A pandemic of deglobalization

PRINCITION ) The explosion of the new choreography, COVID-19, which began in Huhan, China, can be transformed into a global pandemic. Nearly 50 countries have confirmed cases of the virus, while the precise nature of the transmission mechanism remains unclear.

Pandemics are not merely fleeting tragedies of sickness and death. The acceptance of such threats on a massive scale, and the uncertainty and fear that accompany them lead to new behaviors and beliefs. People get more suspicious and even more trusting. Above all, they become less willing to engage in anything that seems foreign, or strange.

Nobody knows how long this outbreak of COVID-19 will last. Unless it becomes less contagious with spring weather coming in the Northern Hemisphere, nervous populations around the world may have to wait until a vaccine is produced and released. Another major variable is the effectiveness of public health authorities, who are obviously less competent in many countries than they are in China. In any case, factory closures and production suspensions that are now undermining global supply chains.

Producers are taking steps to reduce exposure to long distance weaknesses. So far, at least financial commentators have focused on calculating the costs for specific sectors: automotives concerned about exchange parts shortages; textile producers deprived of fabrics; sellers of luxury goods left without customers; and the tourism sector, where tourist ships, in particular, have become spread grounds. Looking at the long-term consequences of the COVID-19 crisis, individuals, companies, and maybe governments will try to protect themselves with complex accounting contracts.

It is easy to imagine that new financial products will be structured to pay off automobile producers in case the virus reaches a certain mortality rate. The demand for new contracts could spur new bubbles, as profit opportunities multiply. History offers intriguing precedents for what may follow. See the famous financial crisis after the <x0mania of tulips”, in the Netherlands between 1635 and 1637.

This episode is especially popular because its teachings became popular by Scottish journalist Charles Mackay in his 1841 book, “memory of the extremely popular delusions and the madness of the crowds”. For Mackay, the tulip crisis seemed to predetermine capital speculations on railways and other industrial developments in North and South America during its time. Throughout the book, he uses this episode with all his moods, telling stories of ignorant sailors who were swallowing a real fortune, confusing tulips with onions. But as historian Anne Goldgar reminds us, Mackay did not forget that mania corresponded to an extremely high mortality plague that was spread by armies that fought in the Thirty Years ' War.

The plague struck the Netherlands in 1635, and reached its peak in the town of Haarlem, between August and November 1636, which is when the tulip mania began. The inflammatory capital in flower cones was fed by a strong wave of unexpected profits alluding to the tremendous heirs of plague victims.

Tulips served as a kind of market for the future because the cones were traded during winter when no one could examine the flower's character. They also became the object of complex contracts, such as what determined a price should be paid if the owner's children were still alive in the spring (other than otherwise, the bochi would be transferred free of charge). Financial speculation in this wild environment, apocalypse, arose from uncertainty. But this has often been interpreted as evidence of materialism caused by fear, with the severe crisis caused by secular luxury and exotic materials.

The Tulips, after all, came from the foreign culture of Ottoman Turkey. Like today, epidemics of modern Europe plague created widespread conspiracy theories. The less clear the origin of the disease, the more likely it will be attributed to a malignant influence. There were stories of bad hooded figures going from door to door, mistaking “ ” surfaces of infectious substances. Foreigners and soldiers as well as marginalized poor were crucified as guilty. Here again, a source of the 20th century offers powerful lessons for today.

In the novel of Alessandro Manzoni of 1827, “The promised”, the plot reaches its high point during the outbreak of the plague in Milan in 1630, considered to be a curse introduced by foreigners, as well as the Spanish monarch Habsburg that ruled Milan. Roman became a powerful catalyst for Italian nationalism during the Renaissance. Not surprisingly, the 19th COVID epidemic is already promoting today's nationalist confessions. For some Americans, the Chinese origin of the disease will simply reaffirm the belief that China poses a danger to the world and cannot be believed to be responsible. At the same time, many Chinese will see some American measures to fight the virus, like racial motivation measures, and that the blocking of China's rise.

The theories of the plot regarding the US Central Intelligence Agency, which they say is circulated the virus. In a world flooded with disinformation, COVID-19 promises to bring even more. As Dutch historian Johann Huizunga showed, the period after the Black Death in Europe turned out to be the “beech of the Middle Ages”. To him, the true story of what was happening was not just the economic consequences behind the pandemic, but the mysticism, the lack of rationality, xenophobia that brought an end to a universalistic culture. Likewise today, it is quite possible for COVID-19 to bring “the product of globalisation”.

Project Syndicate World.al