by Bill O’Grady

Although we do cover current events in the Weekly Geopolitical Report, we also try to anticipate changes that may be a consequence of current situations.  The COVID-19 crisis is just such an occasion.  We regularly update the current path of the virus in our Daily Comment, but we will consider the longer-term ramifications of COVID-19 in this report.  We have recently discussed the pandemic, in general, in our weekly reports, and in the previous two installments we discussed how the virus has frayed relations in the EU.

This week, we frame the impact of the pandemic using Walter Scheidel’s book on inequality, The Great Leveler: Violence and the History of Inequality from the Stone Age to the Twenty-First Century.[1]  We reviewed this book in a previous WGR published in 2017.  In Part I, we will examine Scheidel’s thesis that says inequality tends to be resolved by violent or extreme events.  Simply put, history shows little evidence that periods of high inequality are reversed without tragedy.  Using this thesis, we will examine how the COVID-19 pandemic best fits into Scheidel’s framework.  In Part II, we will discuss the equality/efficiency cycle and introduce one of five problems that could be resolved by the pandemic.  In Part III, we will examine the other four problems, discuss the impact of inflation and conclude with market ramifications.

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[1] Scheidel, Walter. (2017). The Great Leveler: Violence and the History of Inequality from the Stone Age to the Twenty-First Century. Princeton, NJ: Princeton University Press.