The Health and Wealth of Nations after the Pandemic of 2020

Tetsunori Koizumi, Director

Adam Smith (1723-1790), the author of The Wealth of Nations (1776) that gave birth to the academic discipline of economics, is known to have painted a rosy picture for the future of humankind that comes with the accumulation of wealth. Smith wrote, in the first chapter of Book I, that: “It is the great multiplication of the production of all the different arts, in consequence of the division of labour, which occasions, in a well-governed society, that universal opulence which extends to the lowest ranks of the people.” Economic development for the past two and half centuries, though it has not extended the universal opulence Smith predicted to the lowest ranks of the people, has steadily increased the material standard of living for those people who are endowed with capital of one form or another.

While Smith emphasized the role of “wealth” for the people’s wellbeing, Benjamin Disraeli (1804-1881), who served twice as Prime Minister of the United Kingdom (1868 and 1874-80), argued for the importance of “health” as a key aspect of the people’s wellbeing in a well-governed society. Disraeli introduced the Public Health Act of 1875 in order to improve the unsanitary living conditions that threatened the people’s health, and stated in a speech he made in 1877 that: “The health of the people is really the foundation upon which all their happiness and all their powers as a state depend.” Such concern for the health of the people as stated by Disraeli was behind the introduction of the 1948 Universal Declaration of Human Rights by the United Nations, whose Article 25 states: “Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services.”

Turning our attention to what is happening in the world now, we are encountering a serious threat to the health as well as to the wealth of the people all around the world in the form of COVID-19, a pandemic caused by the novel coronavirus SARS-CoV-2. The words ascribed to Hippocrates, “Health is the greatest of human blessings,” sound so painfully convincing now that COVID-19 has claimed so many victims around the world since it begun in Wuhan, China, in December 2019. And the great multiplication of all the different arts that has brought about increases in the material standard of living for most people in developed countries, if not the universal opulence which extends to the lowest ranks of the people as Smith predicted, is breaking down, presenting a serious challenge to the sustainability of the wealth-producing machine called “global capitalism.”

While we are used to wild swings of financial markets as one of the inherent features of global capitalism, we are also witnessing a few signs of the breakdown of the great multiplication of all the different arts due, for example, to disruptions in the global supply chain in the production of manufactured commodities. With disruptions in the global supply chain, many manufacturing industries are forced to shut down, or severely curtail, their production activities around the world. As the government is heavily involved in the management of capitalist economies, governments all around the world are making their frantic efforts to maintain the viability of their economies with timely unemployment compensations for those workers who have lost their jobs and one-time stimulus payments for the general public to simulate their consumption activities.

Granted that a well-governed society is needed for maintaining the health and wealth of the people, we do not have to be libertarians to be warned about the way the government is increasing the scope of its influence on the way people conduct their daily affairs such as the restriction on the freedom of assembly and movement and the discouragement, if not the negation, of the way people interact with each other with hand shakes and hugging. “Our ideas of normality, of public life, of social interaction—all of these are being put to the test as never before,” as Chancellor Angela Merkel stated in her March 19 televised address to the German people. The people in a democratic society do not live by the forced constraint imposed by the government, but by the voluntary observance of the rules of good conduct. However, the kind of worldwide crisis we are in, which presents a serious challenges to the health and wealth of the people around the world, demands that we figure out and observe the rules of good conduct that are over and beyond what are expected of us under normal circumstances. Neither the blind observance nor the bold defiance of the constraints imposed by the government is helpful in maintaining a well-governed society.

It is ironic in a way that the natural environment around us is getting a break in the form of lower emissions of carbon dioxide from the slowdowns and shutdowns of economic activities around the world. The restrictions imposed on travels on the road and in the air also imply lower emissions of carbon dioxide that contribute to global warming. Whether this is the trend that will continue to be observed after the pandemic subsides is still too early to predict. However, to the extent that the great multiplication of the production of all the different arts, in consequence of the division of labour, is taken over by robots that do not need to commute to their workplaces, we may expect to see the trend continuing after the pandemic subsides. The same can also be said of the increased reliance on telecommunication networks that will replace direct human-to-human communication in economic activities.

All these changes we are witnessing today in the midst of the coronavirus pandemic will have far-reaching implications on the way societies are organized and the people behave when the crisis is over. Will the government go back to its traditional role as the guarantor of civil liberties and individual rights? Will the economy go back to the manic drive towards globalization that has been the characteristic feature of global capitalism up until the world was hit by COVID-19? Will the people go back to the traditional mode of social interaction where intimacy was defined in terms of close physical contact? Some commentators have already started to speculate what the answers might be to these questions. In a letter written to W. Lutoslawski in 1906, William James (1842-1910) wrote: “Great emergencies and crises show us how much greater our vital resources are than we had supposed.” It is certainly our hope that James was correct in his assessment of our human potential as we try to ride out the great emergency and crisis that are testing our vital resources.