[The Editors' Verdict] History Is Written by the Winners of the Pandemic

Kim Kyung-soo, Professor Emeritus at Sungkyunkwan University

Foreign Policy, an international affairs magazine founded by the late Samuel Huntington, author of "The Clash of Civilizations," published in March the perspectives of 20 international political and economic scholars on the world after the COVID-19 pandemic. Among them, four expressed hope, four predicted the collapse of the U.S.-led international order, eleven were pessimistic, and one foresaw a changed role for central banks.

The most common view is pessimism, anticipating a global economic recession and a retreat from globalization. The pandemic has pushed the global economy, which was already in a slump due to low productivity and demand, into a prolonged downturn not seen since the Great Depression 90 years ago. The pandemic, which prompted a reassessment of the benefits and costs of globalization, has reaffirmed the existence of nation-states and is seen as having nailed the coffin shut on the globalization completed at the end of the 20th century.

Companies that suffered significant losses due to the breakdown of the sophisticated international division of labor production system known as the Global Value Chain (GVC) will recognize the risks inherent in the interdependence of GVCs and will seek to replace them with less efficient but more stable domestic supply chains. The real danger lies in protectionism driven by nationalism that restricts trade and the movement of people. Emerging countries may also attempt to control capital under the pretext of protecting their economies from international capital.

Over the past 20 years, the digital revolution and automation have reduced mid-level technical jobs, stagnated middle wages, and widened income inequality. This trend is expected to accelerate. Offline industries such as retail, dining, travel, and tourism will shrink, and many low-wage jobs will be replaced by essential service jobs such as police, firefighting, logistics, and public transportation.

There has never been such a massive fiscal injection since the end of the war. However, there is no certainty that it is sufficient. The enormous debt cannot be resolved by central banks’ tricks, and history shows that extreme alternatives such as printing money or strategic default have been sought. When people’s expectations that debt will be repaid through taxes manifest as austerity, the situation worsens.

Looking at the history of pandemics, they have never led to cooperation between countries but instead revealed the nature of international politics that causes conflicts. Countries that failed to respond to the pandemic are especially prone to blame others, deepening conflicts between nations. The will and effort to solve global problems such as climate change will significantly weaken, as many countries focus on domestic issues caused by the pandemic crisis. Ultimately, the number of failing countries will increase, and U.S.-China relations are expected to deteriorate further.

History will be written by the winners of the pandemic. When authoritarian regimes prevail, the space for democracy narrows. If international organizations provide more useful information about infectious diseases, pandemics can certainly be mitigated. Otherwise, the U.S. leadership that has guided the international order for 75 years will be considered a failure. However, China’s elevated status in the international community has boosted the self-esteem of the Chinese people. The pandemic will accelerate this change. Geopolitical conflicts arising from the U.S. trying to maintain hegemony will only hasten the shift from U.S.-centered globalization to China-centered globalization. There is also a forecast about the changed role of central banks, but it is nothing new. South Korea already implemented an industrial policy combined with monetary policy during the military government era in the 1960s, which ended in failure.

Nevertheless, there is still hope. Humanity will struggle and make many mistakes in the war against the common enemy called the pandemic, but democracy will ultimately prevail. In any case, the world will seek mutual cooperation.

Kyungsoo Kim, Professor Emeritus, Sungkyunkwan University

This content was produced with the assistance of AI translation services.