Why Our Knowledge Economy Can Survive the New Age of Pestilence

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In ancient times pandemics and war disrupted economies for decades, if not centuries.  Why did that not happen in the 20th century and what are the implications for our post-pandemic comeback?  We’ll explain.  And,

According to an unknown pundit, “history is a sequence of disasters and the stuff in between them is boring.”  While each catastrophic event is unique in the chaos that it sows and how it shapes subsequent human events, in the throes of a crisis, we often look back, seeking patterns to assuage our uncertainty.  So, it’s not surprising that interest in the 1918 Spanish flu pandemic surged along with the coronavirus earlier this year — but perhaps the important lesson to take from history is not what is similar but what is different.

It would be convenient if all major disasters could be classified as either purely natural, such as earthquakes, and purely human-made, such as civil war.  But the historical record does not always allow such clear categories.  When ignorance, cruelty, and the rigid adherence to some cause or ideology aggravate what nature wreaks, nature and people can work hand-in-hand to kill, disrupt, and at times change the course of human history.

In the past, catastrophes, especially unprecedented and unanticipated ones known as “black swans” have changed the course of history.  The Justinianic Plague that broke out in 541 A.D. may have prevented the reconquest of Italy by the Byzantines along with the possible resuscitation of the Roman Empire.  The Black Death, one leading scholar has argued, produced far-reaching demographic, economic, and cultural changes, but it also “prepared a road for renewal.”  Similarly, human-made disasters changed the direction of history, none more than the repeated invasions of the Middle East by Mongol invaders and the diseases inflicted on the original populations of the New World by European explorers.  In the process, regions that had been prosperous and sophisticated were reduced to poverty-stricken backwaters.

How has modernization changed the way economies are exposed to, respond to, and are affected by disasters? At some point around the year 1800, a major transition took place that drastically changed the...

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