spared (combined they recorded less casualties than Croatia). China – the country where the pandemic started, may be winning (as The Economist acknowledged last week): after one month, the total lockdown policy resulted in a steep reduction in the curve of cases and deaths and the country is the first to fully restore transportation and manufacturing.

Welfare superpowers

This may change permanently the equilibrium between social and political systems which are competing for global leadership. The outcome sounds like a paradox because the West is still the area of the globe enjoying two thirds of what is spent on healthcare and life science. Public expenditure on health is, according to OECD data, almost 10,000 USD per person in the USA, circa 3,500 in the EU, just a little bit more than 300 in China. 19 out of the 20 largest pharmaceutical companies are either American or European, and Angela Merkel has repeatedly reminded us that one of the EU’s greatest prides is to be the world Welfare superpower.

The real, fundamental question is: how can it be that the richest, most protected portion of the world, is losing a war which is fought on the front line of hospitals and of each household?

One possible response is that we may be facing a contradiction between personal freedom and the sense of community that tragedies like COVID19 make us rediscover. The sheer limits of individualism seem all of a sudden now much more evident.

We are discovering that there may be a trade-off between the interests of the community we belong to and some of the freedoms that have defined our “style of life” (as the President of the European Commission, Ursula von der Leyen, calls it). It seems that, unexpectedly, freedom of movement within Europe (the Schengen area), protection of personal data (privacy), freedom of enterprise and of trade, may have made us more vulnerable.

The protection of personal data becomes hypocritical when significant data about European citizens already belongs to a few global platforms.

An area of free circulation (like Schengen), which is not capable of formulating a common policy vis-à-vis an emergency or a common strategy towards entrants from a third country, is unavoidably unstable. The protection of personal data becomes hypocritical when significant data about European citizens already belongs to a few global platforms, while EU governments are unable to use these data to isolate outbreaks. Freedom of enterprise can produce huge inefficiencies as in the US healthcare systems. Untamed globalization can create new fragility, when countries which rely too much on global value chains risk collapse for the lack of relatively simple chirurgical masks.

Community in crisis

In the meantime, the rest of the world (and most of Asian countries) appear to have maintained a sense of community which is making them to better cope with the crisis. It seems that societies adapt better to a hyper-sophisticated twenty-first century when they manage to temper freedom with responsibility; combine individual aspirations and collective choice; improve the efficiency and accountability of policy making.

This is a radical challenge and the West is certainly going to lose if its politicians, academics and civil servants continue to take for granted a superiority which is in tatters. We will need a great deal of creativity, humility and passion to reinvent the forms which define the social contract and overhaul institutions conceived to govern a different century.

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