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The economic fallout from the Spanish flu was far less dramatic than the Covid-19 pandemic. In the USA industrial output fell sharply but rebounded within a few months. Retail was barely affected, and businesses did not declare bankruptcy at higher rates than usual. The pandemic in general cut the GDP of most of the developed world by no more than two per cent.
The Spanish flu killed just over half a million Americans, around 0.5pc of the population. Adjusted this would work out to a little under two million deaths today, close to the number predicted in the worst-case for the coronavirus that Imperial College London published. Worldwide, the Spanish flu killed 40 million people, or 2pc of humanity, equivalent to more than 150 million people today. Even worse than Covid-19 it picked not only the elderly and infirm but also infants and those in their 20s and 30s.
So why did this ferocious pandemic fail to wreck the world economy? Well, for the most part, whether by necessity or choice, people just got on with life. In the developed economies measures varied widely but most closed schools and large public venues. For the most part, however, non-essential businesses remained open, and customer demand was sufficiently robust to keep them afloat without the help of costly stimulus packages.
A century ago, people inhabited a physical and mental universe that had not yet been sanitised by modern science and life was shorter. Worldwide life expectancy has since doubled. The older generation back then remembered catastrophic outbreaks of cholera and yellow fever. There were no vaccines for influenza, tuberculosis, tetanus, diphtheria, typhus, measles, or polio, no antibacterial sulfonamide drugs, no penicillin, no antiviral drugs and no chemotherapy. Wealth offered limited protection and the rich and poor were in it together.
We now inhabit a world of greater comfort, safety and predictability. For the first time in history, the developed world has good reason to expect science to shield and heal the population. Many in the developed world can afford to give free rein to their anxieties. Fear has reappeared in a way that most have never previously experienced. We worry the next victim could be a vulnerable spouse, a devoted parent or a beloved grandparent. It is these personal anxieties and tribal empathies that have sucked the oxygen out of the economy and put lives on hold.
Today, the selective empathy of privilege amplifies existing inequalities. Thanks to social security systems and other benefits we have transferring wealth from young to old. But now we have taken the more radical step by shrinking the economy to safeguard those most at risk from Covid-19.
Unfortunately, some in societies have been left behind such as the unemployed, poor and ethnic minorities. The young and the poor, already held down by inequality, debt and fading prospects of social mobility, are bound to pay the heaviest price.
Experts have yet to conclude how this pandemic will change everything. Perhaps this experience will bring about the much-needed change in order that we stop our suicidal behaviour that has taken the world to the brink.
Gordon is the former president and chief executive of BMMI. He can be reached at [email protected]