As the world now registers over 1 million tested and confirmed COVID-19 cases, life continues to stall in unprecedented ways. Lockdowns and stay home orders continue to be administered in the majority of the world’s developed countries, and storefront/transportation businesses such as restaurants, bars, event venues, airlines, etc. continue to count down their days to bankruptcy (or bailout, in airlines’ case).
Coronavirus has unleashed a black swan event on our world unlike anything in recent decades, and totally unprecedented in the post-Cold War modern era. The events of this pandemic is changing how things function in many countries, and some of these changes are almost certain to be permanent, as we head into a vastly different post-coronavirus reality.
In this post I will summarize several key changes that are taking place right now in the midst of this pandemic – changes that I believe will be permanent even after the world recovers from this crisis.
1. Remote Work Arrangements Becoming the Norm
Throughout this pandemic, companies had no choice but to settle for work-from-home (WFH) arrangements. It was the only possible way for most digital product/service companies to keep productivity going without risking virus spread.
With this WFH situation, many employers are discovering that WFH is functioning better than they may have expected, and many employees are discovering that they may actually be more productive working from a quiet home environment.
The question now is – when things “return to normal” or are close to returning to normal (like in parts of China right now), who will return to an office work environment and who will not? My guess is that more digital skills employees (e.g. software engineers) will demand remote work arrangements from their employers, and more employers will agree.
Through this great WFH experiment, both employees and employers in digital product/service related industries are realizing that maybe it’s not necessary to put 30 people in a large room decorated with ping pong tables and bean bags to be productive. The trend is likely to stay.
2. Doing Everything Online Becoming the Norm
As humans we will always adopt things based on greater convenience and stimulation. The transition from offline to online was already happening in this millennium, since online is faster, more efficient, and requires less physical effort. The COVID-19 pandemic and people being forced to stay home and cope meant that the transition just got accelerated.
Having lived in both Europe/North America and Asia (China), I can say that the attitude towards adopting novel digital technology has been more conservative in the West. People in the West have generally been more wary of losing privacy or security risks, and thus were slower adopting mobile payments, delivery apps, etc. In China, on the contrary, mobile payments and delivery apps were practically adopted nationwide overnight (2015-2016). The pandemic has forced people to use apps, and forced businesses to accommodate the new digital era of providing service.
The usage of co-working applications such as Jira, Slack, and Zoom have been growing rapidly in 2020, and Virtual Reality (VR) events have the potential of becoming the norm in the future (Fortnite virtual concert, VR conferences, etc.). On the social side, dating and social validation are already largely digital (Instagram, Tinder, etc.), and will likely be almost entirely digital in the future. After all, who wants to waste time and money traveling around to physically be somewhere when they can almost achieve the same result in their pajamas with only a fraction of the effort. Also, when you are doing it in your pajamas at home, you can use Photoshop.
3. Tighter Borders and Increased Xenophobia
This pandemic has served as a shock event to nation states around the world and their leaders. A lot of countries have indeed closed borders during the pandemic, and some will remain closed for a while. This has shown that strict border control is very easily achievable by governments, and leaderships around the world will likely use the method at their convenience going forward.
We have been on the globalization trajectory for so long, that it got to a point where anybody shutting borders to outsiders is considered a bigot or racist (recall the Migrant Crisis in Europe in 2015). Now that the elephant in the room is out thanks to COVID-19, I wouldn’t be surprised to see some governments using excuses to shut borders in order to fulfill their agenda. You can already see some of this happening in countries like Hungary and China.
As well, an unfortunate byproduct of COVID-19 will be increased racism and xenophobia around the world. East Asian people will almost certainly suffer more incidences of racism worldwide for the next year or so, and COVID-19’s accompanied economic and political fallout will lead to an increase of frustrated and unemployed youth in many countries, who often will use xenophobia as a crutch to explain their dire situations.
We’ve already seen the peak of globalism in my humble opinion – nationalism and statism are back in ascendency, especially with a confused younger Gen Z population eagerly looking for answers in all the wrong places.
4. Political and Economic Policies Leading to Lower Standards of Living in the Developed World
Since the Great Financial Crisis of 2008, it has become increasingly obvious to the average person that many world leaders are clearly lacking in leadership and integrity. Irresponsible fiscal policies in most Western nations led to skyrocketing sovereign debt, with the subsequent solutions being dropping interest rates to zero and printing enormous amounts of new fiat money. These are the easy temporary fixes that politicians love all-too-much, because they keep things together while these politicians see out their tenures. However, the long term effects of this financial snowball should be quite disastrous.
We saw recently that during the COVID-19 induced March 2020 stock market crash, central banks used all their quick fix methods in the arsenal – dropping interest rates, artificial stimulation – to little effect. The bubble has grown so large that when it starts leaking, temporary bandages are no longer enough to cover the leaks.
It’s likely that going forward, the central banks will continue to print money to stimulate the economy. As I mentioned in my last article with the Cantillon Effect, new money injected into the system will mostly only go to those at the top. People of the middle class and the bottom rungs of society get nothing other than inflation as a result of increased money supply.
If this trend continues (and it likely will), we will definitely see a greater socioeconomical gap between the rich and poor, in North America, Europe, and many other nations. When the gap becomes too big and essential goods (food) become too expensive for the lower class, the only result will be social unrest and riots. We’ve already seen this happen in cities like Paris and Santiago (whether justified or not), and I expect to see more such instances worldwide in the upcoming years.
5. The World in General Will Become More Unsafe
With impending economic struggles and a further division of social class, coupled with the envy and exposure we get with social media, I expect the world to become more unsafe for daily life. There will be more petty crime, muggings, robberies, and such – we have already been observing such a trend in so-called developed world cities such as London, Paris, and San Francisco. Many such developed metropolises are no longer safe to walk around in at night. Limited by resources and bureaucracy, central social services such as the police will not be able to keep up with the increase in petty crime cases.
Having been living in Asia, I can say that East Asia will be one of the safest places in the world to live and work for this decade. The efficient (in some cases hardline) governments coupled with a less confrontational culture mean that countries such as China, Japan, South Korea, and Singapore will continue to be very safe places to live.
6. Increased Informational and Financial Surveillance
We’ve already been on the path of increasing informational and financial surveillance for several years, with the NSA, battle for the 5G networks, China’s Great Fire Wall, etc. Now, with the COVID-19 pandemic, some authorities have jumped at the opportunity to banish cash due to “its potential as a virus transmission device.”
The war on cash is totally on, and coronavirus just gave authorities whole new ammunition.
Taking away cash removes the last remaining century-old concept of individual financial sovereignty – holding gold bars is already banned in some countries or next to impossible to achieve in others. Now, all your money will simply be digits in a bank’s database, being at their mercy.
Luckily, Satoshi Nakamoto invented bitcoin for this specific purpose – a decentralized network of money with no central authority, which gives individual ownership and sovereignty to each bitcoin holder. With the way things are going, I am more bullish than ever that bitcoin will become a parallel global monetary system and store of value – it is scarce like gold but electronic, and therefore concealable, borderless, mobile, and highly convenient.
Another great financial crisis will certainly turn many more people towards the camp of “lost faith in the government and big banks,” and this will also be bullish for bitcoin as an economic alternative.
Stay safe everyone, keep your masks on (unlike what the lying SOBs at WHO have been telling you), and prepare yourself for an uncertain future.
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