If the epidemic, or rather the response to the epidemic, destroys thousands of small businesses, what then?
by Theodore Dalrymple
One should never underestimate the power of amnesia in human affairs. Even catastrophes on a vast scale are often soon forgotten, at least by those who were not directly affected by them. The young in Eastern Europe, it is said, know nothing of the ravages of communism, though they lasted decades and still exert an influence, and quite a lot think that socialism might be a good thing to try, as if it had never been tried before. Moreover, no memory exerts a salutary effect by itself unaided by thought and reflection: memory (even where accurate) has to be interpreted, and where there is interpretation there is the possibility of error and disagreement. To this day, economists argue over the causes and true lessons of the 1929 crash.
What lessons will we have learnt, or conclusions will we have drawn, from the Covid-19 epidemic, and what will its long-term effects be? Dogmatism could never be more out of place. It is even more difficult to predict social trends than the course of an epidemic. Projection is not prediction and speculation has an inherent tendency to over-dramatize.
We still can’t know when or how the epidemic will end, or how large and serious it will prove to have been. As I write this, there have been 10,000 deaths from the virus (or as some intellectually cautious people might put it, associated with the virus). There is still scope for multiplication by many times the number of deaths for this epidemic to be still be but a blip on the world mortality statistics: after all, there are 2,800,000 deaths annually in the US alone.
Of course, both exponential growth in the numbers of deaths and imagination can quickly inflate the size and effect of the epidemic. Exponential growth cannot continue for ever – a Staphylococcal colony in a Petri dish may grow exponentially for a time but will never take over the whole biosphere – but it can continue for long enough to produce a catastrophe. Imagination, perhaps, can make it grow even faster – in the mind; and thus a question in the future might be whether the virus itself, or the response to it, caused the more damage. It may prove as thorny a question as that of the causes of the First World War. From the present standpoint, the virus or the response to it seems certain to have caused an economic catastrophe, whether or not the response was wise or justified from the public health and reduction of mortality point of view. I write this in Paris, where thousands of small businesses face the possibility of a month and a half without custom, and hence with overheads but no income. Two small businessmen of my acquaintance are talking of bankruptcy after only a few days of shutdown, and their position can hardly be unique. The longer the shutdown, it goes without saying, the more bankruptcies there will be.
Are thousands of businesses to be left to sink, though not to sink without trace, for they will leave behind them a trail of unemployment, despair, and physical degradation for lack of upkeep of premises? Almost certainly the government will choose the alternative, namely to prop them up, but this is only the lesser of two evils, electorally if not economically, and has consequences of its own, all the more so because governments such as the French have for decades been running deficits even in good times and public debt is already high. To say après nous le déluge is no longer a bon mot, or even the description of an economic policy, but an acknowledgment of an unavoidable fate.
There will be acrimonious debates about whether the shutdowns were really necessary and whether they worked in halting the epidemic. Upon which answer prevails, socially if not intellectually or because it is the right answer in the sense of best approximating to the truth, will depend responses to future epidemics (we assume there will be some). In all these debates, many alternative facts, to coin a phrase, will be brought forward as evidence for a conclusion already arrived at or strongly desired. No one will give up his point of view simply on the first presentation of contradicting evidence.
There will no doubt be much post hoc ergo propter hoc reasoning about what actually caused what. But there are even greater difficulties ahead that are not mere questions of fact. It seems for the moment at least that the epidemic kills mainly old people, the death rate increasing rapidly with age over 60 or 65. The numbers of years of human life lost to the epidemic will be comparatively small by comparison with the number of deaths itself. In terms of the number of years of life lost, the death of one twenty year-old equals the death of perhaps fifteen eighty year-olds. This is not to say that one twenty year-old is in any sense worth fifteen eighty year-olds, and in fact one averts one’s mind from such horrible calculations – except in retrospect and in theory. But sooner or later someone will attempt to calculate whether the health cost of the response (for impoverishment, as we are constantly told, even if only relative, is bad for health) has its health consequences.
How far will this episode mark our mentalities and for how long? I have been reading articles in the French newspapers, early in the period of mass house arrest, suggesting everything from a recovery of spiritual values to a reconsideration and rejection of what is invariably called in France neo-liberalism. In part, naturally, the strength of the effect will depend on how long the crisis lasts and on how profound its economic effects.
The crisis has revealed the fragility of things, from individual human life to the continuance of interconnected economic activity. From this revelation, some hope that we shall have learned not to take for rock solid what is in fact extremely fragile, and learn to rely less on what is external and superficial for our satisfactions an sense of security. For myself, I believe this to be unlikely, at least judging by my own case. I have been several times close to death through illness, but as soon as the danger was past I felt as invulnerable as I had before and even forgot, or at least pushed to the rear of my mind, the fact that I had ever been in danger. Recently, for example, I reviewed my own medical history and was surprised by how often I had been seriously ill, having started from the supposition that I had been healthy all my life. Even now, when I am in the age group most at risk from the infection, I rely psychologically on the fact that, unlike so many of those who have so far died, I am basically healthy. Such amnesia renders us careless, no doubt, but also allows us to carry on.
Moreover, the supposedly salutary effect of being thrown back on our own resources will probably be illusory, but rather reinforce our dependence on the internet and social media for our mental sustenance. The one thing our resources will not be is our own.
As to the effect on us from the point of view of political philosophy and political economy, it is certain to strengthen the case, at least for a time, for dirigisme – however long or short the crisis will be. The return of the state, declared one French headline, not without ideological delectation, as if the state (which in France is responsible for considerably more than half of the country’s GDP) had ever gone away or had been some kind of starveling, wasting away for lack of financial nourishment. Yet in spite of the enormous weight of the state, we find – according to the latest headlines – that facemasks are lacking for health staff in publicly-run facilities. This is not necessarily anyone’s fault because the crisis was not foreseen: but it makes you wonder how much of a country’s GDP the state must absorb before there are enough facemasks. South Korea is at the moment being held up as exemplary in the way it tackled the crisis, certainly by comparison with European countries, yet the state’s share of its GDP, at about 16 per cent, is less than a third of France’s. In other words, an inflated state may not be a strong or efficient state, just as a leg swollen by oedema is not strong or efficient merely because it has increased in size, rather the reverse.
If the epidemic, or rather the response to the epidemic, destroys thousands of small businesses that the state either cannot or will not rescue from bankruptcy, this might strengthen big business relative to small, since big businesses will be in a better position to weather the storm than small. And this in turn will reinforce the tendency to corporatism and oligopoly, even where the economic activity itself such as the manufacture of aeroplanes does not inherently conduce to it. Things will never be the same again? This is not the Black Death, which did as much to destroy medieval civilization as anything, nor is this likely to be. But the effects will not depend only on the facts of the case. Interpretation will be all.
First published in the Library of Law and Liberty.