Back to List
Empty Mind after Ten Thousand Reasons

Three Choices of the United States Facing Corona Crisis

Kazumasa IWATA


Resumption of economic activity in the United States was premature. The new coronavirus is robust. Mutation is repeated, while the mechanism of antibody formation is complicated. We must take into account not only the “base-case scenario” assuming that vaccine development will succeed early new year, but also the case of the “Nightmare Scenario” (Japan Center for Economic Research Mid-July Forecast), where it won’t succeed.

Facing the crisis of the World War II, former British Prime Minister Churchill, said that choices at the times of crisis shape the world for several generations to come. There are three choices of the US.

The first choice is the deepening divide of the US. According to Professor Thomas Phillipon of the New York University, the US market has become less competitive, as compared with the European market, in part due to the increased monopoly power of the big tech companies; it erodes consumers’ interest. New entrant firms are suppressed, while individuals become the “data slavery.” In addition to the income gap between high-skilled human power and low-skilled one, a new gap was created under the corona crisis between workers who can stay at home and those who provides services that require face-to-face contact.

The assault of a black man by a white police officer highlighted the depth of the “racial injustice” since the time of foundation of the US. We are shocked at the news that President Trump intended to mobilize federal troops to control civil protest. It signifies the depth of “division between the state and the society” as seen only in some developing countries.

The second choice is “security-oriented US” under the US-China confrontation. According to artificial intelligence researcher Kai-fu Lee, China has already outpaced the US in areas such as AI perception. Its advantage lies in the ecosystem of a wide range of venture companies and the centralized data collection and management system under the “digital dictatorship state.” China will introduce the Central Bank Digital Currency (CBDC) based on the block chain technology for the first time in the world, aiming to replace the current international financial settlement network under the dollar standard system.

On the other hand, in the US, from the perspective of security, national organizations, in collaboration with tech companies, will try to manage all the personal information. It will also cooperate with 10 democratic countries (G7+ Korea, India, Australia) to keep Chinese companies completely out of the US defense industry-related supply chain. However, if the “surveillance capitalism” lacks proper and democratic monitoring mechanisms, it will threaten the privacy of individuals. It is suggestive that the European Court of Justice has made judgement that the “privacy shield”, agreement on a personal data transfer between Europe and the US, violates the “European Union General Data Protection Regulation.”

The third choice is the “US prioritizing social agenda.” Securing of the human rights and the citizens’ rights and the expansion of political participation will deepen democracy. In a digital society that allows both the democracy and privacy protection mutually consistent, it will aim to resolve issues such as racial injustice, increasing inequality, and global warming. As the excessive monopoly power of big tech companies will be rectified, the US market will restore its dynamism.

We hope that from the bottom of deep division of the US, “new political dynamism” will be forthcoming; Dr. John Hamre, President of the Institute for Strategic and International Studies (CSIS) pays attention to new movements.

(The english translation of the article was published in the Nikkei morning edition 2020/08/07.)