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Xander and Erik record one of our longest episodes yet–with a lot of beer. We talk about Modern Monetary Theory and its role in the COVID-19 policy conversation, and the impacts plagues have had on societies in the past. Prepare for laughs.

Our Full Notes

General

  • [Increasing the sample size – everyone’s talking about 1) spanish flu and 2) plague and not a lot in between
  • Economic recoveries not like wars b/c infrastructure doesn’t need to be rebuilt (Bloomberg, that other academic article)

 

Social consequences Covide-19

 

Statnews: https://www.statnews.com/2020/04/09/its-difficult-to-grasp-the-projected-deaths-from-covid-19-heres-how-they-compare-to-other-causes-of-death/

 

EUROPEAN UNION CONSEQUENCES

Lots of strain on the system in particular as suffering northern countries still asked to bail out even-more-suffering southern ones.

    • “Why is Italy’s & Spain’s failure the Danes’ problem?” kind of thing
  • Obviously borders closed again to limit spread
  • EU response has been slow… Bloomberg’s/Economist’s Andreas Kluth worries that this is “grist for the nationalist mill” and that a case can be made that in a crisis, individual nation-states can act faster. 

 

SPECULATION – Political consequences?

  • Keep an eye on how people feel about universal healthcare and a broader social safety net in the United States and even other countries
  • Could be the case that universal healthcare is re-branded not as a socialist thing but simply as a way to better serve public health and reduce the risk of uninsured getting everyone else sick. 

 

The Plagues of Moses

https://www.telegraph.co.uk/news/science/science-news/7530678/Biblical-plagues-really-happened-say-scientists.html). But just to run with the biblical story, the first-born sons of Egypt were all killed, there were boils, all that. Could have been a real disease as a result of all this. Obviously would have been extremely disruptive and the social consequences may have been disastrous in an age when people believed god/gods were responsible for this stuff, especially especially when your Pharaoh is god incarnate. We do know that the Egyptians held on so it didn’t lead to downfall of their society.

 

Scientists have had fun speculating about how environmental disruption may have legitimately led to these kinds of issues. Anyway, happy Passover, let’s jump into the stuff we have better data on: https://www.livescience.com/58638-science-of-the-10-plagues.html

 

The Athenian Plague

Thucidydes, Erik’s favorite nonfiction author, writes of a terrible plague that struck Athens during the Peloponnesian War (and much of the Eastern Med, but Athens worse). Hit them 3 times during the war and killed perhaps 100k people. In particular it hit them while they were hiding in Athens, all packed up, from the Spartan army marching around burning stuff. 

 

Huge social implications for a society that was otherwise very conservative and very much into following the rules and mores of society: 

“…the catastrophe was so overwhelming that men, not knowing what would happen next to them, became indifferent to every rule of religion or law.”” – Thucidydes 

 

The superstitious Hellenes believed the gods had abandoned them and this was particularly tough for their war effort. Athens’ army was a proud citizen-army that was greatly reduced. Athens went on to lose to Sparta after 19 more years of war. Then the rule of the Tyrants in Athens and hey maybe all this inspired Socrates/Plato to start thinking about Justice and gave Philip of Macedon the open door he needed to unite Hellas and send Alexander the Great to kick the butts of the Persians. 

 

So y’know, butterfly flaps its wings. 

 

The Plague – black death, bubonic plague

 

541 – Plague of Justinian

  • First appearance of what came to be known as the Bubonic plague. The second outbreak of plague (1348) is known as the black death
  • Named after Justinian who was the emperor of the eastern roman empire at the time.
    • Erik: rough legacy
  • Originated in Ethiopia, then spread to Egypt, Gaza, Jerusalem, and Antioch (Source). From there spread around Mediterranean on trade routes.
  • Extremely deadly. Estimates range from 25 million (ancient.eu) to 50 million, which represented about 25% of the world’s population at the time (Census.gov), although I’ve read before that even more people perished than this. 
    • Of course, data from this far back is hard to estimate. Other sources claim that even more people died. 100 million in Europe and Asia ended up dying (JVMH), or about half the global population at the time. (NatGeo)
    • In Constantinople, the capital of the empire, between 5,000-10,000 people were dying daily.
    • [Mention that it may have been even more deadly than in 1348 since in 14th there may have been a small amount of immunity leftover from when it broke out the first time in the 6th century]
  • Plague continued to spread around mediterranean for another 225 years, only receding in around 750 (reappearing, of course, 600 years later). (Source)
  • Huge consequences. Absolutely crippled Rome and Persia, which were duking it out anyway. Then guess what, a bunch of really zealous Arabs came pouring out of the desert (which didn’t get it due to being dry / distanced from the Mediterranean) and gave the 1000-year-old Persian empire a deathblow, and crippled the Eastern Roman empire into becoming a besieged regional power for the next 300 years. 

 

14th century plague

    • Labor shortages → peasants could demand greater rights. Landlords resisted, led to peasant rebellions in 1380s (New Republic)
      • Boosted real wages for 4 decades following plague (Bloomberg)
      • In England, laws were passed that were intended to force working age adults to work until they were 60 at 1346 wages. Employers were prohibited from paying higher wages
        • Plague “left England with a 25-40% drop in labor supply, a roughly 100% increase in real wages, and a decline in rates of return on land from about 5-8% (that means landowners had to pay more, and retained fewer earnings)” – according to a recent paper published by researchers at the SF Federal Reserve and UC Davis’ economics dpt (Source)

 

  • Good quote: ““These laws implicitly acknowledged that the feudal bargain had vanished. They did not appeal to the personal bonds of loyalty and protection, but rather, they appealed to simple impersonal checks on monetary exchanges.” And thus the plague that had ended the lives of some 75 to 200 million people in Eurasia also helped put an end to the feudal arrangement itself.” (New republic)

 

    • Textile workers in France were able to get several raises in a row. (Bloomberg)

 

3rd plague pandemic

  • Black death was 2nd, b/c the first occurrence of yersinia pestis was Justinians plague in 541 
  • 12 million deaths in India and China – about 10 million of which were in India. Lasted from mid 19th century until the early 20th century, and came in different stages (similar to the 2nd plague pandemic, which began in the 14th century but reoccurred in Europe for several hundred years thereafter. 
  • Began in Yunnan China in 1855, with another major outbreak in Hong Kong in 1894 that would ultimately lead the plague around the world, including to to san francisco.

 

1900 San Francisco Bubonic plague outbreak (Nature):

  • Believed to have originated in Southern China, and as Chinese workers immigrated to San Francisco, brought it with them.
  • At the time, the bacteria that caused the plague, yersinia pestis, had been identified (1894), but little was known about its transmission. (Nature)
  • Chinatown was quarantined by health officials, and people began to hide dead bodies from the city’s health inspectors.
  • As with today, SF’s officials tried to hide the true nature of the plague at first. For those who think that the US uniquely mishandled the crisis:
    • China/Italy/US/Spain all basically suffered from the same lack of concern in the initial phases, leading to greater complications later on. 
  • A wider outbreak of the plague in SF occurred in 1903. Rupert Blue, a physician soldier, was put in the charge of the campaign:
    • “Blue set about disinfecting the city. Starting with Chinatown, earthen basements were concreted, concrete ones flooded with carbolic acid, walls washed with lye, streets asphalted, cesspools filled and decrepit dwellings demolished. Infection discovered elsewhere in the city led Blue to ponder modes of transmission. Suspecting flea-infested rats, he initiated a ferocious eradication campaign”
    • SF was declared plague free in 1908, 8 years after it had arrived. It was then transferred to the wild squirrel population, and a handful of Americans everyone contract it (the plague is today easily treated with antibiotics)

 

Cholera in Europe and unrest of 1830s and 1848

  • Third cholera pandemic in Russia – 1852-60. ~1mm people.
  • [TBD find more – see jacobs nyt book revioew]
  • Cholera outbreaks in Europe may have contributed to social urnest that led to revolutions of 1830s/1848 (New Republic)
    • [Need detail on these revolutions]
  • Following the Napoleonic wars, which ended in 1815, Europe had just established a peace founded on the notion of balance of power. This was a somewhat precarious balance, and depended upon a coalition of powers in the west with different system of governments – both autocratic and democratic-ish – to band together and contain another French attempt at expansion. In the east, the an alliance based on the notion of the legitimacy of ruling monarchs bound together Russia, Austria and Prussia. All of Europe was afraid of France, but autocratic monarchies were especially afraid of revolutions challenging their rule as it had in Frnace in the late 18th c.

 

Influenza

  • 1889-90 Flu pandemic, also known as “Asiatic flu” or “Russian flu” : https://en.wikipedia.org/wiki/1889%E2%80%931890_flu_pandemic
  • 1918-19 Spanish flu
  • 1957 Asian flu pandemic
    • Deaths: 1-2 million worldwide, or perhaps 2-4 million. 70,000-116,000 people in the US died. (CDC)
    • CFR: 0.3% in the UK
    • Originated in Guizhou China
    • Didnt really go away – continued to circulate until 1968, at which point it underwent genetic shift and became…
  • Hong Kong flu, or the 1968 flu pandemic (Wiki).
    • Deaths: 1 million worldwide, 100,000 in the US (CDC). 
      • Most excess deaths were people 65 years and older.
    • CFR of 0.5%
    • Appeared in July, and to Vietnam and Singapore. US soldiers in Vietnam brough the disease home, and it became widespread by December 1968.

 

HIV/Aids – 1980s

  • Haiti – tourism industry, which accounted for a large portion of the economy, declined rapidly. Revolt began in 1985, and Duvalier, the country’s dictator, left in 1986 (New Republic, NYTimes1983)
    • Haiti had already begun to lose tourism earlier in 1980s due to the recession in the US. (NY Times) Thing to keep in mind here – there is rarely one cause for social unrest, but many. 

 

Economic consequences:

  • Fascinating article published by SF Fed / UC Davis economics dpt make some really fascinating conclusions about the impact of plague/pandemic on some economic variables:
    • Real interest rate declined substantially for about 40 years
    • Real wages went the other way – substantially increased for 40 years. 
  • Used time series data from 1317-2018 for several European countries. They even re-created their results excluding, in one case, the Black Death (since it was the most devastating plague in terms of % of population) and the Spanish Flu (as some people argue that the Great Depression that came 10 years later could have also resulted in depressed real interest rates). Interestingly, the results remain similarly robust even when omitting these cases (p.12)
  • This can tell us a lot about what might come after covid, which the authors say could become the second most devastating pandemic event in the last 100 years – and we’ll discuss some of these other ones in a bit.
    • [TBD add detail here]
  • One really interesting conclusion that we could use as a transition to any discussion on MMT: “If low real interest rates are sustained for decades they will provide welcome fiscal space for governments to mitigate the consequences of the pandemic.” (SF fed)

 

 

Sources:

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