Lessons from COVID-19: We Need a Global Stimulus
It began in China. Streets emptied, businesses closed, a country-wide hibernation of commerce and people. Not long after, it spread across the globe, and in a matter of months an invisible enemy had done the unfathomable. Nearly every city in the world transformed into a temporary shell of itself.
As unbelievable and improbable as the COVID-19 pandemic has seemed, it is something deeply human. Pandemics have littered our past and profoundly shaped much of human history. Why then does it feel like such a shock? Perhaps because we are in an unparalleled time in human history. A time of minimal war, relative control of many previously devastating diseases, a general abundance of food, and overall much higher quality of life than most of our ancestral predecessors. An age in which we have felt, at least temporarily, immune to the uncertainty of the natural world.
Many have called the COVID-19 pandemic a dress rehearsal for a potentially much worse virus in the future. And while there is no certainty as to how or when that will prove true, it has clearly shown how unprepared much of the world has been. Considering the devastating economic effects and more devastating loss of human life, it is imperative we learn from this difficult time and make the large and substantive changes necessary to prevent a similar or worse response to the next global catastrophe.
While our world is segmented into countless countries, states, and cities, a natural disaster like COVID-19 has no regard for man-made borders. It is a rude awakening to a truth humanity so desperately needs to learn: that we are all interconnected, interdependent. That we live together on one planet.
This is undoubtedly a dress rehearsal. But not just a dress rehearsal for a potentially more deadly pandemic in the future. It is a dress rehearsal for natural disasters and economic uncertainty of many kinds. Put simply, it is a dress rehearsal for how we as a planet are prepared for unavoidable and unpredictable unknowns.
Yet how can you prepare for unknowns? In the case of viruses and pandemics, stockpiling of medical equipment, preemptive research on transmittable disease, better testing methodologies, and detailed plans for minimizing spread all come to mind. All of these and likely many more are very legitimate and worthwhile approaches toward future preparation. Nonetheless, how do we prepare for the economic upheaval? Any good plan must account for worst case scenarios. If the walls don’t hold, how do we maintain a semblance of economic stability in times of global uncertainty?
Let’s consider another of the many possible forms of uncommon economic upheaval. The World Bank predicts 600 million job losses due to automation by 2032. Throughout history, technological leaps have continually changed and evolved the jobs that people do. Back in 1900, over 40% of the U.S. workforce was employed in agriculture. Now it is less than 2%. This, like pandemics, has been a constant of human history. While this has ultimately been positive for humanity, many of these times of intense technological job displacement have often aligned with great societal unrest and turmoil.
Though different in many ways, technological job displacement and pandemics share a couple of important characteristics common among many sudden shifts or black swan events. Both create a temporary paralysis in work and income. In the case of a pandemic, it is due to quarantine, social distancing, and sickness. In the case of technological job displacement, it is due to the loss of now irrelevant or redundant work. For most people, this proves a temporary condition. For economies as a whole, these are turbulent times that eventually level out again to a new normal.
During the height of the storm, however, an unnecessary and preventable amount of economic turbulence occurs. People lose their savings, homes, jobs, and sometimes lives. Much of the poor and middle class are forced to sell off savings and a redistribution of wealth to the richest segments of societies often occurs through opportunistic investing by those with the cash flow and security to afford it. A shrewd investor cannot be blamed for their role in this, as it is a reasonable action for someone with the means to do so. It is rather the fault of a fragile and fundamentally unbalanced economy that allows for such an occurrence. Too great a wealth disparity is historically a very dangerous recipe for societies and can often lead to further social unrest.
With all this in mind, there is a conceptually simple and profound solution to help mitigate times of economic upheaval and the many negative consequences both financial and otherwise. On the most basic level, it is to create a global distribution channel in which value can efficiently be distributed to all or parts of humanity immediately and efficiently. This could be used for a one-off stimulus like the ~$1,200 per person the United States is currently planning, or for something more regular.
What if we could provide everyone on the planet temporary relief during this time of economic paralysis? Even if we wanted to, there is no means to do so. Now, imagine if the stimulus weren’t temporary but permanent. It could be a backbone for the global economy — a gyroscope of stability that would minimize the extent of economic swings. While it won’t prevent a pandemic, technological job displacement, or other forms of economic upheaval, it will minimize their effects on the global economy and prevent many of the damaging secondary consequences.
It is the objective of our organization, Hedge for Humanity, to do just that. For the reasons outlined above and many more, it is critical that such a system is developed, whether that be through the efforts of our project or others. As economist and author George Gilder has said, “Economies change as fast as minds do.” Just as infectious as viruses can be on the planet, so can new ideas and new solutions. The current estimate for the contagion rate of COVID-19 hovers around 3x compared to a 1.3x for the flu. That essentially means for every one person who gets infected, they will infect three others on average. It’s not hard to imagine how quickly a positive movement can spread with a similar rate of spread.
We are developing the technological tools, sustainable funding models, and global network to achieve this. We invite you to become a part of this effort today — whether by volunteering your time and talent, donating funds, or even just by signing up as a recipient in the network. You can help us create a better future for all humanity!
Learn more at www.hedgeforhumanity.org.
Written by Jonathan Frechin. Edited by Eric Stetson.
