The Future After Covid-19: Creative Destruction on Steroids

From an essay by Michael Shermer in The American Scholar headlined “Time After Time: The future of civilization after Covid-19”:

In my 2015 book, The Moral Arc, I tracked centuries of progress in domains ranging from politics to economics, civil rights to criminal justice, war to civility, governance to violent crime, with a number of stops along the way. In nearly every case, the evidence demonstrated that gradual, step-wise problem-solving is by far the most successful strategy in creating a safer and more equitable society. Will that trend continue through this pandemic and into a post-Covid-19 world? Let’s consider the possibilities.

The Economy and Business

The economy will eventually recover, as has happened after every downturn in history, although there are reasonable concerns that runaway inflation—from printing over $2 trillion in aid—could crater the economy. The amount of money being tossed at this crisis is unprecedented, so the prospect of recovery could be delayed for many years. But will it ruin the economy? I don’t think so. As Adam Smith replied to a friend who worried that American independence might ruin Britain’s economy: “There’s a great deal of ruin in a nation.”

Even without the worst-case scenario of devastating inflation, businesses and entire industries that were already on the margin may never recover, including small colleges and universities without robust endowments, midsize churches and other places of worship, smaller newspapers, magazines, and other media companies, as well as the department stores and other retail outlets that shuttered and never reopened. Although this likely outcome will be disastrous for many of the people directly affected, this is not an altogether bad thing for long-term economic health; it’s Austrian political economist Joseph Schumpeter’s “creative destruction” on steroids, accelerating change that clears the way for new and innovative industries to take root and thrive.

Amazon has already capitalized on this process enthusiastically. When new markets open up, competition steps in, so we could see other online retailers, like Walmart and Target, cutting into Mr. Bezos’s empire, and who knows what new technologies are being developed right now in some entrepreneur’s garage that, in the fullness of time, could become the next Apple, Google, or Amazon. Rarely do monopolies reign for long before innovators step in to challenge their dominance. Meanwhile, abandoned department stores, malls, and other buildings could be converted to warehouses, storage units, fitness facilities, medical centers, museums, and even apartments and condominiums, a process that is already beginning. . . .

Universal basic income (UBI) was largely a fringe idea until Andrew Yang promoted it during his 2020 presidential campaign. At the time, few could conceive of the government dispersing checks to tens of millions of people to supplement their income, but that is exactly what happened only a few weeks after he dropped out of the campaign. Depending on the economic outcome of these relief payments, they may be held up as a model for future federal intervention.

Once travel restrictions are lifted and airlines negotiate the most cost-effective way to keep passengers safe, business travel will bounce back from its current state of near nonexistence. But it will likely never again approach pre-Covid levels. Why schlep your atoms around the world when your virtual self can cover most of what constitutes communication?

The entry and regulatory barriers for teleconferencing and remote communication for both established and new companies servicing this new demand will likely decrease as more of our lives move online. Yes, some business still needs to be conducted face to face, but not much, especially now that business contracts and other legal documents can be signed remotely.

In time, medical personnel and patients—first by necessity, then by desire and demand—will turn even more toward telemedicine, virtual reality, and other online tools. Few people will miss the wasted time and energy of driving to the doctor’s office, checking in, and especially waiting—sometimes for hours—for a consultation that lasts, on average, 17 minutes. Most medical procedures cannot be done remotely, but any relief of the burden at either end of the doctor-patient relationship will surely be welcomed.

Entertainment, Travel, and Vacations

Bars, restaurants, night clubs, sports stadiums, theaters, and other high-social density entertainment venues may continue practicing reasonable hygienic measures without too much push-back from customers, although “tight cultures” like Germany and Japan will have an easier time of it than “loose cultures” like Italy and the United States, where citizens are less inclined to follow norms in times of crisis. . . .

Airbnb rentals could continue to increase and staycations may become even more popular as people explore their local environs, which could also enhance the quality and maintenance of local public gardens, parks, and recreation spaces. . . .

Movie theaters could go the way of drive-in theaters, whose appeal began to wane in the 1970s as home entertainment systems grew in popularity. Today, with a plethora of cheap online streaming services and high-definition, big-screen TVs, why leave home to sit in a crowded theater. . . .Drive-in theaters are making a comeback around the country as people seek to get out of the house while remaining safely ensconced in their cars.

Politics and Society

The practice of U.S. senators and representatives conducting congressional business remotely will not only better serve the people they represent, but reduce the governmental waste spent on travel, housing, and all the rest that goes into the current system. That Congress is struggling to make this transition is indicative of a system designed in the 18th century. . . .

It’s time for electronic voting. Trillions of dollars are transacted electronically every year, and although fraud exists, it isn’t enough to force businesses to revert to using paper. Signed ballots? No problem. If you can secure a loan, buy a home, invest in a business, wire money, and buy and sell stocks online, surely casting a vote in an election should be child’s play for security programmers. . . .

Political polarization seemed to decrease for the first couple of months of the pandemic, but as the November presidential election returned to our newsfeeds, we slipped back to where we were at the end of 2019—peak polarization. People and nations sometimes become more united when confronting a common enemy, as the English did during the Nazi Blitz. It remains to be seen if Covid-19 will bring us closer together or drive us farther apart, but so far the signs are discouraging. Time (and the next election) may tell.

A healthier balance between individual freedom and collective action could develop. Many Americans seem to think that wearing a mask infringes on their freedom, although they don’t seem to object to being forced to drive on the right side of the highway, or to restaurants requiring them to wear shoes and shirts for service. . . .You’re free to smoke but you are not free to blow it in my face. You’re free to risk contracting Covid-19, but you’re not free to put me at risk. As Thomas Hobbes, John Locke, and other pioneers of the social contract explained centuries ago, all of civil society is a tradeoff in which we give up freedom for security.

Gun sales have spiked during Covid-19. Americans purchased 1.9 million firearms in March—the second highest number ever—as fears increased that the pandemic could lead to civil unrest. . . .Gun violence remains a problem in the United States—one that won’t go away any time soon, and may even become worse, if the spike in gun-related homicides of many U.S. cities is any indication.

 is the publisher of Skeptic magazine, a presidential fellow at Chapman University, the host of the Science Salon podcast, and the author of a number of books, including Why People Believe Weird Things, The Mind of the Market, The Believing Brain, The Moral Arc, Heavens on Earth, and Giving the Devil His Due.



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