Pandemic 2020, how bad is it really and what impacts could arise?
This is a short tale about where we are during Covid-19 (“the [chinese] virus”), what the past century gave us, the Spanish flu, what economic and legal impacts arose and could arise now. Firstly, we know the current statistics, the numbers are still growing. Secondly, the economic stimulus by most nations, the debt that nations are taking on has far reaching implications. Finally, what legal issues could arise immediately on businesses, aged care or even associations.
Statistics
Covid-19 is certainly a killer, with the current (as at 9 August 2020) figures showing almost 20 million infected, almost 13 million recovered and over 6 million currently infected and over 730,000 deaths. But we need to consider that we live in world with over 7.8 billion inhabitants and growing. Ok, before you shoot me, this pandemic is far from over, but as it stands we can raise two key metrics, the chance of catching and dying from this virus.
In the Australian context, the Australian population is 25.6 million. The total cases in Australia have been 20,698 so far and 278 deaths. So this means:
— — — — — — Cases — — — -Deaths — — — --Population
World — — — 19,800,000 — — 720,000 — — 7,800,000,000
Australia -— — - 21,084 — — — — 295 — -— — - 25,600,000
World (%) —--0.2538% — -— 0.0092%
Australia (%) — 0.0824% — — 0.0012% (source in links above)
It’s evident that when you do the simple math, you’re three (3) times more likely to catch the virus outside of Australia, and seven and a half (7.6) times more likely to die from the virus outside of Australia. The Australian experience shows better tracing and controls of the virus in all states, except for the state of Victoria. These statistics will change until the virus has a vaccine or is eradicated, but some believe that it cannot be eradicated. Regardless, our stats aren’t bad.
When we look back to the previous pandemic a century ago between 1918–20, the Spanish flu saw 17.4 million to 39.3 million die, depending on which study you rely on. If we consider the world in 1918 had 1.8 billion, then the Spanish virus killed approximately 1% of the population. At the moment, Covid-19 has a mortality of 0.0092% in the World, compared to 1% for the Spanish flu, that’s currently 108 times more deadly than Covid-19. In Australia the Spanish flu was 833 times more deadly than Covid-19 (1%/0.0012%), if we compare the World mortality of Spanish flu to the Australian Covid-19 rates. In short, so far the statistics are clear, the virus, since it originated in china in December 2019, isn’t as deadly as the Spanish flu pandemic from a century ago.
If you aren’t thinking it, I am. At what stage will Covid-19 be at Spanish flu levels? Do the math. 7.8 billion * 1% = 78 million. With the current average daily deaths worldwide at 5000, if the figures remain the same “ceteris paribus”, we would need at least 10,000 days or 27–28 years to get near it. That’s not to say that we should not be cautious, rather that we should tone down our fear and not let the media keep us on edge.
Economics
The first wave of consumerism, prior to the great depression saw mass production and the creation of consumer credit. GDP and unemployment was not as severely affected by the Spanish flu as compared to Covid-19 today. It was evident in 1919, that cities that addressed the health issues, saw their economies less affected by the Spanish flu. Some countries today can see their economy is doing better that the rest of the world, like New Zealand. The economic outcomes of Government stimulus during the time of the Spanish flu are difficult to calculate, but as the era saw the end of the first world war, a positive sentiment, GDP growth was a rational outcome. The economy post world war 1 was less evolved than that of today as it was newly industrialised, but it saw the early effects of consumer credit by increased cars on the road. We later learned that credit promotes a false prosperity and exacerbates the income gap. We know today, that the effects of consumerism are far reaching, creating unhealthy lives for those who practice it and results in unhealthy lives for those who supply it and even the earth.
Reading the various articles, it reminds me of the french saying “the more things change, the more they stay the same”, which is also represented by the tango, “Cambalache”. Governments appear to have learned to be more responsive, in this globally connected world, or have they?. Our cheap goods in the Western world are lacking today because the supply of those goods are either not being built, or they can’t get to us because of travel bans. In our efforts to build “economies of scale” in production, we have outsourced too much, and during this pandemic, it makes the supply across borders more difficult.
In an earlier post I outlined the stimulus package that Australia is applying for Covid-19. Other countries across the globe are investing an equivalent between 1–20% of their GDP to counteract the Covid-19 impacts to their economy, the optimal approach will be different for each nation, but the average seems to be between 10–15%. When we consider that the prudent debt to GDP level of a nation is 60%, and that in 2020, there are almost 70 nations with a figure greater than that level. The greatest Economic minds have factored in reduced growth rates for the global outlook, but the question remains, with all this stimulus and borrowing, what does the medium to long term look like? It’s important to consider that while the world economy will contract for the next year or two, the impact of increased debt beyond 70% for several nations will further decrease economic growth, leading to a longer period required to pay down the debt. This one event may take up to two decades to fully recover.
Our global economy is connected in complicated ways, supply chains link us all so that my coffee and roses may come from Colombia, my toaster is made in china, flown to me by planes made in the USA or France, Fuel from the Middle East, purchased in Singapore. It has been argued that the economic house of cards could be addressed if we #Dechinafy the world economy, and it looks like the USA is already contemplating decoupling the medicinal and tech industry from china. Even if a large number of nations #Dechinafy their supply chains, china has pre-empted the move by applying their belt and road initiative, which has been signed by the Australian state of Victoria, even when it was advised that it was not in the national interest for Australia. The key questions asked should be, if the agreement is not legally binding, why did they sign it in the first place and what incentives were given and to whom.
What is scary, isn’t the pressure that china has applied to trade with Australia, rather the increased price of gold. There exists a principle know the “flight to quality”, which occurs in times of economic uncertainty. Moving funds to gold means, pulling money from shares, property and other investments which will further drive down those markets. The potential uncertainty at the moment is whether a trade war or actual conflict might eventuate between the USA and china. The war economies have started kicking into gear, with china, France and the USA, but thankfully against the most important war, the one against Covid-19. History has already shown that an armed conflict is possible and conceivable between the USA and china. However, war is sub optimal to the world economy.
Legal issues
The press has touched on the potential for legal action on the basis of negligence because of the spread of the virus. The question: Is it possible to have a legal action against a group/association/body corporate? Negligence is founded in the Doctrine of Tort, which is a civil wrong, and is not covered by criminal law or contract law. Civil cases are judged on the “the balanced of probabilities”, which essentially means, that where there is a 51% chance or greater, or “more likely than not” that it was the case, that the legal action will have a very real prospect of success. In short, it is easier to prove a civil case than a criminal case, as criminal cases must evince guilt beyond all reasonable doubt.
The key to the found a case in negligence in the jurisdiction of NSW, Australia, is three fold: 1) a duty of care exists, based on an existing recognised relationship or where there is reasonable foreseeability that an act or omission might cause harm; and 2) there was a breach of that duty; and 3) damage was caused by the breach, also known as causation or the “but for” test. Each case would need to be tested on its merits, but it is not inconceivable that in the coming months, we will see cases about Covid-19.
The only way that we can protect ourselves, organisations and other groups that we belong to, is by following the government regulations, keeping abreast of any changes, being diligent with the policies and documentation of our adherence. The seminal case that grants us the sage advice of adhering to policy and documenting it religiously is that of Strong v Woolworths. It is more likely that Covid-19 negligence cases wont arise at your local shops, or even sporting clubs, but they are more likely than not to arise against Aged care facilities and potentially criminally reckless acts.
Now what?
From a practical perspective, it is evident that this virus will continue for a while, and we should for our own economic prosperity do all that is possible to continue the economy ticking along, while applying all possible preventative measures. Face masks should have been the norm from day one, now, it is mandatory in Victoria and recommended in NSW. Australia has had both success and setbacks over the last eight months of the “Rona” times. In light of the early mistakes, it was argued that a “captain’s call” be made and the Commonwealth (Federal) Government making the national health directives, it is legally possible and acceptable. The counter is that the current “National cabinet” is achieving the Commonwealth guidelines, without imposing on the jurisdictional sovereignty of each state and allowing each state to react to their circumstances. I’d call it, so far so good, except for Victoria. Now, let’s finish up on a positive that will get us back to (economic) boom times sooner, the latest is a vaccine isn’t too far off according to well respected experts. That doesn’t mean let’s be complacent, rather let’s keep the facts front of mind and continue to do our best to keep ourselves virus free, the economy ticking and not infecting others.
