Thursday, April 09, 2020

Why the Wealthy Fear Pandemics

There have been numerous stories of the very wealthy retreating from cities to flee to the country estates and - better yet if one owns one on one - remote islands - to escape the COVID-19 pandemic and crowded cities such as New York.  They seek to avoid the masses and potential infection.  But, as a piece by a historian in the New York Times lays out, the wealthy have another reason to fear a pandemic and the upheaval that it can bring: the masses demand a more equal playing field and a bigger piece of the economic pie - something Republican "reverse Robin Hood policies" strive to prevent.  At present, the verdict is out on whether or not the COVID-19 pandemic will cause a demand for economic change in America.  Rapidly rising unemployment (another 6 million workers are likely to file unemployment this week) may work against Republican regimes which have long sought to kick the unemployed to the curb or limit unemployment assistance to levels that do not allow for survival.  One can hope that the majority will say "enough" to the 1% sucking up more and more of the nation's wealth and that progressive changes will come.  Meanwhile, here are article highlights on the world's past experiences:  
In the fall of 1347, rat fleas carrying bubonic plague entered Italy on a few ships from the Black Sea. Over the next four years, a pandemic tore through Europe and the Middle East. Panic spread, as the lymph nodes in victims’ armpits and groins swelled into buboes, black blisters covered their bodies, fevers soared and organs failed. Perhaps a third of Europe’s people perished.
The plague returned a mere decade later and periodic flare-ups continued for a century and a half, thinning out several generations in a row. Because of this “destructive plague which devastated nations and caused populations to vanish,” the Arab historian Ibn Khaldun wrote, “the entire inhabited world changed.”
The wealthy found some of these changes alarming. In the words of an anonymous English chronicler, “Such a shortage of laborers ensued that the humble turned up their noses at employment, and could scarcely be persuaded to serve the eminent for triple wages.” Influential employers, such as large landowners, lobbied the English crown to pass the Ordinance of Laborers, which informed workers that they were “obliged to accept the employment offered” for the same measly wages as before.
As a result of this shift in the balance between labor and capital, we now know, thanks to painstaking research by economic historians, that real incomes of unskilled workers doubled across much of Europe within a few decades. According to tax records that have survived in the archives of many Italian towns, wealth inequality in most of these places plummeted. In England, workers ate and drank better than they did before the plague and even wore fancy furs that used to be reserved for their betters.
At the same time, higher wages and lower rents squeezed landlords, many of whom failed to hold on to their inherited privilege. Before long, there were fewer lords and knights, endowed with smaller fortunes, than there had been when the plague first struck.
But these outcomes were not a given. . . . . The policy choices that result determine whether inequality rises or falls in response to such calamities. And history teaches us that these choices can change societies in very different ways.
Looking at the historical record across Europe during the late Middle Ages, we see that elites did not readily cede ground, even under extreme pressure after a pandemic. During the Great Rising of England’s peasants in 1381, workers demanded, among other things, the right to freely negotiate labor contracts. Nobles and their armed levies put down the revolt by force, in an attempt to coerce people to defer to the old order. But the last vestiges of feudal obligations soon faded. Workers could hold out for better wages, and landlords and employers broke ranks with each other to compete for scarce labor.
Elsewhere, however, repression carried the day. In late medieval Eastern Europe, from Prussia and Poland to Russia, nobles colluded to impose serfdom on their peasantries to lock down a depleted labor force. This altered the long-term economic outcomes for the entire region: Free labor and thriving cities drove modernization in western Europe, but in the eastern periphery, development fell behind. But more often than not, repression failed. The first known plague pandemic in Europe and the Middle East, which started in 541, provides the earliest example. Anticipating the English Ordinance of Laborers by 800 years, the Byzantine emperor Justinian railed against scarce workers . . . . The doubling or tripling of real incomes reported on papyrus documents from the Byzantine province of Egypt leaves no doubt that his decree fell on deaf ears. None of these stories had a happy ending for the masses. . . . . In most European societies, disparities in income and wealth rose for four centuries all the way up to the eve of World War I. It was only then that a new great wave of catastrophic upheavals undermined the established order, and economic inequality dropped to lows not witnessed since the Black Death, if not the fall of the Roman Empire. In looking for illumination from the past on our current pandemic, we must be wary of superficial analogies. Even in the worst-case scenario, Covid-19 will kill a far smaller share of the world’s population than any of these earlier disasters did, and it will touch the active work force and the next generation even more lightly. Labor won’t become scarce enough to drive up wages, nor will the value of real estate plummet. And our economies no longer rely on farmland and manual labor.
Yet the most important lesson of history endures. The impact of any pandemic goes well beyond lives lost and commerce curtailed. Today, America faces a fundamental choice between defending the status quo and embracing progressive change. The current crisis could prompt redistributive reforms akin to those triggered by the Great Depression and World War II, unless entrenched interests prove too powerful to overcome.

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