COVID-19: The Great Reset

With income inequality more marked than ever in many countries and technological developments driving further polarization, total GDP or averages such as GDP per capita are becoming less and less useful as true indicators of individuals’ quality of life.

Low-income workers in routine jobs (in manufacturing and services like food and transportation) are those most likely to be affected. The labour market will become increasingly polarized between highly paid work and lots of jobs that have disappeared or aren’t well paid and are not very interesting

In all likelihood, the recession induced by the pandemic will trigger a sharp increase in labour-substitution, meaning that physical labour will be replaced by robots and “intelligent” machines, which will in turn provoke lasting and structural changes in the labour market.

But the comparison stops there; it is meaningless for two reasons: 1) the flu numbers correspond to the estimated total flu burden while the COVID-19 figures are confirmed cases; and 2) the seasonal flu cascades in “gentle” waves over a period of (up to six) months in an even pattern while the COVID-19 virus spreads like a tsunami in a hotspot pattern (in a handful of cities and regions where it concentrates) and, in doing so, can overwhelm and jam healthcare capacities, monopolizing hospitals to the detriment of non-COVID-19 patients.

This problem of asynchronicity between two different groups (policy-makers and the public) whose time horizon differs so markedly will be acute and very difficult to manage in the context of the pandemic

Understanding this growth dynamic and the power of exponentials clarifies why velocity is such an issue and why the speed of intervention to curb the rate of growth is so crucial. Ernest Hemingway understood this. In his novel The Sun Also Rises , two characters have the following conversation: “How did you go bankrupt?" Bill asked. “Two ways,” Mike said. “Gradually, then suddenly.” The same tends to happen for big systemic shifts and disruption in general: things tend to change gradually at first and then all at once. Expect the same for the macro reset

As a result, we operate in a real-time society, with the nagging feeling that the pace of life is ever increasing. This new culture of immediacy, obsessed with speed, is apparent in all aspects of our lives, from “just-in-time” supply chains to “high-frequency” trading, from speed dating to fast food. It is so pervasive that some pundits call this new phenomenon the “dictatorship of urgency”

As the chart makes clear, an “infectious diseases” risk is bound to have a direct effect on “global governance failure”, “social instability”, “unemployment”, “fiscal crises” and “involuntary migration” (to name just a few).

Coming from the word quaranta (which means “forty” in Italian), the idea of confining people for 40 days originated without the authorities really understanding what they wanted to contain, but the measures were one of the first forms of “institutionalized public health” that helped legitimatize the “accretion of power” by the modern state.

Radical changes of such consequence are coming that some pundits have referred to a “before coronavirus” (BC) and “after coronavirus” (AC) era.