If you are still on holidays or about to pop off for a few days before the ‘back to school’ period, and are looking for a good book to read – perhaps one that titillates with stories of abbots cavorting with young ladies- then I can heartily recommend The Decameron, which does all that, and more.
Giovanni Boccaccio’s Decameron was one of the first literary masterpieces of the Renaissance. It is set in a villa outside Florence, at the height of the Bubonic Plague. Seven women and three men flee the Plague, ensconce themselves in a villa and spend ten days flirting, philosophising and debating. It originally came to my mind in May 2020, the third month of the COVID lockdown as I searched for templates for what the post-COVID world might look like.
Society changed for ever
The Black Death radically changed Europe, largely through the demographic effect that a 30% reduction in population had – in England nearly 40% of land changed hands, a shortage of labourers meant a rise in wages and innovation in farming methods and produce.
Rising wages for those who survived the Black Death altered the social mix (Walter Scheidel’s The Great Leveler is very good here) to the extent that the wealthy begun to dress more extravagantly in order to distinguish their social standing and in this were helped by regulation (i.e. England’s Sumptuory Laws 1363).
The Black Death also upset the geopolitical map of Europe (similar, much earlier plagues like the Athens Plague and Antonine Plague had profound geopolitical effects), led to trade and banking revolutions and spurred the rise of cities like Madrid and Genoa, and the demise of others like Winchester.
COVID has also changed many things. In May 2020 I thought that if there was to be a post COVID ‘Decameron’ thesis it might revolve around at least three elements – a return of pricing power to workers and corresponding uptick in consumer spending, a broad based improvement in human development and a renaissance in culture and technology.
To tackle the first one, COVID has most certainly disturbed developed world labour markets – where initially retention payments have distorted markets giving way to a very strong labour market, such that it is untypical for unemployment to be as low in face of aggressive interest rates hikes. One sign of this is the welcome reversal of the ‘she-cession’ where proportionately more women than men lost jobs during the COVID period, but female workforce participation in the US is now at a record high.
The overall impression is that workers, especially skilled workers, have more pricing power. The notion of working from home has certainly granted many more ‘liberty’ in how they work and has led to transformations in real estate markets, work practices and eventually I hope, better infrastructure for rural areas. In terms of wages, over the past three years nominal wages have risen handsomely, but parsing recent work by both the ECB and IMF, real wages have not risen much across the developed world. At this point however with inflation ebbing (but expectations of inflation remaining high) we may well be on the cusp of an upward wage spiral.
The second element of the Decameron thesis is the extent to which the COVID crisis will usher in a trend towards improving human development – in developed and developing countries. The components of human development – from life expectancy, to education and healthcare, to economic development – came to the fore during the coronavirus crisis and the value of good, accessible healthcare systems has become abundantly clear. I might even stretch the point to say that well educated leaders, who take science seriously, were better performers than those who did not (Bolsonaro, Trump, Boris).
Having attended a lecture at Trinity College on Monday by Angus Deaton and Anne Case, whose focus is (famously) on morbidity and mortality, it is hard to be convinced that human development is advancing in the US (for instance there is a stark difference in death rates and quality of life between well-educated and less well educated Americans). Life expectancy in the US has dropped precipitously, a development that I think is only matched by the fall in Russian life expectancy in ‘fall of communism’ aftermath.
What is concerning is that there is a broad picture of falling human development. In the two years after the COVID pandemic for which there is data, the UN’s HDI indicator fell for the first time in its history (since 1990), with 90% of countries recording a drop in their HDI score. This reverses the overall rise in human development over the past five years. What is also a concern, is that to my reading, the idea of human development as a policy pillar seems to be absent from political debates in the major economies.
The final aspect of the Decameron thesis I want to touch on is the extent to which there is a renaissance in ‘the way we live now’.
AI, quantum computing, the space economy and bio-engineering are now coming into the public domain, and the strategic competition between the US, China and Europe means that these and other sectors like green energy will receive a huge funding boost, though strategic competition between the regions means that these innovations will develop in a fractioned way.
What is also striking is the frivolity with which some actors invest capital. Last week India managed to land an unmanned spacecraft on the south pole of the moon, for a project cost of USD 75mn, USD 15 mn less than the price Saudi football club Al-Hillal spent on Neymar.
The wealthy should be careful how they spend their money. The idea of wealthy people secluding themselves in a villa to avoid a highly contagious disease is as unpopular today as it was in the 14th century. Again, as Walter Scheidel has pointed out, the Bubonic Plague was eventually a leveller of inequality in the 14th century though plenty of periods of unrest (La Jacquerie in France in 1358 and the Peasants Revolt in 1381 in England).Social and political volatility may well be a feature of our future.