A few months into the coronavirus pandemic I stood over the stone which marks my maternal grandparents’ final resting place. I had made the two-hour journey for some reasons I understood and others I did not.
As I wiped away the tears from my eyes, I looked around the churchyard at the memorials listing the dead of this small parish. As in any small village in Ireland, Britain or France, the gravestones contained the surnames of families rooted in the one place for generations. Names I knew from my own childhood, including that etched onto a cross above a newly dug mound of earth.
I paused as I took in the scene and suddenly realised he would, because of the pandemic, have been denied a funeral inside the church. I was momentarily overwhelmed and sank to my knees as I thought of the thousands who passed, and had to watch them pass, without this most precious of rituals.
My younger self would have tried to find a rational explanation for my reaction that morning, if perhaps only to avoid an awkward confrontation with the reality of my emotions. There was something in the contrast between the peace of the churchyard, and the interruption of the final communion with the departed, which moved me beyond comprehension.
But our intellect has profound limits, as do the words on which we lean to describe our lived reality. And this is our challenge in the wake of Covid-19. We have a profound need to make sense of what has just happened. But we understand less than we think, and what we can say barely begins to describe our individual and collective experiences in this unsettling age.
For this reason we look into the past. Even if it is an unreliable guide, history at least provides a starting place to make sense of the present. The dates on my grandparents’ grave (1908-1990) bookend that century of turmoil and crises which engulfed, and then fundamentally altered, our world.
My Irish grandparents’ lives also spanned the same tumultuous epoch. The four of them lived through a civil war in Ireland, two global conflicts and the Great Depression. They were in their early 40s when two cities in Japan were destroyed by atomic bombs. They lived the second halves of their lives in the shadow of nuclear obliteration.
All four of my grandparents survived into my own childhood. I knew them well enough to understand that they looked at the world differently from my parents. They were of that generation that had made the world a better place. A generation that found ways to prevent and treat diseases that had killed millions every year. A generation that did not fight a third World War. A generation that found a way to deal with crises that were far more threatening to humanity than those we have experienced in the past two decades.
Insolvency
Many of the same qualities are to be found in the population of modern Ireland. It is less than a decade since the country stood on the brink of insolvency.
This November will mark 10 years since secret negotiations commenced for an emergency loan designed to stop the country running out of money and being ejected from the euro area. That moment was the high water mark of a crisis that left many scars, some of which are still visible today, while others are the hidden memories of those who suffered.
Ireland is a small country, but it had to face a financial collapse as large as any in history. Its experience before, during and since the global financial crisis offers lessons as the world deals with the Covid-19 pandemic.
As in the global financial crisis, governments have been overwhelmed, practically and, to a degree, intellectually and emotionally. As in the earlier crisis, politicians and officials have had to make imperfect decisions. They had to sound authoritative when, in truth, very little was certain. It was a messy, uneven experience, but it created the conditions necessary for the country to recover.
In fact, far more was achieved. Ireland’s crisis was, it must be said, largely of its own making. The economic and political rot had penetrated the foundations long before the banks started to show the effects.
But Irish people not only had the resilience to endure the consequences of the crisis, they had the gumption to tear out and replace the foundations. This involved some tough choices, as well as many years of sacrifice. It is true that the Troika overcame political inertia and accelerated the reform process. But it is also true that Irish politicians and officials did most of the spadework.
Had it been otherwise, the reforms may only have ever been skin deep, and they would not have endured in the many ways that are evident today. And it may be that one benefit of a fatalistic caste of mind is that it leads a nation to embrace, rather than resist futilely, its fate.
Our only way out of the economic realities of the pandemic will be to address them in the same determined manner. We need economic growth to restore employment, repair public finances, and pay for health and social care provision.
At an intuitive, emotional level, people understand that difficult choices have to be made. They also understand there are no simple solutions. But this does not mean there will be no public appetite for politicians who promise to limit the pain or make it go away.
Or, for that matter, an appetite for politicians who suggest that someone else should bear this pain. We witnessed a rise of populist politicians after the global financial crisis. These parties have consistently polled well in elections globally. Although some of them would object fiercely to the suggestion that they are the spiritual descendants of previous populist movements, much of what they say, and how they say it, is eerily familiar. The echoes of 1930s Europe are impossible to ignore.
The triggers for extremism, in both the 1930s and 2010s, were economic disruption, and a profound (and closely related) loss of confidence in established political leaders. We are not immune to a further rise in populist politics and politicians. And we would be deeply unwise to conclude that such parties will only ever have limited appeal.
But if the pandemic has demonstrated anything, it is that simple solutions do not work for complex problems. Populist politicians may have some good questions, but they rarely have the answers.
Of all the strains of populism, the most dangerous, especially at this point in history, is nationalism. A global disease has, paradoxically, triggered a local, insular response. Nationalistic rhetoric has only intensified divisions, and done nothing to foster co-operation. There has to be a very real danger that global trade, and therefore global economic activity, will be casualties of the pandemic.
No economic crisis in history has been made better by limiting global trade. International co-operation is required to ensure that trade, the engine of economic growth, can run at the required speed.
Darker future
It will not take long before we know whether the prevailing global economic model – market economies trading freely with one another – will prevail. We need it to do so. It dragged us out of the depression of the 1930s. It fostered peace and prosperity after the second World War. It has lifted millions out of poverty in the developing world. And it was, until 2020, enabling us to recover from one of the worst financial crises in history.
But has this system broken down irretrievably following the pandemic? And are we, to complicate matters, operating at the limits of economic policies already pushed to the limits after 2008? Are we, in other words, staring into a darker post-pandemic future than we might hope or imagine?
As a starting point, we need to accept it is going to take some time to recover, and therefore we are in for the long haul. This is one of the biggest single lessons of the global financial crisis: the consequences of a major crisis endure. They endure in observable ways such as unemployment, home repossessions or business failures.
The effects are also felt in things we tend not to think about. The roads, schools or hospitals that are not built because governments lack the resources. The mental health consequences of long-term joblessness. The businesses which are not created because people are fearful of the risks.
The Troika’s grip
Ireland has much to teach the world about surviving a crisis. But it has even more to say about what can then be done to recover and rebuild. This has been called, in a different context, “winning the peace”. It is the laborious work of putting things back together after they have been wrenched apart. It is the unglamorous process of making sure things work, not only when they are going well, but especially when they are not.
It is, in other words, precisely that work which Ireland has been doing for over a decade.
Ireland won the peace because it was courageous. It made the tough calls. There is no question that the Troika had a role in this. But once Ireland’s politicians saw there was economic and political upside in a full-throated recovery, the momentum was irresistible.
Only later, when the Troika’s grip weakened, and the worst of the medicine had been swallowed, did opposition harden, most notably against the water charge. But by then the State was in good shape, and Ireland was the IMF’s poster child for reform achieved in the face of adversity.
As I survey the pandemic-ravaged economies of the western world, it is this lesson from Ireland’s recovery that resonates most with me today. In most of the developed world, there is no equivalent forcing mechanism to the one the Troika imposed on the Irish State, nor is there the matching domestic appetite.
The reckoning with reality that occurred in Dublin after years of political drift did more than end Ireland’s funding crisis. It allowed the State to leave behind the legacy of a system in which the confusion of business and personal relationships, as well as political corruption, had rotted it from the inside out.
Who is going to tell the truth this time in Washington, London, Paris or Rome? Who is going to point out that the monstrous Covid-induced debts will have to be repaid? Who will observe that the printing of ever more money has only ever led to further asset bubbles and, in most cases, inflation?
And who, especially after so many deaths in care homes, is going to advocate a properly funded social care system?
In weighing these questions, it is worth emphasising the fundamental difference between this crisis and its recent predecessor. In 2008, the fall in confidence was sharp, but the bottom was found quickly. This meant the foundations for recovery were established not long after that crisis began. Confidence returned and growth resumed, if barely in some countries. We have not yet found the bottom following the pandemic, and it is highly likely we will be bouncing off it for years to come.
For this reason, the 1970s may offer a better point of comparison. That was a decade of multiple economic shocks. In 1973, the Organisation of Petroleum Exporting Countries (Opec) announced an oil embargo, leading prices to rise by nearly 400 per cent.
In the US, this led to rationing of gasoline and the introduction of a national maximum speed of 55 miles per hour. In Britain, the government introduced a three-day working week to conserve electricity. These were some of the observable effects. The broader economic consequences reverberated throughout the decade.
The world is a very different place today, and the world economy is different from that in the 1970s. But the political situation looks strangely familiar. Against a backdrop of mounting public debts, there are few truths being told about the diminishing choices open to governments.
This puts politicians on a collision course with electorates who simultaneously desire greater economic security and increased expenditure on key services, especially public health.
The 2020s will be a difficult decade, punctuated by crises as the Covid bills start to land. This is sobering in its own right. But what should concern us even more is the mismatch between the scale of this challenge and the wherewithal of our governing elites.
The initial phases of the pandemic have shown what can be achieved through determined and intelligent leadership. Germany, New Zealand and Australia have each had “a good crisis”. Contrast the experience in these countries with those in the US, UK and much of western Europe. But are you surprised when you look at who is in charge?
The problem, of course, is that successful management of a pandemic within national borders does not count for much in a globalised world economy. In fact, disease control and economic freedom, as we have learned, make for uneasy bedfellows.
But as the Irish people know only too well, trade results in prosperity. Nationalists and populists might not like the fact we are roped onto the one economic line, but it is as true today as it was in 1914, 1945 and 1989, if not more so.
And on this point we need to understand our own history. Loss of confidence in political structures always leads to change. Economic turmoil always results in change. The fracturing of the established international order typically leads to conflict. This is not our destiny, but we should not be complacent. We have run to the ragged edge of monetary policy. The fiscal situation in many countries is desperate. And we have yet to see the full impact of job losses on tax receipts and welfare budgets, let alone the wellbeing of those without work.
Yet there are reasons for hope, reasons to frame our present predicament as an opportunity. The Austrian psychiatrist Viktor Frankl spent his life trying to help people look at the world and their own lives differently. He survived the Holocaust, but his wife did not. He describes his own experience of coming to terms with its effects in his seminal book, Man's Search for Meaning.
Frankl’s message is that when we live our lives with purpose, we can overcome any challenge, setback or crisis. As he put it: “In our response lies our growth and freedom.”
That is always an option: to choose. And it presents us with a great opportunity today as we come to terms with our post-pandemic future. As long as we, the people, choose to elect the people who will make the right choices on our behalf.
This article is based on Post-Pandemic: 12 Lessons in Crisis Management by Jonathan McMahon, published by The Liffey Press. Jonathan McMahon was a director at the Central Bank of Ireland between 2010 and 2012, and prior to that worked at the Financial Services Authority (UK) and in the private sector
