The year 1348, in the words of historian A.L. Maycock, was the closest that humanity ever came to going extinct. That was the year the Black Death descended on the European continent. And many historians today estimate that it killed as much as 60% of Europe’s population.
Italy was hit especially hard by the plague. Port cities like Venice were accustomed to receiving ships from all over the world, and many of them carried the Yersina pestis bacteria which caused the plague. And it was out of this pandemic that the first modern public health measures emerged.
Venice created a special council to reduce the outbreak… and one of their first decrees was to ban infected or suspected ships from docking. Plus, any traveler who arrived from a plague-infested area was required to isolate themselves for a period for 40 days, or quaranta journi in Italian. This is the origin of the word quarantine—it’s a reference to the 40-day isolation period during Bubonic Plague.
Even when the worst was over, though, the effects of the plague were disastrous.
In his book An Introduction to the History of Medicine, author FH Garrison described the social impact of the pandemic, writing that family members and lifelong friends abandoned one another in an effort to save themselves from infection. Public gatherings, including church attendance, declined dramatically.
The Black Death also ravaged European economies. So many people died that there simply weren’t enough willing, healthy workers. Commerce ground to a halt. Trade was nonexistent. And by many measures, Europe didn’t fully recover its population or economic activity for hundreds of years.
The Corona Virus Outbreak
What we’re experiencing right now is not going to be anywhere near as bad as that. Not even close. The world is not coming to an end despite what you might read on Twitter. But Corona or Covid-19 will certainly have a huge impact that’s for sure!
Just look at Italy. The entire country is on lockdown, practically frozen in time like the ruins at Pompeii. We can’t even begin to grasp how much of an impact that will have on the economy.
China, the world’s second largest economy and biggest manufacturer—effectively shut down last month. That alone is enough to tip the world into recession.
Planes, trains, and ships are virtually empty. This is as bad as 9/11 was for the airline industry. Tourism, which comprises more than 10% of global GDP, has almost completely collapsed.
Sporting events and concerts are being cancelled, even the Olympics may be cancelled… all of which will clearly have a nasty economic impact.
And we’re barely scratching the surface.
There’s going to be real damage to the global economy. Corporate earnings will fall. Plenty of companies will fail and the unemployment rate will rise. Tax revenue will shrink and government deficits will skyrocket. Usually when there’s a big crisis, the central banks step in and restores some calm, but that’s not happening now. Markets continue to fall and people are terrified.
Bottom line, this is going to be a wild ride, and we’ve barely started. But we’re going to see some extraordinary opportunities come out of this. And anyone with courage and clear thinking will do extremely well!