The 1980s was meant to be the point of no return for the withdrawal of governments’ overbearing involvement in peoples’ lives. Thanks to strong-willed politicians, many Western democracies started to dismantle the welfare state that helped Europe recover from the devastation of World War II.
The free market economy was here to stay. The pushback of the public sector’s involvement in the economy, social services and regulation seemed irreversible. Momentum was added to the surge in raw capitalism when the collapse of the Soviet Union saw the dismantling of Eastern Europe’s planned economies. We were all meant to rejoice at the newly-gained freedom from the nanny state’s grip.
Former US president Ronald Reagan, who probably was the first and most influential promoter of smaller government, said in his inaugural address in 1981 that “government is not the solution to our problem; government is the problem”.
His ideological soulmate Margaret Thatcher declared war against trade unions, who she believed were keeping Britain from flourishing. Successive UK governments of the right and the left started nibbling at the welfare state. Even the National Health Service, arguably the most remarkable social achievement of the UK in the post-war years, was debilitated by massive funding cuts. Politicians argued that it was time for private medical care to provide a more cost-effective service to Britons.
How times are changing! The COVID crisis has forced all governments in Western democracies to reluctantly challenge the free market dynamics to save their economies from collapsing entirely. However, it is fallacious to believe that the government’s likely more prominent involvement in peoples’ lives is only a result of COVID.
One lesson that will undoubtedly be learnt is that most countries need to build greater resiliency in healthcare systems
COVID is both a propellant and an accelerant to the many changes that are affecting Western societies. Ordinary people are no longer so impressed with the so-called freedoms they gained in the last two decades of the last century. They may enjoy buying cheaper goods online thanks to globalisation and the technological revolution that has given birth to Amazon and eBay. But the price many have to pay for this is becoming increasingly unacceptable.
People now expect their governments to protect them from the adverse effects of phenomena they cannot control. They want medical services to be efficient because health has never ceased to be more important than wealth. Despite a shaky start, governments in the West soon used all their fire power to save jobs, upgrade medical services and speed up public investment to restore some normality in people’s lives.
This pandemic’s long-haul consequences are higher government spending, increasing debt and taxes that eventually have to pay for the crisis. One lesson that will undoubtedly be learnt is that most countries need to build greater resiliency in healthcare systems. They expect their governments to show the kind of leadership required to define and implement the solutions to address pre- and post-COVID challenges.
Globalisation has had some very positive effects on Western societies but it has also created debilitating problems in our communities. The income and wealth gaps keep getting wider, thereby increasing inequality.
Climate change threats are becoming more real while our political leaders adopt a wait-and-see attitude before taking the necessary action to reverse the trend. Geopolitical hotspots increase as the solidarity and cooperation among Western democracies weaken. Digital giants are perceived to have too much power. They seem to be solely motivated by amassing wealth for their shareholders while contributing very little to society’s well-being.
Few doubt that the free market economic blueprint of the last three decades has to change. There is nothing wrong with governments once again taking a more active role in investing in sectors that make peoples’ lives better: infrastructure, health, social services and education. The more adverse effects of globalisation on Western societies need to be addressed with urgency to stop the continuing rise of nationalism and populism.
What will matter in this change process will not be the quantity of government but the quality of government. The risks of not finding the right leaders to bring about this change must not be underestimated.
With many Western democracies suffering from a range of weaknesses of their political leaders, including sleaze, cronyism, sexual abuse and incompetence, it is hard to conclude that big government’s return will indeed be a positive catalyst for the change we need.
Many understandably fret on whether we have the right people, policies and execution capabilities to ensure that the return of big government will resolve the current challenges.