We are continuing to see the COVID19 coronavirus spread around the world with a big flare up in Italy. Johns Hopkins maintains a good global map of the outbreak. There are now quite a few experts who believe that the virus may be impossible to contain and could result in a global pandemic. This is something the world is woefully ill prepared for.
The danger we are now finding ourselves in can be directly traced to our reliance on the market mechanism for allocating attention. A global pandemic is an example of the kind of tail risk for which prices cannot exist. This is a key theme of my book World After Capital and I have been using pandemics as an alternative example to the climate crisis (another, while we are at it, are asteroid strikes).
Now why am I saying this is about attention and not capital? Don’t we need way more hospital beds? Well, once a pandemic is in full swing yes we will be capital constrained for sure. But we had a long time before that to work on such things as detection and treatment. SARS, which occurred nearly two decades ago, was also a coronavirus. Since then we have had another reminder of the potential danger in the form of MERS about eight years ago.
I very much hope that the experts are wrong and that COVID19 can be contained. No matter what happens, we must learn to allocate attention to tail risk threats (and opportunities, eg. nuclear fusion) outside of the market mechanism if we want humanity to progress.
PS I also wrote a prior post that relates the virus outbreak to privacy and democracy (two other themes in World After Capital)