The Corona pandemic is intensifying and nothing is the same anymore. Will society return to its former normal state, or are we now living in a whole new age? Opinions differ, for both good and for bad. My name is Henrik Jönsson, and I am an independent, libertarian entrepreneur and social commentator. All the more countries are now pushing their boundaries and introducing emergency quarantine measures in an attempt to curb the spread of the corona virus. How has the world historically reacted to major pandemics? What will be the consequences for society and the world economy? – and how to handle this new situation? These are the issues I address in this week’s video. Do you appreciate my videos? If so, I’m grateful if you support me through one of the payment options out here on the left. My films take between 2 and 3 full working days to produce – every week – and I cannot continue making them without your financial support. Big thanks to those of you who already support my video production! Also, don’t forget to hit the “subscribe” button below if you haven’t already, and also check ”All” under the INSUFFERABLE bell icon to possibly get notifications when I publish new videos – which I do with relentless discipline every Saturday morning at 0800 CET! Because today I talk about epidemic, economy and entropy! Stay tuned! Pathogens, i.e. bacteria, viruses and disease-causing microorganisms, have been human companions since the beginning of time. In fact, every living thing is constantly battling for adaptation and survival – which is earned only through resilience and adaptability. H.G. Well’s novel “The War of the Worlds” from 1898 was written in the midst of a burning cholera epidemic, thirty years before modern antibiotics had yet been invented – and at a time when the Darwinian natural selection was still significantly present. ”Survival of the fitness boys!” The poorly prepared Martians in Well’s book arrive with superior technology to enslave the Earth’s population, but ultimately die because their immune systems are not adapted to the terrestrial bacterial flora. “The martians had no resistance to the bacteria in our atmosphere to which we have long since become immune. Once they had breathed our air, germs, which no longer effects us, began to kill them.” Just like Martians, both viruses and humans fight for survival, and constantly adapt to overcome each other. An expressive illustration of this is how more and more microbes are now gradually developing so-called antibiotic resistance, and becoming immune to the treatments we humans in modern times have begun to use to prevent diseases from getting attached. In 2013, the World Health Organization declared that antibiotic resistance is now considered a global security threat. Even in modern times, infectious diseases are thus one of humanity’s greatest enemies, and the World Health Organization’s warning emphasizes the modern society’s dependence on vaccines and antibiotics. There is no vaccine yet for Covid-19 – the disease caused by the corona virus – and the infection requires, for those seriously ill, intensive care to be cured. Therefore, in order to keep up with the limited resources of care, more and more emergency state-like measures are now being applied – with great consequences for modern society as a result. Unique to our time is globalization: never before have so many people been able to travel so freely around the world and thus conduct both wealth-creating trade with each other – but also spread pathogens at an unprecedented rate. THE GLOBAL MARKET’S VULNERABLE STRENGTH Free trade, mobility and specialization have in modern times created historically unmatched wealth – but the dependence on global trade flows also makes society vulnerable. The political philosopher Leonard Read wrote a famous essay in 1958 called “I, Pencil.” The text depicts the immeasurable value creation of free trade, and how no man alone can create an object we take for granted. For example, a pencil. The pen’s shaft is made of cedar from California, and requires logging machines, transportation and sawmills to be manufactured. All of these tools exist only because of many years of expertise – and THEIR manufacturing requires access to raw materials such as iron ore, oil and energy. The writing pin found inside the pen’s wooden shaft is made of graphite from Sri Lanka, and requires mining operations that require drilling machines, electric light and burlap for packaging. The graphite is processed and mixed with chemicals from different parts of the world, and then baked in ovens someone built and operates. In order to strengthen the pen’s durability, it is then supplied with a full six layers of varnish, which are extracted from, among other things, castor beans that someone has grown, watered, harvested and refined. The rubber pulp, which is converted into chemical rubber through chemical processes, is grown in Indonesia, and the copper framework that holds it in place is extracted in South American mines. Manufacturing a single pencil literally requires many thousands of people who are part of an extremely complex, self-generating network of trade exchanges. If the manufacturING of a pencil requires all this expertise and all these steps, imagine what a miracle the cell phone or computer you are currently using is. Generations of expertise have created advanced factories that can manufacture integrated circuits and silicon chips, millimeter-thin, touch-sensitive LED screens and microscopic camera sensors, speakers and signal equipment with the ability to communicate with satellites 30,000 meters above Earth’s surface – which in turn connects you to computers across the globe, some of which are currently pumping endless streams of ones and zeros to your device’s processor, which instantly translates them into the pixels that makes up this video stream. In fact, even calling this magnificent brilliance a “miracle” is to insult the human triumph that is the ultimate jewel of our civilization – for it is generation after generation of talented and hard-working people who, in the sweat of their brows, have enabled our entire society to today enjoy the extraordinary fruits of this extraordinary time. Let us liken this myriad global activity of prosperity to an anthill: a visible jumble of individuals who each pull their weight helps to maintain and develop an ever-growing civilization. Political regulation of the market can be regarded as suddenly pushing a stick into the anthill. Huge systems collapse, but due to febrile activity, the ants find new ways and compensate for the sudden intrusion. Insert a couple of sticks to the anthill and it collapses, and may be abandoned, but the ants find new paths, move around their eggs and continues to build. … until a pain limit is reached, “Rock bottom is reached” because if the number of disruptive moments gives rise to systemic collapse, it becomes extremely more efficient to build a completely new anthill in a place where you are not disturbed as often. A CLOSED WORLD The measures now being taken at international level to curb the pandemic can be likened to not only forcing all the ants to stay inside the anthill, but also to placing each stack in an incubator where no new straws, leafs or insects can be added to the construction work. This is not a criticism of the measures currently being implemented by the world’s governments to limit the impact of the pandemic, just a point that the measures are in principle threatening to shut down the entire world economy. And a prolonged shutdown of the world economy is likely to reap significantly more human lives than any pandemic. The pandemic – whose horrific results are still pending – is only the first phase of this crisis – the subsequent and major crisis is of social and economic nature. To take a very small and local example: right now many people are staying at home to limit the spread of the infection. This is a perfectly reasonable reaction from the pandemic point of view. But the economic system suffers from a domino effect. The consequences of many people staying at home affect the companies, whose production rate and order intake are falling. Many companies will be forced to terminate staff in order to survive. The terminated become poorer, and can no longer contribute to the social economy. When people are poor and stay at home, restaurants close, with yet more layoffs as a consequence. Farmers and commodity producers receive fewer orders. Stores are closing. Meetings and events are booked off. Economic activity in society as a whole is declining. As a consequence, more people become unemployed and poor, and start spending their savings – which makes it even more difficult for the remaining business owners to be able to run their businesses. This negative spiral actually describes an ordinary recession, but in this case it is actually worse than that, because the crisis is systemically and globally forced as a result of the pandemic measures. China dominates the world’s manufacturing industry, and for a long time has operated at about 65% of its normal production capacity. “So maybe we get a little less plastic junk and a few fewer pirated electronic gadgets?” someone says and shrugs their shoulders. Unfortunately, it’s not that easy. ALL product manufacturing is – as the pencil example shows – dependent on so-called “supply chains”. Even if you only run a local pizza place, you buy goods such as packaging materials, ovens and raw materials from a wholesaler. The wholesaler in turn buys the products in volume from factories, which depends on components, cables and materials manufactured in China and other countries. If there is a shortage of copper wire, memory chips and soybeans, there will be a shortage of almost exactly everything in the whole world. The production and delivery deficits are now systemic, but are not yet visible in the consumer stage. This is due to a phenomenon called “lead time”. The term lead time describes the delay between the initiation of a process and its consequences starting to appear – for example, the time between a finished product being delivered and the local warehouses being emptied. As a private person, therefore, it is wise to prepare for scarcer times. And no: this does not mean that you have to stock toilet paper, since one of the few remaining domestic manufacturing industries Sweden actually has is just paper. The ongoing shutdown of the world economy is historically unique. It is therefore reasonable to assume that many people are still living in the delusion that the authorities will soon ring the bell and say that everything is over, and then allow society to return to its former normal state without hindrance. It will not happen, because it is not possible. “One has to understand that it is not possible to shut down the entire economy and expect that it returns the same as before.” The pandemic has not yet blossomed with full force, and the economy is already in free fall. Chaotic and authoritarian socio-political forces on all sides are in full motion, where all questioning is portrayed as directly socially dangerous unfairness – and where the government in more and more places uses the crisis as a pretext to strengthen its power and control over society. This is not a question of right or left, but of freedom or control – where the pursuit of control is precisely the stick the central power wants to run into the productive anthill of the free market. The American scientist and politician Benjamin Franklin summed it all up in his classic quote: “Those who would give up essential liberty to purchase a little temporary safety, deserve neither liberty nor safety.” Many people will die. Millions of people will lose their jobs. Hundreds of thousands of companies will go bankrupt. At the same time as the infrastructure of the community is congested and understaffed. “…and that means that all companies are just cutting expenses, but they have no income what so ever, so the consequences are that unemployment rises every second.” “It’s mass unemployment, we’re talking about unemployment at 20-40%, that means that there are very few businesses to turn to.” It is not unlikely that entire countries will collapse because of this. For example, the already strained Italian banking system is currently balancing on the edge of the abyss, and it becomes more expensive for Italy every hour to borrow money to continue fighting the pandemic. If Italy falls, it likely hampers all euro cooperation – and the EU suffering from a deep economic depression because of it. Both in Sweden, the US and in many other countries, financial support packages are announced. “The crisis package we can present today could consist of 300 billion SEK if the additional liquidity is utilized.” “He will ask for a total of 850 billion dollars to deal with the economic fallout from the coronavirus.” These measures can be likened to trying to extinguish a forest fire with a water gun, for the simple reason that the economic crisis is global, and that there is no way to cover it up at national level in the long term. However, this socio-economic situation is by no means unique to our time, and in the aftermath of a pandemic, major political, economic and social changes follows. To illustrate this, I have compiled a brief overview of pandemic history. HISTORICAL PANDEMICS The first documented pandemic took place during the Peleponese war in the early 430s BC. The infection spread through Libya, Ethiopia and Egypt and finally entered Athens, which was under siege by the Spartans, with the result that two-thirds of the Athenian population died. As a consequence, Athens lost its protectionist trade monopoly in the Aegean. The pandemic was terrible, but contributing to the collapse of the monopoly led to an increase in prosperity throughout the Greek world. When The Black Death occurred in the mid-1300s, somewhere between 30 and 60 percent of Europe’s population died. This led to an acute labor shortage in, among other things, the agrarian English economy, which caused the value of land ownership to fall and the value of labor to increase. As a consequence, the feudal system collapsed and gradually replaced with independent owning, which led to the enormous wealth increases that paved the way for both the Renaissance and later for the Age of Enlightenment. The pandemic was terrible, but contributing to the collapse of feudalism led to an increase in prosperity throughout Europe. The early 17th-century malaria epidemic caused Pope Urban VII to issue a claim to stop the infection. This eventually led to the discovery of quinine, a muscle relaxant extracted from the bark of the Peruvian Chinese tree – which has anti-malarial effects. The discovery was revolutionary, and for a period of time, quinine was valued higher than gold, creating world-wide trade, traveling and reducing malaria. In the early 1800s, British East India Company soldiers began mixing their bitter-tasting quinine tonic with gin and lime to make antimalarial medicine more palatable. The malaria pandemic was and is terrible, but it also helped to push the disease back – and also created the drink Gin & Tonic. These historical examples are not intended to trivialize the terrible pandemics that have repeatedly afflicted humanity. On the other hand, it is wise to remember that tough times also create new opportunities for those who can think clearly and have a certain entrepreneurial courage. “If life gives you lemons – make lemonade” “When life gives you lemonade – make lemons. Life will be all like “whaat?” reads an upbeat word of wisdom popularized by American super entrepreneur Dale Carnegie. The call is to turn sour circumstances into something positive. My own contribution to the discussion is: “why make lemonade, when a lemon can become a battery and spread light!” It is always the darkest just before dawn. As a social commentator in a difficult time, it is easy to be accused of passive criticism. Therefore, I have been exploring, for some time, the possibilities of providing some form of education for you who are, or who want to become, an entrepreneur in the midst of this new chaos – and who want to help make the world better. Send an introductory email with the subject “Exent” to [email protected] if you want to be contacted about this later this year. My name is Henrik Jönsson, and I see opportunities in difficult times. Take care of each other out there. Thank you for listening!