Covid and four crises

Below the surface of geopolitical rivalry, medical chaos, social protests and distress and growing climate disasters lie deeper issues that this book explores. Chapter 1 on the Great Transformation dissects the deep schism between two Austria-Hungarian thinkers who shaped market ideology for the rest of the 20th century.

Covid and four crises

representational image (iStock photo)

The pendulum swings in multiple planes. A political pendulum swings from left to right and back again. Economic pendulums swing from order to disorder (crises) and back again. Lim Mah-Hui and Michael Heng have just published “Covid-19 and the Structural Crises of our Time” (ISEAS, 2022) that dissects the pandemic as quadruple crises at the health, economy and finance, environment and global levels. Welcome to the Age of mega disruptions.

The 2020 pandemic was global, with serious setbacks deepening all the cracks revealed in earlier crises: the 1997 Asian financial crises, the 2007 global financial crisis and the failed reforms since. As British academicians replied when the Queen asked why no one saw the 2007 crisis coming: “no one had the imagination…”  Academics and policy makers were so engrossed in their individual silos that they could never see the whole cracking and changing before their own eyes. They lacked the imagination to connect the dots.

This book is therefore a welcome addition to the literature on probably the most devastating event of the 21st century. The pandemic is redefining and shaping the trajectory of economics, politics, society, and planetary ecology for the rest of the century. There is no normal. The coronavirus is emblematic of our current ills, because if we do not control the microscopic virus, it will control the macroscopic world. What is unfolding is a desperate struggle of power, not just between the medical profession and the virus, but also between nations and markets, since whoever controls the virus controls the economy, and whoever controls the economy and the pandemic better, may end up as the winner in the global race.


For every vaccine that is invented, the virus mutates further. But of course, it is not so simple. When the pandemic broke out in China, the West thought it was China that would stumble. But it turned out that the two states at the top of the Global Pandemic Readiness Index, the United States and Great Britain, ended the year 2020 with 400,000 and 100,000 deaths instead.

Below the surface of geopolitical rivalry, medical chaos, social protests and distress and growing climate disasters lie deeper issues that this book explores. Chapter 1 on the Great Transformation dissects the deep schism between two Austria-Hungarian thinkers who shaped market ideology for the rest of the 20th century. Friedrich Hayek, the economic philosopher, pushed for free market forces, whereas political scientist Karl Polanyi analysed how market forces and their contradictions created the Great Transformation since the Industrial Revolution.

He thought that market forces alone could not solve societal and planetary ills. The Hayek-Polanyi debate was an ideological struggle between state versus market. Lim and Heng correctly identified that capitalism had morphed from industrial capitalism to managerial capitalism and financial capitalism forms that are devouring not just society, but even the planet. In Chapter 2, they delve into the history and evolution of pandemics to show how unprepared all bureaucracies and systems were to cope with these Black Swan events.

Chapter 3 moves from health analysis into an assessment and evaluation of the economic rescues, stimuli and their consequences. Few could doubt that Covid exposed all the economic frailties and inadequacies of the current national and global systems. The cracks that appeared are now wide open and raw, erupting in anger of the masses and populist extremes in different political forms.

In Chapter 4, the authors explore whether we have sown the seeds for the next financial crisis. With global financial markets at all-time high, with spectacular bubbles in cybercurrency Bitcoin and penny stocks like GameStop, will the liquidity generated by central banks to combat the pandemic and prevent financial crisis be sustainable?

Increasingly, scientists have traced the origins of the pandemic to climate change and demographics, as humans live in closer proximity to animals, where the viruses jump zoonotically. But there is a planetary limit when globalisation covers the whole planet, and consumption by one part in excess of its share can only be achieved by exploiting resources through debt. Excess consumption of planetary resources is only possible through further debt creation, which is why climate change and increasing carbon emission are tied to financial capitalism and monetary printing.

In short, our One Planet cannot sustain every African, Asian or Latin American enjoying the same standard of living and carbon emission per capita of Americans or Europeans. Neoliberalism promises much but cannot deliver in practice. We need a wholly different model or worldview. The authors examine the political consequences of the pandemic in Chapter 5, explaining the rise of populism and the democratic retreat. This debate is increasingly entrenched in the US-China rivalry, where both sides begin to demonize each other.

In Chapter 6, the book explores possible futures. This is an important contribution because what comes next is an interaction between different forces. The authors, influenced by Polanyi, see a Triple Movement shaped by market forces, state-led social protection, and emancipation of civil society, which will play an important role in checking the flaws of either state or market.

The authors hope for stronger global governance, but is that possible when nations and societies are so polarised and divided? This book is an important contribution to the debate over our futures. The authors show that all “- isms” are thought-constructs that do not conform to reality. Democracy, capitalism, autocracy, socialism etc. are labels that have different meanings to different people. Man and Nature are One. The world cannot be broken down artificially into parts which do not add up, because those who divide the world into parts can never see the whole. We live in an organic giant, open complex system that is always changing, and we simply do not know for better or for worse.

(The writer, a former Central banker, comments on global issues from an Asian