Zbigniew Piekarski looks into the future to show how history will repeat itself.
Imagine this as a history lesson from the 23rd century on severe economic contractions that bring on pandemics. The most famous pandemic that swept through Europe was in the 14th century, and we can see certain similarities with another pandemic that occurred in the early 21st century.
In the 14th century, the European economy was experiencing difficulties. Europe was approaching the limits of expansion, both on its frontiers and in reclaiming land from forest and swamp. The arrival of the Mongols and the Ottomans disrupted trade routes, and certain areas were edging into depression. Worse, the overall climate was changing with cooler and wetter weather creating lower crop yields even as the population was increasing. By the early 1300s, reoccurring famines meant that cannibalism was commonplace.
The Church was in poor shape. The popes resided at Avignon, not in Rome. Heresy was found in England, Bohemia and southern France, and the Church seemed unable to control it. The Holy Land had been lost in the 1290s, and efforts to recover it had been dismal failures.
The Hundred Years' War added war to famine. The English started to fight with the French. The Battle of Crecy in 1346 opened the hostilities, with 12,000 English defeating 36,000 French. The French became so vexed that they slaughtered their own mercenaries, the Genoese. Soon mercenary armies appeared, which served one king or the other or - when neither king could pay - would roam the countryside in search of plunder.
Then, just as people thought that it couldn't get any worse, a visitor from China by the name of Yersinia pestis arrived along the trade routes, and between 1347 and 1351 more than 33% of the European population died. The loss of population on this scale changed Europe forever and released an avalanche of new solutions. The search for the cure formed the beginning of modern medicine, as the Four Humors Theory plainly did not work. Religion had to relax its grip, as it failed to provide an answer for the majority. Religious individuals of a sadomasochistic persuasion became the "flagellants" who wandered from town to town mutilating themselves, killing any clergy who disagreed with them and any Jews that they encountered.
The Plague, the Pestilence or the Great Mortality had three different forms. Bubonic plague was the most common. Egg-sized swellings appeared at the site of the fleabite usually around the groin, armpits or neck. Agonizing pain followed. Purplish blotches formed and frequently encircled the waist as blood hemorrhaged under the skin. Death occurred within four to six days.
Once the infection mutated into the lungs, then pneumonic plague appeared. A cough, a sneeze or the mere act of breathing transmitted the disease. Symptoms included the vomiting of blood and skin ailments. The pneumonic form could strike with an abruptness that added to the terror. (Pneumonic plague was the form thought to be the greatest risk from bioterrorists.)
Even now when nursery children in England sing "Ring-a-ring o' roses, a pocket full of posies. A-tishoo! A-tishoo! We all fall down," they are referring to the pneumonic plague as it was thought that the smell of flowers could prevent infection.
The plague mutated again to septicemia, which became the most deadly and most painful version as a massive number of bacilli invaded the bloodstream, and the body exploded with the disease. Death occurred within a day, even before the symptoms appeared, which consisted of a rash or skin abrasions.
Angelo di Tura, a chronicler of Siena, described the atmosphere as one in which "father abandoned child, wife husband, one brother another; for this plague seemed to strike through breath and sight, so they died."
You probably have not heard about the next outbreak that began in 1892 in Yunnan, China, and spread to India by 1896, killing approximately six million people in India alone; for it did not affect Europe. You may also not know that it still exists everywhere in the world. It is quite common among rodent populations - rats, of course, but squirrels, rabbits and skunks as well - and still leads to localized outbreaks in humans.
From this climax of human misery and disease, it took humankind more than six and a half centuries to reach a peak of prosperity and health - and then a severe economic contraction set in and a new pandemic appeared.
Like the 14th century, the early 21st century was not a good time for Europe. It was a bear market of historic proportions. The European economy was in difficulties, and more than 33% of the working population was destined to retire within 30 years. Not one state was able to provide promised health and welfare benefits. The climate was changing with warmer and wetter weather enabling the arrival of the mosquito and the diseases that it produced. The fear of terrorism added to the destabilization.
A month after the world markets reached the first of their many "lowest" levels in October 2002, a new disease was identified as having originated from China. It was called SARS (severe acute respiratory syndrome) and was initially contained. However, the bacteria had, by then, acquired increased resistance to antibiotics and were capable of rapid mutation.
A few years later a variant of the disease started to spread along the trade routes of the world.
On the WSE: The WSE is about to erect a statue to Daniel Baraniuk, who achieved a World Record in 2002 in Heidepark, Soltau, Germany by sitting atop a 2.5-meter pole from May 15-Nov. 27 - 196 days and nights. His closest competitor fell off in October that year. Therefore a Pole sitting on a pole and staying there just because there's nothing better to do will become the new emblem of the WSE as it valiantly resists the meltdown of other exchanges into September.
Zbigniew Piekarski is a Warsaw-based portfolio manager. He can be reached at zbigp@bipnet.pl.
