Hearing my father.
From a generation that endured 4 devastations.
My father was born in an age of severe deprivation. He was an infant at the outbreak of WW1; a teenager during the Spanish flu pandemic; lived through the great depression as a young adult and then served as a soldier during WW2. The early part of that period was called the lost generation. At the end of WW2 it had merged with the “Greatest generation”. At this time of living in a pandemic of Covid 19 one reflects on the lessons of those times. Data and statistics tell only a small part of the story. Moods and emotions are not so easily transferable. But they are the essence of being able to capture the behaviour and societal response to the events to get some idea of how we should respond and what awaits humanity after this time passes. There are many different scenarios sketched by a variety of sources of a different world that we could be facing. I’m not a futurist and would be loath to go down that path. Of course it is already a very different world from the Greatest generation. One is the massive accumulation of debt used to prop up markets and act as an economic stimulus when we should have allowed natural cycles to do their work. Severe distortions still remain - especially in the bond markets - where there has been a flood away from "risky" emerging economy bonds such as South Africa to "blue chip" assets such as US long term bonds. Now massive amounts in more debt have been created; compounded by substantial amounts in government debt in combating the virus and declines in revenue from shrinking economic activity. This has left a stark disequilibrium between the respective needs of the have- and have-not nations as the world enters recession. There's no doubt that the world monetary system is being shaken to its core and will emerge very different from what it is now. What that will look like is anyone's guess but it could see a run on the Dollar which at this time is still the blue-chip global investment. Fiat currencies then lose their primary anchor, setting the stage for a Bretton Woods type redefinition of the monetary system. There can be little doubt also that the IMF and the World Bank are going to be reshaped in the aftermath of the pandemic. The other, positive difference is technology and communication. These played a small role in previous pandemics and their ability to keep a large part of the economy going as well as keeping people informed, is a definite game changer. Ultimately individual behaviour will determine the outcome. In this I am reminded of a news headline that confronted delegates at an IMF and World Bank meeting in the late 70's. It read "The victors beg from the vanquished", and referred to the US and Britain, victors of WW2 urging the vanquished Germany and Japan to adjust their policies to correct their massive trade surpluses. There are many factors that helped make these economies highly successful after WW2. But what is often forgotten is the role played by individual behaviour and societal response. Surrounded by rubble and devastation expectations were at their lowest. Yet aspirations, or cohesive self-help determination was all the average citizen could fall back on to. That played powerfully into the axiom that when people by and large are contributing more than they are taking they create surpluses and prosperity. When they are taking more than they are giving they create deficits and poverty. I would argue it was that that played the most important role in the economic recovery of these two nations. My life partner passed away 2 days before the national lockdown. It has plunged me into deep nostalgia and reflection, part of which was going back over the articles I have written these past number of years. Many of them reflected on the momentous times we are living in and that this era will see a redefinition of economics as we know it.
I have also argued for a shift of our understanding of social interaction and the economic construct from a self-gain perspective to a contribution perspective; from an instinctive survival mode to an empathy mode. I have argued too that human empathy has made us the majestic species we are.
This is the opportunity presented by the pandemic. It demonstrates powerfully that survival and empathy are the same thing.