What can the Black Death teach us about the global economic consequences of an epidemic like the Corona?

The corona epidemic is causing serious economic disruption. What can be learned from the past? The Black Death in the years 1348-1350, killed wherever it went and claimed between 75 million and 200 million victims worldwide, including about half of the population of England. The economic consequences were also far-reaching

By Adrian Bell, Dean of the History of Finance, Prosperity and Resilience, Henley Business School, University of Reading, Andrew Prescott, Professor of Humanities and the Digital Age, University of Glasgow and Helen Lacy, Lecturer in Late Medieval History, University of Oxford

Concerns about the spread of the coronavirus translated into an economic slowdown. Stock markets took a hit: Britain's FTSE 100 saw its worst trading days for many years, as did the Dow Jones and the US S&P. Money has to go somewhere and the price of gold – a stable anchor during extreme events – hit a seven-year high.

Looking back at history can help us consider the economic impacts of public health emergencies and how best to manage them. However, it is important to remember that past pandemics have been far more deadly than the coronavirus, which has a relatively low mortality rate. Without modern medicine and institutions like the World Health Organization, populations were far more vulnerable in the past. The Justinian Plague in 541 AD is estimated to have killed 25 million people, and the Spanish Flu in 1918 killed around 50 million. By far the worst death toll in history was caused by the Black Death. Caused by a number of infectious agents. It raged from 1348 to 1350, killing wherever it reached and claiming between 75 million and 200 million victims worldwide, including around half the population of England. The economic consequences were also far-reaching.

'Anger, antagonism, creativity'

It may sound contradictory, against common sense - and this should not minimize the psychological and emotional turmoil caused by the Black Death, but most people who survived began to enjoy an improved standard of living. Before the Black Death, England suffered from overpopulation. Following the epidemic, the labor shortage resulted in an increase in workers' daily wages, as they were able to market themselves to the highest bidder. The diet of laborers also improved and included more meat, fresh fish, white bread and wine. The landowners did struggle to find tenants for their lands, but changes in productivity improved the estate's income and reduced their demands. But the post-Black Death era was, according to economic historian Christopher Dyer, a time of "restlessness, excitement, anger, antagonism, and creativity." The government's immediate response was to try to stem the economic tide of supply and demand.

This was the first time an English government attempted to regulate the economy. The Workers' Law was enacted in 1351 in an attempt to restore wage levels to those of the pre-pandemic and to limit the freedom of movement of workers so that they would not migrate between employers. Other laws were enacted that try to control the price of food and even restrict women from wearing expensive fabrics.
But this attempt to regulate the market was unsuccessful. The enforcement of labor legislation led to evasion and demonstrations. In the long run, the real wage rose when the population level remained at the same level with repeated outbreaks of the epidemic.

Land owners had to accept the changes in the land market due to the loss of population. There was large-scale emigration after the end of the Black Death, as people took advantage of opportunities to move to a better country or engage in trade in the towns. Most landowners were forced to offer more attractive deals to ensure that tenants would work their land.

A new middle class of men (almost always men) emerged. These were people who were not born landowners but managed to become rich enough to purchase plots of land. Recent studies have shown that property ownership has opened up to market speculation. The dramatic change in population size caused by the Black Death also led to a boom in social mobility. The government's attempts to limit these developments followed and gave rise to tension and resentment. Meanwhile, England was still at war with France and was required to raise large armies for its systems overseas. This had to be paid, and in England this led to an increase in taxes on a shrinking population. The Parliament of Richard II the Younger came up with the innovative idea of ​​punitive poll taxes in 1377, 1379 and 1380, which led directly to social unrest in the form of the Peasants' Revolt of 1381. This rebellion, the largest ever seen in England, came as a direct result of the recurring outbreaks and the recurrence of the epidemic and the government's attempts to tighten control over the economy and realize its international ambitions. The rebels claimed that they were severely oppressed and that their masters "treated them like animals".

Lessons for today

Although the plague that caused the Black Death was very different from the virus that spreads today, there are some important lessons here for future economic growth. First, governments must take care to manage the economic recession. Maintaining the status quo for vested interests can cause unrest and political volatility. Second, restricting freedom of movement can cause a violent reaction. To what extent will our modern, mobile society agree to quarantine, even if it is for the common good?
Also, we should not underestimate the psychological response of looking for the guilty. Following the Black Death there was an increase in xenophobic and anti-Semitic attacks. Fear and suspicion of foreigners changed trading patterns.

There will be economic winners and losers as the current public health emergency continues. Following the Black Death, the elites tried to consolidate their power, but a change in the population forced them in the long term to improve the welfare of workers, both in terms of wages and mobility and in opening the land market (the main source of income at the time) to new investors. The shrinking of the population also encouraged the immigration of skilled tradesmen or low-paid professions.
These lessons reinforce the need for measured and calculated responses on the part of today's governments.

to the article on The Conversation website

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