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Education
Apr 1, 2020

Timely Lessons From The Spanish Flu Pandemic Of 1918

Sponsored Content provided by Robert Burrus - Dean , Cameron School of Business - UNC-Wilmington

Greetings from the Cameron School of Business. The hallways might be quiet, but there is a TON of learning going on as we have quickly converted our classes to online classes in the wake of coronavirus. Perhaps we’ll write about how this will change higher education in another blog post. Today, however, we seek to gain some insights about healthcare and economic lessons learned over a century ago during the Spanish flu pandemic. These takeaways include the value of social distancing combined with economic policy to more effectively mitigate the health and economic tragedies.
   
Please note that the name of the flu doesn’t mean that the strain originated in Spain; however, Spain was one of the first countries that reported the severity of the virus. The pandemic overwhelmed the medical establishment and spread very rapidly, particularly in military camps where soldiers were training for combat in World War I. The CDC notes that the pandemic spread in waves highlighted by peaks in colder months – the first wave happened in March-April of 1918, the second hit in September-November of 1918 (almost 200,000 deaths in October), and the third wave commenced in January of 1919. Notably, returning soldiers at the end of the war enhanced transmission.(1)

The Spanish flu was deadly. Estimates range from 20 million to 100 million worldwide deaths with at least a half-million deaths in the U.S. (roughly equivalent to the population of Washington D.C. at that time.) Many researchers have attempted to analyze the small bit of data that exists and conclude that mortality rates and population density during the Spanish flu are related as urban communities were caught off guard by the pace of the virus and healthcare workers had no good treatment options.(2) This is a strong case for social distancing. (Research also shows that there is less of a relationship between excess mortality rates and population density - meaning that the Spanish flu spread about as easily to rural areas as during any other outbreak of flu.)

Universities were also caught off guard with the speed of the spread the virus, and students had to be treated in dorms and gyms.(3) Thankfully, we had adequate warning of the coronavirus at UNCW and students are currently taking classes from their homes.

Along with the spread of the Spanish flu was a call for “social distancing”, and many businesses were ordered to temporarily close. Unfortunately, these mitigating efforts happened well into the spread.  Economic times were tough, with real economic growth slowing in 1919 and economic recession hitting in 1920. One thing to note: it is almost impossible to decouple the aggregate economic impact of the flu and public health policies from the impact of ceased war efforts.

A study on a much smaller scale, using data from Sweden during the Spanish flu, notes that returns from business ownership fell significantly while earnings (wages) were not as impacted.(4) This disproportionate burden on business owners is to be expected given the level of risk that entrepreneurs embrace when starting an entrepreneurial venture including the risk of a collapse in demand.

There are many takeaways from the Spanish Flu as we struggle against COVID-19. 

  • From a healthcare perspective, a lack of social distancing will quickly overwhelm the ability of the medical community to care for patients – communities must act (see Italy). Social distancing was ineffective during the Spanish Flu because many communities were already inundated before they were aware of the dangers they faced. Our community has had ample warning, and our efforts can be effective if we are vigilant. Also note that the Spanish flu came in waves; thus, communities cannot be complacent when new cases fall. Stay-at-home orders are sound measures to prevent high density gatherings and the spread of the Coronavirus into our homes.
 
  • As additional waves of the Spanish Flu were likely caused by soldiers returning from battle, travel should be curtailed as much as possible. Until recently, all cases in New Hanover County were a direct result of travel.
 
  • Businesses will be hurt, no doubt about it. This is particularly alarming for me as we are about to graduate many highly qualified students and I know many business owners. There are two bright spots. First, there was no internet in 1918; today we have a medium to lessen the impact of Covid-19. Information can travel quickly, and businesses can continue to partially operate. Every faculty member at UNCW, for example, has mastered new technology in the past three weeks. Second, policymakers have moved swiftly to provide relief for businesses and employees. Monetary and fiscal policies had not yet been “discovered” in 1918, so they were not used to ease the pain of lost revenue and income. One can certainly question the size of the proposed fiscal stimulus, but undoubtedly, the stimulus will help to ease the immediate pain. 
 
  • With time, the American way of life will recover from short-term losses of freedom. Most people have willingly accepted self-quarantine even without any mandates. These individuals recognize that freedom comes with responsibility. When this pandemic has run its course, life will likely return to normal and entrepreneurs will take market risks to spark our economy. And hopefully, we’ll much more appreciate the opportunity to interact personally with our loved ones, friends, and neighbors.  
With the lessons of history as our context, and the power of technology as our ally, let’s be hopefully vigilant, care for our healthcare heroes, and use common sense to ensure the risks of the coronavirus pandemic are short lived.

(1) https://www.cdc.gov/flu/pandemic-resources/1918-pandemic-h1n1.html
 
(2) T. Garrett. 2008. “Pandemic economics: The 1918 influenza and its modern-day implications.”
Federal Reserve Bank of St. Louis Review, 90 (2): pp. 75-93
 
(3) See Elon University: https://www.elon.edu/u/news/2020/03/24/weve-been-here-before-elon-the-spanish-flu-of-1918/

(4) Karlsson, Martin, T. Nilsson, and S. Pichler. 2014. “The impact of the 1918 Spanish flu epidemic on economic performance in Sweden: An investigation into the consequences of an extraordinary mortality shock.” Journal of Health Economics, 36: pp. 1-19.
 
Robert T. Burrus, Jr., Ph.D., is the dean of the Cameron School of Business at the University of North Carolina Wilmington, named in June 2015. Burrus joined the UNCW faculty in 1998. Prior to his current position, Burrus was interim dean, associate dean of undergraduate studies and the chair of the department of economics and finance. Burrus earned a Ph.D. and a master’s degree in economics from the University of Virginia and a bachelor’s degree in mathematical economics from Wake Forest University. The Cameron School of Business has approximately 60 full-time faculty members and 20 administrative and staff members. The AACSB-accredited business school currently enrolls approximately 2,000 undergraduate students in three degree programs and 200 graduate students in four degree programs. The school also houses the prestigious Cameron Executive Network, a group of more than 200 retired and practicing executives that provide one-on-one mentoring for Cameron students. To learn more about the Cameron School of Business, please visit http://csb.uncw.edu/. Questions and comments can be sent to [email protected]. 
 

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