A Bangladeshi child works in a polluted environment at a shipyard near the Buriganga River in Dhaka on March 9, 2020. Photo: AFP / Mehedi Hasan / NurPhoto

The coronavirus pandemic has upended the global economic system, and just as importantly, cast out 40 years of neoliberal orthodoxy that dominated the industrialized world. 

Forget about the “new world order.” Offshoring and global supply chains are out; regional and local production is in. Market fundamentalism is passé; regulation is the norm. Public health is now more valuable than just-in-time supply systems. Stockpiling and industrial capacity suddenly make more sense, which may have future implications in the recently revived antitrust debate in the US.

Biodata will drive the next phase of social management and surveillance, with near-term consequences for the way countries handle immigration and customs. Health care and education will become digitally integrated the way newspapers and television were 10 years ago. Health care itself will increasingly be seen as a necessary public good, rather than a private right. Each of these will produce political tensions within their constituencies and in society generally as they adapt to the new normal.

This political sea change doesn’t represent a sudden conversion to full-on socialism, but simply a case of minimizing our future risks of infection by providing full-on universal coverage. 

Internationally, there will be many positive and substantial international shifts to address overdue global public health needs and accords on mitigating climate change. And it is finally dawning on Western-allied economic planners that the military price tag that made so-called cheap oil and cheap labor possible is vastly higher than investment in advanced research and next-generation manufacturing.

This also means that the old North (developed world) versus South (emerging world) division that long preoccupied scholars and policymakers in the post-World War II period will become increasingly stark again, particularly for those emerging economies that have hitherto attracted investment largely on the grounds of being repositories of low-cost labor. They will now find themselves picking sides as they seek assistance in an increasingly divided and multipolar world.

The fault lines of the next economic era have already begun to surface, creating friction with the previous international structure of banking and finance, trade and industry. There is a force beyond elites and critical industries driving this: The proletariat has literally become the “precariat.”

In the US and Europe, the staggering number of service-economy workers are going to be quickly politicized by the shortfalls: People have seen a collapse in income and big failures in education and health care. Union-busting, pension fleecing and austerity budgets and new technologies that concentrate wealth away from labor have created a circumstance where ownership and profit models must be revisited to sustain stability. 

To be fair, this isn’t the first time that the sacred tenets of the global economic framework have dealt with a crisis that seemed to usher in a new era. The same thing happened in the aftermath of the financial crisis of 2008. But that was largely seen as a product of faulty global financial plumbing that nobody truly understood, as opposed to a widespread social collapse closely approximating the conditions of the Great Depression, as we have today.

Even as we re-integrate, it is hard to envisage a return to the “old normal.” Trade patterns will change. Self-sufficiency and geographic proximity will be prioritized over global integration. There will be new winners and losers, but it is worth noting that the model of capitalism we are describing – one that does not feature obscenely overcompensated CEO pay co-existing with serf labor and the widespread offshoring of manufacturing – has existed in different forms in the US from 1945 into the 1980s, and still exists in parts of Europe (Germany) and East Asia (Japan, South Korea, Taiwan) to this day.

Our everyday lives will be impacted as selective quarantines and some forms of social distancing become the new normal. All of this has implications for a multitude of industries: restaurants, leisure, travel, tourism, sporting events, entertainment and media, as well as our evolving definition of “essential” industries. Even our concept of personal privacy will likely have to be amended, especially in regard to medical matters. 

Taken in aggregate, we are about to experience the most profound social, economic and political changes since World War II.

This article was produced by Economy for All, a project of the Independent Media Institute, which provided it to Asia Times.

Marshall Auerback

Marshall Auerback is a researcher at the Levy Economics Institute of Bard College, a fellow of Economists for Peace and Security, and a regular contributor to Economy for All, a project of the Independent Media Institute.

Jan Ritch-Frel

Jan Ritch-Frel is the executive director of the Independent Media Institute.