Reprinted from Bloomberg under Fair Use.
The Virus Should Wake Up the West
The job of government is to protect its citizens. The pandemic reveals that key institutions in Europe and the U.S. are no longer up to the job.
In 1651, a gentleman scholar who readily admitted that “fear and I were born twins” published one of the great books on government. Thomas Hobbes had survived the notoriously bloody English Civil War by fleeing to France — and his great philosophical concern was personal safety. Life in a state of nature was, he observed, “solitary, poor, nasty, brutish and short” because people were always fighting. So, he argued, citizens should contractually give up their freedoms to a ruler who could offer them protection. The state’s legitimacy depended on it fulfilling that contract and keeping its citizens safe, a revolutionary idea at a time when kings, like his former pupil Charles II, claimed their position came by divine right. For Hobbes, who also managed to survive the Great Plague in 1665-66 and died in his bed at 91, our contract with “Leviathan,” as he called his book, depended on its ability to keep us safe.
If Hobbes were alive today, he would feel vindicated. Around the world, fear is on the march — and, in order to be protected from this terrible virus, we are willingly surrendering basic rights, even the freedom to leave our own homes, to Leviathan. The Covid-19 pandemic has made government important again. Not just powerful again (look at those once-mighty companies begging for help), but also vital again: It matters enormously whether your country has a good health service, competent bureaucrats and sound finances. Good government is the difference between living and dying.
Since Hobbes’s time, the world has come full circle. When he wrote “Leviathan,” China rather than Europe was the center of administrative excellence. China was the world’s most powerful country with the world’s biggest city (Beijing had more than a million inhabitants), the world’s mightiest navy and the world’s most sophisticated civil service, peopled by scholar-mandarins who were selected from across a vast empire by rigorous examinations.
Europe was a bloodstained battlefield ruled by rival feudal families, where government jobs were either allotted by birth or bought and sold like furniture. Gradually Europe’s new nation states overtook the Middle Kingdom because they underwent a series of revolutions unleashed by national rivalries and political ideas — not least those advanced by Hobbes. By mastering the art of government (even copying China’s “mandarins”) the West dominated the world for 400 years.
The West’s governmental advantage is now questionable: Simply ask yourself whether you would feel safer today in New York and London or in Singapore and Seoul? Asia is catching up with the West, and in some smaller countries has overtaken it, in large part because Confucian Asia in particular has taken government seriously over the past few decades while the West has allowed it to ossify.
The public sector in the West is decades behind its private sector in terms of efficiency and dynamism. Lenin once said that “there are decades where nothing happens, and there are weeks where decades happen.” The coronavirus crisis is exactly such a history-accelerating event. If Western governments respond creatively to the crisis, they will have a chance of reversing decades of decline; if they dither and delay while Asia continues to improve, the prospect of a new Eastern-dominated world order will surely increase.
In 2014, we published a book about the state, “The Fourth Revolution: The Global Race to Reinvent the State.” Looking back, especially through Covid-tinted spectacles, we got one big thing right, and one wrong. We correctly argued that government was a vital source of competitive advantage and that the West was falling behind. But we were wrong to believe that Western countries would respond to China’s rise by modernizing their governments, putting aside petty squabbles and copying leaner countries like Singapore.
Instead, in so far as it’s done anything, the West has turned to what might be described as big-government nationalism, typified by British Prime Minister Boris Johnson and U.S. President Donald Trump; reform has taken a backseat to rage. In continental Europe, there has been no change: The European Union has survived both the euro crisis and then Brexit without any serious attempt at self-improvement.
Will the Covid-19 crisis be the spur? At first glance, the omens are not good. Everywhere you look, you see our Leviathans in a sorry state — overstretched and inefficient, driven by panic rather than careful planning. Hospitals reached capacity with terrifying speed: In New York City, the epicenter of global capitalism, doctors wear ski goggles instead of masks, and nurses use garbage bags rather than protective gowns. The EU wasted days wrangling about what to do and, as usual, was bailed out by the European Central Bank printing money. In Hungary and Poland, illiberal rulers have tried to grab more powers. Across the West, tests that would allow us to discover who has had the virus are in short supply.
But look more closely, and there are more positive signs. Countries that have rethought government, like Denmark, or valorized good government traditions, like Germany, are doing better at dealing with the virus not just than those Western countries that have not done so, like the U.S. and Italy, but also better than authoritarian secretive China. The pressure of the pandemic is producing exciting innovations as well as messy confusion. The West possesses the technology, the managerial expertise and the liberal tradition to reinvent the state. Now it has a life-and-death reason to do so, too. In the past that has usually worked.
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If you look back through history, Western government has been through at least three big revolutions, driven in each case by new ideas, new technology and new threats.
The first, which Hobbes helped inspire, was the creation of the competitive nation state. Europe’s monarchies simultaneously imposed order on feudal barons at home while vying with one another for supremacy abroad. Indeed, it was the struggle for mastery in Europe that propelled Western government forward: Europe’s monarchies seized on technological innovations — particularly new ships and weapons — to improve their chances of survival. When the Chinese invented gunpowder they used it for fireworks; Europeans used it to blow one another (and then the Chinese) out of the water.
The second revolution occurred in the late 18th and early 19th centuries. Thinkers such as Adam Smith and John Stuart Mill in Britain and Thomas Jefferson and James Madison in America argued that corrupt monarchical privilege should give way to liberal efficiency. New technologies such as the railway and later the telegram allowed the state to do more with less. British liberals were particularly effective: Gross income from all forms of taxation fell from just under 80 million pounds in 1816 to well under 60 million pounds in 1846 even while the Victorians built the schools, hospitals and sewers that Britain still uses. Liberals balanced the books by ruthlessly getting rid of sinecures, sacking incompetents, opening the civil service to merit and abolishing the purchasing of commissions in the army. A tiny government in an offshore island succeeded in dominating, either by conquest, seduction or colonization, three-quarters of the world. Victorians like the great Liberal Prime Minister William Gladstone believed that it was perfectly possible to make government more useful and smaller at the same time — an idea the West has sadly lost.
The third revolution began in the late 19th and early 20th centuries — and laid the foundations for the welfare states that all of us in the West now inhabit. The watchword was security once again, but this time it was security against maladies, misfortunes and inequalities, rather than civil war and the plague. The revolution eventually produced ambitious creations such as Lyndon Johnson’s Great Society and European social democracy, but its starting point a century ago was a familiar combination of forces: new technologies (mass production, the gas engine, electrification); new “left-wing” ideas about social justice (most radically from Karl Marx but more influentially in the West from Fabian intellectuals such as Sidney and Beatrice Webb); and a new competitive threat (posed by a newly united and ambitious Germany). Indeed more conservative figures, including Winston Churchill, thought that mass education and health care were necessary to produce a fighting force capable of modern warfare. “You can’t run an A1 empire with a C3 population,” as David Lloyd George, Britain’s World War I leader, observed.
As late as the 1960s, many people in the West still believed that government could secure ever more benefits: America was aiming for the moon (and getting there) while continental Europe was being rebuilt. People trusted experts to fix things. But after the debacle of Vietnam (brought to us by America’s best and brightest) and the disaster of the energy crisis, faith in government began to pall.
Policy makers began to turn to libertarian thinkers, like F.A. Hayek and Milton Friedman, who trusted the market rather than enlightened bureaucrats to fix things, and who had long argued that people were handing over too many freedoms for only marginal gains in well-being.
In the 1980s, these ideas spawned a half-revolution, when Margaret Thatcher in the U.K. and Ronald Reagan in the U.S. challenged the welfare state. Some chunks of Leviathan were duly privatized, and taxes were cut. But the numbers show that Leviathan was simply pausing to digest rather than going on a diet. Nowadays, the state consumes about 40% of gross domestic product in the West, compared with 10% at the beginning of the 20th century. The regulatory state exploded on both sides of the Atlantic: You need a license to become a hairdresser in Florida; in the European Union, Brussels sits like a spider in a web of red tape.
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The Western state is a grumpy, unloved compromise. The people who pay for it think it gets too much; the people who use its services think it gives them too little. The more things the state promises to do, the more it overburdens itself; the more it overburdens itself, the more we all complain.
When it regulates something, we complain; when it stands pat and allows something to go wrong, we complain louder. And the gulf between it and the more dynamic private sector yawns ever wider: For instance, productivity in the public sector in Britain fell by 1% between 1999 and 2010 at a time when the productivity of the private sector increased by 14%.
Both the left and the right have lost their way. Although the original Fabians believed in a big state that also held teachers to account with rigorous testing and ruthless inspection, modern left-wingers like Bernie Sanders in the U.S. and Jeremy Corbyn in the U.K. are more loyal to the teachers’ unions than the poor they fail to teach. The modern right has betrayed Friedman and Hayek, doling out boondoggles to Wall Street (like “carried interest,” which is basically a subsidy for private equity), while hiding behind mantras that government should be as small as possible: If Republicans really think minimal government is the answer, they should move to Congo, taking their carried interest with them.
Behind the ideological squabbling, the main problem with Western government is simple: It is out of date. If you want a symbol of this, look no further than U.S. school calendar, which was designed for an agrarian economy where children needed long summer holidays to bring in the harvest. Think of all the changes that America’s private sector has been through over the past century: vertical integration followed by contracting out; steep hierarchies followed by delayering; skyscraper headquarters followed by suburban campuses followed by a return to the city. Think of all the companies that have been created and destroyed in a never-ending whirlwind of creative destruction. Now think of Washington. The Department of Agriculture remains a giant despite the fact that agriculture accounts for only 2% of GDP.
Gridlock has only made things worse. America’s intricate government machine, built on checks and balances in Congress, has been all but paralyzed by partisanship. With Republicans refusing to raise more money in taxes (not a penny more!), Democrats refusing to reform entitlements (not a penny less!), vested interests putting their fingers in every pie, and emotive squabbles about abortion and transgenderism sending everybody bonkers, the result is a government dystopia. Resources are diverted from necessary jobs, such as fixing roads and bridges, to unnecessary ones, such as states setting up agencies to regulate interior design. According to the Pew Research Center, fewer than 1 in 5 Americans trust the federal government to do the right thing, half the proportion in the 1980s; back under President Johnson it was around 4 in 5.
While Western government has atrophied, Asia has embraced the future. Singapore has been a leader. A city-state that was once an impoverished swamp and a colonial satrap can now claim to be the best-governed small state in the world. Singaporeans have significantly better schools and hospitals than their former colonial masters in the U.K. as well as higher living standards.
Singapore has achieved this not by spending large sums of money — it spends less than 20% of GDP on government — but by thinking more creatively and acting more decisively. The government recruits its brightest citizens, paying high-flyers as much as $2 million a year, but also weeds out poor performers. It uses a mixture of frequent testing and substantial rewards to galvanize its schools. Successful students are offered free scholarships to the world’s best universities in return for committing to several years of public service. Singapore’s hospitals are superb and basically free, but it also demands that people pay a small sum to visit a doctor — to stop the nuisance visits that normally plague other free services.
Singapore also works creatively with the private sector. The government maneuvers local businesses up the “value chain” — betting first on manufacturing then on services and now on the knowledge economy, particularly information technology and pharmaceuticals. It obliges global companies to locate their higher-value activities in the island state. And, in a striking invasion of individual liberty, it forces citizens to live in ethnically mixed neighborhoods, to prevent the divisions that have ruined so many neighboring countries, and to save a certain proportion of their income for their health care and retirement. Lee Kwan Yew’s creation is certainly a nanny state; set beside the U.K. or the U.S., it is also an intelligent, creative and frugal nanny.
And China? It is, of course, a mixed picture. Many parts of its local government are capricious, corrupt and bullying. President Xi Jinping’s accumulation of power, culminating in his decision to declare himself leader-for-as-long-as-he-wants, smacks more of feudalism than late modernity. Officials have accumulated narco-sized fortunes. Some of its uses of technology — especially facial recognition — are creepy.
But there is also a more impressive story, one that has gotten lost. China’s more enlightened officials are following the Singaporean model of trying to create a world-beating government, led by a caste of elite mandarins. The Communist Party has turned itself into a giant human resources department that keeps detailed files on cadres across the country. Performance measures are ubiquitous: provincial heads, university administrators, factory managers, local bureaucrats are all — at least in theory — promoted according to their ability to hit government targets. For the moment, American governance seems to be in a very different place.
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The relative performance of Asia and the West in coping with coronavirus should be a warning to the West. Many of the most impressive government responses have been in East and Southeast Asia. While the West dawdled, Japan, Hong Kong, South Korea and Singapore all developed their own tests for Covid-19, ramped up production of the materials needed for the tests and made money available so that people could pay for tests and treatment. South Korea even installed booths in the streets in Seoul where you can get walk-by tests from masked health-care workers sitting behind protective glass. The fact that, having done everything right, Singapore was eventually forced to introduce a lockdown, or “circuit-breaker” as it calls it, on April 7 is testimony to the virulence of the virus. Only eight people have died there.
China’s performance might be ranked as “improving.” It would be an understatement to say that the dark side of its government played a signal role in landing the world in its current mess. The best guess is that the virus was incubated in Wuhan’s unregulated markets where live animals, including bats, are stored cheek-by-jowl with fresh food. Even if this guess turns out to be wrong, the fact is that once the virus appeared, local officials in Wuhan, in the worst tradition of police states, tried to silence the bearers of bad news rather than listening to them. Even as the scale of the disaster became apparent, Communist Party apparatchiks moved far too slowly. Hence the talk of “China’s Chernobyl.”
That said, since its dismal start, the regime’s more recent attempts to deal with the virus have been fairly impressive. China imposed a ban on travel inside the country and a shutdown on most daily life. Xi eventually put himself at the center of the national effort and even appeared in Wuhan wearing a mask. Despite its initial secrecy and failure to stop foreign travel, China has shared information about its experience with dozens of countries and dispatched medical equipment. Masks arrived in Italy in boxes printed with the lyrics of Italian operas and in Hungary in boxes printed with the favored “Go Hungary” slogan of its power-grabbing prime minister, Viktor Orban. “The situation I see can be described as this,” Orban declared in an interview relayed on Chinese state television, “In the West, there is a shortage of basically everything. The help we are able to get is from the East.” Even allowing for the continued massive suspicion over its case numbers, there is still a good chance that China’s Chernobyl might end up being a victory for China’s soft power — certainly in contrast to America’s performance.
No one would describe the virus response as being a success for Western soft power. A few European countries have performed creditably. Germany, where trust in government runs at the same high levels that we see in South Korea and Singapore, has been successful at mass-producing tests and using them to slow the death rate. By the end of March, the country had tested a million people: In Bavaria, 11,000 of the 13,000 tests it does every day are in private labs.
But most of Europe has been caught short: Italy wasted days in partisan squabbling, with the nationalist League party choosing to single out a boatload of African immigrants (as if they had come from Wuhan). The British government initially buried its head in the sand while China was going into lockdown, wasting a chance to purchase tests and protective equipment on the global market. It then veered from a “herd immunity” strategy to a lockdown. By one count, the British death rate is 100 times higher than Japan’s. With its prime minister needing hospitalization and basic Covid tests in short supply, it will be hard to convince the world that post-Brexit Britain is a place to be admired.
As for the U.S., the leader of the free world is in a deplorable condition — especially given the extra months of warning it had to prepare. Whatever the merits of President Trump’s unconventional leadership style, it has been singularly ill-suited to the coronavirus crisis. First, he ignored experts and the evidence from Asia and Italy, declaring that the crisis would be over by Easter, when Americans could flock to church to give thanks; then he warned about hundreds of thousands of deaths. While other leaders have used their media briefings to dole out practical advice, Trump has mused about his TV ratings, indulged in conspiracy theories and wondered whether he should pardon Joe Exotic, a private zoo owner imprisoned for conspiracy to murder. A smart president — or indeed any other president! — would have rallied the governors and got agencies to work together: This president is at war with prominent Democratic governors, while the Department of Homeland Security, the Centers for Disease Control and Prevention and his own scientific advisers have often seemed at odds with him and one another. If anything, Trump has exhibited even less leadership abroad, failing to give any notice to his European allies about his travel ban on their countries, and trying to blame China for everything.
To be fair to Trump, America’s problems extend beyond him. Many of key government institutions have looked out of shape and outdated. Nowhere has this been more evident than with health care. The world’s most expensive health-care system leaves millions out in the cold, lacks a command structure that can coordinate across states, and puts too little emphasis on primary care and too much on highly specialized medicine. Even with money finally being directed at the problem, Covid-19 tests are hard to come by.
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So what should we learn from this? The two most common lessons that are being drawn are that autocracies work better than democracies and that government needs to be expanded permanently to deal with global crises. The autocracy camp starts with the fact that China has generally done better in the crisis than the U.S. and moves swiftly to general conclusions about the relative merits of autocracies and democracies. The big government camp argues that, just as wars have greatly expanded the role of the state in the past, so the war against Covid will greatly expand it from now on. Government-supported health systems will expand to deal with future threats. Governments will be stuck running big chunks of the economy.
Both arguments are unconvincing. There are high-performing democracies and low-performing democracies, just as there are high-performing autocracies and low-performing autocracies. Autocratic China still looks worse than democratic South Korea, Taiwan, Germany and Denmark. As for the current list of state-expanding measures in democracies, they look pragmatic and temporary: a combination of Keynesian demand-management to boost the economy, time-limited intervention to prevent vulnerable industries from collapsing and a basic income for workers who are temporarily laid off. Rather than clear the way for an era of ambitious government programs, the crisis could well usher in yet another era of austerity, especially as already indebted governments like Italy try to bring their debt under control.
The most interesting lessons from the crisis concern two things that are seldom discussed together: the efficiency of the government apparatus and the purpose of government in general. The West needs a wholesale program of modernization in government and a new theory of government to accompany it. Even if the West does not come up with another Hobbes or Mill, it can do a great deal to re-engineer the working of government just by updating it from the agricultural era — by harnessing technology more effectively, learning from best practices in public and private sectors around the world, and by finally getting rid of out-of-date privileges.
Take technology first. It is notable how many of the countries that have handled the virus well are the ones that use technology best — especially mobile phones. The South Korean government sends its citizens an SMS if they step outside their local areas (failure to carry a phone carries a fine). Singapore’s health ministry has designed an app that can retrospectively identify close contact of people who have come down with Covid. The Israeli government has authorized Shin Bet, the internal security service, and the police to break into the phones of anyone who is suspected of carrying the virus.
Of course, these all raise profound questions of personal freedom for the post-Covid world. But for the moment it seems to be justified on Hobbesian grounds. After all, it doesn’t seem too much to ask people to make the same sort of concessions to governments in return for increased safety that they already make to private companies in return for digital convenience, provided, of course that the concessions are temporary. Even bossy Singapore’s app is designed to expire automatically in six months out of consideration for individual privacy. As Covid-19 is beaten back, governments may offer deals where people are allowed out of isolation if they accept some degree of monitoring; many die-hard libertarians, confronted with yet more time with their families, may give in and sign up.
The other thing that links governments that have reacted well to the crisis is a taste for learning from one another, and from the past. Countries like South Korea, Taiwan and Singapore all studied SARS and the H1N1 influenza. They responded to the new coronavirus quickly by closing down borders, tracking and isolating individuals suspected of carrying the pathogen, and publishing regular updates. On Jan. 20, when China had reported only a few cases, Taiwan reinstituted its Central Epidemic Command Center, first created after SARS, and immediately told the army to start manufacturing protective equipment. Denmark did not react so toughly, but it did act quickly. By contrast, most European countries and American states, despite having far more time, have a poor record of seeing what works, and copying it.
This is emblematic. The single greatest failure in the West’s public sector has been its failure to copy success. Look around Western Europe and North America and there is plenty of good government to be found. If you want a clever way to reform pensions, look at Scandinavia or Chile. If you want to provide your young with vocational training, look at Germany.
In the private sector “best practice” spreads rapidly because companies that learn from the best survive and those that refuse go under. The “Japanese threat” of the 1980s was defeated because Western companies learned how to copy just-in-time production and lean manufacturing. But in the public sector, thanks to a combination of jobs-for-life and risk aversion, institutions get stuck in their ways. The British have been talking about copying Germany’s system of technical training since Prince Albert’s time. The Americans examined Sweden’s entitlement reforms carefully but couldn’t summon the political will to get something similar through Congress.
The pandemic may well finally spark a burst of modernization. Governments will be squeezed by two contradictory pressures. The first is the pressure to improve many of their welfare provisions, most particularly their health-care and social care systems, so they can cope with any subsequent outbreaks. The other is to balance their books as public debt surges to unsustainable levels.
Look at Italy for instance — perhaps the least reformed system of government in Europe. It is now obvious that the country needs a better health service, especially given the age of its population. But Italy is also one of the most indebted countries in the world. At some point, the penny will drop: Italians will have to get rid of the ancestral perks and corruptions within their system to redirect the cash toward their poor and needy.
Or look at the U.S. Anecdotal evidence suggests that for perhaps the first time in their lives, America’s wealthy have finally become aware of just how wretched public care is for the poor. Makeshift gowns, handmade masks, temporary burial spaces: Is carried interest, or the absurd tax breaks that prop up private health-care plans, really worth such indignities?
The great irony is that a better public health system could save those same rich Americans money. We argued six years ago that there was a good case for government to take over more of the U.S. health-care system, not just on moral grounds of providing the poor with medical care but also on the basis of value for money. America’s empire of hidden subsidies, all the absurd complications of insurance and misplaced incentives, means the U.S. spends a higher proportion of its GDP on public health than “socialist” Sweden — and that is before you take into account the cost of tax breaks for private health care, which are still (another example of how out of date the system is) distributed through companies, not given to individuals. The coronavirus has reinforced the argument that Americans would have better health care and pay less in taxes if they had more public health care.
Indeed, this crisis should prompt all the democracies of the West to ask some hard questions. Should governments offer state employees jobs for life? Should they restrict access to the teaching profession to people with teaching certificates? If video-consultation for doctors and video-teaching for schools worked so well during the crisis, why not embrace them in normal times? Should governments pay for students to go to universities, as they do in much of Europe, when the gains from higher education go overwhelmingly to the privileged? Should governments own large tracts of land in capital cities when those tracts could be sold to fund hospitals? Should privileged 60-year-olds be given free subway rides in London and subsidized train fares in the rest of the country? Does it make any sense for the U.S. to spend more on mortgage interest relief for the richest people than it does on affordable housing for its poorest?
A combination of modernization and pruning could take reformers a long way. But at some point, ideology intervenes. Much as we would like to argue that overhauling American health care is a simple case of modernization and following best practice, we have to accept that many Americans will claim it is a philosophical question. Our response is simple: Bring it on. The West needs to tackle the great question that most countries have avoided since the 1980s: What is the state for?
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The Covid crisis has been a powerful reminder that the basic function of the state is the one that Hobbes defined in “Leviathan”: to offer its citizens protection. Today that means more than just preventing egotistical citizens from killing each other in “the pursuit of power after power that endeth only in death.” It means providing some kind of public health-care and welfare systems. The phrase “herd immunity” may be an ugly one but it gets to the heart of the matter when health is concerned: During a pandemic, the health of even the most privileged is dependent on the health of the least privileged. The fight against a virus is necessarily collective. But the problem with collectivism is that, taken too far, it can squeeze out individual liberty. So along with Hobbes we also need to read our John Stuart Mill.
Mill would argue that it is one thing to exchange personal freedom for security during a crisis but quite another for this to become a permanent way of life, either because government agencies, as is their way, fight to retain these powers, or, worse still, because we become accustomed, collectively, to losing our liberties. The Hobbesian state is good at preserving the rudiments of life, but it suppresses both freedom and creativity (Hobbes’s old university, Oxford burned all his books, including “Leviathan,” in the quadrangle of the Bodleian Library in 1683). The West’s competitive advantage over China — the modern book-burner (or website blocker) — lies in that freedom, and the entrepreneurialism it unleashes.
But only if it applies the other, “efficient” side of Mill’s liberalism — the side that loathed privilege and corruption. Having begun life as an advocate of a minimal “night-watchman” state, that intervened as little as possible, Mill softened as he grew older. What good was liberty if you had no education or health care? The state had to help to provide schools, hospitals and the other basic resources that citizens needed to enjoy their liberty. The night watchman became more of a nanny, but his starting point remained the expansion of individual liberty. The application of Mill’s ideas today would lead to a wave of reforms like those of William Gladstone, making a state that was at once smaller and more efficient — targeted to those who really need subsidies and constantly aware of the dangers of collectivism. This involves ripping away the privileges and rules that have grown around Western institutions like ivy round a tree. The Western political class, particularly in its transnational form, increasingly looks like the Old Corruption that 19th century liberals railed against, with its luxury offices, tax exemptions and smorgasbord of perks.
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The secret of the West’s success over the past 400 years is its appetite for creative destruction: Just when everything looks hopeless, it succeeds in regenerating itself. This is obviously true for Britain, which was the home of many of the thinkers we have lauded in this essay. By the time Mill reached old age, Britain was renowned for its efficient civil service with officials recruited on the basis of merit and the economical Gladstone was priding himself on “saving candle wax and cheese pairings in the cause of the country.”
The U.S. has been equally good at regenerating itself. In the Progressive era, Theodore Roosevelt took on the great monopolies, liberating the economy, while others targeted political corruption, established an efficiency movement and built the institutions of state. In the early 20th century, the country had to be saved from financial disaster by J.P. Morgan because it didn’t have a central bank. In 1913, Woodrow Wilson established the mighty Federal Reserve. Franklin Roosevelt created a national welfare system in record time in the mid-1930s and then repurposed a vast industrial network for wartime production a few years later. Lyndon Johnson launched an ambitious poverty-fighting program in the mid-1960s. Both Ronald Reagan and Bill Clinton prodded reforms in terms of taxation and welfare.
There is no doubt that the West faces as big a crisis as it has since the Second World War not just because of the damage that is being inflicted by Covid-19 but also because the crisis coincides with a weakening of America’s power and a strengthening of China’s. The great geopolitical question facing the world is whether the West can rise to the challenge as it has so many times before and rethink the theory and practice of government — or whether it will fumble about, leaving China to reclaim the global leadership it had when that frightened old tutor sat down to write “Leviathan.”
This column does not necessarily reflect the opinion of Bloomberg LP and its owners.
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