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How will coronavirus change the world? Show more Show less

As coronavirus spreads, the possibility that it will have a severe and lasting impact on our world increases. But how will covid-19 impact the different facets of our existence and society? After the coronavirus pandemic is over, will we go back to life as normal? Or will things never be the same?

Political effects of coronavirus Show more Show less

As coronavirus spreads, political institutions and actors will inevitably react.
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Coronavirus will normalize state involvement in all economies

As free markets take an enormous hit from the global pandemic, government involvement is bound to become crucial. As large parts of the private sector become largely nationalized in countries like the UK, free-market regimens will seem outdated and state involvement will become the new norm.
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Context

The Argument

As the pandemic spread from nation to nation and waged a global war on health, economies were also severely damaged. During that period, 22 million Americans alone filed for unemployment benefits.[1] Worldwide, as stock markets underwent a tremendous shock, questions were raised by many. Some compared this situation to the Recession of 2008 while others thought this could be worse than the Great Depression of 1932. All of these events, though varied, have one thing in common: They allowed the state to become involved in their economies. Coronavirus will normalize such state involvement in all economies because many businesses will fail if the government does not intervene. When it comes to state involvement, two important approaches need to be addressed. The first one is laissez-faire which is the concept that all capitalistic societies must let economies run uninterrupted and that in the long run, any market failure will fix itself. However, this policy was challenged by John Keynes who explained that in some extraordinary circumstances this will not hold true and that the government needs to become involved in order to rescue the economy. The pandemic has ushered such a time where government intervention is crucial. From dictating when businesses can open, what sectors of the economy need to be prioritized over others to how much aid each division will get, the government now has the power to determine all of these things. Furthermore, this pandemic will not only have temporary effects on the economy, which has led the government to spend almost 2 trillion in stimulus money, but it will also have shockwave long-term effects. For a prolonged period of time, economies will depend on the government and this co-management will normalize state involvement.

Counter arguments

Due to COVID-19, the government has definitely become more involved in businesses. But, this involvement is very much short-lived and it will not continue in the future. The reason is that state involvement for prolonged periods of time actually has more adverse effects than positive ones. In a capitalistic society, production and supply are driven by demand for such products. When the government gets too involved in terms of dictating what items are "essentials" and what items are "non-essentials", eventually there will be a significant gap in demand and supply. During the pandemic itself, such measures are key in making sure that hospitals and other essential businesses are supplied and cared for. However, if this were to continue, then ultimately businesses will see a continuous loss in revenue and governmental involvement will need to cease.

Framing

Premises

Rejecting the premises

Proponents

Further Reading

References

  1. https://hub.jhu.edu/2020/04/16/coronavirus-impact-on-european-american-economies/source.html

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This page was last edited on Saturday, 27 Jun 2020 at 14:28 UTC