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We may currently be facing the biggest economic crisis of all time, because it is a multifaceted crisis: first, there is the pandemic with its disastrous direct consequences for tourism, the service sector, and trade.
Secondly, there is an oil price shock with a geopolitical background. Third, there is a shock caused by supply chain disruption due to heavy reliance on just-in-time production and distant producers. Fourth, there is a crisis of confidence due to differing risk assessments and disagreements about whether Western governments are guilty of negligence or fearmongering to massively restrict civil liberties. Finally, the ultimately inevitable correction of an overstretched “everything bubble” in which the traditional instruments of monetary policy have been exhausted.
We are dealing with a stroke of fate, but not with a “Black Swan” event. None of the crises were unpredictable in themselves, least of all the pandemic. In 2012, a study commissioned by the German Bundestag had already analyzed and done detailed calculations about the scenario of a pandemic caused by a SARS-like virus, with alarming results. No less than Bill Gates himself has been issuing urgent warnings for many years. The current shock thus points to deeper-seated problems—namely, the decline in society’s ability to learn. This decline could sharpen even further throughout the crisis intervention, and that represents the greatest danger in the long term.
Of course, the economic shock caused by travel and curfews also has an impact on health—a fact that many overlook. Public Health and the economy are not mutually opposed. The main driver of longer life expectancies with a higher quality of life is increasing prosperity, contrary to the romanticization of earlier lifestyles said to be “in harmony with the environment.” The consequences of impoverishment due to the measures taken are invisible and are therefore easily overlooked. Economists may be inclined to make calculations—but in this case nothing can be calculated. One could compare the economic damage with the potential death toll, but this is a comparison that few would find morally justifiable. However, it is not so easy to dismiss: it is indeed a true dilemma.
On the one hand, the economic damage has an invisible but direct impact on life expectancy and will certainly claim some lives due to complex effects: e.g., suicides and murdered wives, an increased health burden due to lack of sunshine, lack of exercise, unbalanced diet, which is only partially mitigated in some places by a decreasing health burden due to improving air quality. On the other hand, this damage is more linear than the opposite side being compared: the scenarios of non-intervention in the current, incomplete state of knowledge.
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