The Spanish Flu Didn’t Wreck the Global Economy

In October 1918, the Spanish flu descended on Stanford University. Residents donned facemasks, football games were cancelled, and students were asked to quarantine on campus. But classes and assemblies continued to meet. And in addition to fulfilling their regular academic obligations, male students trained to combat German machine guns and poison gas in World War I. Over a tenth of all students fell ill, and a dozen died—roughly in line with the 45,000 cases and 3,000 fatalities recorded in nearby San Francisco. Yet faculty and students started to abandon face coverings just a month after the initial outbreak. Football returned to campus shortly thereafter, even as the disease lingered throughout the winter. The contrast with the current coronavirus pandemic is striking. I cannot enter my office at Stanford without special permission from the dean. Almost all undergraduates have left campus, and everyone who can is required to work online. The university hospital, recently rebuilt to the tune of $2 billion, had to cut pay by a fifth for all of its 14,000 employees as anxious patients put off treatment. San Francisco County, now almost twice as populous as a century ago, has reported 2,400 infections and 40 deaths—a per capita fatality rate 99.2 percent lower than that of the 1918–19 pandemic. But two full months after California Governor Gavin Newsom ordered residents to “shelter in place,” the prospect of even a gradual return to normalcy remains elusive at best. Scaling up California’s experience by several orders of magnitude gives a good sense of the state of the world right now. Several hundred million workers have lost their jobs. Global GDP is set to decline by a greater percentage than at any time since the Great Depression. One and a half billion students—some 90 percent of the world’s total—have been affected by school shutdowns. Most societies now face a prolonged economic slump that will derail and blight countless lives. The economic fallout from the Spanish flu was far less dramatic. In the United States, industrial output fell sharply but rebounded within a few months. Retail was barely affected, and businesses did not declare bankruptcy at higher rates than usual. According to the latest econometric analysis, the pandemic of 1918–19 cut the United States’ real GDP and consumption by no more than two percent. The same appears to have been true for most advanced Western economies. Yet the Spanish flu may turn out to have been far deadlier than the novel coronavirus. It killed at least 550,000 Americans—0.5 percent of the population. Adjusted for population growth over the last century, this would work out to a little under two million deaths today, close to the number predicted in the worst-case, zero-distancing scenario for the coronavirus that Imperial College London published in March. Death rates in 1918–19 were far higher outside of the industrialized world. Worldwide, the Spanish flu carried off 40 million people, or two percept of humanity, equivalent to more than 150 million people today. Even worse, it stalked not only the elderly and infirm but also infants and those in their twenties and thirties. This squeezed the workforce and snuffed out the lives of many who had just started families, leaving behind spouses and children to fend for themselves in a sink-or-swim society. So why did this ferocious pandemic fail to wreck the economy? The answer is deceptively simple: for the most part, whether by necessity or choice, people barrelled through. Authorities in many countries recommended hand washing and the use of handkerchiefs as face coverings. In the United States, measures varied widely from city to city and state to state, but across the country, local officials closed many schools and large public venues. For the most part, however, nonessential businesses remained open, and customer demand was sufficiently robust to keep them afloat without the help of costly stimulus packages. Were the lives of Americans back then worth less than they are today? Only in the most technical sense. In recent years, various U.S. government agencies have set the value of a human life at around $10 million. Estimates in other high-income societies are not far behind. A century ago, no one would have thought of putting similarly hefty price tags on human beings. More to the point, life was shorter overall. In the mid-1910s, mean life expectancy at birth in the United States was only two-thirds of what it is now. Worldwide, it has doubled since. What is more, a century ago Americans still inhabited a physical and mental universe that had not yet been sanitized by modern science. The older generation would have remembered catastrophic outbreaks of cholera and yellow fever. There were no vaccines for influenza, tuberculosis, tetanus, diphtheria, typhus, measles, or polio, no antibacterial sulfonamide drugs, no penicillin, no antiviral drugs, and no chemotherapy. Wealth offered limited protection at best: more often than not, the rich and poor were in it together. Over the last hundred years, peace, medicine, and prosperity have steered humanity toward greater comfort, safety, and predictability. For the first time in history, the residents of the developed world have good reason to expect science to shield and heal them. To varying degrees, these expectations have also taken hold in developing countries as income and education have expanded, hunger and premature death have receded, and conscription has gone out of fashion. People expect more from life and behave accordingly. It may be tempting to take the collective embrace of lockdowns and social-distancing measures as signs that higher expectations have made people kinder, ready to shoulder economic burdens in order to protect the elderly, the immunocompromised, and the plain unlucky in their midst. But diligent citizens under lockdown ought to be wary of congratulating themselves for letting the better angels of their nature take flight. Empathy remains in short supply: if Americans really cared about refugees or those affected by their foreign wars, their politics would look quite different. Their kindness does not extend even to their fellow citizens—witness the endless plight of the un- or underinsured and those doomed in so many ways by their ZIP codes. Viewed against this unflattering background, the response of many Americans to the pandemic can be more plausibly explained by the fear—unfamiliar in these times of prosperity and science—that the next victim could be a vulnerable spouse, a devoted parent, or a beloved grandparent. It is these personal anxieties and tribal empathies that have sucked the oxygen out of the economy and put lives on hold. For the first time in history, many in the developed world can afford to give free rein to their anxieties. Even 20 years ago, hardly anybody could have worked or studied from home. Technology alone has made sustained distancing feasible, even tolerable. But not for all. The days when Stanford students braved the same risks to life and limb as today’s cops and cashiers are long gone. Expectations of life have grown across the board, yet more for some than for others. Today, the selective empathy of privilege amplifies existing inequalities. Thanks to Social Security and Medicare, Americans have long been in the habit of transferring wealth from young to old. But now they have taken the more radical step of destroying resources—by shrinking the economy—to safeguard the often few remaining years of those most at risk from COVID-19, the disease caused by the novel coronavirus. Technology renders this gambit least painful for the most protected, those who can hope to ride out the storm from the relative security of their home offices and higher-paying work. Meanwhile, a large part of society is left behind, mired in unemployment and precarity or stuck in face-to-face jobs that promise on-going exposure. The young and the poor, already held down by inequality, debt, and fading prospects of social mobility, are bound to pay the heaviest price. Pundits have yet to tire of predicting how this crisis will change everything. But will the unnerving experience of this pandemic also inspire humanity to review some of the loftier expectations we have nurtured? We must face up to the tradeoffs we are rushing to accept with scant regard for those who can least afford them. This article was originally published on ForeignAffairs.com.