“How to survive the coronavirus recession 2020?” series is part of the “Less is more economy” discussion, which explores the potential for a happiness-driven economy that does not necessarily rely on material abundance to thrive.
How to survive the coronavirus recession 2020?
2. Let’s start from the food sector
In the last post, we discussed what recession meant from people’s perspective. It became clear that it was not about our receded abilities to produce or create; it was about the receded effectiveness of the economic system as a whole. So we asked what we could potentially do at an individual level to survive the imminent recession, assuming that we will maintain abilities to produce and create. Potential solution was to explore ways to keep trading – the fundamentals of economics – going among ourselves even when a variety of institutions that sit in between us as producers (or workers) and us as consumers did fail.
Figure 1: How the economy shifts from its normal state to recession –
People’s perspective (click to slide)
When a recession hits the economy, the institutions lose their ability to keep paying us wages. So the idea is to bypass them and keep trading alive among ourselves. It sounds a daunting task, so let’s look where we could start the conversation. When we look at our expenses, it becomes clear that some products/services are difficult to deliver by individuals: real estate properties, utilities or medical/higher education services.
So we start the discussion from food, since it’s essential to survive but could be produced at a small scale, and then consumed locally. Already, we are seeing how the food supply chain via institutions are being clogged. Producers lose ways to deliver their products to customers, ending up wasting what their produced. In the meantime, people are losing access to food, either because store shelves are empty or they lose their jobs.
By the way, we all know how quickly toilet paper disappeared from store shelves. It is a good example how rigidly the modern supply chain is structured in order to maximize efficiency: there are commercial toilet paper and its household counterpart. Because of the stay-at-home order, the demand for the first sharply declined while the demand for the latter surged. While we easily assume that toilet paper is toilet paper, the industry doesn’t work that way. Consumer toiler paper still face shortages.
Similar situations are occurring across various sectors. Here are some example from the food sector.
Coronavirus impacts on producers: forced to waste products since large-scale customers temporarily closed business, or had to shut down operation because employees contracted coronavirus
Coronavirus impacts on consumers: cannot find food products since people are panic-buying, or can no longer afford to buying food
Coronavirus impacts on consumers: temporary upending of supply and demand – people are baking breads at home instead of buying.