With the virus encouraging more people and businesses to develop online, remote working models, it is going to put a premium on things like high-speed, reliable internet, video, two-way video, etc. And paradoxically, that means digital viruses are even more a threat (and often come from the same places as the biological ones, such as China). So I expect that spending on cyber-security, as well as developing more resilient business models (diversified supply chains, closer-to-home manufacturing of essentials such as medicines), and leaner, more scalable medical services, will increase. That should happen as a free market response, rather than because the State wills it.
This virus will be used to bash free trade, encourage protectionism, and so on. But the verities about the division of labour and comparative advantage remain. Complete self-sufficiency cannot be squared with a high standard of living; autarky means a cramped, sclerotic world. There is a reason that the 1970s sitcom, The Good Life, was indeed a comedy because it took the piss out of the idea of freeing oneself of a complex division of labour. It brings enormous costs.
Protectionism, like its twin, anti-trust, are often the playthings of sore losers in business, and hit the consumer or smaller-scale entrepreneur. We should not lose sight of the enormous gains made since the end of the Berlin Wall and wider expansion of trade.
The current disruption should encourage a more clear-eyed understanding of the risks of doing business with dictatorships and closed societies such as China, and a need to find alternatives where possible. Wholesale theft of intellectual property can no longer be tolerated as easily as in the past. How to deal with that remains a difficult question.
On the need to avoid undue risk, it is worth pondering the following: According to the US broadcaster Tucker Carlson, 95 per cent of generic drugs used in the US are imported from China, although I am not sure what he uses as a data source for this. Most good investors understand the need for good portfolio diversification, so the same surely will apply to supply chains after this virus episode.
The developments might also encourage, or they should, a more self-reliance culture (people should learn first aid, store more non-perishable foods at home and other necessities), and in countries where people have not become too sheeplike, encourage a more robust approach to self-defence and respect for property. Imagine what happens if looting breaks out in certain situations.
Another takeway: this horrible episode has put certain rather silly (at least they are to me) concerns into perspective: PC pronouns for certain genders, “woke” remakes of action films like the much-delayed Bond film, “cancel culture”, etc. It might even remind people that screaming that the world is coming to an end unless we switch off industrial civilisation RIGHT NOW is so silly, and so monstrous, that it blunts the public to legitimate worries out there. Greta needs to put a sock in it, and go back to school and hit the books. And the man formerly known as Prince Harry simply must, for our sanity, fuck off.
