How the Pandemic will change our World

After each major event in history the trajectory of a nation and the world changes. This is what Daron Acemoglu and James Robinsion, writers of Why Nations Fail, call a critical juncture. According to the authors, a critical juncture is “a major event or confluence of factors disrupting the existing economic or political balance in society”. In an attempt to better understand the impact of the novel coronavirus on the world, this article looks back at the plague and how it shaped the world we know today.

Source: Huawei

How the the Black Death Transformed Europe

In 1347 the plague, also known as the Black Death, reached the port of Constantinople. A couple of months later, it was spreading through Western Europe wiping out around half the population of any area it hit. By 1351, the Black death had resulted in the deaths of between 75 to 200 million people in Eurasia and North Africa. Such a catastrophic event had a critical effect on the existing system at the time. As you read on, you’ll understand that the plague offers an explanation to why Western Europe is more advanced than Eastern Europe.

During the 14th century Europe had a feudal system. It was based on a hierarchal relationship between the king, the lords beneath him and the peasants at the bottom. The king granted land to the lords who in return allocated the land to the peasants. The peasants had to perform compulsory labor services and were subject to heavy fines and taxation. They were also not allowed to change lands without the permission of their landlords who were also policemen and judges at the time.

As the plague created a shortage in labor, it shook the foundations of the feudal system. This scarcity of labor encouraged peasants to demand less fines and unpaid labor. Of course, this was not welcomed by those in power. In England, the government tried to put a stop to this through passing the Statue of Laborers in 1351 which aimed at fixing wages at the levels paid prior to the plague. But their attempt did not work. Tensions escalated culminating in the outbreak of the Peasants Revolt in 1381. The government was unable to enforce the Statue of Laborers. This was the start of a free labor market in England.

Source: Wikipedia

Although the demographic impact of the plague was the same everywhere it hit, it had a different impact on Eastern Europe. In Eastern Europe, peasants did not have enough power to change the system. Lords were slightly more organized and had more consolidated land holdings. As a result, lords started taking over even larger areas of land.

The effects were slim during the thirteen hundreds but by the sixteen hundreds Eastern Europe and Western Europe were worlds apart. In the West, people were free and were becoming an integral part of a booming economy while in the East serfdom still prevailed.

The impact of the Coronavirus on the world

Similar to the plague, the coronavirus pandemic had a socially, economically and politically transformative impact on the world. Of course, the world today looks very different than how it did when the plague hit 700 years ago. Economic and political institutions have transformed over the years and have become much more advanced and complex. But the lesson learned from the plague is still applicable today. Critical junctures are a double-edged sword. As we have seen in medieval Europe, the outbreak of the plague changed the trajectories of Western and Eastern Europe in completely different ways.

The novel coronavirus outbreak is altering the trajectory of our world. There is no doubt that it had and continues to have a political, social and economic impact on our world.

We have, for example, seen changes in peoples behaviors. On the company’s conference call Walmart’s CEO Doug McMillon said “Changes in customer behavior have accelerated the shift to e-commerce and digital.” The worlds largest retailer believes that most of the behavior change will persist beyond the pandemic. And this is just one example of many. (More articles about the impact of the coronavirus are here and here)

The outbreak of the plague has taught us that the impact of critical junctures can take hundreds of years to become visible. We are currently witnessing a critical juncture. So, let’s make sure that we are moving in the right direction!


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