Posts

Winners and Losers: The Global Economy After COVID

The COVID-19 pandemic has transformed the world economy in ways that will be debated by pundits and future historians for decades to come. Yet, as hard as it is to predict a disrupted future accurately, the pandemic (not to mention its probable successors) looks likely to produce clear economic winners and losers. The top digital companies—Amazon, Apple, Tencent, Microsoft, Google, Facebook, Ant, Netflix, and Hulu—have thrived during quarantines and the ongoing dispersion of work. These are the most obvious winners in what leftist author Naomi Klein has called a “Screen New Deal” that seeks to create a “permanent and profitable no-touch future.” Since 2019, Facebook, Apple, Amazon, Microsoft, and Google have added over two-and-a-half trillion dollars to their combined valuation, and all enjoyed record breaking profits in 2020.

But it’s not just the tech oligarchs who have benefited from the pandemic disruption. Companies that keep the basic economy functioning—firms dealing in logistics, for example, or critical metals or food processing—have become, if anything, even more important. With the shipping supply chain disrupted due to the pandemic, logistics giant Maersk is set to increase its inland-based operation with the acquisition of the Swiss-based broker KGH Customs Services. The company reported its best quarter ever in the first quarter of 2021, launching a $5 billion share buyback scheme. And although the developing world has been hit hard by declines in tourism and investment, mining giants such as Glencore are investing billions to challenge China’s market dominance in rare earth minerals. The global market for cobalt is expected to double by 2025 and has launched a new “scramble for Africa,” which is also raising moral questions about whether or not the green oligarch’s love of the planet outweighs human rights abuses such as the practice of child labor in the Democratic Republic of Congo.

Even some high street businesses which have taken major hits are finding new niches. Many small businesses may never return to pre-COVID levels, as people have become used to the convenience of online purchases. Nevertheless, some are finding new uses for redundant malls, and have discovered new ways to reach more customers using social media and technology. Lower property prices are also opening up potential opportunities for entrepreneurs in pricey places such as Manhattan, San Francisco, or London. Pestilence re-shapes economies.

In his 2017 book The Fate of Rome: Climate, Disease, and the End of an Empire, historian Kyle Harper argues that plague, as well as climate change, undermined the Roman empire, creating conditions that boosted the barbarian warlords who would later become the Medieval aristocracy. The lethal plagues of the Middle Ages likewise disrupted the great Mongol empire, at the time the largest in history, and in conjunction with cooling temperatures, undermined the stability of the great Silk Road and ended the Pax Mongolica. This opened the door to the Age of Exploration and Europe’s maritime conquest of the world. Within Medieval Europe, the Black Death killed as much as 40 percent of the population, but also precipitated the rise of the Third Estate, and in some places raised wages for scarce labor. “People were fewer,” noted historian Barbara Tuchman, “but they ate better. The pandemic also led to greater emphasis on long-distance navigation.”

During the current crisis, disintermediation has been the primary driver of the post-pandemic economy. The novel coronavirus forced businesses to adapt quickly to new circumstances, and as with all economic crises, created winners and losers. The lockdowns accelerated the use of digital technology for work, retail, and entertainment. This has not only helped the big firms but also produced a whole crop of new startups, many of which address the shift to online work. The tech oligarchies now face competition from decentralized networks based on blockchain technology which is less vulnerable to domination by giant firms with algorithms that are designed to eliminate the incentive structures that lead to central node control and promote monopolistic behavior. Domains such as Lokinet, Ethereum, Odysee, and Urbit seek to give users ownership of their own data. Even Google’s near-monopoly of web browser supremacy is set to be challenged by data-privacy-conscious alternatives such as DuckDuckGo, which has seen a 62 percent growth in search results in 2020. Users are clearly becoming more conscious of privacy and data ownership.

Read the rest of this piece at Quillette.


Joel Kotkin is the author of The Coming of Neo-Feudalism: A Warning to the Global Middle Class. He is the Presidential Fellow in Urban Futures at Chapman University and Executive Director for Urban Reform Institute. Learn more at joelkotkin.com and follow him on Twitter @joelkotkin.

Hügo Krüger is a Structural Engineer with working experience in the Nuclear, Concrete and Oil and Gas Industry. He was born in Pretoria South Africa and moved to France in 2015. He holds a Bachelors Degree in Civil Engineering from the University of Pretoria and a Masters degree in Nuclear Structures from the École spéciale des travaux publics, du bâtiment et de l’industrie (ESTP Paris). He frequently contributes to the South African English blog Rational Standard and the Afrikaans Newspaper Rapport. He fluently speaks French, Germany, English and Afrikaans. His interests include politics, economics, public policy, history, languages, Krav Maga and Structural Engineering.

Homepage photo: Steve Jurvetson, via Flickr under CC 2.0 License.

Climate Policy: COVID on Steroids?

For most people around the world, the Covid-19 pandemic seems a great human tragedy, with deaths, bankruptcies, and fractured mental states. Yet for some, especially among the green Twitterati and in some policy shops, the pandemic presents a grand opportunity to enact permanent lockdowns on economic growth, population growth, and upward mobility.

Pointing to reductions in greenhouse gases due to the lockdowns, some see the pandemic’s wreckage of much of the economy – including the mass destruction of businesses and family budgets – not as a plague of its own, but, as a British Climate Assembly put it, as a “test run for a new climate-driven economy.

“We have an “incredible responsibility” to “actually converge the solutions – at least the financial solutions – to coronavirus to the financial solutions for climate,” hyperbolized former UN Climate Chief and UN Paris pact architect Christiana Figueres, “because what we cannot afford to do is to jump out of the frying pan of Covid and into the raging fire of climate change.”

President Donald Trump may have been responsible for the vaccine success of Operation Warp Speed, but now his fast-track approach, ironically, is being adopted by climate campaigners in a drive to change our entire economy in short order. After all, they argue, the lockdowns demonstrated that governments can impose without constitutional constraint virtually any restrictions to address a perceived crisis. And the pandemic, by killing much of the economy – particularly travel – temporarily succeeded in reducing greenhouse gases by as much as 7 percent worldwide and 12 percent in the U.S.

The pandemic has also generated a social crisis, with its effects being felt disproportionately by the poor and working class in virtually all countries. It has depressed further the already historically low fertility rate throughout much of the world, including in the two remaining superpowers, China and the U.S. Covid, suggests a recent study by Brookings, has accounted for a half million fewer births in America alone.

Death to people – one way or another

In a sense, the call for semi-permanent lockdowns reflects deep-seated ambitions long nurtured in the green movement. The idea of limiting family life has been central to the environmental movement for a generation, at least since the days of Paul Ehrlich’s Population Bomb (1968) , which suggested, among other proposals, adding sterilant into the water supply. This approach was amplified four years later by the corporate-sponsored Club of Rome report, which sought to reduce consumption, economic expansion, and population growth to stave off mass starvation and social chaos.

Creating a sense of imminent crisis – just as in the justification for lockdowns – has long been critical to the propagation of environmental gospel, as longtime green campaigner Michael Shellenberger amply demonstrates in his new book, Apocalypse Never. Many of the predictions made by Ehrlich and the Club of Rome proved to be at best exaggerations, as resources did not wear out as predicted and mass starvation has been reduced dramatically since the 1960s.

Perhaps the one thing some greens may not like about the pandemic is that it was not lethal enough. The late Jacques Cousteau, for example, believed that curing viruses presented “enormous problems.” No longer, he complained, could epidemics compensate for excess births over deaths. Admitting that it was “terrible to have to say this,” he suggested stabilizing world population by eliminating 350,000 people per day. “This is so horrible to contemplate that we shouldn’t even say it” – but Cousteau said it. These are not the views of a lunatic fringe. Former National Park Service biologist David M. Graber deemed humans “a plague upon ourselves” that needs to be culled.

The political dilemma

The big problem, of course, lies with selling the agenda of permanent lockdowns, as well as advocating against human existence. The pandemic represented arguably a clear and present danger, though there is room for debate on how best to deal with it. In contrast, the climate “crisis” has been warned about for years, often in hyperbolic terms; however serious the problem, it certainly does not possess anything like the immediacy of the pandemic, or, for that matter, the economic and social devastation left in the pandemic’s wake.

Read the rest of this piece at Real Clear Politics.

Joel Kotkin is the author of The Coming of Neo-Feudalism: A Warning to the Global Middle Class. He is the Presidential Fellow in Urban Futures at Chapman University and Executive Director for Urban Reform Institute. Learn more at joelkotkin.com and follow him on Twitter @joelkotkin.

Homepage photo credit: COPPARIS2015 via Flickr under Public Domain.

God and the Pandemic

If God gives you technology, use it to reach people!
~Rabbi David Eliezrie The Secret of Chabad

During this most miserable of years, religion, like virtually every major social institution, has been profoundly disrupted. There have been church closures and the ranks of outdoor—or socially distanced—worshipers represent a mere fraction of those who engaged before. Yet the pandemic may also mark a critical breaking point, leading to profound changes in how spirituality is experienced and sustained. In some senses, we are witnessing a shift as important as that brought about by Guttenberg’s press and Luther’s vernacular Bible during the Reformation. As sociologist and historian Max Weber suggested, these developments overturned the notion that “magic and the supernatural quest for salvation” belonged to the Latin-speaking priesthood. The pandemic and the flood of new online spiritual offerings have combined to transform religious life in much the same way.

Read more