The economics of pandemics: Some useful lessons from the past

Abstract

The mortality crisis induced by historical pandemics has had relevant effects. It expressed a regulatory role in the balance between population and available resources. It reduced the human capital available to work, making greater its bargaining capacity, resulting in an increase in wages. The disappearance of some of the landowners favoured a process of unification of landed properties and a concentration of wealth. The regulatory function of economic processes fostered by the mortality crisis is attenuated with the start of the Industrial Revolution, to the point of almost extinguishing itself in today's pandemic crisis. This notwithstanding, the strategies to combat mortality impose high economic costs and intervene to alter the functionality of a globalized economy. Pandemics continue to represent an element of caesura between historical periods, with a clear distinction between a before and an after. This article describes past pandemics and identifies possible lessons that can be drawn in the economic field from those events, being aware of how distant our connected and globalized world is from those times. Covid-19 has so far caused the deaths of more than two million people. In relative terms the figure is very low in comparison to previous pandemics. The much lower mortality is matched by an incomparable economic damage.