Global governments and stock markets are working on assumptions that there will be an economic recovery from the Coronavirus pandemic. Models and projections of this vary but the forecasting group Oxford Economics, is predicting a strong economic recovery in the second half of this year.
But is there any historical precedent to suggest that we will see a ‘strong recovery’ once the pandemic is over? In the 14th Century, the Black Death ravaged Europe and, as an article in City AM paper pointed out this week, there are some remarkable similarities between that pandemic and the current one.
Obviously the Black Death was far more lethal, depending on your source, killing between 30% and 60% of Europe’s population. But people quickly worked out that it could spread from person to person. Those who could fled from infected areas, locking themselves away in castles and monasteries. The peasantry had far fewer options – but still sought to limit contact with the outside world.
There was a shortage of PPE in the 14th Century. Gloves, in particular, were in short supply, with glove makers trying to poach employees from their rivals. Unlicensed glove production – often of poor quality – soared.
And there were scams and people who took advantage of the situation. William of Liverpool offered to take away the bodies from one village and bury them in what he promised were his ‘extensive fields.’ He was convicted of fly-tipping the bodies on his way home.
As we have seen, events such as coronavirus bring out both the bad and the good in people. Anyone following national or local media will be struck by the parallels to events happening today – human nature often remains the same.
The key point, though – is that economic activity recovered remarkably quickly once the pandemic had passed. Although partly achieved through a significantly smaller population, there was innovation in agriculture and improvement in diet and health. Wages rose and huge swathes of society had more money to spend on consumer goods, from beer to clothing to furniture.
At the same time, we saw a growth in technologies in shipping & printing, a growth in banking and accounting and development of credit networks and guilds amongst common people. States also made it easier to integrate markets and to reinforce contracts of exchange through law.
With structural economic reform there was the opportunity for innovation creating opportunities for 14th Century entrepreneurs to rebuild their businesses. Confidence, from both business owners and consumers, recovered quickly.
Perhaps, we are not experiencing something of quite the same scale, but as we have written previously, we are absolutely certain that history will repeat itself. Human nature does not change. Sadly, the successors of William of Liverpool are equally busy in the current crisis. But so are the successors of those 14th Century entrepreneurs who rebuilt the country once the pandemic passed.