Will there be long term social and economic impacts from COVID-19?

Will there be long term social and economic impacts from COVID-19?
Source: Getty Images

One of the legacies of major crises is that they have the potential to spark change and renewal. From the ashes of World War II major powers forged ahead with the United Nations, leading to the rise of international institutions with the expressed goal of forging international cooperation.

They also have the power to breed disruption and chaos. After the 9/11 terrorist attacks in the United States, a multi-trillion dollar war was fought against perceived enemies. A host of aggressors contributed to the sustained violence, leading to hundreds of thousands of lives lost, which in turn affected the lives of myriad families across the globe.

While these two examples, like most events that shape our world, are contested over their merits and justifications, the larger point stands: crises have a unique power to reshape human affairs in one way or another.

For this reason, Hippocrates, the ancient Greek physician, specifically used the word “crisis” to refer to a turning point. In health terms, Hippocrates described a crisis as a flashpoint. From that moment, a patient would either find the strength to overcome the ailment, or it would lead to death.

With this in mind, what kinds of long term outcomes can the COVID-19 crises have on human society? While predicting the future with much accuracy isn’t possible, a look into history could help determine the possible direction of movement.

Source: SCMP

Pandemics shape history

Throughout history, pandemics have contributed to the shaping of policy and the roles of leadership.

In 542, a plague hit the city of Constantinople, the capital of the Eastern Roman Empire. At the time, the city was ruled by the Emperor Justinian, who by historical accounts governed over an influential and productive period of imperial history. Before the plague, his reign was reportedly a busy one – codifying Roman law, making peace with nearby nations and overhauling internal administration.

The disease, which severely crippled Justinian’s rule, reached Rome a year later before eventually spreading to the rest of Europe. After successive rounds of the plague over many years, by 750 much of the region was significantly altered. Followers of Islam came to control a large portion of Justinian’s former territory and much of Europe was ruled by the Franks, a people who originated from Germanic lands.

While the plague shouldn’t be viewed as the sole reason for such dramatic shifts in history, it does point to the power of disease to impact human affairs on a larger scale, regardless of an event’s complexity.

The threat of contagion has also been a source of human scientific ingenuity. Evidence suggests that medieval Chinese and Indian practitioners were some of the first to implement inoculations against smallpox, while the work of Edward Jenner, an English physician, was crucial in popularizing vaccinations around the turn of the 19th century.

At the time, smallpox was still a major problem, even affecting leaders like Abraham Lincoln, who reportedly nearly died of the disease. On May 8, 1980, the World Health Assembly officially declared the world free of smallpox.

Economic changes incoming?

Although the threat of COVID-19 is only a few months old, it has already significantly altered the economic landscape. Many countries around the world have passed historic relief packages to keep businesses and families afloat.

In the coming weeks and months, scores more people face the prospect of unemployment amid severe inequality. This, coupled with ever-increasing deficits as governments around the world print excess money to stave off economic collapse, has led some analysts to try and gauge the scale of COVID-19 among other important moments in economic history.

“This is a crisis that’s similar [to the 2008 financial crisis] except it goes way beyond the banks,” said Ray Dalio, the founder, co-chairman and co-chief Investment Officer at Bridgewater Associates, an American investment firm. “So when you [the government] starts to think, ‘who do you want to save?’ you have to think ‘how do you provide them with income?’… and if you don’t do that the consequences are enormous.”

“We have to think about the consequences, though, of producing all that money and credit. Where does it all come from and what does it mean? … there has to be more money and credit … to save important things and [so] that you only impose a certain amount of suffering on people [that] they can bear, or there will be a revolution and you won’t have productivity.”

“You have to bring in the elements of wealth gaps and politics,” added Dalio. “The world does not operate without consideration to how wealth is distributed.”

Others, like former Democratic presidential hopeful Andrew Yang, argue that the pandemic could be the catalyst for broader economic changes. He ran on a platform of giving all Americans US$1,000 per month to decrease the likelihood of economic uncertainty among the public.

“This is something we actually can implement immediately, in a powerful way, that will improve millions of Americans’ lives and make us stronger and healthier from day one,” he said.

Earlier this month, it was reported that Spain is working towards implementing its own national UBI, which would guarantee all citizens a basic amount of money every month.

Impacts on digitalization

Another longer term impact of the virus could be the further digitalization of the economy and perhaps social life more generally.

As many people start working from home in large numbers, as colleges ramp up online course offerings and home delivery becomes more of a necessity than a choice, companies could seize on these trends by increasing platforms and services that cater even further to online users.

While many of these changes are borne from restrictions put in place due to the virus, most of which should be relatively short-term, some say the pace of digital growth could become even more apparent in a world after COVID-19.

“Even when the COVID-19 outbreak is contained, it’s unlikely things will return to normal,” wrote Andrew Filev, a contributor to Forbes who focuses on entrepreneurship and the future of work. “Instead, we’re seeing the forced acceleration of previously slow-moving trends that are likely to shape the future for the long haul.”

Source: Acronis

Some of the ways Filev suggests life could change due to the pandemic are in the sectors of telecommunication, on-demand services, virtual events and in the ever-increasing use of ‘cloud technology’ to store data digitally.


Have a tip or story? Get in touch with our reporters here!

Sign up for daily news briefs from The Millennial Source here!