Lessons from History

The world frequently experiences times of intense difficulty. These crises can be natural disasters such as earthquakes, floods or bushfires. Economic recessions — or depressions — disrupt whole economies. Wars cause mass devastation. And as we’ve experienced lately, pandemic causes loss of life and severe disruption. The COVID–19 pandemic has been a crisis of enormous scale — a health crisis that killed millions of people and resulted in the deepest recession since World War II. In many parts of the world, the pandemic has also accompanied a crisis of democracy, with governments letting people down badly.

By exploring past recoveries, we can generate insights into the crisis we’ve just been through and how we — and our governments — might approach our coming recovery. Germany today is a manufacturing powerhouse with the world’s largest trade surplus and South Korea is on its way to having the longest life expectancy in the world. New York is the world’s leading city for finance and media and Taiwan has handled COVID-19 better than almost anywhere else in the world. All of these places were devastated by crises in the relatively recent past, and all have recovered strongly to be better than before. 

An exploration of past recoveries shows that over the longer term, a crisis is less relevant than the steps cities and nations take afterwards. Assessing these recoveries from afar, it’s easy to see that years on, recovery can result in even greater prosperity and success than might otherwise have been possible. If other places can leverage their recoveries into a brighter future, then we can too. 

Insights from Past Crises

If past recoveries are any guide, it is likely that many countries will return to economic growth in the short term. For a while, we may even see growth slightly faster than normal, particularly following the vaccine roll out and if governments maintain an adequate level of economic stimulus. What’s not clear is whether we’ll see a boom beyond the initial bounce — like the U.S. experienced with the Roaring Twenties — or a decade of sluggish growth and stagnating living standards, just as much of the developed world experienced after the Great Recession of 2010. Following a crisis, the decisions that set a country up for long-term economic growth are some of the most critical that governments will make. 

Lasting social consequences arising from the pandemic are inevitable. Recovery following the Spanish Flu involved an intensification of social activity and led to permanent changes in gender roles. The very identity of Christchurch changed following the 2010 earthquakes, with the city shaking off its conservative reputation to become a place where “everything is possible”. If the Spanish Flu is any guide, following an enforced period of reduced human interaction, we may be drawn to intensify our social lives, making up for lost time. A decade of parties ahead, perhaps? Alternatively, after many people reconfigured their relationship with the office during the pandemic, perhaps we will be more inclined to keep working from home, connecting with our local neighbourhoods. 

Not all of these social effects will be positive. The increased prevalence of mental illness has been a consequence of almost every crisis in history. Experts are expecting a tsunami of psychiatric illness in the years ahead. Disrupted learning flowing from school closures will have long-term consequences. The OECD calculates that students who were at school in 2020 can expect to earn 3% lower incomes over their lifetimes.

Past crises show us that recoveries are rarely neat, linear progressions. They play out in the context of complex histories and pre-existing structural issues. But they invariably bump into other issues along the way too. The reality is that there will be future crises, and they won’t wait until recovery is complete. The pandemic arrived in an Australia still reeling from devastating bushfires. And when New York was starting to bounce back from the Great Recession, it was hit by Hurricane Sandy. 

The COVID-19 Classroom

The COVID-19 pandemic has provided us with many insights, and it’s important that we remember these as we move towards recovery. 

We’re All Connected

It has reminded us that health is a public concern, not just a private matter that concerns only the individual and their family. We’ve also learned that what happens around the world impacts us at home. It’s likely that only when most of the world’s population is vaccinated will we be able to declare the end of the pandemic. We’ve also experienced the consequences of the inequality that pervades our society. Precarious and underpaid work served only to exacerbate the pandemic. All crises expose the fault lines in society, and this pandemic has been no different.

Competent Government Matters

We’ve learned that at times like this, it’s actually important to have a competent government. We understand its value most clearly when it is absent. Countries such as the U.K. and the U.S. have been characterised by flip flops in public health advice, botched test and trace regimes, and chaotic and ever-changing lockdown arrangements. Competent governments rely on the existence of institutions that have the capacity and authority to do things properly. These institutions need to have the staff, expertise, resources, and authority that equip them to respond to complex situations such as we’ve just been through. For these institutions to be effective they also need to be supported with a legal and political culture that is committed to public administration. Political leaders that value public administration have been critical during our most recent crisis. 

Small Units of Government

Smaller units of government have proven to be particularly important. Many smaller jurisdictions — such as New Zealand, Taiwan, Iceland, and Australia — have proven remarkably successful in containing the virus. In federations, state and provincial governments have played an important leadership role. Small nations and state governments have often proven more agile than their larger counterparts, and better equipped to develop a rapid policy response. 

Trust

Governments and citizens have a symbiotic relationship. During a crisis, people need to trust experts, governments, and each other. In the absence of trust, governments find it much more challenging to respond competently. But the incompetence of government is likely to further undermine trust, leading to a downward spiral of declining trust and poorly-functioning government. Trust and capable public sectors are national assets that need to be nurtured over many years. The pandemic has shown us what can happen when they are left to wither. 

Our Coming Recovery

As we commence our recovery, we won’t just be dealing with COVID-19 and its aftermath. Our recovery will coincide with a host of other serious challenges. While many existed prior to the pandemic, the virus has shone a light on others or even exacerbated them. This makes the task of recovery more complex, with a great many factors to consider, ranging from deep inequality, to geopolitical tensions and long-term economic stagnation. Yet, while all this represents a challenge, some also provide an opportunity. The accelerating decarbonisation of the economy, for example, may provide the perfect catalyst to stimulate post-COVID economic development. 

Consequently, we find ourselves with some powerful opportunities to recover from the crisis, tackle our biggest problems and create a brighter future. Billions of dollars of stimulus will — and should — continue to flow for some time. Directing these funds with purpose has the potential to yield positive outcomes in areas such as climate change, inequality, and economic productivity. As we emerge from the crisis to rebuild our cities, we have the opportunity to ensure that our communities, infrastructure, and economies become more resilient and hence better able to recover from future crises. Resilience will be further enhanced if we can cooperate globally. And by involving a range of perspectives in our recovery, there’s the potential for an exciting range of new approaches to be tried and tested. 

In the short term, there will be value in establishing dedicated agencies to coordinate recovery, perhaps underpinned by formal partnerships between different levels of government. Commissioning post-pandemic inquiries (similar to the 9/11 Commission or the Royal Commission into the 2009 Australian bushfires) will help to carefully document what was learned, ensuring we are better prepared and better able to respond in the event of a similar crisis. Cities will need to be rejuvenated with arts and events, to give people the confidence and purpose to return to public spaces. We’ll need to re-engage vulnerable students in learning and boost support for mental health.

Economic stimulus must be maintained for as long as it takes, with stimulus focused on initiatives that help drive long-term economic growth and help tackle intersecting challenges, such as climate change. We will need to experiment: trying lots of things, keeping the things that work, and discarding those that don’t. And given the central role they will play in underpinning our long-term prosperity, economic development and education will require concerted additional effort over many years.

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Shaping Our Recovery

Keep stimulating the economy for as long as it takes.

Focus stimulus on initiatives that help drive long-term economic growth and help tackle intersecting challenges, such as climate change. 

Establish a dedicated recovery agency, underpinned by a formal partnership between different levels of government.

Commission a post-pandemic inquiry.

Double down on economic development and education.

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The Road to Recovery

Crises do not have to leave a long-term legacy. We can recover. Places recovering from past devastation have gone on to create prosperous, exciting futures. The people living in places such as New York or Aceh or South Korea now enjoy a quality of life far better than what had existed before their crises. In many instances, places that experienced crises have not merely recovered, they have gone on to lead the world. Their experiences should provide us with the confidence that we too, can recover.

Recovery is not guaranteed though. History is also strewn with examples of places that failed to recover. They withdrew economic stimulus too early, or held too tight to their pre-crisis worldview. Embarking on what — for most of us — will be the biggest recovery process of our lifetimes, it’s important that we approach it in a considered fashion, learning lessons from the past.

While the COVID-19 pandemic has been the biggest crisis of a generation, our recovery also represents an enormous opportunity. It has the potential to catalyse us towards renewed prosperity, advance us on a path to zero net carbon emissions, reduce inequality and strengthen our democracy. Examples from history show that with the right choices, we won’t just recover, we will go on to create a better, brighter future.

This is a commentary by Andrew Wear based on his latest book, “Recovery: How We Can Create a Better, Brighter Future After a Crisis,” published in October 2021.