Covid divide in 2022: you ain’t seen nothing yet

As the Omicron wave washes through, it’s hard, even with the seasonal perspective, to reckon what things might be like in say a year’s time.

But perhaps necessary.

Because the day-to-day measures seem less and less meaningful – except where they provide a pointer to the direction of long-term policy.

The intellectual and political ferment seems particularly well advanced in the UK.

Ministers have reached the point where they are prepared (at least privately) to question robustly the health advice they are getting, and what is more to take account of broader analyses which include the social and economic costs of Covid measures.

But they nonetheless remain seemingly-hamstrung by conventions that prevent open discussion of cost-benefit and policy trade-off, and so need to get their message across by oblique (ok – becoming less oblique now) signalling.

Where does this lead in 2022?

Because all governments, everywhere, must consider Covid options in the context of their broader political objectives.  

It does mean that this consideration is likely to come into sharper focus.

To simplify, consider two polar approaches (although the reality is more likely a confused mixture).

The first regards Covid policy as the single most important and pervasive issue facing government.  Those at risk must be protected at all costs, and those affected, even indirectly, must be made whole.  It affirms the need for solidarity and  state direction. It suggests Covid avoidance will remain a significant element of public policy, with current measures evolving, but remaining in widespread use in some form for some time.

It is not unreasonable to say that Jacinda Ardern’s government is a poster child for this perspective.

The second sees the pandemic becoming endemic, one problem among many, to be assessed by vulnerability and ability to respond.  It focuses particularly on the inflexibility of much of the policy response, and believes the imperative is to ensure society can adapt and respond to new social and economic pressures.  

One can argue that Britain’s government is struggling to develop some such position.

The choice is of course much influenced by the starting point of each country’s Covid experience, but one might expect underlying political and social priors to become increasingly dominant over time, reinforcing choices already made.

In the short term, the NZ approach looks cosier.  With such an attentive state, there are attractions to trading autonomy for security.  But the price for a regimen of five million usually ends up being disproportionately paid by the creative, productive, free-spirited and indeed radical forces.

Meanwhile, the UK seems to be moving to a messier and less comfortable place.

Because acknowledging that Covid is no longer a crisis means putting it in the mix with all the other problems.  Which are not trivial.

On the economic front, real wages have been largely stagnant since 2008, and the government is demanding higher taxes from 1 April (around 3% of take-home pay for middle income folk).  Interest rates are heading up and house prices look high enough to worry the haves, whilst still tormenting the have-nots.

This backdrop helps focus attention on the cost-effectiveness of Covid control measures.  The Times, for example, reporting that “staff shortages are a bigger threat than patient numbers as daily infections hit record high” and cutting the self-isolation period to five days may be necessary to “save the NHS [National Health Service]”.

Curmudgeons might wonder if these are the extra resources their higher taxes will be paying for.  

Indeed, this sort of thing looks like a popular mood music for 2022, with Covid regulation morphing into the new supply chain constraint, and precautionary labour market inflexibility developing as the new industrial action.

But furious conflict will be a sign that the money to buy peace and unity has run out and that the argument over who bears the pain is at least being debated.

It may force Boris Johnson’s government to review its more expensive and illogical policies (say foreign aid and energy) and perhaps force a showdown should it try to impose more levies on the most productive sectors – which must grow in order to break the stagnation cycle. 

It may even make them more eager to come to terms with ongoing changes in the world economy (like tech-driven changes in international trade in services). 

But their misery is likely to be unrelieved.  Experience tells us that the benefits of economic restructuring take time to come through.

On the other hand, delaying restructuring – as New Zealanders should recall only too well – can result in long periods of relative stagnation.  And if you choose to subsidise fear of Covid, you are likely to get more of it.

So Happy New Year: 2022 is shaping as a year of greater political and social – as well as economic – divergence.