The crucial fight
for life is not centered between the disease and civilization. For no doubt it is a shoo-in, and the outcome
is assured. History has shown
civilization always wins. History pages
are replete with virulent diseases that threatened to wipe out humanity, and
they have never been successful.
But on another front,
the eventual outcome may not be that assured.
What about the fight against the global economy?
First an irony, the
case of the managed and government-controlled economy on one hand, and on the
other hand, the mostly free capitalistic economies of the rest of the world. We know the threat originated from the
former, but the devastation and havoc have spilled over to all economies. We do not like to think the worst that there
was malfeasance involved in the spread of the threat. But it lingers in the mind.
The global economy
froze for a few seconds, before it started plunging on its downward trends. Then comes wholesale business stoppage and
laying off of entire workforces. Before
long, the crunched numbers show the unprecedented collapse of gains slowly and
painfully garnered through the years. And nobody even knows what the end game will
be.
Then some quick
and calm reckoning appears on the fore.
While not much
thoughtful studies were expended on the business closures, what escaped in the
equation was whether those businesses could even restart once the bigger
problems are resolved or mitigated.
The answer could
be short and straightforward, many of those businesses could never hope to reopen
especially if stoppage is substantial or protracted enough. These are the small business operations which
account for the vast majorities in practically all economies. They could never hope to be able to sustain
such short-term losses.
And worse, because
of what we have learned about the kind of capitalist model the entire world is
now embroiled in. Not the traditional
concepts of capitalism studied in school but the one unwittingly exposed during
the last global financial crisis that saw many big financial companies tumble
into the dust of ignominy and oblivion.
Companies like too-big-to-fail Lehman Brothers.
In a simplified
and uncomplicated way, what we learned is that most if not all economic activities
are “securitized” and distributed to all parts of the globe via the financial intermediaries. The case of the sub-prime loans was the most
visible and catastrophic. But was not
the dilemma’s entirety.
What were “securitized”
were not just familiar assets, but included even the profit expectations of all
businesses, big and small.
The current strains
the global economy is now laboring under may be too onerous for it to hold for
long before it is projected to collapse.
There is no security blanket to speak about acting as the roof to
protect, when the walls are the ones tumbling down.
Some references: