Shutdown: How Covid Shook the World's Economy

by Adam Tooze Narrated by Simon Vance, Adam Tooze

Overview

Deftly weaving finance, politics, business, and the global human experience into one tight narrative, a tour-de-force account of 2020, the year that changed everything--from the acclaimed author of Crashed.

The shocks of 2020 have been great and small, disrupting the world economy, international relations and the daily lives of virtually everyone on the planet. Never before has the entire world economy contracted by 20 percent in a matter of weeks nor in the historic record of modern capitalism has there been a moment in which 95 percent of the world's economies were suffering all at the same time. Across the world hundreds of millions have lost their jobs. And over it all looms the specter of pandemic, and death.

Adam Tooze, whose last book was universally lauded for guiding us coherently through the chaos of the 2008 crash, now brings his bravura analytical and narrative skills to a panoramic and synthetic overview of our current crisis. By focusing on finance and business, he sets the pandemic story in a frame that casts a sobering new light on how unprepared the world was to fight the crisis, and how deep the ruptures in our way of living and doing business are. The virus has attacked the economy with as much ferocity as it has our health, and there is no vaccine arriving to address that.

Tooze's special gift is to show how social organization, political interests, and economic policy interact with devastating human consequences, from your local hospital to the World Bank. He moves fluidly from the impact of currency fluctuations to the decimation of institutions--such as health-care systems, schools, and social services--in the name of efficiency. He starkly analyzes what happened when the pandemic collided with domestic politics (China's party conferences; the American elections), what the unintended consequences of the vaccine race might be, and the role climate change played in the pandemic. Finally, he proves how no unilateral declaration of 'independence" or isolation can extricate any modern country from the global web of travel, goods, services, and finance.

*This program includes a downloadable PDF of graphs and tables from the book.

Editorial Reviews

NOVEMBER 2021 - AudioFile

Reading his introduction with clarity and aplomb, the British historian and Columbia University professor offers the coherent story of how the world reacted to Covid. Simon Vance narrates the balance of this intelligent work with equal grace and fidelity, but his slower pace and deliberate enunciation have a theatrical quality that is not the best fit for the writing. SHUTDOWN is a thoughtful, almost encyclopedic examination of the huge impact Covid is having on the world’s economies, international politics, and the daily lives of almost everyone. Tooze’s writing is notable for his ability to tell this story with a historian’s perspective, a reporter’s economy of language, and an obvious sensitivity to the upheaval people are suffering. His analytical skills are arresting, especially in the sections on how politics has impacted government responses to the pandemic. T.W. © AudioFile 2021, Portland, Maine

Publishers Weekly

07/05/2021

The real shocker of the Covid-19 virus is not its death toll—there have been deadlier pandemics—it’s “the scale of the response,” writes historian Tooze (Crashed) in this sweeping survey. In what he calls “a comprehensive crisis of the neoliberal era,” nearly 95% of the world’s economies suffered a reduction in GDP, he writes, and the World Bank estimates that the long-term wage loss will be $10 trillion. Month by month, Tooze covers the progression of the pandemic, tracing government action in Wuhan in January and Italy’s response in March as that country went into lockdown, charting the pandemic’s impact on stock markets and on mental health, the divisions in America as the presidential election loomed, the debt faced by the hardest-hit countries, and the race to create a vaccine. A comprehensive history of an unprecedented year, Tooze’s account describes how the pandemic played out politically across the globe, the interplay between climate change and the pandemic, and the myriad effects of the world economy nearly shutting down in a brief period that, as Tooze puts it, made “History with a capital ‘H.’” Readers will find this deeply informed parsing of the pandemic to be illuminating and thought-provoking. Agent: Sarah Chalfant, the Wylie Agency. (Sept.)

From the Publisher

"This book’s great service is that it challenges us to consider the ways in which our institutions and systems, and the assumptions, positions and divisions that undergird them, leave us ill prepared for the next crisis. . . . Whether we can overcome that incoherence and meet the challenges ahead while protecting the values at the heart of the American idea — freedom, pluralism, democracy — is the essential question posed by Shutdown."—The New York Times Book Review

"A seriously impressive book, both endlessly quotable and rigorously analytical. Tooze synthesises a huge volume of information to argue that we must prepare for a new wave of crises or risk being sunk by them. Hopefully, governments everywhere will heed his warning.”—The Guardian

"Offer insights and frameworks likely to be of enduring value… To read Shutdown feels like sitting alongside the great professor while he feverishly collates an array of data and anecdotes, attempts to chronicle what is going on, his head fizzing with ideas about what it might all mean and where it might be leading."—Financial Times

"This is truly a picture of the global impact of the crisis; it covers the disruption in the financial markets, as well as the ins and outs of government policy. . . An impressively full account of the economic developments of the past 18 months."—The Economist

"A primer on the mechanics of a global financial panic, the techniques that central bankers deployed to contain it, and the political events that ensued. Laced through these taut synopses is a meditation on a grand historical question: Did 2020 mark the end of the world economic order as we’d known it since 1980? And if so, what precisely is taking neoliberalism’s place?"—New York Magazine

"Tooze’s book offers readers a comprehensive and smartly written summary of the economic impact of the coronavirus…Tooze briskly and expertly recounts the tense weeks in March 2020 [and] routinely compares the coronavirus shutdown to the 2008-2009 financial crisis, [which] happens to make for apt comparisons, as few previous economic and health disasters can match the scale and global reach of this pandemic." —Washington Post

"[Tooze's] writing demystifies the world before us, dispelling the cloud created by the chaotic motivations and invidious narcissism of the market. Shutdown is one such cure, a book that answers so many questions about the state of the world that it will leave its readers feeling not just more learned but dizzy too. It is cliché at this point to remark that after COVID-19, everything changed; what Tooze illustrates masterfully in Shutdown is that the crisis the virus unleashed began much earlier, the world order’s fragility the product of a much longer process of mismanagement and selfishness."—Vulture's "40 Books We Can’t Wait to Read This Fall"

"Fascinating, informative, and wise...Tooze brings us to the brutal reality of Covid: it was not about money...Shutdown concludes with a plea for 'constant interplay of expertise and counter-expertise.' It is a wake-up call for us to bridge that chasm." —Paul Collier, Times Literary Supplement

"Adam Tooze makes a strong case for looking back, and beginning to draw some conclusions. . . . His focus is the period that started with Chinese President Xi Jinping’s public acknowledgement of the coronavirus outbreak on Jan. 20, 2020, and ended with U.S. President Joe Biden’s inauguration exactly a year later. The scale and variety of what unfolded in the intervening days remains dizzying. Tooze lucidly organises these events in the book’s 300 pages, while maintaining the sweeping perspective that will be familiar to readers of Crashed."—Reuters

"A comprehensive history of an unprecedented year, Tooze’s account describes how the pandemic played out politically across the globe, the interplay between climate change and the pandemic, and the myriad effects of the world economy nearly shutting down in a brief period that, as Tooze puts it, made “History with a capital ‘H.’” Readers will find this deeply informed parsing of the pandemic to be illuminating and thought-provoking."—Publishers Weekly

"Economic historian Tooze examines the unprecedented decision of governments around the world to shutter their economies in the face of pandemic . . . As the pandemic hopefully continues to fade, other crises remain. This book is a valuable forecast of future problems."—Kirkus Reviews

NOVEMBER 2021 - AudioFile

Reading his introduction with clarity and aplomb, the British historian and Columbia University professor offers the coherent story of how the world reacted to Covid. Simon Vance narrates the balance of this intelligent work with equal grace and fidelity, but his slower pace and deliberate enunciation have a theatrical quality that is not the best fit for the writing. SHUTDOWN is a thoughtful, almost encyclopedic examination of the huge impact Covid is having on the world’s economies, international politics, and the daily lives of almost everyone. Tooze’s writing is notable for his ability to tell this story with a historian’s perspective, a reporter’s economy of language, and an obvious sensitivity to the upheaval people are suffering. His analytical skills are arresting, especially in the sections on how politics has impacted government responses to the pandemic. T.W. © AudioFile 2021, Portland, Maine

Kirkus Reviews

2021-06-29
Economic historian Tooze examines the unprecedented decision of governments around the world to shutter their economies in the face of pandemic.

“The virus was the trigger,” writes the author. But other elements were at play, including a serious slowing of global economic growth, a rise in nationalist and authoritarian regimes around the world, and what, in effect, was a new cold war with China. In other words, the agents for destabilization were myriad well before Covid-19 arrived. Tooze, a scholarly writer of uncommon clarity, summons from the language of EU economic forecasting the useful word polycrisis to describe this multipronged series of failures of imagination and governance. Whereas the financial crisis of 2008 showed the weakness of the world banking system, Tooze writes, the shock of the pandemic spoke to the weakness of asset markets as a whole, requiring entities such as the U.S. Treasury to assemble “a patchwork of interventions that effectively backstopped a large part of the private credit system.” It did not help that the “fascistoid” Trump administration was so inept, though it did help that Steven Mnuchin, “the least ‘Trumpy’ of the Trump loyalists,” led those Treasury efforts. Other economies suffered in even greater proportion, especially that of the U,K,, whose structural shortcomings were exposed at just the time the country was departing the EU. Unlike in the crisis of 2008, though, British far rightists, like their American counterparts, had cut their ties with the business community, and the business community responded by rejecting austerity. So it was, Tooze observes, that when Joe Biden assumed the presidency, he pushed for big-dollar measures, which corporations supported, to jump-start the economy—with the proviso, Tooze notes, that Biden drop his push for a $15 minimum wage. Even so, he concludes, it is in the U.S. that “the disharmony between politics and economic and social development is at its most extreme and consequential.”

As the pandemic hopefully continues to fade, other crises remain. This book is a valuable forecast of future problems.

Product Details

BN ID:	2940173165404
Publisher:	Penguin Random House
Publication date:	09/07/2021
Edition description:	Unabridged

Read an Excerpt

Chapter 1

 

Organized

Irresponsibility

 

Skeptics-and there have been skeptics from the start-like to point out that the remarkable thing about the Covid crisis is that we turned something ordinary into a global crisis. No matter what we do, people die, and the same people die of Covid as die normally-old people with preexisting conditions. In a normal year, those people die of flu and pneumonia. Outside the privileged core of the rich world, millions of people die of infectious diseases like malaria, tuberculosis, and HIV. And yet "life goes on." Severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2) was, by the standards of historic plagues, not very lethal. What was unprecedented was the reaction. All over the world, public life shut down, and so too did large parts of commerce and the regular flow of business. All over the world this massive interruption of normality stirred, in various degrees, incomprehension, indignation, resistance, noncompliance, and protest. One need not sympathize with the politics of the objectors to acknowledge the historical force of their point. In a new and remarkable fashion, a medical challenge became a much wider crisis. Explaining how this might have happened not as the result of effete and overly protective political culture or as the result of a deliberate policy of repression, but as a result of structural tensions within early twenty-first-century societies, will help set the stage for understanding the crisis of 2020.

 

It is true that old people die, but what matters is how many and at what rate and from which causes. At any given moment, this rank order of mortality can be described in terms of a matrix of probabilities that has evolved over time and is held in place by medical possibilities, health economics, and the pattern of social advantage and disadvantage.

 

Table 1: Causes of Death                                                                                             

 

            Total deaths                 Communicable, maternal, neonatal, and nutritional diseases (%)             Noncommunicable diseases (%)            Injury (%)       

 

            m         m         %         %         %         %         %         %

 

            1990    2017    1990    2017    1990    2017    1990    2017

 

Western Europe 3.86     4.16     4          5          90        91        6          4

 

United States    2.14     2.86     6          5          87        89        7          7

 

Latin America

and Caribbean  2.36     3.39     28        12        57        76        15        13

 

China   8.14     10.45   17        3          72        89        11        7

 

India    8.38     9.91     51        27        40        63        9          10

 

Sub-Saharan

Africa  6.77     7.48     69        58        24        34        7          7

 

World  4.65     5.59     33        19        58        73        9          8

 

Source: https://ourworldindata.org/causes-of-death

 

Seen globally, the story of the last decades is one of considerable advance in reducing death from diseases of poverty-communicable, maternal, neonatal, and nutritional diseases. Nevertheless, it remains true that poor people and people in low-income countries die soonest and of the most preventable conditions. In a low-income country like Nigeria, where life expectancy at birth is fifty-five, 68 percent of deaths are due to diseases of poverty. In Germany, where life expectancy is eighty-one, that share is 3.5 percent; in the UK, 6.8. The United States is in-between. In 2017, health spending per capita in high-income countries was 49 times greater in purchasing power parity terms than in low-income countries.

 

Within rich countries, there are appalling disparities in infant and maternal mortality and overall life expectancy along lines of race and class. Epidemics of drug use in disadvantaged and marginalized populations, asthma, and lead poisoning go unaddressed. In Germany, 27 percent of men in the lowest income class die before the age of sixty-five, compared to 14 percent for the highest income group. For women, the disparities are only slightly less stark. In the country's two-class health insurance system, the life expectancy of the 11 percent in private insurance is four years longer than those in the public system. In the United States, commonly described as the richest country in the world, according to a study of 2009, 45,000 people died for lack of health insurance. People in low-income census tracts in the United States are twice as likely as those in high-income areas to be hospitalized with flu, to require intensive care, and to die of it. The difference is starkest for poor people over the age of sixty-five.

 

It would be too much to say that these probabilities enjoy general acceptance. They are, on their face, a scandal. They give the lie to any idea that our collective priority is keeping people alive, but as stark as these differences are, the ratios are at least familiar. The probabilities change, but only gradually and generally only in a favorable direction. The crucial point, as far as the coronavirus crisis is concerned, is that as 2020 began, the only infectious diseases that still plagued the average citizen in a country above the high middle-income threshold were lower respiratory tract infections and the flu, and they were generally dangerous only to those of advanced age. In the United States, only 2.5 percent of all deaths in a normal year were attributed specifically to influenza and pneumonia. Adding all lower respiratory tract infections brought the share to 10 percent of all deaths. Together they accounted for 80 percent of deaths from infectious disease. HIV/AIDS and diarrheal disease, notably C. difficile, made up the rest. SARS-CoV-2 shook the confidence in those probabilities.

 

The conquest of major infectious diseases was one of the great triumphs of the era after 1945. It was a historic achievement on a par with the end of famine, universal literacy, running water, or birth control. Increased life expectancy is the secret sauce behind economic growth. It is marvelous to consume more. It's even better if you live decades longer to enjoy it. By one estimate, if we properly factored in the greater longevity achieved over the course of the twentieth century, it would double our estimate of the growth in the American standard of living. By the 1970s, as the final victory over smallpox and polio came within grasp, these triumphs spawned the idea of the epidemiologic transition. Infectious diseases would be consigned to the past.

 

The advances were greatest in the rich Western countries. But achieving the epidemiologic transition was a common aspiration of modernity. It was as relevant to the Soviet Union and Communist China as it was to the West. Indeed, as a collectivist project led by public agencies, it suited their political vision better than that of the West. Embattled Cuba, with its hardy public health system and outsize program of global medical assistance, is a dramatic demonstration of this point. For the Communist regimes, there was no contradiction between sacrificing tens of millions of lives for the advance of socialism, coercive birth control campaigns like China's one-child policy, and a massive collective effort to save lives and conquer infectious disease.

 

But as momentous as it was, almost at the moment of its triumph in the 1970s, the conquest of infectious disease began to be hedged by doubt. Influenza remained unconquered. It is both ubiquitous and easily underestimated as a cause of death. It accounts for a surge in mortality from all causes that occurs on a regular annual basis. This is normalized because many of these deaths are attributed to other, more immediate causes such as pneumonia and heart attacks. Influenza is highly contagious and there is no interval between infection and infectivity, which means that testing and quarantine are hopeless. It mutates rapidly, so vaccination will be at best partially effective. The one saving grace is its low lethality.

 

The same could not be said for some of the new infectious diseases that specialists began to tangle with in the 1970s. The nightmarish Ebola virus was identified in 1976, AIDS in 1981. In the West, HIV/AIDS remained confined to stigmatized minority populations. In sub-Saharan Africa, it became a generational crisis of young heterosexual people, and above all, women. By 2020, HIV/AIDS had claimed 33 million lives. Somewhere around 690,000 would die of the disease in 2020. As far as infectious diseases were concerned, it turned out, we were far from having reached the end of history.

 

Indeed, as scientists explored disease mutation and circulation, the picture that emerged was one of a precarious balance. Modern science, technology, medicine, and economic development might be giving us greater ability to fight disease, but those same forces were also contributing to the generation of new disease threats. The emerging infectious diseases paradigm, proposed by scientists from the 1970s onward, was, like the models of climate change and earth systems ecology that emerged at the same moment, a profound critique of our modern way of life, our economy, and the social system built on it. Our use of land across the globe, relentless incursions into the remaining wilderness, the industrial farming of pigs and chickens, our giant conurbations, the extraordinary global mobility of the jet age, the profligate, commercially motivated use of antibiotics, the irresponsible circulation of fake news about vaccines-all these forces combined to create a disease environment that was not safer, but increasingly dangerous. It was no doubt true that all these factors had been present to a greater or lesser extent for at least two millennia. The sophisticated urban communities of the Roman empire had already been prey to pandemics sweeping across Eurasia. But the late twentieth century, for all its medical prowess and newfound affluence, was seeing a dramatic escalation of threat potential. We were, whether we recognized it or not, involved in an arms race.

 

This was a profound diagnosis of the threats generated by our modern way of life. There are groups led by the anti-vaxxers who dispute its logic. But they are fringe elements. It is not the warning of emerging infectious diseases as such that has proven controversial. It is our willingness to follow through on its implications. If the experts tell us that our modern economic and social system is systematically generating disease risk, what do we do about it?

 

To address the problem at its source would require a comprehensive effort to map potential viral threats combined with systematic control of land use and a dramatic change to industrial farming. Such a transformation would mean confronting interests that range from giant global agro-industrial firms to Asian poultry magnates, corrupt city officials in Southern China, and hardscrabble farmers in some of the poorer places in the world. The drift of higher-income diets toward more meat and dairy products would have to be reversed. Unsurprisingly, the actual policy response falls far short. Health officials undertake efforts to impose hygiene regulations on factory farming and to tidy up wild meat markets. There are local and sporadic bans on the hunting of "bushmeat." But the more fundamental drivers of emerging infectious diseases remain unaddressed.

 

At the global level we have organizations like the World Health Organization (WHO), in which thousands of highly professional, motivated, and well-intentioned individuals from all over the world fight the good fight. But as a global health agency for a rapidly developing globe inhabited by 7.8 billion people, the WHO is a Potemkin village. For the two years 2018-2019, the WHO's approved program budget was no more than $4.4 billion, less than that of a single big city hospital. The WHO's funding is cobbled together from a hodgepodge of sources, including national governments, private charities, the World Bank, and big pharma. In 2019, among its largest donors, the Gates Foundation ranks alongside the national governments of the United States and the UK and ahead of Germany. The venerable Rotary International contributed as much, if not more, than the governments of either China or France. Altogether, the WHO can muster no more than 30 cents per year in spending for every person on the planet.

 

The WHO's dependence on its donors shapes what it does. Campaigns for disease eradication such as polio are high on its agenda. The WHO plays a key role in monitoring the flux of diseases around the world. It is a technical business. It is also highly political. The two essential preoccupations of international health regulation back to its earliest days in the first half of the nineteenth century were the Western fear of disease spreading from east to west and the interest of advocates of free trade to limit the use of onerous public health regulation such as lengthy quarantines. The idea was to ensure that plagues did not become an excuse for shutting off commerce. Those twin tensions still haunt the WHO. In its efforts to coordinate a global public health response, it is caught between the fear of antagonizing states by labeling them as sources of infection, its professional desire to take early and decisive action, and the backlash that it will face if it triggers what turn out to be costly and unnecessary limitations on movement and trade. After the global panic triggered by the appearance of plague in Surat, India, in 1994 and the blanket shutdown of travel during the SARS crisis in 2003, there was a push at the WHO to adopt a more cautious approach to travel restrictions. Likewise after the anticlimax of the 2009 swine flu epidemic, the WHO faced a vociferous campaign accusing some of its officials of artificially inflating the market for expensive vaccines. To manage these hugely difficult choices on a precarious shoestring budget was a recipe for disaster.

 

The British economist Lord Nicholas Stern once remarked that climate change results from history's greatest market failure-the failure to attach a price to the costs of CO2 emissions. If this is true, then as the coronavirus crisis of 2020 demonstrates, the failure to build adequate defenses against global pandemics must be a close second. Even the best-funded global public health infrastructure cannot offer guarantees, but as 2020 began, the disproportion between pandemic risk and the investment in global public health was nothing short of grotesque.

 

 

To talk in terms of 'market failure' understates the force of the point. What is at stake in the response to pandemic threats is not just a vast amount of economic value. What is at stake are basic questions of social order and political legitimacy.

 

If it were the case that governments could simply ignore epidemic threats they had done too little to forestall, if life could simply continue in the face of a sudden surge in deaths, then the underinvestment in public health would have a cynical rationale. But in fact one of the foundations of the modern state is the promise to protect life. Not by accident, the frontispiece to Thomas Hobbes's Leviathan features plague doctors. Given this basic understanding, for a modern state to allow a dangerous pandemic to run through a country unchecked would require a bold strategy of depoliticization, or at the very least, a gradual process of "hardening" of public attitudes. In 2020, the idea that Covid was "just the flu" turned out to be a harder sell than its advocates imagined.

 

Rather than ignoring the pandemic threat, in recent decades governments around the world have equipped themselves with specialist departments that prepare for biomedical catastrophe. They think like the military. Their assumption is not that the threat can actually be overcome-the faith that infectious diseases can be tamed is the conceit of sunny-minded public health campaigners. The job of the pandemic specialists is to prepare for a threat that will never go away and is, if anything, increasing in seriousness. Ominously, since the 1990s, "preparedness" has become the mission of more and more branches of government all over the world.

 

It is an intensely serious but also grimly futile business. The potential risks are vast. We can all too easily imagine a global outbreak of an Ebola-like disease, or a highly infectious influenza with the lethality of the Spanish flu. But at the same time, there is no willingness to make structural changes to our food chain or transport system to reduce risk or even to invest in an adequate public health system. Little wonder, therefore, that a global inventory of pandemic preparedness in 2019 found literally every government in the world wanting. It is a classic instance of what Ulrich Beck called "organized irresponsibility." And it harbors within it the potential for not just economic and social damage but political crisis.

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