Health and Healthcare Systems

Historian Niall Ferguson on what the pandemic means for the global economy, geopolitics - and parties

Niall Ferguson, Senior Fellow, Hoover Institution, Stanford University, USA and David M. Rubenstein, Co-Founder and Co-Executive Chairman, Carlyle Group, USA; Member of Board of Trustees of the World Economic Forum speaking in the Leadership Lessons: Through the Lens of History session at the World Economic Forum Annual Meeting 2020 in Davos-Klosters, Switzerland, 23 January. Congress Centre - Spotlight. Copyright by World Economic Forum/Manuel Lopez

Historian Niall Ferguson at the 2020 Annual Meeting in Davos. Image: World Economic Forum/ Manuel Lopez

Charlotte Beale
Our Impact
What's the World Economic Forum doing to accelerate action on Health and Healthcare Systems?
The Big Picture
Explore and monitor how COVID-19 is affecting economies, industries and global issues
A hand holding a looking glass by a lake
Crowdsource Innovation
Get involved with our crowdsourced digital platform to deliver impact at scale
Stay up to date:


In January, Niall Ferguson warned his readers to “brace yourself for a coronavirus pandemic”.

The economic historian has been a vocal critic of early complacency in the face of uncertainty around the virus, and a supporter of countries that reacted fast and decisively, such as South Korea.

"There have been two pandemics in history that killed nearly a third of humanity", Ferguson said.

"One in the time of the ancient Romans, the Antonine Plague, and of course the Black Death of the mid-14th century. There was no way of knowing in January if this was the big one.

"The 1918-19 influenza killed 3% of the world's population - not in the same league as the Black Death, but 3% of today's world population is a pretty big number.

"So getting people to realize the risk in January, when we knew almost nothing except that there was an infectious disease, that it was going from human to human, and that it was killing people, was difficult."

In an interview for the World Economic Forum’s World vs Virus podcast, Ferguson discussed lessons from history for the economic recovery ahead; the potential impact of the virus on geopolitics and globalization; and why lockdown life suits some people - including him.

Ferguson is currently the Milbank Family senior fellow at the Hoover Institution, Stanford and Managing Director of Greenmantle, a macroeconomic and geopolitical advisory firm.


What can history tell us about the world's current economic situation?

We are now in the biggest economic shock since the Great Depression. The big question is: can we get out of it quickly?

If you look at the forecasts that investment banks produce – and indeed governments – wonderful V-shape projections suggest that we'll be back to where we were at the end of 2019 by some point in 2021. If you believe that, I'll sell you a bridge, because there's no way this is going to be a V-shaped recovery.

Even the much smaller financial crisis of 2008-2009 was followed by pretty slow recovery. People used to worry about secular stagnation. It took six years for unemployment to get back to where it had been prior to the 2008 crisis. The idea that we're going to merrily go back to where we were in a matter of months is entirely at odds with economic history.

A shock like this can inflict a very, very sharp decrease in economic activity, but you will not get an equally sharp recovery. So there are two things one has to take away from the economic history and the history of pandemics.

One: pandemics take a while - typically two years. There's usually more than one wave. Sometimes you get three, like in 1918-19, and a lot depends on whether you get a vaccine in that two-year timeframe. There's no certainty that we will, although the chances are probably better than at any time in history, because of the sheer number of projects to find a vaccine.

Have you read?

The second point is that any economic shock of this sort takes time to recover from. And although fiscal and monetary policy are being used on an impressive scale – in fact, on a scale we haven't seen since World War Two – a pandemic is not a war.

In a war, you employ a lot of people, mostly men, to go and fight, and then you employ a lot of people, including women, to make things they can fight with. But that's not what pandemics are like. There's no great production stimulus. We're already past the point at which the world is short of ventilators, even if ventilators were useful – which is itself not clear.

So a pandemic is much more of a deflationary shock than a war, because there isn't the offsetting demand for labour and resources that you got in the 20th century, in time of war.

Recovery shapes have become a parlour game for economists. I just say: imagine a tortoise-shaped recovery, where you start on the shell and you go down to the point at which the neck connects with the body, and then you go up. But the head, where you finally get to, is quite a way below where the shell was.

There's a need to recognize how difficult it will be to get the world back to where it was at the end of 2019. We're in a much different place, and it's not clear that normal service can ever be resumed in air travel, in tourism or in entertainment, as long as there isn't a vaccine or a very effective therapy. Activities that essentially were predicated on gregariousness, on people being in quite close proximity to one another, can't recover.

You can tell people: the lockdown's over, back to work. They've already done that in China. But you can't tell them: go out shopping, go to the movies. They're not going to do that, because people are rational. Up to a certain point, they adjust their behaviour and try to avoid situations that would likely cause disease spread to resume.

What does the pandemic mean for globalization?

Globalization was in retreat already. I've been arguing for some time that peak globalization was probably 2006-2007. The financial crisis dealt it a blow. Then there was a political backlash that produced populist governments, and protectionism was back on the agenda.

All this has been playing out for more than 10 years. But the pandemic's a real setback for globalization, because it exposed something I've been arguing about for a while, and most recently in my book The Square and the Tower.

If you build a highly integrated global network, then you are vulnerable, because highly integrated networks are great at spreading things like viruses.

In the same way that highly integrated online networks can spread fake news and malware computer viruses, a transport network like the one we had built by the end of 2019 was perfectly designed to make sure that a virus like Sars-CoV-2 could spread to pretty much every country in the world, in an amazingly short space of time.

We can't go back to the world of 2019, in a number of respects. I don't think we should assume there'll be a post-COVID-19 era, any more than there's a post-influenza era, or a post-tuberculosis era, or a post-AIDS era. There are a whole bunch of diseases that we simply learn to live with as a species, because we can't eradicate them and we can't successfully vaccinate against them. It's better at this point to imagine a world with COVID-19, rather than a world after it.

In that scenario, a couple of things are clear. First of all, bigger isn't always better. The countries that have handled this crisis the best are not the big ones. The big guys have really underperformed. The winners, if you want to use that terminology, have included really quite small countries such as South Korea, Israel, New Zealand.

Small is beautiful in the pandemic. There are diseconomies of scale. If you're large, you've got a large border. It's hard to keep a virus out of a country like the US. You can't exactly shut the state border. Even if we wanted to here in Montana, we couldn't actually just shut out traffic from, say, New York, where the disease has done the most damage.

Secondly, Cold War Two, between the US and China, is very clearly a reality. If you doubted it last year when I first started talking about it, it's surely obvious now that the relationship between the US and China is very badly damaged. A common enemy like Sars-CoV-2 hasn't brought the two sides together. Quite the opposite - there's been a war of words.

I look back on the endless conversations about trade deals last year with a certain amount of amusement. At this point, the whole issue of trade has receded, because we're now more focused not only on this info war, but also on technology war issues, that I think are really more important than the trade war. So that's a key takeaway right now: Cold War Two is a reality.

How could the pandemic change the world for the better?

We won't go back to travelling around as much as we did for meetings. People are adjusting to having conversations on platforms like Zoom. I think that's a good thing for a whole variety of reasons.

More generally, I have never been somebody who liked parties or crowded bars. I was always somebody who liked to live in a relatively isolated spot. From my vantage point, the world's going my way. All the things I used to hate about the world, like flying far too frequently and having to go to conferences, are going to be rather satisfyingly diminished.

I recently wrote that to learn how we'll change our behaviour socially, ask how we changed our behaviour sexually after the discovery of HIV/AIDS. The answer: it will change a bit, but not entirely. Even when it was clear that HIV/AIDS was lethal, and before there was any kind of effective therapy, people didn't wholly change their behaviour. They continued to have unsafe sex.

I think we'll continue to have unsafe socializing, even when this virus is threatening our lives, because that's how humans are. We are not terribly good at radical adaptation of our behaviour.

My own personal response is to say - hurrah. I can spend more time with my wife and children than I used to, travel less, live in a more secluded way. For me, that's a clear win.

But for the majority of people who are more sociable and don't have the option to live in a remote part of Montana, this is not good news. Most people will find a permanently socially distanced world rather miserable and depressing, even as I'm enjoying it.

Don't miss any update on this topic

Create a free account and access your personalized content collection with our latest publications and analyses.

Sign up for free

License and Republishing

World Economic Forum articles may be republished in accordance with the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Public License, and in accordance with our Terms of Use.

The views expressed in this article are those of the author alone and not the World Economic Forum.

Related topics:
Health and Healthcare SystemsEconomic GrowthGlobal Cooperation
World Economic Forum logo
Global Agenda

The Agenda Weekly

A weekly update of the most important issues driving the global agenda

Subscribe today

You can unsubscribe at any time using the link in our emails. For more details, review our privacy policy.

Gender and health equity will only come with universal access to eye health – here's why

Dr. Princess Ifeoma Ike

May 24, 2024

About Us



Partners & Members

  • Join Us

Language Editions

Privacy Policy & Terms of Service

© 2024 World Economic Forum