The new Covid variant has a few unkind words for the world’s governing class—and for global elites more broadly.
On Friday, in the wake of news about the new Omicron variant of the Covid virus, the Dow Jones Industrial Average saw its biggest drop in more than a year.
If you wanted to find something positive to say about this development, you could view it as a kind of tribute to the stock market—a demonstration of how fast it assimilates information bearing on the future economic health of the planet. In this view, the world’s capital markets constitute a vast and powerful global brain, one that adroitly updates its model of the future in accordance with the latest data. One financial analyst summarized the Omicron update this way: “Markets are clearly speculating that a rapid spread of a more brutal Covid strain could once again derail the global economy.”
That makes sense. But there’s one thing I don’t understand. If the stock market is so attentive to warning signs about the future of the planet, why does it ignore so many flashing red lights? Why have market indexes risen relentlessly in recent years even as the world’s governing class has shown itself to be incapable of dealing with the kinds of problems the world will increasingly face?
The problems I’m talking about vary in their nature and their gravity. Some involve biotechnology, others involve electronics, others involve outer space. Some of them are scarier than the Covid pandemic, some of them less so. But they all have a basic property in common with the pandemic, a property that points to the urgent need for new kinds of policies and a new kind of politics. Covid is in that sense a metaphor for challenges to come, a kind of message from the future.
And, so far as I can tell, not many people are interested in deciphering it—not many politicians and not many of the journalists, commentators, think tankers, and various other global elites whose job supposedly includes identifying looming perils and helping to head them off.
And it’s not like deciphering this larger meaning of Covid is that hard! Let’s start with the Omicron variant itself:
The stock market reacted to Omicron as if a formidable new variant of Covid was something that had come out of the blue—a shocking development that Wall Street had no way of anticipating. Yet we’ve long known that (1) formidable new variants of Covid are bound to arise, given enough instances of viral self-replication; (2) there’s lots of viral self-replication in countries with low vaccination rates; (3) there are lots of countries with low vaccination rates; and (4) dealing with this problem—making the acceleration of global vaccination a priority—is something the world’s most powerful leaders aren’t focused on.
If they were focused on it, we’d be seeing the unfolding of a project that looked something like this: (1) loosening the intellectual property rights enjoyed by vaccine makers; (2) compelling them to share the know-how that would allow factories around the world to take advantage of this loosening and ramp up vaccine production; and (3) making sure, with subsidies if necessary, that (a) the vaccine makers who thus sacrifice profits are rewarded amply enough to preserve their incentive to innovate; and (b) the newly abundant vaccines are inexpensive, especially in low-income countries.
So incompetent are the world’s leaders that they can’t even get to step 1 of this project. A proposal at the World Trade Organization to loosen vaccine intellectual property protections has been stymied for months by the opposition of various western countries. And those western leaders who say they favor loosening IP protections—including Joe Biden—haven’t been acting like they mean that as anything more than a political slogan. The US—a country willing to expend great political capital to strongarm allies into helping it sanction small countries that pose no threat to it—has expended roughly zero political capital to get vaccines to small countries that, in the absence of those vaccines, do pose a threat to it.
In short: If I were the stock market, and I prided myself on my forecasting skills, I might have started my new-covid-variant downturn a while ago.
But what’s really concerning—yes, more concerning than the failure of the world’s leaders to respond wisely to a global pandemic—is the large number of emerging challenges that are structurally similar to the pandemic. They share a property with it that is simple in concept but powerful in its implications.