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How Will the World be Different After the Pandemic?

Learnings from Various Government Responses to the Coronavirus and the Importance of Maintaining Open Societies after the Pandemic

By Kurt Lieberman, CEO of Magni Global Asset Management. He can be contacted at klieberman@magniglobal.com.

Photo by Artem Beliaikin from Pexels

Much has been written on the global effects of the COVID-19 pandemic. I thought it would be interesting to view things from a different perspective.

The world will overcome the challenge of COVID-19, though the damage from the outbreak is broad and deep. My previous column—which focused on the weaknesses in China’s governance that made the outbreak worse—remains valid, though dated. The unfortunate reality is that few countries have handled the outbreak well.

So far, South Korea and Taiwan appear to have done better jobs. Clearly, Italy and Spain have not. Over time, a clearer picture about the relative success, or lack thereof, in addressing COVID-19 will become apparent. While preliminary in nature, there are quite a few lessons to be learned from analyzing the different approaches countries used to respond to the coronavirus.

  • Widespread testing remains a very powerful tool. Early in the outbreak, South Korea was testing at almost 1,000 times the per capita rate as the United States. Such broad testing was undertaken to do more than confirm COVID-19 patients. South Korea tested to find who had been exposed. Until such testing is done extensively, and around the globe, governments won’t know who is infected or where the virus is spreading.

  • Without thorough testing, blunt approaches are required, such as social distancing and the more extreme “lockdown” method. Open societies with individual liberties have a much tougher time maintaining this type of government control. For most of modern history, lesser control over individual activities has been a good thing, and hence, one of the reasons open societies have been more successful. This pandemic presents a paradox to that historical trend.

  • Testing supply chains and processes quickly became bottlenecks as governments realized the importance of testing the masses. Reagents were in short supply. The correct type of swabs to take samples ran out. Labs became overloaded. Countries with open societies need to have governments that are ready to handle societal events in an orderly manner, so that blunt top-down control of individual activities is not required. This means better planning for subtle and tactful epidemiological controls, and increased investment in testing capacity.

  • Without widespread testing, everything is a guess. The lack of knowledge of who is infected or where it is spreading makes ending social distancing and lockdowns more difficult. Governments are literally flying blind.

  • Transparency and trust become increasingly important. Transparency means that a government is being open with its citizens. In the United States, the shortcomings of our testing system were evident for a while, yet there was little communication about it. Transparency helps assure trust, and the legitimacy and stability of government is enabled by trust. When bad things happen, high levels of trust lead people to rally for their government instead of demonstrating against it.

  • Context is also important. Transparency with improper or limited context can be harmful. There has been a lot of transparency about Confirmed Cases. The metric of Confirmed Cases says a lot more about the testing system in a country than it says about infections. A shortage of testing kits means that countries only test those who likely have COVID-19. Most people infected with COVID-19 are not tested, and thus the true number of infections is far larger. Transparency around a number that is rather useless created a false sense of security in countries like the United States.

  • Read the fine print. There are indications that coronavirus tests are not very accurate, with “false negatives” occurring frequently. A “false negative” is a big issue in this situation. “False negatives” mean that people, who are sick with COVID-19, receive a test result saying they don’t have the virus, even though they do.

  • There are some promising drug advancementss. An anti-malaria drug from France, as well as a Japanese drug used in China, appear to be promising. Hopefully, these and other medicines can be found to treat symptoms.

  • A vaccine is still far away. A lot of work is being done on vaccines to prevent the infection, but vaccines take time. Vaccines are different from drugs that treat symptoms as they are given to the healthy. As such, complications and interactions with other drugs become very important. In the past, some vaccines that were brought to market quickly in order to address previous outbreaks caused more damage than they prevented. We need to be aggressive in conducting research, yet thorough in our approval process.

  • Testing may become a bright spot. Companies from Roche to Abbott to Eli Lilly have created new ways to complete testing. Hopefully, these tests can be deployed quickly.

  • The creativity on testing is testimony to the power of capitalism. Companies are rushing to be the first with the solution, and part of their motivation is the profit they’ll earn if they’re selling the chosen test.

Capitalism is powerful yet amoral. It can be used for good or bad. We need the power of capitalism while helping to channel the power for good. That version is called “moral capitalism”. It is the combination of trust, preparedness, transparency, context, and responsiveness in a country that enables businesses to flourish.

Once the pandemic has subsided and the world returns to some new form of normalcy, let’s hope we spend the introspective time to learn from this experience. Along the way, I hope people around the world realize much more we have in common and that we are stronger working together.

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© Newday Financial Technologies, Inc 2020