Posted on: 30 April 2020
By Laurent Muzellec, professor in marketing, Trinity Business School.
First published in the Irish Independent.
The Covid-19 pandemic is a tragedy that has already killed thousands around the globe. Governments, on the advice of medical staff and with the support of their citizens, have ordered a lock down to slow down the transmission of the virus. This measure, the only one possible in the absence of systematic testing has been effective in reducing the death toll. Confinement as a temporary emergency measure made sense to “flatten the curve”. Some countries have started to lift the lockdown but according to a recent Harvard study, it may be necessary to have periods of confinement until 2022. Maybe now is the time to calmly review the situation and discuss the merits of a prolonged confinement in the context of all of society, including future generations.
First, let us have a look at the present and future economic costs that those restrictions are imposing. During the lockdown, countries are reportedly functioning at 60% of their capacity. According to the European Commission, this translates into a reduction of 10% in GDP for the Eurozone for 2020. In comparison, the GDP of the Eurozone only shrank by 4.5% in the last major financial crisis in 2009. This economic crisis is already being compared to the 1929 crisis. Companies are going bankrupt at an unprecedented rate and the unemployment rate in the USA is already at 16%. Similar figures or worse are expected across Europe. This is the situation as of today and it is getting worse for every week the lock down is prolonged.
We could argue that this economic slowdown has some benefits. Aside from spending time with our families, we are experiencing what the world would feel like with much less cars and pollution. Pictures of wild animals re-entering lost territories are populating social media and we can only rejoice at those scenes.
But governments are spending billions in an attempt to mitigate the economic crisis. Budget deficits are predicted to reach 10 to 15% of GDP for countries in the Eurozone. Ultimately, those deficits will be added to national debts e.g. France’s debt pile will likely soar to 115 percent of GDP, Italy to 150%. Fiscal measures in Europe alone should add up to €1.5 trillion this year. Thanks to quantitative easing by central banks, developed countries may limit the damage. In simple terms, central banks are issuing money ex-nihilo to buy debts generated by their respective governments. This money is used to help people and companies during this difficult period. In a few years, the debt that is not owned by anyone but the central banks can simply be erased. Nobody can predict the effect of this monetary sleight of hand. At the minimum, it should result in hefty inflation and a significant lowering of the standard of living of the population in years to come. In addition, most of the debt will not be erased and the burden of this crisis will be passed on to our children.
To summarize, the price of this collapse will not be paid by the generation that is more likely to die from the virus (the average age of people dying from the coronavirus in France, for example, is 81), it will be paid by the current and future workforce – our children. Ironically, in countries such as the USA, France and Germany, the older generation most affected by the virus had a better standard of living than any previous generation before them and very likely than any generation after them. In comparison, the crisis and associated measures taken by governments will be paid for by future generations whose destiny already seemed very uncertain.
All of this reveals a contradiction and an obsession.
The contradiction is that usually we accept many risks and deaths in order to live the way we live. The World Health Organisation estimates that pollution kills 4.2 million people every year. 1.35 million people die in road crashes each year. 2.5 million die from harmful use of alcohol along with another 6 million people from tobacco, including a few hundred thousand from secondhand smoke exposure. Annual influenza epidemics result in 500,000 deaths worldwide. Yet, pollution is widely tolerated, tobacco, alcohol and cars are not only legal but also legally advertised; nobody really cares about the flu. In comparison, the measures taken to avoid the spread of the corona virus, which so far has killed “only” 190 000 people, have jeopardized our way of life and the well-being of future generations.
The obsession is that life should be preserved at all cost. Financial cost, but also maybe at the cost of living our lives with the most basic human rights and dignity. Freedom of movement has been suspended and tomorrow movements may be digitally tracked through our mobile phones. As temporary measures, they may be acceptable. More fundamentally, in many western societies, this obsession for life as opposed to living means that death is taboo. It is associated with the prolonging of life at any cost. Confinement is not a sustainable way of living and yet even stricter measures have been imposed for people over 70. Confinement also means dying alone, without the human decency of a proper family goodbye and burial. Is it really worth living in those conditions in order to survive another week, another month, at best a few more years? Maybe? Surely, it is up to the individuals concerned to decide for themselves.
I know that many will argue that our way of living prior to covid-19 was not sustainable. This is true. They may argue that this crisis will be the opportunity to rebuild a brand new world. I share the hope that we can change our way of living for a better future for our children. However, we need to stop dreaming that human nature is going to change dramatically within a few months. As if our society is going to become more altruistic and capitalism more human just because of a pandemic. If 30% unemployment becomes the norm, social unrest rather than social harmony may be a more likely outcome.
So where does all this leave us? People who are the most vulnerable should protect themselves and should be protected to the best of our abilities. Every single one of us should behave in a way that is mindful of others. Individuals should take responsibility for themselves, for their parents, and also for their children. The voices of doctors, to whom we are incredibly indebted, have been heard: we know that the lives of hundreds of thousands of people are at risk today. But as the dire consequences of a prolonged confinement are becoming clearer, maybe other voices should also be heard – the sociologists, civil society, economists, to name a few but not all. We need to face the very difficult decisions that need to be taken. Whether we collectively decide to go on with confinement, we need to take stock of the consequences from multiple perspectives. Maybe now is the time for our western democracies to truly debate about it and decide our present and our future.
