Who Will Prosper After the Plague?

Who Will Prosper After the Plague? By Joel Kotkin.

By disrupting smaller grassroots businesses while expanding the power of technologies used in the enforcement of government edicts, the virus could further empower both the tech oligarchs and the “expert” class leading the national response to the crisis.

In our increasingly feudal society, the small property owning yeomanry who operate the local businesses essential to Los Angeles shopping streets, and New York neighborhoods are already under threat and will be squeezed further by both the pandemic and its aftermath.

But even more hard-pressed will be the growing, propertyless serf class that includes laid-off workers and the roughly 50 to 60 million workers in essential jobs … and of those, 35 to 40 million require close physical proximity as opposed to those who can retreat to safety behind their computers. Roughly 70% of these workers are in low-wage professions, such as food preparation, and often, despite their increased risk, often lack health insurance from their employers. …

Over time, the crisis is likely to further bolster the global oligarchal class. The wealthiest 1% already own as much as 50% of the world’s assets, and according to a recent British parliamentary study, by 2030, will expand their share to two-thirds of the world’s wealth with the biggest gains overwhelmingly concentrated at the top 0.01%.

In an era defined by “social distancing,” with digital technology replacing the analog world, the tech companies and their financial backers will prove the obvious winners. In a sign of what’s to come, tech stocks have already soared. The biggest long-term winner of the stay-at-home trend may well be Amazon, which is hiring 100,000 new workers. …

Barely 3% of low-wage workers can telecommute but nearly 50% of those in the upper middle class can. While workers at most restaurants and retail outlets face hard times, professors and teachers will continue their work online, as will senior bureaucrats. …

The hardship caused by today’s crisis is particularly evident in retail, where 630,000 businesses have already shut down. … Since the pandemic some 87% of small-business owners now say that they are struggling in a Wallet Hub survey, and a full third predict they will fail if conditions don’t change in the next three months. …

Restaurants, small retail establishments and “personal service” establishments like salons and gyms will experience the greatest pain. In the past their primary selling point against larger firms has been their independence and familiarity with customers. Many have taken on debt they may have trouble to pay off. According to the JP Morgan Institute, 50% of small businesses have a mere 15 days of cash buffer or less. If the shutdown lasts much longer as many as three-quarters of independent restaurants simply won’t make it. …

Historically, pandemics have tended to spark class conflict. The plague-ravaged landscape of medieval Europe opened the door to numerous “peasant rebellions.” This in turn led the aristocracy and the church to restrict the movements of peasants to limit their ability to use the new depopulated countryside to their own advantage. Attempts to constrain the ambitions of the commoners often led to open revolts — including against the church and the aristocracy.