COVID-19: Lessons from History

A brief history of the pandemics over the last century | COVID-19: Video by World Economic Forum:

The Coronavirus pandemic has already had a major impact around the world. The question though is what kinds of long term impact might it have? History is our best guide here. How similar is this to previous global pandemics? How did we react in the past and how should that inform what we do now?

Dr Steve Davies, Economic Historian, considers previous global pandemics and the impact they have had on society and the global economy. By examining past experiences we can attempt to answer key questions such as how long might this last, how bad might it get, how quickly will the economy recover and what might some of the lasting impacts be.

The History and Economics of Pandemics: Video by Dr Steve Davies:

Results of Major Pandemics
– Often slight – depends on (A) Severity and (B) the political and socio-cultural reaction.
– Apart from the few really major ones the mortality is not the most important result.
– If a major impact, it will accelerate and intensify pre-existing trends.
– Major intellectual and cultural effects.

Economic Impact 1
– Massive supply side shock.
– A supply led recession/slump NOT a demand led one.
– Physical assets are still there but danger is the social relations that make them productive are eroded.
– A severe slowdown but short-lived.
– Main goal is to preserve the supply side relations.

Economic Impact 2
– Will probably accelerate previous trends (e.g. home working).
– Also lead to striking innovation and departures (historical precedents).
– Some areas will be permanently reduced or transformed.
– Others will grow.

Economic Impact 3
– Likely a sharp rebound.
– In conjunction with other things will likely cause a sharp correction in asset values and destroy a lot of ‘wealth’.

Economic Impact 4
– Historically really big pandemics have arrested or reversed economic integration.
– Likely to happen this time.
– A pull back from economic integration, globalisation.
– An acceleration of pre-existing trends.

This Will Happen Again
– Pandemics are a regular feature of the modern world.
– Even a serious flu is a bad one (typically reduces global GDP by 0.7% in a year). Sooner or later a really bad one.
– Several features of the way we live now make one more likely.
– Especially contemporary intensive farming and pressure on wildlife habitats + overuse of antibiotics.

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