Stabilize the economy and help save a life by self-isolating. Now.
The COVID-19 pandemic is first and foremost a human tragedy: it has a 15% mortality rate for our most vulnerable loved ones, friends and neighbors and a 2% to 3% overall mortality rate. It has already impacted our economies and has the potential to throw the world into another global recession. Unlike most other geopolitical, economic and humanitarian crises, this time each of us can — and therefore should — do something about it.
Let me start by stating that I am a capitalist: I started, grew and sold a financial risk-management business in lower Manhattan that survived the tech bubble, September 11 and the Global Financial Crisis. I have been on the executive board of a public company and I’m now the Chief Commercial Officer of a private equity backed financial technology business called Style Analytics. And I believe each of us has a moral obligation to slow the spread of coronavirus by self-quarantining, even if we are not showing symptoms.
How can a capitalist suggest that we should do something not in our financial self-interest? Because: a) it really will help save human lives and b) it is in our financial (long-term) self-interest.
The market reactions to coronavirus are largely due to the high uncertainty of how bad the disease will get and how long it will last in the economic powerhouses of the world: Western Europe, the US, South Korea, Japan. The economic damage it will do is directly proportional to how badly it inundates our health care systems and how long we spend dealing with it.
Doing our part to limit the spread of the disease is the single best thing you or I can do because it simultaneously helps save lives and it limits the disease’s economic, market and humanitarian impact.
We already know that China’s draconian policies of mass quarantine seem to have limited the disease growth curve to about two months. Italy and Israel are the first democracies to follow suit with mass quarantines.
If we use China’s disease timeline as a guide, the West could be done with this disease by late April or early May if we take it seriously enough to limit its spread by acting now. If we don’t, it could be with us far longer. While viruses can indeed drop off with warm weather, we simply don’t know enough about this virus to rely on that solution. It’s proven to be rather, well, virulent.
Many democratic governments, like the US and UK, will be very reluctant to require citizens to self-quarantine: we culturally value individual freedom over collective benefit. That leaves it up to corporations and individuals to do the right thing. If we don’t, we will collectively and individually suffer longer than necessary.
Time really is of the essence. Julie McMurry’s informative and science-driven advice at Flatten the Curve uses a graphic, adapted from the US Centers for Disease Control and The Economist, to clearly show that our health care systems have a capacity limit that we don’t want to breach. I’ve adapted that graphic on the top of this post to show why everyone who can self-isolate should self-isolate.
The risk for most of us is not that we will die but rather that our respective health care systems will be overwhelmed by the number of cases of coronavirus and therefore they will not be able to handle any other health problem that people have all the time. In the US, we have about 1 million hospital beds but coronavirus numbers say we should expect to have 4 million to 8 million hospitalizations just from this disease.
Worldwide healthcare systems simply do not have the scalability in high surge demand situations we’ve all come to expect from ubiquitous cloud-based technology systems like the one you’re probably reading this on. It’s possible that our health care systems could reach their breaking points.
In Italy, whose medical system is ranked #2 by the WHO compared to the US’s ranking of 27, doctors are triaging patients like they do in wartime. Soon, throughout the developed world, people who need an Intensive Care Unit may not find one available for hundreds or thousands of miles.
The market impact of coronavirus so far (as of 11 March) has been a 15% drop in stock valuations from the highs of late February. In other words, we’ve lost 1/2 of the gains we made in 2019. But the worst of the disease’s impact hasn’t yet hit the West. By limiting the spread of the disease, we will lessen the financial impact and might event prevent a truly massive financial loss.
Western culture, especially in the US, promotes self-interest over communal interest. Coronavirus is forcing us to challenge that approach.
With a 2% overall mortality rate, if ¼ of the US population is infected (Angela Merkel now says up to 70% of Germany may eventually be infected), we’re looking at 1.6 million US deaths. If all of us Americans self-isolated immediately, we could potentially save those 1.6 million people.
In other words, for every 200 of us who self-isolates, we could save one person’s life. Who wouldn’t want to do that?
Altruism, despite the appearances, provides an advantage to groups that practice it over those that do not because we are stronger together than we are separately. I cannot fight this disease, if I get it, without the help of a trained physician and she cannot help me without the appropriate equipment, hospital and ultimately electricity generated far away by people neither of us will likely ever meet. We live in an interconnected and interdependent world.
Zeynep Tufekci’s blog article in Scientific American makes an elegant case for our civic duty to assist others during this outbreak.
While no one knows what will happen with markets over the next few months, we do know that limiting coronavirus’s impact will lessen the damage.
If not for your fellow human, then do it for your own economic self-interest: limit your contact with others, stop shaking hands, cancel your travel plans, limit in-person meetings, and strongly consider self-quarantining. We’re all in this together and each of us has a communal obligation to do our part.
