Pandemics--Winners and Losers

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I have been studying the implications of a possible Asian Avian Flu pandemic.  In a "worst case" scenario, what would be the long term effects on the economic infrastructure in the event of a 20%, 30%, or 40% de-population of the planet? The only historic parallel that comes immediately to mind is the "Black Death" plague pandemic in Europe. The resultant de-population caused massive labor shortages in subsequent decades. And that of course was in a non-technological and largely agrarian society. What happens to a highly technological, highly interdependent society with extremely long chains of supply?

What are the full implications, both at the societal level, and for each of us, living out in the boonies?  Most SurvivalBlog readers pre-positioned gear or live full time at our retreats.  OBTW, with a tip of the hat to The Mogambo Guru's outrageous acronyms, I call our retreat's storage room: "Jim's Amazing Secret Bunker of Redundant Redundancy." (JASBORR)

I recently put on my Prognostication Hat and considered the far reaching implications of a pandemic. With the help of the fine folks over at The Claire Files (our designated discussion forum for SurvivalBlog topics), I came up with a few conclusions. I'd appreciate your comments on factors that I might have overlooked.

Likely Effects: Just the fear of exposure will greatly change the way people interact. I predict that while most lower and middle class families will be forced by circumstances (most notably paycheck dependence and lack of savings) to continue their normal daily routines, upper class families will go into "cocooning mode" (self-quarantine) as much as possible. This effect may last well beyond the period when the pandemic is active in any particular region.

Here are some comments from readers of my pandemic discussion thread at The Claire Files:

"Merlin419" wrote: "The spread of such a disease would not be selective in the loss of population. Some skilled professions would be harder hit than others."

"Merlin419" also later added: "Knowing how to read plans is a plus for some of us. The main thing is to gather as much knowledge as possible. A simple on for your self would be easier to buy but if you want plans on hand check this one out; http://hbd.org/mtippin/woodmill.html  looking at things now while still available is one more small step to self survival."

"Bellis" wrote:... if I remember correctly the Black Death in the U.K. killed about one third of the population and led to a change from oversupply of labour to drastic shortages of skilled and unskilled workers.  This led to wage increases as might be expected.  However the employers were not happy, and national price and wage controls were put into place to try to keep wage inflation down.  When this failed restrictions on movement were tried to prevent workers moving to a better position.  None of these lasted long and there was a lot of 'black market' activity in labour - there are also several rags to riches tales from the period.
One other feature was that the more marginal areas of the country became abandoned after the plague died down as the survivors saw better opportunities for themselves and moved on.  Whole villages were deserted - any survivor of a modern plague may just see their neighbourhood die out anyway as the other survivors see a better life elsewhere.
As to the economy, we do indeed live in a much more specialised and mechanised economy than before, with much longer and more complicated supply and delivery chains, and much more centralised production.  This I think will cause major problems during and after any epidemic, and any heavily mechanised industry - whether it be food production, textiles, heavy industry etc could be affected... 
Most people today have specialised in one small part of a much larger manufacturing chain.  Losing any one of those links in the chain will stop the entire process until a new person can be found, assuming that a replacement can be trained at all.  And even if the machines can be kept working, they cannot work around problems like humans can - a skilled worker can take raw materials that are nearly right and do the job anyway, modern machinery has to have exactly the right materials, to very fine tolerances, at exactly the right time or else.  Modern manufacturing is extremely dependent upon things working just so - any disruption to any part of the chain can stop the entire process in its tracks.
Even worse... restarting local production, from what skills and tool base?  Most production is heavily centralised and the tooling and machinery industries geared up to supplying a few very large concerns.  Where are you going to get the new plant and machinery to set up a new flour mill for example, who even knows what one should look like?  How many people are actually skilled workers, and how many are really glorified machine managers - a generation or so ago most would at least have had some idea  or experience of hand tools / production methods, but today? Where do you find your miller, baker etc? God forbid this kind of thing ever happens... living through the epidemic will be bad enough, but the first decade or so afterwards would probably be worse..."

"Bear" wrote: "It's not hard to imagine a situation where enough key people go missing (die, leave, run away, etc..) that complex manufacturing and production systems fail. We could end up living with production systems more like late 19th or early 20th century simply because they are more flexible, if less efficient."

Definitely some FFTAGFFR there! I greatly appreciate their replies. Now, back to some of my own observations:

The biggest losers will be the airlines. Already hurting because of terrorism and more recently from the shock of fuel price increases, the fear of a pandemic may be "the last nail in the coffin" for many airlines.

The continuum of severity for a pandemic will be something like the following (from best case to worst case):

Best Case: Widespread Public Fear, but no significant loss of life.

1% to 5% Loss of Life (mostly overseas), Grid-up. A lengthy economic recession. Minor economic dislocation/readjustment

10% Loss of Life, Grid-up. Major economic dislocation, demographic shifts.

20% Loss of Life, Grid-up. Severe/recurring economic recessions or depressions. Major demographic shifts and involuntary relocation of population.

30% Loss of Life, Grid-down short term. Deep long term economic depression. Major social unrest.

Worst Case: 40% or More Loss of Life, Grid-down long term. Full Scale Economic Collapse. A Second Dark Age

 

JWR's Predicted Winners and Losers if Grid Up (Mild Pandemic):

Winners Losers
Small charter airlines Large airlines
Home-based businesses Public school attendance & school teachers
Telecommuters Public transportation
Storage food packagers and sellers Theaters
Security-related businesses (Alarm companies, Locksmiths) Church attendance
Mail order businesses Life insurance companies
Home-schooling and curricula suppliers Health insurance companies
DVD& CD mail order sales/rentals Any business dependent of face to face contact
Hand sanitizer manufacturers Traveling salesmen
Antibacterial soap manufacturers Pay phone and vending machine companies
Camping/survival gear manufacturers Gambling industry, casinos, slot machines makers
Electronic banking Large retail chain stores
Shopping/delivery services Sporting events/leagues/venues
Internet service providers Concert venues
Cellular phone companies Convention Centers/Convention Organizers/Promoters

JWR's Predicted Winners and Losers if Long Term, Grid Down, (Severe Pandemic):

Winners Losers
Small family farms Most businesses
Home-based businesses making practical products Most industries
Manual Laborers (due to long term labor shortages) Public schools (likely to never recover)
People with specialized hand craft skills Public transportation (likely to never recover)
People with specialized repair skills Airlines (likely to never recover)
Experts in 19th century technology Church attendance--may re-emerge as small home churches
Second hand stores Life insurance companies (likely to never recover)
Small scale welding and machining shops Health insurance companies
Auto, truck, and tractor mechanics Any large public venue (stadiums, concert halls, casinos, ...)

I'd appreciate your comments and suggestions via e-mail to expand on this topic.

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This page contains a single entry by Jim Rawles published on October 23, 2005 4:58 PM.

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