Adam Tooze on our Financial Past and Future

Tyler Cowen interviews Adam Tooze over at Medium:

COWEN: Let’s go back to the Spanish Flu of 1918–1919. Do you think that Western economies were better equipped to deal with the pandemic, in percentage terms, at that time than they are today?

TOOZE: Well, it’s an interesting question, and it’s an interesting way of putting the question. What’s been striking about the 2020 pandemic is that we have chosen an extraordinarily high-cost route. We have chosen a comprehensive lockdown as the default strategy for dealing with this. As far as I’m aware, no one attempted anything remotely like that in response to Spanish Flu.

At the local level, there were efforts, city by city, but there were no comprehensive national lockdowns. In fact, if you study the economic history record, the archive of that period, the policy decision-making in, say, the Weimar Republic, which I’ve spent some time on — all the minutes of the Versailles Peace Conference — the flu barely figures. It figures in a sense that occasionally a prominent person will get sick, famously President Wilson.

The idea of a kind of comprehensive lockdown as part of a public health response, as far as I’m aware — and of course, this has taken us all aback and has caused us to reflect on what we might have missed in the historical record — I don’t remember it arising anywhere as an option. And we know that the consequences were, of course, dramatic in terms of the loss of life, particularly in what was then the imperial world; the colonies, so-called, in Africa and India.

We’re much more affluent than we were then by an extraordinary . . . It’s very difficult to exaggerate in order of magnitude, broadly speaking, in terms of per capita income. And we’ve chosen a very high-cost route for dealing with the epidemic this time.

More here.