TiB 108: All the money fit to print; the epistemology of coronavirus; pandemics in historical perspective; and more...

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Countries around the world are (rightly) enacting economic stimulus packages of unprecedented scale. As Stephanie Kelton notes in The Intercept, the question of how to pay for it - so prominent recently on both sides of the Atlantic - has gone out of the window.

For Kelton, a leading Modern Monetary Theorist (MMT), that’s absolutely right. We discussed MMT last year (see also this explainer and Kelton’s forthcoming book), which argues that any country that can print its own currency (which is not everyone) faces no effective budget limit - and certainly shouldn’t worry about inflation in times like these. Trump agrees - see this remarkable clip.

At least for now, we’re all MMT-ists. But what happens next? You can imagine very different legacies over the next decade: another long period of austerity to pay down debt - or a new era of Big Government. Tyler Cowen foresees the end of the progressive left, while Jeremy Cliffe predicts the rise of the “biosurveillance state”. But who knows? I remember assuming that the Global Financial Crisis would cause a backlash against deregulation and neoliberalism - but it led to a decade of spending cuts and the collapse of the social democratic left. Predictions are hard, particularly about the future. 

Coronavirus in the US looks to be a disaster - and that’s at least in part because it took elites across the ideological spectrum too long to take it seriously. Silicon Valley is proud of having been ahead of the curve, but there’s another group with a disproportionate number of early coronavirus believers - Trumpists (although only those outside the White House, alas), as this provocative Vanity Fair article describes.

That’s troubling for liberals like me - and it’s worth examining why it happened. Partly it’s ideological fit: if you believe in repatriating supply chains and want to rein in globalisation, a pandemic originating in China is catnip. But it goes beyond that. Early Trump supporters necessarily had to be deeply comfortable broadcasting beliefs that might be mocked by mainstream opinion.

To see why that’s so important, read this thread and this reflection by Vox writer Kelsey Piper on why she didn’t sound the alarm publicly despite being privately anxious. In her words, “the implications of my beliefs were too ridiculous for me to feel comfortable committing them to public scrutiny”. This mindset is endemic - and is a big problem for mainstream liberals in a world where accelerating change delivers more Black Swan events. Developing an epistemology that takes unusual ideas seriously without falling for them all will be one of the important challenges of the coming decade. 

What can the history of pandemics teach us about coronavirus? First, that perhaps we shouldn’t worry so much about the apparent trade off, discussed last week, between protecting public health and the economy. According to this new paper, during the Spanish flu epidemic of 1918 the areas where government cracked down more aggressively not only had fewer deaths, but also recovered faster economically.

But, as usual, I’m interested in a longer time horizon. This thoughtful piece by Ben Gummer - a former UK Cabinet minister and author of a book on the Black Death - looks at what 14th century bubonic plague changed in the long run - and concludes that the answer is “not very much”. Gummer argues that the plague accelerated changes, but didn’t affect the most important arcs of history (try to detect its impact, for example, in this chart).

What the Black Death does show us, though, is the consistency of humans’ desire to narrativise events beyond our control. For every 14th century flagellant blaming sin or impiety, there is a 21st century counterpart pointing the finger at climate change or globalisation. As Gummer says:

The culture wars know no bounds. 

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Until next week,

Matt Clifford