Our way to interpret the world depends on the language we use to describe it. In the CoViD19 emergency, the language we are currently using is not correct, since it refers to our history rather than our future.
This is not a war, it’s a pandemic. Resorting to war analogies it’s convenient, easy to understand and everyone gets it. But this is not a war.
For its very nature, a war is a temporarily unique event unlikely to be repeated. I’m not speaking of those eternal religious wars. Those cannot be won or lost, they’re not fought with the rules of a war. Wars aim at the annihilation of the enemy. Razing, suppressing, and rebuilding. Wars are fought to annihilate. For what I mean by war, this does not end with peace, since peace is the only thing left.
This is not a war since economic wars are different. Investments serve to rebuild real estate assets, while return plans are carried out knowing that the GDP relative to the lost consumption is balanced by the remaining voices — which tend to explode due to war damages. The economic boom in Italy — and in all the countries affected by the Second World War — is the consequence of the wealth a country creates whenever assets crash. A demolished bridge it’s worth double of a non-demolished bridge since you first create wealth demolishing it and then you recreate wealth rebuilding it.
This is not a war because while at war we lack the meeting point between supply and demand due to the fact that the productive infrastructure of the economic system falls short. Today — and for the first time in our economic history — we have a demand and a supply that cannot meet because we lack the free movement of people and goods.
The chase between demand and supply
The consequences of such a shock will manifest with the natural contraction of the aggregate demand which is not supported by the pre-pandemic levels anymore. The chain of effects on the level of investments is easily predictable. However, humans are resilient beings. I think this will also give space to investments in previously neglected areas. It is, nonetheless, undeniable that this pandemic will force many — if not all of us — to reposition their businesses.
This is not a war since the pandemic is hitting interpersonal, national, and international relations. Right now, we are losing productive and positive relations. Rebuilding a bridge is way easier than rebuilding a net of relations undermined by fear and uncertainty. The fear to be quarantined by the infection destabilizes all the industrial relations affected by such risk. I believe that this needs to be carefully considered. There are companies that rely almost exclusively on industrial relations and work with business models widely based on cash flows.
Italy is packed with enterprises (especially in the ICT field) in which the cash flow/asset ratio is higher than 0.5. For this reason, I believe that to survive these times we will need to converge on new economic models.
This is not a war since the times we’re living do not foresee any winner. We will not win because we cannot annihilate our enemy. None of the classic war methods, in the mainstream meaning we know war with, can help us fight, annihilate, the lethal, infective opponent of our times. This enemy is polymorphous. It changes, mutes, and is always operative.
This is not a war since no efforts will be implemented to relaunch the economy. Companies already exist. Infrastructures are still untouched. We will support finance with the consequent ethical implications — which I won’t deepen here.
This pandemic forces upon our economic systems a radical change of perspective. The economic models consider three analytical dimensions: short, medium, and long term. Today, our economic decisions have to fit a new dimension in the analysis of such a universe: the dimension of the immediate. The decisions we have to take in the immediate must integrate into our vision of the other temporal dimensions in order that the very first interventions won’t seem incoherent with — or even opposed to — the tasks we’re following.
Forecast for China, Euro Area, and Italy in the 2T 2020!
This pandemic imposes so radical changes that one could be ready to break the “big taboo” of the global monetization of the crisis. To manage a pandemic you don’t need national economies, but rather international protocols of structured and structural cooperation, where everyone is requested to be close to the affected countries, independently from the political sides. A virus does not recognise boundaries, races, genders, and religions. A virus is atheist and democratic: it infects everyone.
A country hit by a pandemic it’s just a starting point where to activate a net of global protection based on financial tools, economic models, and healthcare structures with a logistic as quick as the army’s.
What sectors can work from home?
Relations will find a new space with a higher attention on social healthcare. We will not stop to have social interactions: we are and will remain human. But we’ll reconsider the way we carry out future business in order to understand who prefers a different way to relate to other people. Bringing our work home is not an option for all the industries, but we’ll pay more attention to the activities that can be delocalized, thanks to the never-actually-happened dematerialization of paperwork. To do so, companies will have to invest to change their work from smart to inclusive. In Alan Advantage we already started this journey which will lead us to a new methodology, a new way to understand relations and business. The entertainment and hospitality industries will change their business models, welcoming those necessities that were not essential in terms of revenues up to date.
New air filtering systems to reduce saturation in close environments could make the difference when choosing a restaurant or a pub in place of another lacking adequate ventilation.
Cinemas where the “VIP seat” service is considered a special treatment could make this an everyday feature and keep alive, in this way, a market strongly attacked by alternative viewing systems as ultra HD streaming and 8D audio.
This is not a war. Once you fight a war you move on. This pandemic will come back, with a different name from the previous SARS and the ongoing CoViD19. This weapon of economic and social destruction will knock again at our door, pushed by climate changes or fueled by different cultures of environmental or personal hygiene.
Viral attacks will not disappear, precisely like Ebola, Marburg, and Dengue have not disappeared. But we can — and must — prepare to face adequately and sustainably the next attack. We already know this will not be local, but global. Our Europe is not only European, but also Chinese, African, Middle Eastern, Indian, and of all the countries that see us as the cradle of civilization and social liberation.
I admire Mario Draghi, but this is not a war. This is and will be our everyday life and, as such, we have to manage it with moves that have a less emotional and suggestive vibe and a more economic and financial character.