Hard Truths: Summary

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.

The past few months have seen this pandemic transform from a health emergency into a unique once-in-a-century social crisis.

The policy 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.

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.

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.

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.

Fifth, the adjustment costs are enormous and will grow over time.

Sixth, there is an old normal, the time just ended in February, but no new normal.

Seventh, 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.

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

Governments can facilitate (and not impede) this transition in social attitudes by building confidence, creating trust, and enhancing safety.

The full article lists over twenty-five specific policies that are forward thinking, preventive, flexible, light touch, and transparent, and that support economic transitions and fiscal sustainability.

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.

The full article can be found here.