The Covid-19 economic crisis is not a recession. It is not the 2008-9 financial crisis. It is not the Great Depression. Forget the conventional categories of economic analysis. In terms of the size and spread of the global economic impact, the nearest comparison in the last 100 years is the Second World War. For the countries most badly affected by the outbreak, the preliminary forecasts for GDP bear comparison to the transition from planned economies in Eastern Europe – but without, as yet, changing the economic system.

Those countries most badly affected, at least in the developed world, are those where free-market policies had already eroded state capacity and left them with a political elite that made glib semi-competence a government policy goal. These were the countries that did not move rapidly to arrest the outbreak, did not impose the necessary public health sanctions, did not bolster health service capacity, and did not offer the income support mechanisms needed to ensure social distancing would be effective – at least, not until it was far too late.

Britain is, needless to say, leading the charge of the incompetent and the malign, and has set a high international standard for murderous delay: we have lived through the early days of the most catastrophic government failure in modern times, and, barring a miracle, it will – as the biological imperative of Covid-19’s ferocious capacity to spread, debilitate and kill bears down on us – get worse from here on in.

It is unlikely that the economy either here or elsewhere will (to quote the Prime Minister) “bounce back” on the other side of the immediate crisis period. What makes Covid-19 such a fundamental economic challenge is that it is assailing the core institution of capitalism: the labour market. To preserve public health it is essential to impose restrictions on labour. If work involves contact with others, or sharing a space with others – as the majority of work still does – it cannot be safely performed in the crisis period.

A major part of the economy, in effect, must be put into hibernation, and no modern economy can perform such an act without immense costs. But attempting to shirk those costs today will merely produce far worse impacts down the line. The forecast of 250,000 UK deaths from the quack remedy of “herd immunity” gave a glimpse of what could happen when immediate costs are ducked by a government: it is unlikely that civil order would be maintained in a Britain where quarter of a million people had died in a few months from an avoidable medical emergency. The future costs of inaction are greater than the costs of action now.

The world economy, on the other side of this crisis, will reflect that balance of state capacity and competence, and it will be reordered to the benefit of those countries that moved quickly. Already, China is distributing aid to Italy. And as the laggard states scramble to catch up, borrowing without limit, they are creating immense new liabilities: not too apparent now, but when the peak of this outbreak subsides – as it will – they will appear like rotten teeth in an open mouth: leering, demanding immediate treatment, and quite likely sparking calls for a generalised debt amnesty. Austerity will have less appeal when the imperative for effective state functions has been made brutally apparent.

The virus is an acceleration of the tendency, apparent since the 2008-9 crash, of a shift away from the dominant version of globalisation. During the 30 years before the crash, the global economy grew, but global trade grew faster, and global cross-border financial flows grew fastest of all. Since the crash, that has been thrown into reverse: cross-border financial flows, for example, are down more than 60 per cent by value since 2007. And where once the ideology of neoliberalism stressed the need for governments to do no more than create a “level playing field” for markets to operate in, the post-crash period has seen overt state intervention and state-against-state economic clashes, of which the US-China trade war is the most obvious example.

Covid-19, in this sense, is a solvent for deglobalisation. It is unlikely that global trade and travel will ever entirely recover from it once the costs of future pandemics are known and assimilated, just as the financial system never truly recovered from 2000-9. Known risks concentrate the mind, and epidemics are increasing in frequency – not least as a result of climate change.

But a different version of globalisation has emerged. The formal structures of capitalism – beloved, especially, by neoliberal thinkers, who fixated on legal forms – have been weakened, from the World Trade Organisation to the International Monetary Fund, to the act of monetised trade itself. Yet informal structures have appeared in their wake, created and sustained by the ubiquitous structures of data production, collection and analysis. The volume of cross-border data flows has expanded twelvefold since 2008.

A global, connected public exists today in a way it did not previously, and it has clear impacts: would the UK government have reversed course so speedily if we had not been able to see and understand what China and South Korea and Taiwan were doing, and what Britain was not? Similarly, if we have an impressively clear understanding of Covid-19, it is because research data is now made available and shared globally.

A fear of recurring epidemics will no doubt drive an extension of this data economy, as testing and monitoring becomes generalised, along with the sharing of personal data to track outbreaks. But this extension of the data economy runs hard up against the economic fundamentals of the pandemic outbreak itself. A world constrained by pandemic risk, and needing to monitor and regulate its social interactions more closely as a result, is one in which the balance of power at work can shift dramatically back in favour of labour, since the requirement to withdraw labour becomes an institutionalised public health necessity.

The Conservative government’s belated protections for employees are an implicit recognition of this fact, and periods of looser and tighter controls on social contact are envisaged over the coming months. Universal income payments would further institutionalise the shift to labour.

But it is conflicts over the use and control of data for monitoring and regulation of behaviour, extending from the workplace and into wider society, that are likely to inform the post-Covid world; and, for the first time in decades, the terrain may not be decisively skewed against those who work. Modern capitalism, now well into its second century, has never known such a fundamental challenge.