Analyses of how the world reacted to earlier crises show that we might face a crucial turning point right now.

‘After Corona nothing will be the same.’  This is one of the most ubiquitous phrases we read and hear today. How can I, as a historian help to predict what might happen? I’m not qualified to deal with the future but the past!  And in addition, I’m always repeating that history is not a good teacher of life. Simply put, nobody has ever listened to history or to their own experience.

Nevertheless, shall we have a go and see whether previous historical experiences offer elements that can help us to analyse the present situation? Hardly, because the coronavirus pandemic is a unique historical experiment. No earlier epidemic touched absolutely every point on earth, nor were they monitored on the Internet; nor was it possible, at every second, to find out all the available information about them via the phones. All preceding epidemics occurred in a much bigger, and far slower, world. Already for this reason, recent experiences of large world crises cannot easily be applied to this situation. However, what history can offer at this moment are analyses of how states and societies responded to earlier crises, foremost to the two world wars and the economic crisis of 1929.

These responses are important today because they are the expression of universal dilemmas, dilemmas we are also confronted with now.  We could separate those responses into pessimistic and optimistic ones, and you could choose which appeal to you more. Of course, that applies only to the well-meaning among you who are concerned about the future of the world after this crisis. Because, unfortunately, there are many people who revel in these circumstances, who shout and threaten, who scare people. And no, I’m not only talking about the president. I’m talking about ordinary citizens venting their sentiments on the street, in queues, in shops, in front of ATM machines… Just to remind ourselves how people assume fascism as a natural condition, and how much joy and happiness uncontrolled violence offers when it becomes part of a system. This attempt to draw a ‘historical lesson’ is not directed towards them. These people are happy anyway. This text is aimed at those suffocated by the present situation, afraid of what the future might bring, and in whom pessimism and optimism are interlaced. That is why I would like to offer them two versions of the future, a version for pessimists and a version for optimists, based on historical experiences until now.

The Version for Pessimists:

According to pessimists, the world we are familiar with will completely fall apart, and this is largleya result of globalisation. The rapid spread of this epidemic is due to global connectivity, and all those trips around the world, cheap flights and apartment rentals have contributed to escalate the infection.

Consequently, they conclude that this marks the definite end of global integration processes, that in the future everyone will look after their own interests alone and will make efforts to fence themselves off and to permanently separate and protect themselves from others. Trust in global institutions will be lost: the WHO has fallen short, the UN is unable to help, the IMF is delaying. Subsequently, the rich and the elite will seclude themselves, keeping their wealth to themselves and stashing it away, waiting for a new crisis. Isolation will become perpetual; everyone will be in a quarantine of their own making. The poor will once again be abandoned; inequality in the world will become insurmountable. Both the rich and poor will give up on any attempt to redistribute wealth differently; all hope will fade. 

They also say that this surely marks the end of the EU, as internal borders have been re-imposed and free movement stopped. Following this experience, everyone will snuggle into the security of the nation state; this is the end of the idea of cooperation, association, and supranational integration. It is the end of the common market; we will protect our custom duties and tariffs; the free market project will have failed. In the future, everyone will keep their masks and ventilators only for themselves. This is the breakdown of trust; no one helped anyone when the going was hard. Except the Chinese, because theirs is the future.

You can take an aquarium and make fish soup out of it, but you can’t make an aquarium out of fish soup… You’ve cooked the fish – it’s over! That is history.

Zoran Đinđić

That is why this is also the end of democracy, which is slow, inefficient, and in a situation in which thousands are dying every day there is no time to put institutions into motion, to discuss, demur, vote… It will be clear that an iron fist is most effective; only it can shut down everything overnight and frighten people sufficiently into grabbing masks. 

It is historical experience that this was exactly the reaction in a large number of states to the crisis of the First World War and to the economic crisis of 1929. The initial mistake was the decision of all in 1918 to pretend that nothing had happened, that the ‘Roaring Twenties’ were approaching – the ‘Long Weekend’ as that decade became known – and to ignore that the world had utterly changed. This was a fatal blunder, as the profound changes that had occurred went unobserved, and no measures of any kind were applied that might have hindered the new catastrophe. The liberal philosophy remained in place according to which the market alone would resolve all economic problems, the support of the state would not be necessary, while the market alone would regulate salaries, prices, production, sales… Then, as a response to the collapse of world trade during the war, economic nationalism appeared as leaders concluded that the calamity of war had shown that cooperation was untenable, and it was necessary to abandon world trade that had emerged in the eighties of the nineteenth century.  The First World War indeed devastated global trade, leading to the erroneous conclusion that the global exchange of goods would never be renewed, that in the future the state must not depend on others and rather rely only on itself, close borders, raise customs duties, become self-sufficient, and safeguard its economy with protectionist policies from global blows.

All analyses of the 1929 collapse underline precisely that course as one of the decisive responses, since shutting into national markets slowed down and reduced the exchange of trade, leading to decreased production. Subsequently, workers were laid off, which was accompanied by a reduction in spending power, unsold goods heaped up and workers were made unemployed… The conclusion at the time was that the First World War had marked the end of processes which had unified the world from the last decades of the nineteenth century, that it was necessary to go back to ‘relying on one’s own resources’, and that it was important for the state to protect itself.  However, at that moment such thinking was already obsolete and no longer corresponded to the historical point in time: the world had already connected, it was impossible to turn things back by force.  It was no longer possible to ‘de-globalise’, to shut off.  The state’s response to the breakdown of the First World War was wrong.    

Doubts about democracy reinforced the belief in the ‘iron fist’ as the best solution. In the 1930s, dictatorships emerged in all corners of the world, from Japan and Germany to Latin America. It seemed that dictators would be able to protect the state, and that they offered fast and simple solutions. Along with the dictators, ideologies swept in that were to ‘console’ enfeebled and disappointed citizens. They began to convince them that they were superior, better than others. That they deserved more. And could get more. Through war.  September 1, 1939, derived directly from those mistaken responses to the preceding crisis. The rest is history.

The Version for Optimists:

Today’s optimists see this terrible crisis as an incredible opportunity to make a better world! They have concluded that this is the collapse of neoliberalism, as it is clear that society and individuals cannot master this crisis alone. States must help citizens with social measures, must protect the unemployed, enable general health care, and provide support to all who need it. They say that precisely the recent austerity measures have led to the poor equipment of hospitals, to the fact that hygiene supplies are insufficient, and to the lack of doctors and medical staff… Now we see what precarious work really means, as many of those who worked under temporary contracts are now unemployed and lack the resources for a minimum livelihood. They can no longer spend, and if they don’t buy, production comes to a halt. If production stops and the remainder lose their jobs, everything comes to a halt. States will have to intervene in order to protect the economy. They will also have to protect workers, return their rights and provide security. A new form of solidarity must be established; we already see that we cannot do without one another. Not as individuals, nor as states in international relations.

Even Donald Trump and Xi Jinping are talking; it is clear that joint action is needed against the virus; it cannot be overcome with everyone acting by themselves. In short, the optimists say that we are entering a totally new phase. A phase of new solidarity, in which inequality will be lessened.  The redistribution of wealth will have to be changed, social differences must be reduced, and equality must be reinstated among the fundamental political values. Wealthy states will have to help poorer ones in order to ensure their own existence. This is our joint virus. We created it, and we must destroy it together. We brought it forth together by destroying the planet, selfishly exhausting its resources in our greed and unwillingness to make any concessions in our consumption. The planet has now sent us an unequivocal reprimand. We must proceed with measures to save it together, because the virus has demonstrated that it does not take borders into account. 

Optimists can also draw on historical examples. They can call on the positive experiences of the New Deal, and on its implementation in some parts of the world after the Second World War. By 1932, Keynesian economics was ready to flow into Roosevelt’s New Deal programme, which rested on the idea that states have the duty to help the individual and society that are unable to cope at a time of total breakdown. States must have programmes and stable support measures to safeguard the spending power of all citizens, because that is the only way to restart, and subsequently to secure the production chain and consumption.

These ideas were also applied to the global economy after the Second World War, when contrary to what was accomplished after the First, a new global system was forged in Bretton Woods, resting on the idea that the new monetary institutions have the obligation to help underdeveloped ones and states that have fallen into crisis. The massive aid provided to European economies by the United States in the framework of the Marshall Plan was part of that concept that help was necessary, not only for reasons of solidarity but also in order to restore the global economy as fast as possible, which can only succeed as an open economy. The project of the welfare state was created on those principles, a state with the responsibility to care for society, to prevent catastrophes and to provide solutions when they do occur. This was the response from which the ‘Golden Age’ of 1950-1973 emerged, the era of the biggest economic growth in history, the highest living standards, the most stable democracies…

In the democratic states, the Second World War strengthened democracy. Dictatorships, it turned out, only temporarily instilled a feeling of security during the time of the Great Crash, and very fast proved to be unstable regimes. In the first place, by being based on the production of enemies. An enemy is compulsory in order for society to homogenise, so that in an atmosphere of constantly reinforced fear it will flock around the leader. For this reason, dictatorships must produce either internal conflicts and terror against their own populations, or war. Most often is both. That is how dictatorship created the conditions for the Second World War. It was the direct result of the pessimistic response to the crisis of the First World War and the global economic crisis. That is why dictatorships had a common ideological formula, which instead of looking for new solutions and diverse responses offered to attempt to stop and turn back history. And, as was shown, that only leads to new catastrophes. As the former Serbian prime minister Zoran Đinđić said: ‘You can take an aquarium and make fish soup out of it, but you can’t make an aquarium out of fish soup… You’ve cooked the fish – it’s over! That is history.’

States and societies once again face a crucial turning point. At this moment, forces are pulling in opposite directions, and offering very different ways out. This text, I believe, has made clear that I am an optimist. And what about you? Do you think that the world after the COVID-19 pandemic will be half-empty or half-full?

An updated version of this text will appear in the next issue of Südosteuropa. Journal for Policy and Society.

Featured image: / public domain