In Fight Against Coronavirus, We Need to Protect Both Lives and Livelihoods. The Economy Matters Too | Opinion

Coronavirus will bankrupt more people than it kills. Governments must calm the hysteria, not fuel it, and realize that Covid-19 is an economic disease as much as a physical one. So far it has tragically taken 6 lives in the UK and 27 in the United States. (Italy, Iran and mainland China are a vastly different story.) In most of these cases, the victims were elderly and had pre-existing health conditions. Completely healthy and growing businesses, however, are being paralyzed en masse not by the virus itself, but by the panic surrounding it.

We need both the health and economic threats to be taken seriously - without one eclipsing the other. Although the death rate has been relatively low, any loss of life is a tragedy. Despite the relatively low numbers of deaths, the global movement of people and goods has ground to a halt, and travel plans and supply chains that we took for granted just weeks ago now seem like unimaginable luxuries. This has affected my own business significantly, as well as many of my colleagues in the startup community around the world.

The silver lining is that Coronavirus may be the shock we need to recognize the fragility in our current model of endless consumption and embrace new models, like recycling and the circular economy. This can deliver the stability that we so sorely need. If 4,000 deaths in a population of 7.7 billion—the deaths of 0.000053 of the population, in other words—can lead to a 10 percent wipe-out of our stock markets, we need a better, more reliable system.

For most of us, the fear of coronavirus symptoms is still abstract and theoretical. The financial and economic symptoms, however, are starting to affect us all. As imports, meetings and even employee attendance crumble, this appears already to be comparable to the financial crisis of 2007-2008—and this is while the outbreaks in industrialized countries west of Italy are only beginning to climb toward their peaks.

And just as the last financial crisis forced us to think about how to make global capitalism more sustainable, this one will be no different.

Our leaders, however, seem to be in denial about both the scope and the significance of what is happening. President Trump has called Coronavirus a hoax, and Boris Johnson's new chancellor, Rishi Sunak, has refused to follow the advice of prior Chancellor George Osborne and make Wednesday's budget a "Coronavirus budget".

Coronavirus is very unlikely to kill you, but it looks almost certain to cripple your financial plans. This is partly because of a feedback loop between the health scare and economic one: As the health authorities increase their warnings exponentially, markets shudder. As markets collapse, many of us assume that there must be an even bigger underlying health scare - one that perhaps the powers that be do not want us to know about. And so the cycle of fear and conspiracy continues.

It is time this crisis started to be managed by the economists alongside the doctors, the banks right behind the pharmacists. The governments, meanwhile, must ensure that cautioning and informing the public does not slide into scaremongering. Caution is essential to avoid human suffering, but in overplaying this the authorities are inadvertently increasing the human cost—in the form of lost livelihoods— beyond what is likely to be caused by the virus alone.

Governments must instruct us to take enough health precautions—but just enough. Beyond that, they must secure short-term funding to keep businesses steady until the storm passes.

Winston Churchill is quoted as saying "never waste a good crisis", and his words are as relevant as ever. Just as the last financial crisis paved the way for ethical capitalism and sustainable consumption to enter the mainstream, the coronavirus crisis may lead to those values finally being adopted by the masses.

My children intuitively understand the principles of sustainability, and perhaps it is time we re-engineered the way we live and trade to reflect that. This is no longer about "principles", but about our simple self-interest: In economic terms. a more circular economy can deliver a sustained bull market—something that we all want.

The circular economy has been growing for some time: trading in and recycling is increasingly popular, especially with tech products that are marketed as requiring updating far more regularly than is necessary. As the flow of cheap goods from China dries up, the secondary market in used devices will develop. We may even see "vintage tech" emerging in the same way that concerns about fast fashion fed the trend of vintage clothing.

Just as the way we consume may change, so may the way we work. Many bosses are still cynical about remote or flexible working - something that, if done right, can help productivity, workplace inclusivity and the environment (commuting is as bad for the Earth as it is for our souls.) If those managers are forced to embrace home working and see its benefits, that change may stick.

Coronavirus may turn out to be the beginning of a profound cultural shift and a painful example of the "creative destruction" economists like Joseph Schumpeter tell us we need to thrive. But our governments can protect our livelihoods as well as our lives, until it passes.

Asad Hamir is a tech entrepreneur with a focus on sustainability, and co-founder of Klyk.

The views expressed in this article are the author's own.