The role of government after the pandemic

The era of the Safety State is here, with its outsized emphasis on trust and security.

Many hard truths drive our reaction to this social change, including uncertainty, perception of risk, and the scale of the challenges.

Governments can ease the transition with specific open, preventive, forward thinking, light touch, and sustainable policies.

Photo by TAHA AJMI on Unsplash

The Era of the Safety State

The past few months have seen this pandemic transform from a health emergency into a unique once-in-a-century social crisis, with profound effects on human health, mass psychology, and the global economy.

The social and political response to the pandemic is ushering in the era of the safety state, a fundamental change and a response to today’s complete breakdown of social trust and stability. The crisis moment will dissipate with time but the safety state will continue.

There are three essential characteristics of the safety state:

First, it is a world that is turned upside down,

Second, it is anchored in a lack of trust in other people and in social structures, and

Third, there is a deep yearning for certainty and protection.

There are many reasons to think that the aftershocks of the crisis will last much longer than usual.

Most notable are the likelihood of a continuing pandemic, permanent economic dislocation, long-lived fiscal and monetary policies, and new and long-lasting social attitudes towards risk and safety.

Hard Truths

The safety state is rooted in a number of immutable truths that both confuse and complicate how we adjust to this momentous change in social attitudes.

First, the catalyst for change is an invisible pathogen that can be transmitted by anyone and in any location. Risk is potentially everywhere and fundamentally unknowable.

Second, perception of risk is the factor changing people’s behavior, not risk itself. There is no reason to believe that the perception will fade with the pandemic itself.

Third, this change is all about us and our attitudes. It is a mass market force that can be shaped by public policy, but society at large is in the driver’s seat. We will create the future through our aggregated individual actions, not through top-down decisions.

Fourth, the pandemic is important, but its follow-on impacts into the economy, society, and ultimately politics will be orders of magnitudes higher than the health effects. The real public issue is the pandemic response and how that changes going forward.

Fifth, the adjustment costs are enormous and will grow over time. Barriers to social interaction create inevitable economic bottlenecks. Risk aversion slows the adjustment and a slack economy increases public debt and puts downward pressure on wages and prices. Restrictions on how we connect with each other challenge our traditional freedoms and our quality of life.

Sixth, there is an old normal, the time just ended in February, but no new normal. What we are living through now is a kind of suspended time, one hundred percent stalled in the moment. Call it the unnormal because the sustainable future has yet to arrive.

Seventh, we are only in the initial phase of this transitional time. There are still a number of huge challenges ahead: widespread business failures, the army of the unemployed, economic transitions, fiscal unsustainability, and the ultimate political price to be paid through protest and elections.

Policy Options

So, what is the role of government in the safety state, given these hard truths?

The policy response during the initial crisis period has been highly defensive: control the pandemic, close the economy, support incomes, and prevent further health and economic turmoil.

These actions have been highly reactive and married to the status quo ante. We are dealing with last month’s contagion and yesterday’s economic losses. Policy is partial and temporary and is reinforcing old ways at the cost of the new emerging order. There is a lock-in effect at work.

In the immediate post-crisis period, we need to restore our connections with each other, restore our civic order, and, later, discover how to meet the new needs and desires of our changed society.

Those organizations and companies that can deliver safe connections between people are going to be the ones that reap the undoubted opportunities that are arising. Those that cannot will be quickly sidestepped by the market, which has shifted dramatically towards values of trust, security, stability, reliability, community, and safety.

Governments can facilitate (and not impede) this transition in social attitudes by using the following policies to build confidence, create trust, and enhance safety:

Forward thinking policies:

· Setting realistic social safety goals as priority number one,

· Developing safety first protocols with industry partners,

· Creating global-standard safety certifications and ratings,

· Founding virtual universities with safety research mandates, and

· Creating and expanding restriction-free safety zones.

Preventive policies:

· Funding virus detection and destruction technologies,

· Creating “flying squad” contagion intervention teams,

· Forming international collaborations on best safety ideas, and

· Supporting local risk insurance as an alternative to contact restrictions.

Flexible and light touch policies:

· Basing public health restrictions on absolute risk levels and not on changes over time,

· Tying safety requirements to specific risks in each situation,

· Using technology to create virtual barriers equivalent to physical ones,

· Relying on safety guidelines and moral suasion instead of regulations and public orders.

Transparency and information sharing:

· Public education of relative risk comparisons,

· Creating a public web repository of international best policy practices,

· Providing detailed contagion case information to allow people to self-select risk,

· Opening policy discussions to live on-line public input, and

· Publishing minutes of select cabinet committees considering policy trade-offs.

Economic transition policies:

· Crowd sourcing and publicizing new industry investment ideas,

· Build local action coalitions with business and civic groups,

· Setting aside infrastructure for new modes of activity,

· Reducing occupational and industry barriers, and

· Connecting the unemployed to emerging economic opportunities.

Fiscal sustainability policies:

· Phasing out income supports,

· Sunsetting temporary measures,

· Transitioning spending back to baseline levels, and

· Detailing and benchmarking multi-year budget plans back to balance.

The ultimate solution to this momentous issue is for people to accept the risk of the coronavirus, in the same way that we accept other public health risks (like illness, suicides, and car accidents), and then go about our daily business as usual.

Such a change in social attitudes can come in a number of ways: by eliminating the coronavirus threat, by creating a new social safety consensus, or by tolerating the on-going health risk.

Until that happens, we will have to live with the rather profound and disruptive consequences of the Safety State.