20 March 2020

This crisis is no time for ideological hobby horses

By

John McDonnell’s response to the Government’s emergency financial measures this week gave a frightening glimpse into how a Labour government might have handled this crisis.

The Shadow Chancellor’s demands, other than those related to sick pay and renters, were an unreconstructed shopping list drawn from Labour’s defeated manifesto last December. He had a go at greedy private companies, trumpeted the nationalisation of railways, and called for the state to take equity stakes in businesses. To top it all off, he even flogged the dead horse of “free” home broadband that voters so roundly mocked and rejected back in December.

McDonnell is just one of a phalanx of pundits and politicians using the crisis to further their own political worldview. For such people, it’s just a happy coincidence that the response to Covid-19 happens to chime precisely with what they have been advocating for years.

The range is huge: from calls to cancel HS2, to leaving or remaining in the EU, introducing a UBI, protecting the BBC, and a panopoly of other broadly communitarian or socialist policies. (The IEA’s Christopher Snowdon has started a useful and hilarious rolling thread of examples.) This should not be too surprising; we all suffer from confirmation bias, the tendency to interpret new information in a way that conforms to our existing beliefs. As Kristian Niemietz pointed out on these pages, we all think other people politicise a crisis while all we’re doing is raising concerns.

The reality is that we should beware of anyone pushing their usual solution for a new crisis. They may be right, but in a newly bewildering world, they’re just as likely to be wrong. The facts have changed — the prescription is not necessarily the same.

The Government’s response to this crisis has been anything but doctrinaire, and rightly so. If ever there was a need for pragmatism—doing what can be done to solve problems within the existing limitations—the time is now.

Sunak’s business loans and individual support package are a sensible and proportionate response to this extraordinary moment, although many have argued that more must be done. The same goes for Health Secretary Matt Hancock calling on existing manufacturers to re-gear their production lines to produce ventilators rather than, for example, trying to get the Government to manufacture them.

We need to be particularly wary of those who would hijack a crisis to their own purposes – and change things permanently for the worse. As the great Milton Friedman once noted: “Only a crisis – actual or perceived – produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around.”  Dominic Cummings wrote after the Brexit referendum that “if ideas are developed in advance then sometimes they are grabbed by powerful people searching for a path in short term crises.”

British history offers some fine examples of measures introduced in extremis that later became part of the furniture. Income tax, for instance, was introduced by William Pitt the Younger in 1799 as a temporary measure to fund the Napoleonic Wars. It has been levied virtually ever since. In 1914, the Defence of the Realm Act limited drinking hours to between 12.00pm and 3.00pm and 6.30pm and 9.30pm – and the requirement for an afternoon gap in opening hours was only lifted 74 years later in 1988.

The focus now should be on addressing specific challenges, not on how we ought to refashion our political settlement once these highly unusual circumstances have passed.

Take the cries that globalisation is in retreat, because the prevalence of international travel helped the virus spread so quickly. That’s true as far as it goes, but ignores a couple of important counterpoints: first, we’ve had far, far worse pandemics long before the jet age, notably the Black Death and the Spanish Flu of 1918-19. Second, it is through our close international links that we can identify, track and, eventually, develop a vaccine for this awful disease.

And, thanks to a free trading world economy, we have infinitely more resources to help to understand and tackle a truly global emergency. The wonders of modern capitalism are also making the lockdown a little more bearable, with endless digital entertainment and a panoply of goods and services whisked to our doors in no time.

There will, of course, be more specific lessons to draw from this crisis. For a start, we need a swift global agreement to shut down wet markets that sell wild animals, which are the biosecurity equivalent of terrorist training camps or nuclear weapons. Different governments – and businesses – will have to take stock of their preparedness for another outbreak, which has clearly been nowhere near sufficient in too many places. Compare the Western response to places like Taiwan and Hong Kong, which both seem to have learnt the lessons of the 2003 SARS outbreak.

And though we have examples of pernicious rules becoming embedded after a crisis, the opposite may be happening here too. In just the last week, the UK has lifted planning restrictions so pubs and restaurants can offer take-away food, while in the US the ban on doctors practising across state lines has been lifted. Why not just keep those eminently sensible changes in place once the crisis has abated?

Whatever our political preferences, the coming days and weeks will be immensely challenging. Those on the frontlines will be put through previously unimaginable stresses. Millions have already had their lives put on hold with no clear end date.

Just as many are stoically getting on as best they can, so it will be important to adopt the same calm response when the crisis is over. The lessons we take must be specific and pragmatic; not just a crutch for anyone’s existing agenda.

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Matthew Lesh is Head of Research at the Adam Smith Institute.

Columns are the author's own opinion and do not necessarily reflect the views of CapX.