Let’s Make a Deal

I write in a state of profound weightlessness. The Covid-19 crisis has sent the wealthy of the industrialized world like mice into their comfortable homes, while those without stable housing or financial cushion balance on the edge, or fall, into a deep unknown. Those whose jobs are deemed essential work quietly at them, torn between the fear of illness and the security of a paycheck. The newly unemployed are physically locked down, but emotionally blown loose like dandelion seeds in a stiff wind.

Our coping mechanisms have varied, but they loosely, and perhaps inevitably, track the Kubler-Ross stages of grief in the face of so colossal a catastrophe. We began with widespread denial. In a run-of-the-mill crisis this phase might have persisted indefinitely, owing to the disrepute into which the idea of objective truth has fallen. But it turns out there are such things as facts after all, if they are lethal enough. So denial has now given over to rage that our leaders did not better prepare us. Certainly such feelings are justified. But our situation is too dire even to let us dwell on our anger for long. What we need to do now is look out the windshield, not the rearview mirror.

What lies ahead, and what we are likely to navigate for the next stretch of road, are the twists and turns of bargaining. We see it already in the bazaar-like scramble over ventilators and PPE. Countries muscle against each other. Governors compete with their own counties and hospitals. Deals with Chinese middlemen are transacted on the fly. To get anywhere you need a signed purchase order at the ready. If you can’t put cash on the barrel within the hour, you’re not in the game. If you don’t know a guy who knows a guy, you don’t even know where the real game is. Nursing homes with no connections or purchasing power, but with lots of vulnerable residents, can’t even find the queue, let alone get to the back of it. Meanwhile a florescence of fraudsters and con-artists troll for the desperate, take their cash, and disappear.

You might think of this as aberrational behavior in a crisis. You would be wrong. It is the predictable response of unregulated economic actors when markets significantly contract. Under conditions of growth, open-market capitalism typically leads to broad distribution of opportunities and benefits. But diminution and scarcity produce concentration of the powerful, kleptocracy, and widespread poverty. The economic history of many countries has richly illustrated this truth, from Latin America to Southern and Eastern Europe to Russia in the decade after the fall of Communism. Americans over the years have smugly derided these foreigners as incompetent to manage their own affairs, lectured them on the need to impose austerity measures to control inflation and pay back their overdue loans. We felt safe in the belief that we would never confront circumstances such as theirs — or if we did, our “exceptionalism” would allow us to escape the shocks of mass unemployment, high inflation, currency devaluation, black markets, egregious government corruption and cronyism, widespread lawlessness and crime.

The next chunk of road is likely to put that belief to the test, causing us to find out what that “exceptionalism” really entails. Other societies have tried to pull out of the financial morass caused by unregulated capitalism by the sheer force of authoritarian dictatorship. A recent example is Putin’s Russia. China also follows the authoritarian model. Trump has a taste for political authoritarianism but economic libertarianism; after the Covid crisis, if re-elected, his political instincts may combine with the trajectory of circumstance to cement an authoritarian model that we are stuck with for years to come.

The other model, rooted in American history, is to draw on our reserves of social solidarity in the style of FDR confronting the Great Depression. This approach would involve strong government leadership of the economy but enlist broader public participation in it. It would re-establish government as the place where business, labor, and other social groups can discuss and make decisions for apportioning necessary sacrifices. This is something liberal democracy is currently pretty bad at doing, especially when politics is for sale to the highest bidder. Like free-market capitalism, free-market democracy is only good at distributing a growing basket of plenty. When the budget is shrinking, democratic decision-making quickly devolves into a game of “Survivor”, with whispered side-deals over whose line-item will be erased. In order to adapt to our future, future elected officials will need to learn how to fairly slice a shrinking pie. This depends, not just on the trust of the electorate in the elected, but in the participation of the populace in the enterprise. We will need to find and adapt new ways of doing this.

I have struggled for ways to end this post. Rousing comments about the importance of the November election just doesn’t seem to cover it, while allusions to 1859 seem overblown. For now, we may just have to let our stomachs get used to weightlessness, and let our eyes adjust to the gathering dark.