A little over two months of coronavirus have already wrought economic changes. As with any extreme event, epidemics suddenly shed light on certain social phenomena which we hazily know about but often tend to ignore or prefer not to think about. Da “Social Europe”.
Economic history shows epidemics are great equalisers. The most cited example (for which we also have most data) is still the Black Death, which hit Europe around the mid-14th century. In some places, it killed up to one third of the population.
But by reducing population, it made labour more scarce, increased wages, reduced inequality and led to institutional changes which—for some economic historians, such as Guido Alfano, Mattia Fochesato and Samuel Bowles—had long-term implications for European economic growth.
According to these authors, the growing power of labour was checked in southern Europe by restrictions on its movement and other extra-economic constraints imposed by local landlords. In northern Europe, however, where feudal institutions were not so strong, after the Black Death labour became more free and more expensive, which set the foundations for technological progress and eventually the industrial revolution.
A little over two months of coronavirus have already wrought economic changes. Many will be easily reversible if the epidemic is quickly contained and stopped. But if not, they may endure. And, as with any extreme event, epidemics suddenly shed light on certain social phenomena which we hazily know about but often tend to ignore or prefer not to think about.
Consider citizenship and ‘statistical discrimination’. Until about a year ago, a traveller entering the United Kingdom could enter a shorter line if she was a UK citizen or a citizen of another European Union country—or wait in a much longer queue, if otherwise. The distinction made sense because the movement of labour within the EU was free. Since about a year ago, however, the rules have changed in such a way that the fast lane applies, in addition to UK nationals (which is obvious), to citizens of the EU, the United States, Canada, Australia, New Zealand, Japan, Singapore and South Korea.