Did the Response to the Black Death Promote Human Flourishing, While the Response to COVID-19 Encourages Dependence?

Some interesting contrasts with the plague that reduced the European population by almost one-half.

In their book The Black Death and the Transformation of the West, David Herlihy and Samuel K. Cohn Jr. describe how the Black Death of the fourteenth century in Europe (a pandemic that killed between 30 and 60 percent of the European population) led to the transformation of the feudal caste system into a freer, more market-driven system.  This was because the Black Death so depleted the labor supply that the survivors could demand higher wages, and whole new groups of people previously denied access to the labor market were invited in.  As Herlihy and Cohn write:

The civilization that this economy supported, the civilization of the central Middle Ages, might have maintained itself for the indefinite future. That did not happen; an exogenous factor, the Black Death … gave to Europeans the chance to rebuild their society along much different lines.

The large mass of a people craving opportunities to work required old guard institutions to open themselves to industrious new recruits:

The legal systems of late medieval Europe also had to respond to the extraordinary social situation created by an epidemic. Under conditions of plague, certain “privileges,” as they were known in the legal language, went into effect. Women, for example, could now serve as witnesses, and scribes not formally admitted into the guild of notaries could draw up legal contracts. Society needed certain services, and at these moments of crisis it had to allow even the unlicensed or people believed to be incompetent to perform them … [T]o enlist constant numbers out of a shrinking pool, the guild had to spread its net broadly and bring in new apprentices with no previous family connection with the trade … Probably in all occupations, the immediate post-plague period was an age of new men.

And wages skyrocketed as the smaller, but eager, working-age population took advantage of its new opportunities:

Besides commodity prices, the costs of the classical “factors of production”—labor, land, and capital—also responded to the new conditions. Of these production costs, the one most dramatically affected was that of labor. The falling numbers of renters and workers increased the strength of their negotiating position in bargaining with landlords and entrepreneurs. Agricultural rents collapsed after the Black Death, and wages in the towns soared, to two and even three times the levels they had held in the crowded thirteenth century.

The Black Death also freed up resources such that formerly overlooked opportunities for growth could be pursued:

[O]ver the long run, the [Black Death] conferred advantages too. Above all it freed resources. The collapse of population liberated land for uses other than the cultivation of grains. It could be turned to pasturage or to forests. In the past mills and mill sites had served predominantly for the grinding of grain. They now could be enlisted for other uses: the fulling of cloth, the operation of bellows, the sawing of wood. Even as the population shrank, the possibility of developing a more diversified economy was enhanced … In the urban economy, the substitution of capital for labor meant the purchase of better tools or machines—devices that enabled the artisan to work more efficiently. Frequently too, the policy of factor substitution involved technological innovation, the development of entirely new tools and machines. High labor costs promised big rewards to the inventors of labor-saving devices. Chiefly for this reason, the late Middle Ages were a period of impressive technological achievement … [T]he late medieval population plunge raised labor costs, and also raised the premium to be claimed by the one who could devise a cheaper way of reproducing books. Johann Gutenberg’s invention of printing on the basis of movable metal type in 1453 was only the culmination of many experiments carried on across the previous century. His genius was in finding a way to combine several technologies into the new art … The advent of printing is thus a salient example of the policy of factor substitution which was transforming the late medieval economy … A more diversified economy, a more intensive use of capital, a more powerful technology, and a higher standard of living for the people—these seem the salient characteristics of the late medieval economy, after it recovered from the plague’s initial shock and learned to cope with the problems raised by diminished numbers. Specific changes in technology are of course primarily attributable to the inventive genius of individuals. But the huge losses caused by plague and the high cost of labor were the challenge to which these efforts responded.

This led to a tremendous increase in the standard of living:

Europeans, even as their numbers declined, were living better. Many moralists complain of the extravagant tastes for food and attire which the lower social orders now manifested. Matteo Villani remarks: “The common people, by reason of the abundance and superfluity that they found, would no longer work at their accustomed trades; they wanted the dearest and most delicate foods … while children and common women clad themselves in all the fair and costly garments of the illustrious who had died.”

And greater access to better goods for all helped demolish previously-existing class systems defined by one’s ability to enjoy a good life:

Conspicuous consumption by the humble threatened to erase the visible marks of social distinctions and to undermine the social order. The response of the alleged prodigality in food and clothing was sumptuary laws, which governments enacted all over Europe in the fourteenth and fifteenth centuries. They tried to regulate fashions, such as the size of sleeves or the length of trains in women’s dresses; meals, such as the food to be served at weddings; or customs, such as the number of mourners who could attend a funeral. The repetition of these laws suggests their futility. High wages to the poor and improved living standards came to be irremediable facts of late medieval economic and social life.

Governments, still controlled largely by an ancient elite intent on preserving the old status quo, did what they could to inhibit these new opportunities:

Governments tried to cap the swell in wages and to shore up the shrinking rents. They sought to hold prices and wages to previous levels and insisted that workers accept any employment offered them. But they succeeded only in sowing discontent and in provoking social uprisings in city and countryside.

As Herlihy and Cohn summarize:

The great population debacle of the late Middle Ages did not, in sum, introduce an entirely new demographic system. But it did redistribute the population between the two tiers of the traditional system. Depopulation gave access to farms and remunerative jobs to a larger percentage of the population. High wages and low rents also raised the standard of living for substantial numbers. They became acquainted with a style of life that they or their children would not want easily to abandon. For a significantly larger part of society, the care of property and the defense of living standards were tightly joined with decisions to marry and to reproduce …

So it seems that, whereas the Western European response to the tragedy of the Black Death led to the unleashing of a more eager and productive labor force, the American response to COVID-19 today has led to greater retirements, and to even fewer prime working age and able-bodied people participating in the labor force.  As reported by the Federal Reserve Bank of St. Louis, “The labor force participation rate registered its largest drop on record in 2020 [and] the COVID-19 recession was abnormal in the sense that it featured a sharp downturn in real economic activity but also rising asset values, such as for housing and stocks … The large rise in asset valuations during the pandemic suggests that retirement may have become feasible for many people.”

Whereas the Black Death led to rising wages for workers, the American government’s massive stimulus and new entitlement spending has led to inflation.  As the Congressional Research Service states, “Expansionary fiscal policies include an increase in the budget deficit by … increasing government spending or transfers to individuals. Such policies work to increase overall spending in the economy by driving up consumer demand … The downside to achieving these benefits through expansionary fiscal policy is that it can result in demand-pull inflation …”  As the American Enterprise Institute reports, “The CARES Act (March 2020) was the first [federal] relief act, which allowed ERS Quintiles 1, 2, and 3 [those with the lowest Equifax credit scores] to quickly recover and then exceed pre-COVID spending levels on an inflation-adjusted basis (orange line). Other relief acts followed.”

And this inflation has reduced worker wages on net, even as fewer workers are willing to work.

Whereas the Black Death raised standards of living in ways that people overwhelmingly wanted to pass on to the greater numbers of children they had, the response to COVID-19 today has resulted in, as the Census Bureau recently reported, the “U.S. population [growing] at a slower rate in 2021 than in any other year since the founding of the nation, based on historical decennial censuses and annual population estimates … [P]opulation grew only 0.1% [and] the COVID-19 pandemic exacerbated the slower growth the country has experienced in recent years.”  And the response to COVID-19 today has intensified the excessively risk-averse tendencies of many, especially in Democrat-run urban areas, which has driven a polarization in the desire for new children.  As Timothy Carney points out, “Throughout the pandemic, fewer people in America reported a desire to have children. That change, however, is almost entirely among Democrats, according to a study by the American Enterprise Institute, the Institute for Family Studies, and Brigham Young University’s Wheatley Institute.  Republicans were actually more likely to want babies post-pandemic, while desire among Democrats for children fell by a net of 12 percentage points.”

And whereas the Black Death led to an elimination of the feudal caste system, the welfare spending response to COVID-19 may be creating a new feudal-style class of people more dependent on government.

So while the Black Death led to a greater share of people participating in the labor force, higher wages, a higher birth rate for a people optimistic about the future, and the end of the feudal caste system, the massively increased government spending on welfare and new entitlement programs in response to the COVID-19 pandemic today has led to an acceleration in the number of able-bodied people leaving the labor force and retiring earlier, lower wages on net due to government stimulus-fueled inflation, lower overall birth rates reflecting pessimism in the future, and the creation of a larger feudal-style caste of those more dependent on government.

It would be strange indeed if the effects of the Black Death turned out to promote human flourishing, whereas modern responses to COVID-19 turned out to promote human stagnation and dependence.