Even with coronavirus, there’s nothing new under the sun

Getty Images

In times of crisis, one of the most common phrases we hear from motivational experts is, “When life hands you lemons, make lemonade!” Its significance is that every crisis is an opportunity to break down stereotypes or to destroy familiar systems, and this can lead to the emergence of new chances for dynamic changes.

It seems inevitable: When something falls, collapses, or slips away, when people lose their income, when they become unemployed and have no clear prospects for the future, pink-cheeked, lively optimists immediately appear and say, “Well, here’s our chance to make some changes!”

From an economic perspective, we see this sometimes with underdeveloped countries when they enter the next devastating crisis and have no choice but to console themselves with “new opportunities” that will never actually be used by anyone. This often happens in the realm of import substitution — when countries use economic crises as a way to ramp up domestic production and demonize exports. When crisis is upon us, people and nations tend to turn inwards, especially when the threat is external. It’s a pretext for increased feelings of nationalism, economic or otherwise. When the national currencies of weak countries fall, and imported goods rise in price, the authorities seize on this as a propaganda tool to stir up populist feelings among the people. They promise that the debilitating external forces are actually an impetus to revive domestic manufacturing or are a way to change the paradigm of globalization.

These rallying cries are based on the general economic idea that a weak currency promotes production growth. In theory, this is of course true, and in some cases in practice. For example, China is constantly weakening the yuan, which increases the competitiveness of its production. But in order for the economic crisis to lead to an increase in production, it is imperative, at least, that it be available in quantity and with technology that allow you to quickly increase mass, cheap, and high-quality production.

How many times did we hear a variation on this theme in Russian society during the introduction of sanctions and counter-sanctions? “The West imposes economic sanctions against us. Hurray comrades, now we will all begin to produce ourselves!” It is a common misconception that even without a powerful production base or infrastructure, and being completely dependent on foreign raw materials, you can start producing everything yourself. Russia is one of the most striking examples of such an approach, but it can be found on all continents.

And who can blame us? Who among us hasn’t felt the hope that after falling headfirst in the mud, we can get up, dust ourselves off, and become a stronger person for having experienced this hardship?

It’s true that throughout world history you can find a handful of crises and disasters that have changed the course of human development. For example, the “Great Plague” in Europe during the Middle Ages killed almost half of the continent’s population, but capitalism in its current form would be unimaginable without it. Due to the sharp decline in the population, there were fewer people to work on the land plots of the surviving rich — a shortage of labor — and the surviving commoners refused to work for previous “wages.” All changes in the economic system, which in the end led to the current model of capitalism, became possible largely thanks to the epidemic.

Undoubtedly, among the global crises with global consequences was the collapse of the socialist system, which led to the reformatting of a good half of the globe. There are probably a couple of other examples, but not many. Whenever a crisis pushes people to the edge and gives rise to hope for a different future, usually — after the completion of said change — things return to what they were before.

In theory, the collapse of the Dutch economy when the Tulip Bubble burst in the 1630s was to forever bury any mention of its financial market, exchanges, and stocks. But — lo and behold — as soon as Holland rose from its knees, everything returned to normal. After 400 years, the United States fell into the Great Depression, which was also linked to the financial market, but what are the end results? The storm died down, and Wall Street still dictates order in the world of finance.

The most recent crisis of 2008 came thanks to the financial market — easy lending, the habit of taking loans that weren’t secure, derivatives. How many hopes did idealists have that this total collapse would finally teach people a lesson about dangerous financial practices? The fact that you can’t rely solely on loans all your life, that you need to borrow as much as you can pull, that banks will soothe their appetites, and that ultimately the richest will be those who produce something real, and not just trade air on stock exchanges?

Alas, it was all in vain. People didn’t learn from their mistakes. Even less than two years after the bubble burst, things returned to normal again — loans, mortgages, stocks, bonds, derivatives. Millions of people are still employed in the financial sector and aren’t in a hurry to look for different jobs.

Now another possible impetus for human progression is COVID-19 and the large-scale, total collapse of the world economy it has caused. Again refrains of the same song: After the coronavirus the world will never be the same again. The value system will change. The approach to business will change. People will change and work more remotely. Oil prices will depreciate, the raw-material empires will collapse. Trump will give up, and Vladimir Putin will lose his power.

Shadi Hamid wrote recently in The Atlantic about the way this virus has already altered how Americans view our current political climate, and asks, “Related to this is the question of whether the mounting deaths from the virus will bring us together or tear us apart. Which ‘authentic’ version of ourselves will it reveal — the selfish or the sacrificing?” He cites analysis of the aftermath of the Spanish flu epidemic of 1918-1920, which showed an unwillingness or lack of desire by Americans to reckon with the destruction and loss of life caused by the epidemic because they didn’t like what they had become when it was all over.

Unfortunately, our hopes will probably be dashed again in the aftermath of this virus.

Humanity will not change due to coronavirus — unless, of course, it wipes out half of humanity, like happened in the Middle Ages. The coronavirus crisis will not bring any global changes. Nothing will change. The world will stay exactly the same, filthy yet beautiful, as it was before the coronavirus. The shock will pass in a maximum of a month or two, and the coronavirus will be spoken of merely by the neighbors across the hall.

The virus has already shown how vulnerable humanity is, but this is not our last lesson. Very soon it will show us how stable human nature is, which after each fall invariably rises and returns to where it was.

Vitali Shkliarov is the Harvard University fellow at the Center for Russian and Eurasian Studies.

Tags Bubonic plague Capitalism Coronavirus coronavirus pandemic Economic bubbles Financial crises Vladimir Putin

More Finance News

See All
See all Hill.TV See all Video

Most Popular

Load more


See all Video