An Acutely Fragile World: Most governments are in denial.

• Author: Ferguson, Thomas

Right now two giant shocks are convulsing the whole world--Covid and the Russian invasion of Ukraine. Both are ongoing, so surprises are virtually guaranteed. But I think we have enough evidence to draw a few tentative conclusions about the shape of things to come. First, the pandemic shined a terrible, unforgiving light on how fragile a globalized world really is. "Just in time" production, off-shoring, transnational supply chains, and the hollowing-out of firms as they degraded workers into external contractors with lower wages and fewer benefits produced fatally brittle social systems. As the pandemic spread and transnational supply chains broke down, the cumulative impact of more than a generation of steady government cuts in taxes, safety nets, education, and--above all--health care became overwhelming. Virtually every country became paralyzed for a while. In the United States, the United Kingdom, and many developing countries, I think we will eventually recognize that the pandemic actually broke their social systems. As pandemic relief fades from memory and the gruesome toll of delayed deaths, long Covid, substance abuse, and mental health problems climbs higher and higher, the true dimensions of the havoc the pandemic wrought, not least on the U.S. labor force, will stand out more clearly.

But right now, most governments are in denial. As in 1919 or 1945, they are nourishing hopes of going "back to normalcy." That is an illusion. Not only in the developing world, but also in most of the developed world, for example, in France, the United States, Italy, or even Spain, the "vital center" is already the dead center: anti-system political groups and parties are gaining strength, while elsewhere riots (as in Sweden) or tumultuous political movements (mostly on the right), as in Germany or Austria, burgeon.

Where does this leave globalization, the much-touted eclipse of the dollar, or the emergence of prospective new trading blocs rooted in military cooperation and formal alliances?

Let's stipulate that the world is now multipolar, with no one country actually hegemonic, no matter how much it may talk like it is. The closest historical analog, I fear, is not too encouraging: the interwar period of the 1920s and 1930s. But the outcome in our time is likely to depend heavily on what happens on the battlefields in Ukraine.

Few analysts expected a full-scale Russian invasion of Ukraine and almost nobody thought that Ukraine had much prospect...