What the Black Death Can Teach Us About the Global Economic Consequences of a Pandemic

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    Fears about the contagion from the novel Coronavirus have resulted in a slowdown in the global economy. Stock markets have been affected: the UK’s FTSE 100 has seen its worst days in many years, as have the US’s Dow Jones and S&P. And because money has to go somewhere, the price of gold – which is seen as a stable commodity in extreme events – reached a seven-year high.

    A look back at history, however, can help us consider the economic effects of public health emergencies and how best to manage them. While doing so, it is important to remember that past pandemics were far more deadly than the Coronavirus, which has a relatively low mortality rate.

    Millions of dead

    Indeed, without modern medicine and institutions like the World Health Organization (WHO), past populations were more vulnerable. It is estimated that the Justinian plague in 541 killed 25 million people, and the Spanish flu in 1918 about 50 million. But by far the worst death rate in history was inflicted by the Black Death. Caused by various forms of plague, it lasted from 1348 to 1350, killing between 75 million and 200 million people worldwide and perhaps half the population of England.

    The economic consequences were also profound. “Anger, antagonism and creativity”

    It may sound counterintuitive – and this shouldn’t minimize the psychological and emotional turmoil caused by the Black Death – but most of the survivors enjoyed a better standard of living.

    Before the Black Death, England had suffered from severe overpopulation. But, after the pandemic, the labor shortage led to an increase in workers’ daily wages, as they were able to offer themselves to the highest bidder. The workers’ diet also improved and included more meat, fresh fish, white bread and beer.

    Although landlords had difficulty finding tenants for their land, changes in tenure patterns improved estate income and reduced their demands. But the period after the Black Death was, according to economic historian Christopher Dyer, a time of “turmoil, excitement, anger, antagonism, and creativity.”

    Social changes

    The immediate response of the government was to try to stem the flow of the supply and demand economy. This was the first time that an English government tried to micromanage the economy. The Workers ‘Statute law was passed in 1351 in an attempt to set wages at pre-plague levels and restrict workers’ freedom of movement. Other laws were introduced that attempted to control the price of food and even restrict which women could wear expensive fabrics. But this attempt to regulate the market did not work.

    The application of the labor legislation provoked evasion and protests. In the long run, real wages rose as the population level stagnated with recurring outbreaks of the plague. And the owners also had to accept the changes in the land market as a result of the population loss.

    There was a large-scale migration after the Black Death, as people took the opportunity to move to better lands or seek job opportunities in the cities. Most landlords were forced to make more attractive offers to ensure that tenants cultivated their land.

    A new middle class (almost always men) emerged

    These were people who were not born into the landed gentry but who were able to obtain enough surplus wealth to buy parcels of land. Recent research has shown that real estate was opened to market speculation.


    The dramatic change in population brought on by the Black Death also led to an explosion in social mobility. The government’s attempts to restrict these developments generated tension and resentment. England was still at war with France and required large armies for her campaigns abroad. This required money, and in England this meant more taxes for a smaller population.

    The parliament of a young Richard II came up with the innovative idea of imposing punitive taxes on collections in 1377, 1379 and 1380, which led directly to social unrest in the form of the peasant revolt of 1381.

    This revolt, the largest ever seen in England, came as a direct consequence of recurrent outbreaks of plague and attempts by the government to tighten control over the economy and pursue its international ambitions. The rebels argued that they were severely oppressed, and that their masters “treated them like beasts.”

    Valuable Lessons

    While the plague that caused the Black Death was very different from the Coronavirus that is spreading around the world today, here are some important lessons for future economic growth:

    First, governments must be very careful to manage the economic consequences: trying to maintain the status quo in their own interests can lead to unrest and political volatility.

    Second, restricting freedom of movement can generate a backlash. To what extent will our modern, mobile society accept quarantine, even when it is for the greater good?

    Third, we must not underestimate the instinctive psychological reaction. The Black Death saw an increase in xenophobic and anti-Semitic attacks. Fear and suspicion of foreigners changed the patterns of commercial exchange.

    Fourth, there will be financial winners and losers as the current public health emergency unfolds. In the context of the Black Death, elites tried to consolidate their power, but long-term demographic change forced changes in workers’ benefits, both in terms of wages and mobility and in the opening of the land market (the main source of wealth at the time) to new investors.

    Fifth, the population decline also encouraged immigration, albeit to take low-skilled or low-paying jobs.

    All are lessons that reinforce the need for measured and carefully researched responses by today’s governments.

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