Photo from Adam Rowe's, «Google Drone Delivery Service Approved in Australia»
The COVID-19 pandemic has effectively dismantled the traditional ways in which many of our social institutions operate in just a few short months leaving open a vacuum for innovation and technology to fill. The question that we are faced with now concerns how we will decide to glue our social and economic institutions back together now that they’ve been shaken from the ground up: socially, economically, and technologically.
Socially, the widespread nature of the COVID-19 pandemic indiscriminately reminds us not only of our own individual mortality but that of the very institutions we abide by. Few other catalysts could ever demand society to self-isolate en masse. Even dictators have met limits at the borders of the territories they control. In many ways, this microscopic virus has humbled even the largest leading egos and institutional ethos of our society. Rich. Poor. Famous, Anonymous. There is no demographic, race, ethnicity, gender, religion, or manmade social division that can tip a hat to the leveling power that has Coronavirus exerted upon our society from the top-down and bottom-up. When social norms and barriers cease to be definable, those are the moments when the rules by which we interact are re-written-- in ways that can simultaneously pull us together and tear us apart as a global society.
Likewise, many aspects of the economy, domestically and internationally, have been stopped in its tracks. This is largely because employees, business owners, and consumers alike became physically unable to go to work. In the United States alone over 10 million workers in the United States have filed for unemployment in just a few weeks. Put in perspective, it took well over a year before those numbers were reached in the devastating 2008 recession. Further, these statistics do not include the self-employed or those who cannot apply. The economic repercussions of Coronavirus stand to make the infamous 2008 Recession look tame. Put in another perspective, in 2008, the US government printed a 700 billion dollars as a stimulus to the economy. In response to the pandemic induced economic slowdown, the most recent stimulus package amounts to 2.5 trillion and aims to forestall furloughs through September. Likewise, interest rates are at an unprecedented zero percent wooing any potential investor with the energy to bite.
Social and Economic Consequences
In spite of the prevailing public health risk and top-down economic responses, many fear the backsliding economy more than the imperial tide of COVID-19. While the tragic toll of viral casualties grows, another shadow befalls these statistics when one considers that many Corona-linked bankruptcy suicides have yet to come.
Some argue that the government (fiscal policy) and central bank (monetary policy) responses are hurting the taxpayer and saver; and that anyone holding a dollar today is watching that green piece of paper bleed value day after day. The traditional financial system is simply not built to be an ecosystem in which currency can gain value against itself in the long-term, particularly in a system perpetuated by debt. According to financial analyst, Bryce Paul: “price(s) dislocated to the downside on a short spike because people are selling everything that is not nailed down in order to pay their tax liabilities, monthly living expenses, employees…companies are selling assets that they own to make their payroll, even safe-haven assets like gold and treasury bonds …” He goes on to describe how cash money is the denominator of the value, not value itself. Genuine value is found in the production and distribution of goods and services that real people, members of society, can use. Cash itself is valueless if it cannot bring value to one’s life. Extreme stimulus packages toy with the value of the currency in ways that may make asset prices inflate because cash (as the denominator of “value”) grows implicitly weaker when money is printed in excess, but this is done with public stability in mind. The biggest central banks in the world have two main (mandated) initiatives: (1) keep inflation low (2) to keep unemployment low. Thus, the sacrifice and distortion of cash “value” comes with rampant printing to curb civil unrest—the type of civil unrest that occurs when a nation is unemployed.
Technological and Digital Transformation
As the economic pipe of goods as services fails to flow with plenty, the demand to pump-up new and existing digital platforms the world over has never been more dire. Nor has it ever, in human history, been more possible. In a few short months, the entire technological infrastructure that props up our society has remolded. It is sheer necessity that pushes the pace. From online education platforms to telemedicine, from grocery store deliveries to the increasing ease of digital transactions, the list of activities undergoing deep digital transformations is growing by the hour. While each new tech advancement ripples into the future with unforeseeable effects, the fact that there exists – on a modified level – a means to continue engaging in some level of economic activity in spite of quarantines and stay-at-home advisories does provide hope for the situation in terms of mitigating civil unrest and a complete bottoming out of the economy.
The road ahead may be a long one, however one need only look at the epicenter of the crisis (Wuhan) if they are in search of good news. As the site of so much medical chaos just a few months ago, they now have no newly reported cases of the Coronavirus. It came, it was brutal, and it passed. Another item that might provide some hope is that, while the enveloped protein of COVID-19 spreads quickly, it is also comparatively weak and even, fairly fragile once it is out of the host. This paired with the fact that molecular biology research has been underway since the SARS outbreak several decades ago regarding the treatment of CoV viral infections provides significant and promising outlooks for the discovery of more efficient management, mitigation, and treatment mechanisms.
How will our lives change from Coronavirus even after the public health risk passes?
We can expect that, in the depths of economic slowdown, all-hands-on-deck will be pushing to accelerate technological innovation and digital transformation mechanisms to weather the crisis. However, as they say, the most permanent fix is a temporary solution. As we reshape our digital architecture to match the needs of the crisis--- physical isolation, health care, work autonomy, resource distributions, communications infrastructure, digital transactions, telemedicine, quite literally rewriting all aspects of life in digital script--- these remedies to a short term crisis will not be reversible. The only thing we can be certain of is that the COVID-19 pandemic has shifted how we live in ways that we cannot yet know.