Economist Brian Easton says the way we approached the threat of Covid tells us about possibilities for the future ways

This is a re-post of an article originally published on pundit.co.nz. It is here with permission.

The term ‘samfundssind’ increased in the Danish news from just 23 times in February 2020 to 2,855 in March. It means ‘putting the concern of society higher than one’s own interests’ or, more loosely, ‘community spirit’ or ‘social mindedness’. It was a central notion in the Danish anti-Covid strategy.

The Danes have done very well. Their death rate is about a fifth of Sweden’s. There is a vigorous discussion about the Swedish strategy but it rarely refers to the success of their neighbours: Denmark, Finland, Germany and Norway. (New Zealand’s rate is a twentieth of Denmark’s but we do not have the same challenges at our borders.) Admittedly, Sweden made a major technical foul-up with their initial policies; they have become more orthodox and are currently doing quite well although there is a terrible backlog of deaths – one hundred times New Zealand’s death rate.

Some of the enthusiasm for the (failed) Swedish strategy reflects a very different account of how society works or how it should work. It argues that we should aim to maintain as high as possible economic output while minimising Covid deaths. In contrast, Denmark went for as few deaths as possible while minimising the impact on the economy.

These may seem mathematically equivalent, but they involve different strategies. The evidence is that prioritising the economy over mortality  as Britain and the US have done – results in very high death rates; prioritising wellbeing over the economy has kept deaths low but – amazingly – has not done a lot of damage to the economy.

The difference is social management. That is where samfundssind comes in. A strategy which emphasises community solidarity is not one which fits easily with emphasis on the market – the neoliberal strategy.

As it happens, New Zealand went down the samfundssind path although we called it ‘kindness’. The ‘team of five million’ is about samfundssind. Thus far it has worked. Our anti-Covid strategy, like Denmark’s was not that everyone was to look after themselves (and their close family) but that we were all in this together, that we were to be kind to everyone – even strangers (the Good Samaritan).

While there were some special things going for us, most notably a prime minister who truly believed in the strategy, supported by a very competent chief medical adviser with the demeanour of your GP, it involved some finely balanced decisions, evident when the politicians overruled the professional health advice. They were trying to nurture samfundssind without over-relying on it to the point it would break down. Community spirit required trust in those above who were directing it – an informed and believable trust. It could not be totally relied upon.

Thus the leadership had to judge how onerous the lockdown measures could be (recall how there was some common sense tinkering after they were implemented) and also how speedily they could liberalise the measures (I was amused at the cunning used to squeeze in an extra few days). Business had to be handled with great tact. On the whole, they got it right – right enough to be triumphantly re-elected. (However, the consensus over border management is not as strong as that for the internal policies.)

So we – the world – have had a revealing contest between neoliberal market strategies with their emphasis on individualism (their code word is ‘freedom’) and collective social strategies with the emphasis on community spirit and social mindedness. The latter seems to have thus far won hands down in the Covid Crisis (although much of the race is still to be run). .

The contest greatly troubled me when I was writing Not in Narrow Seas. Long ago, markets hardly existed. Yes, there were exchanges but, as the book reports, in a ‘gift exchange’ the focus is more on those involved in the transaction that what is being transacted. That is not true in today’s markets. Frequently one is involved in a commercial transaction with no knowledge of who is on the other side of the deal.

My book describes the steady overwhelming of the gift exchange economy, not only in the Maori one; it is equally ahistoric to think that the early Europeans were exclusively involved in a commercial economy. But markets are very powerful social devices for they allow specialisation (remember Adam Smith’s pin factory?). The resulting efficiency gains meant that commercial transactions steadily replaced the earlier ones. Rogernomics intensified the shift to the commercial economy. Some of its changes were justified, some were excessive – plain stupid.

A simple illustration is that the RNZ (Radio New Zealand) web address is rnz.co.nz. Notice the ‘co’. The organisation is presenting itself as a company as was the fashion during Rogernomics. The implication is that RNZ is a corporation with the purpose of making profits (presumably from radio and related services, but not necessarily; corporations sometimes change their activities).

Excuse me, I want an RNZ whose purpose it the provision of radio and related services subject, of course, to a funding constraint. Bugger making a profit. Scroll back to the third paragraph of this column and you will see the approach parallels New Zealand’s anti-Covid strategy.

It happens that RNZ has never performed quite as a corporation. But on occasions the characterisation of it as a commercial corporation has fouled up its operations and funding.

The health sector has been an ever bigger, and less resolved, example. The management of our hospitals is shaped by commercial considerations, whereas most of us want a health service whose primary concern is providing health services, subject to a funding constraint. One has the uneasy feeling that had the anti-Covid strategy been left with the DHBs, they would have gone down the neoliberal path, or ended up in a major row with their better informed health professional employees.

The corporate model of governance is so deeply imbedded in the psyche of the government that the Simpson Report (the 2019 New Zealand Health and Disability System Review) does not even address the issue but, instead, wants to intensify corporate governance by eliminating elected representatives from boards.

The Rogernomes promised us that when we intensified the use of their commercial model there would be significant gains in material output (an argument paralleled by their anti-Covid proposals). It did not happen. Following their measures we returned to a long-run economic track which was lower than the one we started with, but the growth rate was no faster.

We never learned from the failure. Its underlying model is still there in the psyche, among the advisers, in the institutions we have, in the policies implemented and in the public rhetoric. We shall have to wait to see whether the Covid crisis teaches us anything about how to run a society. By ‘we’ I mean the collective we – as in ‘samfundssind’.

Brian Easton, an independent scholar, is an economist, social statistician, public policy analyst and historian. He was the Listener economic columnist from 1978 to 2014. This is a re-post of an article originally published on pundit.co.nz. It is here with permission.