War spins out of control

Events in Ukraine have taken a tragic turn, and I literally mean tragic, not as a synonym for ‘sad’.

This kind of invasion makes no sense. A puppet government or an occupation would make Ukraine ungovernable except by Soviet methods. The invasion is neither quick nor easy, and it’s about to get much more violent. That’ll backfire in Russia for reasons quite apart from western sanctions. It’s one thing to blow up Muslim guys with beards in Afghanistan. But Ukrainians are supposed to be brothers and Kiev has been the historic capital. WTF are we doing?

I’m not sure if Putin properly planned to invade this way or if it was some kind of forced hand, miscalculation, impulse, or other ‘out of script’ move. I’m impressed by how much not according to plan it appears to be going, and that’s not necessarily a good thing. It’s a sign that even for the aggressor the war is spinning out of control. I didn’t expect Putin to act ethically but I did expect him to take good decisions and now I’m not sure.

I also hear, with worry, that the Ukrainians are unreasonably effective in their defense. Clearly they’re being supplied unlimited amounts of light weapons, which the west doesn’t deny, and I’m guessing they’re also being fed live intel of Russian troop movements. There’s probably a significant covert operation by ‘our side’ on the ground. That’s worries me because the Ukrainians are then pressed to fight a war of attrition, and because the west’s involvement cannot be denied. The conflict is looking more and more like one between Russia and NATO. That’s reckless.

But aren’t they in the right? Would you abandon them? Why should they surrender to a dictator? Of course they’re right. Lots of people are right at different points in history. It’s irrelevant. They’re going to die. Right now we hear they’re doing well, but be careful of cheering the right side in a war. It’s natural because we want ‘good’ to prevail, but very likely the defenders will be violently crushed. Putin and the Russian army are the ruthless ones in this fight and there’s a very real chance Kiev will resemble Sarajevo in Yugoslavia or Aleppo in Syria. I wouldn’t want anyone to fight that. I’d want them to flee or surrender and live another day.

I fear that both sides are now playing forced hands. Putin can’t back down without winning any objectives so what’s his exit plan? A quick strike didn’t work so he has to reinforce. The only endgame is he has to be the bigger mafioso, escalating the atrocities and not caring about casualties until the other side gives in. Zelensky has no exit either. I don’t know if he’s a real hero or if he just plays one on TV, or if there’s a difference in these circumstances. But he chose a path and can’t surrender or call for cease-fire while people are enlisting and allies are providing support. Thus tragic. Both leaders are forced to escalate when it’s not in their interest, and even more so for the soldiers and for the civilians.

I think this war is a reckless miscalculation. All wars are that or else there would be peace, but this one seems especially pointless. Putin probably has some power and succession problems at home, and an idea of a post-Soviet order that’s now out of date. He may have misjudged the west or the state of the Russian army, or had his hand forced if he was to remain in power, or may actually like the idea of spending his final years as outright dictator. I don’t have a moral view of what Putin does, he’s responsible for himself. I’d like to make sense of his actions, and failing.

As for the west where I feel having an opinion is at least relevant, I think we’re being incredibly reckless. Reckless with the Ukrainian people’s lives whom we (mostly America, but we) led down the primrose path so to speak. Yes, go on, antagonize Russia. Yes you can join the EU. Maybe NATO. Yes you’re on the side of freedom. We’ll have your back. We mean we’ll give you weapons. Yes you can fight. We stand with you. Sorry about what happened! It would be morally right, not now but ten years ago, to say you’re in a difficult spot, let’s make a compromise between the big guys so you’re not caught in the middle.

And we’re reckless with how volatile the situation is. Maybe western intelligence calculated that Putin had internal problems, or that his expeditionary army wasn’t in great shape, or that he wouldn’t retaliate against British ships or American aircraft if they’re obviously providing support. That’s an awfully thin safety margin. Based on recent history, I’m not sure the Washington elite are that competent.

Misinterpreting Russia

I continue to maintain that the Anglo-Americans misinterpret Russia. The ‘invasion’ or whatever that was is not beginning. It happened. I expect the new border to be resented for a few years but peacefully become fact, like Crimea.

The west is stuck in a frame of mind where Russia is the geopolitical enemy and therefore look: Putin is the new Stalin. He wants to take over Easter Europe and impose a Communist world order. I don’t think so. I don’t expect tanks to roll over Kiev or anywhere else in Europe. Putin’s speech, which I think is sincere, sounds more like the Century of Humiliation concept that guides Chinese policy. Russia is unhappy with its current settlement, they feel threatened or cornered, and they’re seeking a new deal.

It’s not the 1945 settlement that Putin is going back to, it’s 1990. The disorderly breakup and looting of the Soviet Union left Russia with a ruined economy and a shaky relationship to key assets: The spaceport at Kazakhstan, the military port of Sevastopol in the Black Sea, the Antonov aircraft factory in Ukraine, and others. There’s also the shared sacrifice of Chernobyl and the ancient history of Kiev as the capital of the Russian nation.

In the post 1990 order these were outside of Russia, and while the relevant countries were loosely aligned it didn’t matter. But the west gradually tried to pull Ukraine towards NATO and the EU and in 2014 things took a turn. Ukraine was bankrupt, facing an economic deal from Putin and another (insincere, I think) from the EU. A soft coup took place and a questionable group (fascists) took power. They were immediately America’s darlings and the propaganda of ‘defending Ukraine’ started.

I interpret Russia’s stance as saying “Fine, that’s an unresolved breakup from the 1990s. If Ukraine goes to the enemy camp the border is not gonna be here, it’ll be there”. I understand why Russia took the city of Sevastopol which is home to their Black Sea fleet, and I know nothing about these two border regions. I’m not sure if they matter, or it’s for domestic consumption, or whatever. What I don’t see is some imperialist Russia preparing to roll over Europe.

The mistake, which America shows every sign of making is to say: Russia, you’ve been bad. More humiliation for you! Sanctions don’t work, we clearly need to put military bases on your border. Then Russia has no choice but to boost its military.

What I think Russia wants is normalization of relations with Europe, access to Europe’s energy market, less emphasis on military spending and more opportunities for its civilian aerospace sector that Russia is currently rebuilding. Because of sanctions, Russia has had to develop new engines for its MC-21 passenger aircraft, a hugely costly setback. But Russia wants to develop those industries on its own terms and not simply sell them to Airbus or Boeing, which I think is the actual point of friction with the west.

Russia visions

The problem with Russia is that it wants to be like China: A world power with an independent industry (energy, mining, aerospace, maybe pharmaceuticals). The US wants it to be like Brazil. A harmless 2nd tier state with an open market and maybe one or two industrial gems that Western majors can snap up. I have to say I’m with Russia on that one.

Putin rescued Russia from the pillage of the ’90s, when GDP fell from world 2nd to around 10th place, advanced industry was left to rot, and natural resources went to the mafia oligarchs. The US establishment were ecstatic about that development and the UK sheltered the oligarchs and made them legitimate. Apart from Trump, they’ve not modified this position.

Trump, whether for being an outsider and a petty crook or for other reasons, didn’t care and the problem disappeared. Now it’s back as if on cue, and the English-speaking press are putting out war stories the same clumsy way as they did with Iraq. It looks to me like this crisis is manufactured by our side.

I think Washington sees a proxy war in Europe as a low-cost flex because it’s not in their back yard. It is in ours. We saw the outcome of their efforts in Syria and the Maghreb, where millions of lives were ruined and Europe was left holding the bag. And Russians are Europeans like us. Instead of conflict we want to buy gas from them, rejoin our cultures, and integrate our economies.

The American fixation to decisively win, as opposed to just end, the Cold War is making this impossible. Whatever you think of Putin or challengers like Navalny, Russians are not going to accept a repeat of the Yeltsin years. Cornering Russia guarantees strongman rule for as long as that it the West’s obvious aim.

Vaccine reversals

My opinion of the COVID-19 vaccines has changed slightly. Originally we thought the vaccine would come and end the pandemic, specifically by stopping the spread of the disease. In other words we thought one’s strategy would be like this:

Avoid catching COVID ➔ Everyone get vaccinated ➔ Epidemic ends

Based on that understanding, we urged everyone to get the vaccine for the common good. I personally thought my risk was much lower than the general population, low enough that if no medical progress happened I’d be fine to live my life as normal, but I really didn’t want to give COVID to anyone else. As such I welcomed the vaccine when it arrived.

I also questioned, if the priority is to stop the spread, why did we open schools and why did we start by vaccinating old people? Surely the highest benefit would be to vaccinate young and working age people first since they’re the ones who do the spreading.

That was a reasonable thing to assume based on how other vaccines work. In this case though it seems to be a little different. The various COVID vaccines do not stop infections completely but make them mild. As far as I can tell it’s completely clear that the vaccine makes the disease mild, but unclear if it’s even helpful to stop spreading. You would think probably a better immune response makes people less infectious but it’s not obvious. For example what if it makes more people asymptomatic vectors.

That means the recommendation is still to get everyone vaccinated, but the reason and the arguments you can use to support it are different.

Instead of urging people to get vaccinated for the common good, and claiming you have the right to demand such a thing because the unvaxxed are a danger to you, we now have to suggest that everyone vaccinate to protect themselves. Given the majority of unvaxxed are right wing selfish people suspicious of “the common good”, that argument may carry better.

In the west we’re slowly coming to terms with the idea that the virus won’t be eradicated but it’s going to be endemic. You’re going to encounter it in the wild sooner or later. In China, NZ, etc. they went with a strategy of “keep it out” and I think that’s fragile. They have the problem ahead of them. But in the west it’s behind us. Right now my personal strategy is as follows:

Get vaccinated ➔ Catch a mild COVID ➔ Recover with robust immunity

I’m not going to recommend this for anyone else because I’m not an epidemiologist, and I’m not going out deliberately to seek infection. Also it conflicts with not spreading it. But pragmatically I think the safe thing to do is get exposed to COVID sooner rather than later. I worry that if I get regular boosters and eventually catch a resistant variant when I’m 70 it’ll be a lot worse.

That means our governments have to own up that we’re no longer aiming for eradication but for endemic disease. Everyone should be urged to get vaccinated because after some deadline we’ll drop the masks and all other anti-contagion measures and the virus will circulate freely. The message to the vaccine hesitant should be: We’re not going to force you, but for crying out loud please do it because we’re going to go back to living our lives and we want you to be safe too.

Crucially, the current narrative that the unvaxxed are anti-social idiots putting everyone at risk is wrong. Some of them are idiots, most of them are trying to make rational decisions with bad data and in a system that’s been profoundly untrustworthy. Taking the US as the worst case:

  • Initial advice from the government was authoritative but incoherent and often wrong: Wash hands, don’t get masks.
  • A healthcare system and pharma that is out to get you, make you dependent and screw you over financially.
  • COVID boosters increasingly looking like flu shots, which are a useless if not harmful money spinner.
  • Decades of a political system that demonizes “the common good”. If the vaccine is for the common good it must be bad for me, right?
  • Good and bad people mentality where we (Tech, Democrats etc.) are the good people and all of you over there are deplorables.

It is no wonder that people rebel under these conditions, and calling them idiots or a public menace does not help. In fact, we have to change the narrative to: We, the vaccinated, wish to go back to normal and we’ll pose a greater risk to you. We’d like you to be safe but also live our lives so will you get vaccinated please?

I also take issue with restaurants, theatres, concert halls, and random well-wishers demanding vaccine passes as a condition of entry to their services. I think that’s based on the out of date idea that vaccination is the route to eradication, as well as no small part of moralizing nudge. In Europe you have to have proof of vaccination to sit anywhere inside and here some big venues are doing it. That’s wrong. If a venue required that you take contraceptives as a condition of entry would you accept it?

The rational compromise here is it’s OK to demand vaccination where you have a duty of care to the person becoming ill under your watch. For example it makes sense to demand vaccination for entry to a country, health system, insurer, island or other remote region, cruise ship where you’ll spend several days, etc. It makes no sense for a restaurant or a theatre unless you base it on the idea that unvaxxed = spreaders or you’re nudging.

Unfortunately I think our governments are stuck in the narrative where vaccination was the path to eradication and that’s no longer accurate. We’re going to end up in vaccination limbo as well as endless performative distancing and mask-wearing unless we move on. We have to switch to a narrative that the virus will be endemic but mild and, awkwardly, the vaccinated will go on to live their lives and put the unvaxxed at risk. Thus we should be kind to people and urge them all to get vaccinated, but use almost the opposite words to what we’re using now.

What were we doing in Afghanistan in the first place?

Americans are processing their withdrawal from Afghanistan in the same galling self-centered way they talk about Vietnam. It’s how did ‘we’ fail, as if war is a sporting competition and what matters is that ‘we’ look good in it.

It was inevitable and arguably right for the US to withdraw. Why were they there in the first place? To catch Bin Laden who was elsewhere? To save Afghans from the Taliban horror? Did anyone in power believe that? Did the military? Did the Afghans who collaborated with the west and now fear for their lives?

The Afghan government fell like a house of cards because it was a puppet regime and the US was only ever there as an occupying force. There was no serious attempt to build a structure that lasts. America could probably export democracy, civil rights, and institutions if it wanted but after the Marshall Plan in Europe they showed no intent, and have no credibility to do so. Very likely the people of Afghanistan, Iraq, Iran and elsewhere would rather live in a modern democracy than a theocratic failed state, but none of them trust they can get that from the US.

Time after time the pattern of US intervention has been to pick the enemy-of-my-enemy in some perceived geopolitical game and call them an ally. Each time this has created a monster. The Assad family of Syria and Saddan Hussein were praised as useful moderates. Then they ‘had to go’ and the resulting civil wars created ISIS. In the 70s the western powers supported the shah of Iran, which led to the islamic revolution and Khomeini. And these Taliban, they’re the successors of the Mujahideen whom the US armed and trained as ‘worthy’ opponents of the Soviets. What were the Soviets even doing in Afghanistan? Why was that worth a proxy war? But I digress.

Naive intervention and picking allies of convenience destroys countries and ruins people’s lives. Often the lives of the people who believe in the same ideals the West half-heartedly promotes. Even if the status quo is dictators and islamist head-cutters, don’t underestimate how much worse we can make life in another country with bombs, sanctions, or a military occupation. The way to make the hellish countries on Earth a little less so is probably to stop threatening them, make them feel safe, lead by example, and then help the better elements inside of them. Kind of the same way you help troubled people.

Scottish Independence: What I think will happen

Why I’m against independence. Election day special. This is where I embarrass myself by making predictions on how things might turn out.

I give predictions in “bits” on a logarithmic scale: 1 bit is about even odds. -2 bits means one in four chance for the thing to happen. +7 bits means more than 99% certain. -10 bits means 1/1000 or less chance to happen. There’s no point trying to call a 1-bit (or 50/50 event) but might be worth differentiating a -2 bit (25%) from a -5 bit (under 5%) risk. So here we go:

+2 bits: Turnout will be at least 60%
+1 bit: The SNP alone wins a majority of seats
+3 bits: The SNP, Greens and Alba together win a majority of seats

I think turnout will be good on both sides as this election is seen as a mandate for independence. Sturgeon’s campaign of stirring up sentiments and appearing on TV every day to read statistics seems to have convinced people that England is a basket case and Scotland is well managed (in fact outcomes are about the same). Opposition is weak. The unusually good conservative leader Ruth Davidson is stepping down and the new leader is uninspiring. Labour has the opposite problem, Anas Sarwar is a good leader but the party is kind of irrelevant, after becoming a Guardian echo chamber and losing the north of England over Brexit. George Galloway may get elected in The Borders and be a thorn on the SNP’s side, but he did not manage to create much of an alliance for unity.

+2 bits: The SNP call a referendum during this parliament term
+2 bits: Referendum terms agreed with UK government
-4 bits: The SNP goes ahead with a hostile Catalonia-style referendum

The SNP practically made the referendum an election promise, but there’s a couple of reasons it might not happen this term. It’s obviously risky to separate while we’re still in a pandemic and economic support, as well as vaccines, are provided by the UK government. Support for independence hovers around 50% according to recent polls. Since a “Yes” vote is not a sure bet, and either way would take the wind out of the SNP’s sails, they might choose to campaign some more and use the independence issue to secure another term in 2025.

Initially I expect Johnson’s government to refuse a referendum arguing that it’s too soon, an already stated position. Eventually though I think London and Edinburgh will agree some terms and a referendum will likely go ahead. If Johnson refuses to grant a referendum there’s a chance Sturgeon might go ahead with a hostile vote, not backed by London, like Catalonia in 2017. However I think that’s unlikely because it’ll seriously rattle domestic support as well as damage the prospects of being admitted in the EU.

+2 bits: The UK government sets terms that are “harsh but fair”
+2 bits: The campaign is based on ideology, not facts
-7 bits: Significant incidents of political violence in Scotland

I think the UK government can and should give Scotland terms that are harsh but fair. That means two or more of the following: No dual citizenship or freedom of movement. Papers and customs at the border, like with France. At least 5% share of UK debt denominated in GBP. Scottish banks move to London or lose their Bank of England license. Since the referendum is kind of hostile at best, the UK ought to say OK, you’re on your own. The reason to be kinder than that would be to avoid galvanizing support for independence or alienating voters in England.

Based on the current conduct of the SNP and their organ “The National” I expect the campaign to be all propaganda and no facts. I’d be amazed if we see a white paper anywhere near the quality and thoroughness of the one Salmond’s team produced in 2014, since placing the full facts on the table would make independence look bad. Instead I expect Sturgeon’s team to wave flags and dodge questions on currency, border, debt etc. Sorry I don’t know how to formally score this prediction.

I think there’s a small but not negligible chance that rioting or political violence may erupt related to independence, and I would condemn that regardless of side.

+1 bit: Independence wins the referendum
If it passes:
+2 bits: Austerity, meaning 4% or more drop in public spending
+3 bits: GDP shrinks 2% or trade drops 10% for a year
If it fails:
+1 bit: The SNP fades and the main UK parties rebound
+1 bit: A new party landscape emerges in Scotland

So the referendum happens and, as mentioned, it’s hard to call the result. If independence loses the issue is dead for many years but I’m not sure what will happen with the parties. The SNP could remodel as a center-left party, or if they keep drumming up nationalism they’ll lose their base. We might go back to the Conservative, Labour, LibDem split or another party landscape might emerge, perhaps the successor to the SNP vs. Alba. I think that would be a good development or healthier than the current situation.

If independence passes there will be a couple of years quiet transition period but eventually the change would have to come and that’ll almost certainly bring short-term economic pain. I think we’ll see austerity as Scotland loses UK fiscal transfers and has to balance its budget. Estimates differ as to how much. Trade and GDP would drop due to border bureaucracy, negative sentiment, uncertainty, or other reasons. Most likely short term pain will turn into long term mild disappointment. I think in economic terms independence is about as bad a decision as Brexit, although the UK got hit by Brexit and Coronavirus at the same time and Scotland might fare better.

And no, independence doesn’t cancel Brexit. It’s just a bad economic decision followed by another.

-2 bits: Scotland’s economy outperforms Ireland by 2030
-3 bits: Scotland negotiates a seamless transition from UK to EU
-4 bits: Scotland finds its joie de vivre and becomes as fun-loving as Ireland

I’ve been pessimistic throughout so let’s consider what might go really well after independence. I think it’s very unlikely, but possible, that independence will drag Scotland out of decades of self-loathing and victimhood, people will feel they’re masters of their own destiny, everyone will roll up their sleeves, confidence will rebound, and so on. That’s what independence supporters probably think will happen. I think it’s pretty unlikely, but who knows.

There’s more ways to succeed economically than socially. It’s a tall order but if Scotland plays its cards right it could negotiate a transition directly from the UK to the EU and from the Pound to the Euro. That would be quite the coup. Scotland does have tech and resources and exports, so if it chooses to be a hard-nosed businesslike place it can do pretty well. It’ll have to be neoliberal and kind of ruthless, exploit property and assets to the full, sell out here or there, but it’s possible. A number of people who are less employable, ironically in places like Glasgow and Dundee that are pro-independence may be left behind, but Scotland as a whole may prosper. People point to Denmark or Finland as models. These are relatively conservative country club places. Scotland can do this, at the cost of throwing away the “socialist” vision that now powers independence. Maybe that painful path to a better future is a white lie that the SNP is selling to the people.

Perhaps in the best possible world Scotland will lose its dour Presbyterian morality and become a much freer fun loving place like Ireland is today. That would make independence worth it. I don’t think it’s likely at all, but hey, you can hope.

Happy New Year

2020 has been a pretty good year for me and those around me. A couple of people got COVID and recovered, and some others were stuck on their own for months, but nobody died and no-one had serious health issues of any kind. We had more family time than I thought we could handle, and even managed some holidays. Quality of life went sharply up. For the first time in my working life I can walk to the bakery or cook a nice meal at midday. I started to appreciate the city and the neighbourhood that I live in. Our son moved to the UK and got into uni, remarkably at 17 for his exceptional skills, which is the path he wanted to follow. We both got our right to stay in the UK post Brexit secured. Having him in the house motivates me to take care of myself and live better. Overall nothing terrible happened, anxieties and risks have been closed, and life plans have moved forward.

I’m not particularly afraid of COVID. I’m afraid of giving it to other people and I’m ordinarily afraid of boring diseases like stroke/heart/cancer especially during lockdown. I’m a lot more afraid that the loss of freedoms we consented to: electronic transactions, travel restrictions, contact tracing, etc. will be very hard to reclaim. My job in tech was less affected than most, but I did get in a bit of a rut for lack of travel. Turns out a big part of my work was to meet and bring together other teams, and with online meetings although we can work it feels like we’re using up relationships we already got. I miss Japan. 

2020 was politically divisive but relatively benign. It’s the last year of Trump. He was unpleasant, but did less damage than any other president since Jimmy Carter. Trump killed a senior Iranian officer by drone in 2020, setting a bad precedent, but that was it in terms of major hostilities throughout his four year term. No wars, no countries of muslim people invaded or destroyed. Persistent attempts by the Republican party to bypass democracy are more concerning. Over the summer we saw a wave of riots in the US for better or worse causes. It’s good that in 2020 America discovers racism, but exporting BLM as a global brand was a mistake. In the big picture, America’s performative outrage is irrelevant. The darkest news of 2020 was the implementation of Hong Kong’s security law, the ongoing strangling of Venezuela, and the passing of David Graeber. Treatment of refugees in Greece, on the EU’s orders, was not great either.

This year has to be the year of peak woke nonsense. The so-called left, rather than offering any positive vision, has been pointing the finger at people and calling them sinners. It’s become normal and even applauded to get people fired or expelled from uni because of what they think, your social media posts will be scanned and used against you, you can only have the approved opinion expressed using the correct new words, and any resistance is guilt by association. Black people are to be celebrated, but only as victims, and if they don’t want to play that part they’re accomplices. Scotland is proposing a Soviet bill where you can be prosecuted for comments made in private. The irony of using these fascist methods is lost on the left because they’re good people fighting for good causes, and those they hope to silence are bad “intolerant” people. The effect will be a society where people tow the party line but don’t share what they actually think. What they think will shift for the worse, and at some point the masks will fall off and we’ll be in a much worse place. I hope this trend peaks and reverses, as enough people call bluff and society comes to its senses.

For 2021 I expect we’ll return to normal but with bumps. The vaccine will be rolled out over the next few months and we might have a “missing bullet holes” moment: Should we be giving it to older people who shelter or to young ones who spread the disease? But at some point everyone will get it and restrictions ought to lift. Will they? We may see governments try to keep surveillance, emergency powers, etc. citing some tragic “for the children” cause. This has to be resisted. In Scotland the government will harp on about another independence referendum. I think it’s a very bad idea and it’ll fail when life post Brexit continues as normal and people look at the costs of a split more soberly. At work I have a new role, which I wanted for some time. I’d like to see my colleagues, as well as travel but not at the pre-crisis level. If this year teaches us anything it should be to keep better work-life balance as well as be more sustainable. Possibly also not to bite off each other’s head too.

I know it’s expected to say how unbelievably terrible this year has been but, well, it hasn’t. It’s been an OK or even pretty good year for me and I just wanted to share this fact for perspective. Maybe I’m especially lucky, or just optimistic. I hope this year has been OK or pretty good for you too, and I wish you an even better 2021.

COVID-19 economic reflection

Some thoughts of the economic crisis we’re currently going through, the likely ways out, and the shape of the economy and society in the aftermath.


It’s a relatively safe prediction that the economy after COVID-19 will end up more consolidated and the balance will shift from SMEs to corporations. As a result of the shutdown lots of small firms and their supply networks will be wiped out, while large global brands expand in their space. That will raise inequality within economies, and between economies. For example middle-income countries with lots of SMEs will lose domestic firms and substitute imports from the same multinationals.

In part that may explain stock prices, where tech stocks are having a V-shaped recovery out of touch with the real economy. Amazon is now above its pre-crisis valuation. Inevitably, these firms will see a few bad quarters because the wider public, if not the middle class, will have less money to spend. But they’ll spend it online or on gadgets instead of at the pub. Global firms will be better placed than small firms or other investments, and as such they may see flat profits but higher Price/Earnings ratio.


What’s less clear is whether the economy will recover to its pre-crisis state. Of course in the long run it will. But some sectors, notably oil and aviation, are seeing a sudden glut of resources where the operators have to pay to store their oil or maintain their grounded aircraft. With a slow recovery, and climate change round the corner, we may never see the current stock of aircraft, oil infrastructure, hotels, or cruise ships fully back in use. Companies like Airbus or BP will likely survive, but the more traditional products in their portfolio may be retired in favour of new technologies or greener offerings.

In theory, this is a perfect time to invest in green energy, as well as rethink the platform economy. The first phase of AirBnB or Deliveroo has been an inequality machine. But with lots of people out of work, less international travel, and probably less frivolous spending after the crisis, maybe the platform economy can find itself a democratizing role. Providing services to each other at a local level is not inherently exploitative. Perhaps as we look for a more local and more resilient way of life, both green investment and informal services could see an upsurge. Whether they will is another matter.


The crisis response to COVID-19 has been strikingly local, at the level of European countries, US states, or Chinese provinces. Roughly speaking people organized at the 10M to 100M population scale. Perhaps this tells us something about the natural scale of economic recovery also. After the crisis we may see less global trade but more domestic consumption and domestic tourism. Firms will obviously take advantage of national incentives. How nation-states pay for those incentives will be revealing.

People seem to have learnt a little, perhaps the minimum, from the Global Financial Crisis. This time round the stimulus was quick to come and relatively free of moral lecturing. It’s hard to blame a small business for failing when the government ordered it to close. But attitudes to dealing with the spike in public debt have not changed. The US and Japan are likely to load it on the central bank and deal with it painlessly. Europe is hampered by the Euro and likely headed for another round of austerity. The end result of austerity is the stronger financial capital buying up distressed assets of the periphery.


Much is said about whether, once we’re free to go anywhere and sit down in coffee shops, people will revert to their old consumer lifestyles or, thanks to this forced lesson in stoicism, our preferences and consumption patterns will change. It may not be philosophy that drives the change, but certain things that were politely obscured are now laid bare. As economist Marianna Mazzucatto points out, if the “essential” workers keep us alive, how did the “non essential” ones manage to extract so much value, and is that going to change?

The most benign way to deal with the obvious collective redundancy of the middle class is to consider more flexible work-life options, a different balance of formal employment and community work, or a four day week. Europe may deal with lean times this way. In more sink-or-swim economies like the US we may see a wave of forced entrepreneurship, where people are let go from companies and, if they’re above becoming Uber drivers, they start their own micro-brands offering who knows what products and services.

So on one hand consolidation of capital into fewer, bigger corporations that absorb the markets of smaller firms. On the other, depreciation of legacy sectors and investment in green technology likely sooner than iit would otherwise happen. Widely varying debt politics, and different ways to absorb the semi- and unemployed, either through collectivist work sharing or by somewhat desperate and improvised self employment.

What did COVID-19 do for us?

I guess the media coverage of COVID-19 isn’t cheerful enough, so let’s look at all the good things that the pandemic is doing for us.

It’s an awesome wake-up call for global warming and the collective action we’ll be forced to take in a few years. Previously I thought we’re doomed, climate change is going to be as destructive and violent as it gets. Now I think maybe not. There’s enough signs of organized action, especially on the east side of the planet, that maybe we can get our act together and deal with disaster. Even Europe is getting its act together. America, well, we’ll get to that.

The virus shows clearly which governments are competent and which aren’t. In Asia, apart from initial denial in China, pretty good. Singapore and Hong Kong are impressive. Whether by authoritarianism or public consent their response is effective. Europe acted late but is shaping up. The UK, despite having the technical expertise is politically floundering. Europe’s response is all at the national level. The EU bureaucracy is structured in an inanely conservative way that prevents any meaningful action.

In America, to my astonishment, they have local government and it seems to be doing the right things. The federal government is spectacularly useless. Is that a surprise? Their job is to make war and to protect capitalism. Aircraft carriers and central banks don’t help here. America is ideologically opposed to caring for people as a whole, but locally there is support and governance. I hope people remember and appreciate which kinds of organization made a difference.

People are staying at home and the economy so far hasn’t collapsed. It will definitely gdown and large fractions of people will face hardship, but it’s holding up remarkably well. Partly this is goodwill. It’s understood that we’re dealing with an external shock and people aren’t accusing each other of being poor because they’re lazy. So far, a pretty good attitude. I’m positively surprised.

Some people haven’t adjusted or are already craving a return to normality. How will children do without school? – they say. We need lessons over the internet. Well, maybe, or we need to re-evaluate school. Do kids nowadays learn through textbooks? Do they need to spend their weekdays getting used to office life? There’s lots of adjusting and re-thinking to do. Some people are bad at grasping how something universal is going to affect them personally.

As we get used to working at home, we may gradually re-evaluate what jobs are valuable and need doing. Delivering food and fixing infrastructure, pretty important. Bureaucratic and marketing jobs, like mine, eh… Maybe because of need we’ll adjust to less paperwork or working fewer hours. Or for white collar jobs prioritise coders, designers, engineers, etc. to managers. Our economies are overweight with too many value extractors at the top. Maybe a destructive shock will rebalance them.

In all likelihood, the market economy will fail in some sectors and a wartime plan to provide resources will be needed. For example airlines are likely to fail and transport may have to be re-established. Healthcare in some places may need to be nationalized. I think for-profit services are a luxury for good times, and when a serious crisis comes they get replaced by a smaller, more efficient, planned system. After the crisis, that infrastructure creates space for the economy to prosper around it. We’ve seen that after WW2, and it was mainly cars and appliances then. This time it may be green investment.

Tourism and travel will be badly hit. Conferences are cancelled and frankly I don’t think they’ll be missed. I like travelling but I’d like it to be different after the crisis. Less hopping between cities for a weekend, more periods of living in a new place for weeks or months. More fractal, local networks. Entertainment too will be badly hit. I hope if anything the inability to go to concerts will make people appreciate artists and support them properly.

As I said, there’s a lot of adjustment to do. Coronavirus is a terrible thing, but the actions that we’re taking, or that most of the world is taking, are for the better. The spirit of cooperation is holding up, resilience is suddenly valued, greed is shown to be ineffective. People will have to re-evaluate what’s important in life and what is frivolous. I hope that we emerge from the crisis a little better as individual people, and a lot better as a human collective.