Posted by on April 13, 2020 1:22 pm
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“The corona shock: the virus, an almost black swan and a changed world”

By Prof. Dr. Henning Vöpel, courtesy of HWWI



The ultimate system shock


For a globalized and permissive society it is the ultimate, the greatest conceivable state of emergency: from one hundred to zero, from unlimited freedom of movement to prescribed standstill, from laissez-faire to paternalistic control. It is so extraordinary that it looks bizarre – empty places, empty shops, empty subways. The system is shut down by doing the opposite of what it is aimed at: networking and sharing. The corona pandemic is an allegory of the vulnerability of modern society. Something invisible, which threatens the existence of the individual harshly stops the usual life – for fear of contagion, which becomes a symbol of the systemic risk. Contact becomes taboo, control becomes illusion. For decades, the world has become smaller and time has become faster. 



Corona is the anticlimax: the world suddenly gets bigger, time slows down. All people are equal before this virus. “Corona socialism” doesn’t feel that bad for a few days, but it is actually a seductive illusion, because the state of emergency remains a state of emergency and is not a desirable model for normal times because it can neither function economically nor socially. The corona crisis is also neither an argument against globalization nor one for climate protection. But it is quite possible – and there is certainly a chance of the crisis – that what is “normal” will have changed after the Corona crisis. One can even hope that we will not simply fall back into the usual patterns. A hint of freedom gained can be heard in some places in life. With a little more time, dinner suddenly regains ritual importance, the sporting activity returns to everyday life. No turnaround yet, but a temporary stop can be felt here and there. Another life is possible, not one that will be brought down to zero, but one that will replace less stress with better quality of life in the future, more social because of solidarity, and happier because it is more relaxed.    



However, the reality is different: there is something scary, radical and fascinating about being confronted with the own idea of ​​life and its vulnerability as elementary and existential as an individual and as a society. A great many people, especially high-risk groups, are seriously concerned about their health, are even more afraid of unemployment and are beginning to suffer from the psychological consequences of the ban on contact and its social and infrastructural restrictions. Probably only an event of such force can open our eyes to many things that we missed because we didn’t have time for them and are now beginning to ask whether it has always been or should be.



The globalized threat



A few months ago, the virus, the coronavirus mutation Covid-19, was still completely unknown. Somewhere near the Chinese city of Wuhan, it was probably carried over to a bat. Finally, the Covid-19 virus jumped from this bat to an animal that was offered for sale in the busy market square of Wuhan, not far from the local train station. That’s how it got to people. Unfortunately – a coincidence with a tremendous impact – the Chinese celebrated their Chinese New Year, the longest holiday of the year in China from late January to early February. In China there was a lot of travel traffic on this occasion, so that the coronavirus Covid-19 spread in all directions – from Wuhan to Beijing, Shanghai and other large Chinese cities, from where the virus started its journey all over the world, to Europe and the USA and triggered the world’s largest pandemic since the Spanish flu in the early 20th century. Nobody could have predicted before the end of February, or even suspected the consequences, although there were warning voices, such as that of Bill Gates, who already pointed out in a lecture in 2015 the fundamental danger of an uncontrolled pandemic and our inadequate preparation for such an event.



The pandemic is causing a social and humanitarian catastrophe, particularly in the United States, where many people have little health or unemployment insurance and are forced to go to work despite being infected, making things worse. Ultimately, the crisis can even affect geopolitical developments.   



Now the Black Swan has landed in a world that is already fragmented, fragile and unsettled, without orientation, in a world that is now standing still until further notice. The corona crisis is like a burning glass and a time-lapse, it sharpens our eyes and speeds up our thoughts. The Corona crisis will be the point of reference for future developments and decisions, the reference to this time will accompany us for a long time. The crisis comes over us like a primeval force, almost like an apocalypse of biblical proportions – including a theodicy, the interpretation of crisis and suffering as the test and punishment of mankind. We are suddenly, unexpectedly and so far unprepared, in a state in which we know very little about what we are dealing with, what to do and what the consequences will be. The post-war generations, who are without any example, without any experience for such a state of emergency, who have become accustomed to ever increasing prosperity and unlimited mobility and who know nothing else, have to deal with a situation that brings radical uncertainty. The crisis destroys, it accelerates, it throws back, but it also forces us to reflect, to learn, to help ourselves. It is an encounter with ourselves in a surreal and bizarre present, which looks like an interruption of the timeline, almost like a comatose state – without a past and no future, raising the question of whether we have lived correctly and set the right standards so far. The crisis changes the gradient of developments.



Of course, there is a risk of exaggerating the importance of the corona crisis for our future. The Corona crisis will be a very important narrative, also one that will be used very differently and improperly. Under the impression of a crisis, people always ask what it means and how it can be meaningfully interpreted. Black swans are very rare events with very large effects. This is the reason why people systematically overestimate their influence on the future. Even and especially futurologists and trend researchers tend to overestimate by asking the system question based on the state of emergency. The tricky thing about black swans is that they are too rare to count on and prepare for them, probably even to derive something from them for the future. There are also potentially very many very different black swans, some of which require very specific measures. A deadly virus is an entirely different threat than a meteor strike; Having more breathing masks on hand may be of little use for the next crisis. Preparing for all black swans is simply impossible.



However, it is very important to learn from this crisis to become more robust, more resilient or – as the risk researcher Nassim Nicholas Taleb calls it – “antifragile”, that is, to develop the ability to face the crisis in order to grow on it. Taleb himself even speaks of a “white swan” because the corona pandemic is not really unexpected. But what turns a white swan into a black one? Given the unpredictability of the timing and scale, one probably has to assume that a greater degree of crisis preparation would not have been efficient.



The illusion of knowledge and a new policy



In crises in which we have to act and make decisions based on uncertainty and incomplete knowledge, weighing up goods becomes much more difficult because we have to take a much more differentiated, public interest-based risk assessment and ethical considerations into account. The first question in the Corona crisis therefore arises after politically responsible action. It has been shown that it is extremely important to include scientific expertise, but at the same time to take into account what science does not know. Action with incomplete knowledge will become very important for politics and society in the future, because it requires a more scientific, evidence-based, but also risk-sensitive approach. 



We see something similar with climate change or digitalization. In the case of the corona pandemic, the unconditional protection of people from the possible health risks can only be the only maxim in the short term, until further precautions can be taken to provide people with intensive care and more information and knowledge about the virus and its transmission is available. In the case of exponential courses, only fast and rigorous measures such as shutdown and lockdown help to slow down the spread. Ruling out an uncontrolled and then uncontrollable pandemic, i.e. regaining control over short-term developments, is the most important task of responsible political action. 



The balancing of the protective measures with the economic costs and the not uncritical interventions in freedom and property rights is nevertheless legitimate and has an almost philosophical dimension. According to Kant’s moral philosophy, one would have to argue in the sense of the categorical imperative, i.e. to set the protection of public health as the highest moral principle, while the utilitarianists in the tradition of John Stuart Mills and others argue from the result, i.e. less principled than consequentialist, from the actual effects. The crisis shows that politics will have to think and act more organically in the future, more in context than in individual technical measures, because it operates under the conditions of incomplete knowledge in complex systems. 



The world after Corona



The corona crisis is a very rare event for another reason. Almost all people in the world have a similar experience at the same time. It burns itself into the common memory and becomes a common reference point. Everyone will know where and with whom they have spent this time and what they felt, such as during the 9/11 or the moon landing. The crisis is a shared experience of a sudden existential threat. Such an event can trigger a collective change of consciousness, namely a changed awareness of the vulnerability of our lives, but also uncertainty and fears. This experience can basically lead to two reactions that are diametrically opposed. It can lead societies to want more global cooperation in the future, to better manage the risks. But it can also lead to the opposite, namely to reinforce what we have been observing for a number of years: resurgent nationalism, protectionist isolation and economic self-sufficiency. The elementary experience of sudden vulnerability, which results from functional networking and its economic dependencies, triggers the desire for security, which can be used and exploited politically in one direction or the other. People become seduced in this state of existential insecurity. In this respect, it is more than uncertain today in which direction it will go. 



The historian Yuval Harari named the two large dimensions in which the period after the Corona crisis could develop and decide. The social response to the crisis will range between re-nationalization in the sense of greater economic self-sufficiency and political sovereignty on the one hand and global cooperation and solidarity on the other. The second dimension spans between the authoritarian state and the state economy on the one hand and liberal democracy and a market economy on the other. There has been talk of war against the virus in many countries and in some cases a national emergency has been triggered, making the executive more effective but less parliamentary controlled. Massive encroachments on liberties and property rights have been carried out in a completely legitimate public health interest that will surely leave behind a changed economy, probably also a changed society. Poverty may increase, the inequality of income, wealth and opportunities increase again. The search for protection can lead to a move towards the private, the selfish, the national and ultimately a strong state. Corona will change the politically and socially relevant identity relationships in societies – positive and negative, local and global. 



This has potentially serious consequences for globalization, which is in a critical transition geopolitically and globally. Globalization needs rethinking more than ever, it has to be more inclusive and just in order to regain trust. Here, too, the corona crisis is like a burning glass for the developments and trends that we have been observing for several years. In this sense, as a possible tipping point, Corona can be a significant and drastic event. This does not apply to the progress of globalization, but also to the development of Europe, which did not do too well in coordinating the Corona crisis. The lack of European solidarity can lead to dangerous consequences crises such as a sovereign debt crisis in the next few years. In this respect, it can be assumed that the corona crisis will have a structural impact on our future far beyond the discussion of shutdown and lockdown. The lack of European solidarity can lead to dangerous consequences crises such as a sovereign debt crisis in the next few years. In this respect, it can be assumed that the corona crisis will have a structural impact on our future far beyond the discussion of shutdown and lockdown. The lack of European solidarity can lead to dangerous consequences crises such as a sovereign debt crisis in the next few years. In this respect, it can be assumed that the corona crisis will have a structural impact on our future far beyond the discussion of shutdown and lockdown.   



New awareness as a wake-up call



The black swan will leave us again, the crisis will pass. But it can, one can already guess today, leave a changed world and a changed consciousness. In the end, the corona crisis can even increase our willingness to change. The crisis forces us to let go and make friends with the idea that everything can be different in a few months because nobody knows how to get out of it in terms of health and economy. The current disruption can change the system due to the collective change in consciousness that triggers it. The shared experience that nothing is safe and suddenly everything can be different helps us to master the tasks ahead Rethinking the future and reshaping the world – from globalization to digitization and climate change. The sudden and existential experience of disruption can ultimately help us to shape the necessary change better and with a common awareness of the important and elementary values.



The value and appreciation for the systemically relevant work of people who have previously worked in secret every day is increasing without this being expressed in the form of prices, wages and salaries, even in a market economy that forms shortages and preferences at prices. System relevance is always a question of the system. And the system determines the people who live in it. Values ​​of value can and will change. The Corona crisis would then be the wake-up call and the beginning for more empathy and solidarity, which is ultimately necessary for the level of cooperation that we need to solve the problems in a globally networked world. 



The feeling of vulnerability can mature into an awareness of togetherness. The crisis can actually open our eyes to asking the right questions not only in terms of coping with the crisis, but for an active, conscious and optimistic shaping of the future. The corona crisis by no means poses the system question. But every crisis tests the system, which is based on freedom, on its prerequisites: responsible politics, trustworthy institutions and people in solidarity. If this test is also passed, it may be that Corona has made us poorer in many ways, but perhaps even richer in terms of our future viability, our ability to shape the future. trustworthy institutions and people in solidarity. If this test is also passed, it may be that Corona has made us poorer in many ways, but perhaps even richer in terms of our future viability, our ability to shape the future. trustworthy institutions and people in solidarity. If this test is also passed, it may be that Corona has made us poorer in many ways, but perhaps even richer in terms of our future viability, our ability to shape the future.


Henning Vöpel has been director and CEO of the Hamburg Institute of International Economics (HWWI) since 2014.