Lots of billions lost to flu

Today, we are challenged again to reflect about resources, availability of wealth and how vast amounts of money can be spent wisely or just evaporate. It is also a call to reflect about priorities, decide on the appropriate ones and how to fund them. More concretely, all this is about uncertainty and its impact on capital markets, on short-term decisions and, in the end, on the minds of people.

Today’s uncertainty is about the coronavirus.

More concretely, almost every stock in the STOXX 600, the largest European share index, are trading since this morning in negative territory, in the red, as the specialists say. This represents around 180 billion euros the investors have lost during the day, just today. This is about 2% of the entire capital invested in those companies. But it is a lot of money that has faded away.

The investors are pessimistic about the impact of the virus and the capacity to control its transmission. A friend from the East Asia region told me that, in the current state of world affairs, “when China sneezes, the rest of the world catches the flu virus!” It is not exactly like that. But for sure the Europeans that negotiate in the capital markets got high fever today.

Notre-Dame and the response of the wealthy

Many people have shown sincere astonishment and expressed deep shock when told that a small group of French billionaires and some big corporations have pledged close to one billion Euros to finance the restoration of the Notre-Dame Cathedral. People compare such largesse to the poor response given to recent humanitarian appeals.

The gap is indeed abysmal and difficult to understand.

I do not pretend to know the minds of the very rich. But I have met a few. And they are indeed much more willing to give money to the arts, the protection of the natural world, the advancement of scientific research, and other broad issues than to alleviate poverty and address social issues like the plight of the homeless or drug addiction. Patron of the arts is a tradition that comes from the aristocratic times. It occupies a very high position in the status ladder.

Moreover, it is also my reading that many of those who became outrageously wealthy believe that poor people are responsible for their own fate. They kind of share the moral high ground those who have been successful in life love to place themselves. From those heights, they look at everyone else as people who have not been able to create their own life opportunities or have just accepted their condition without fighting back. Many rich people – and I am only referring to those who are generous enough to pay for big causes, I am not talking about the greedy and the corrupt – are convinced that poverty is an individual responsibility. They do not say it loudly. But they think people should have tried harder. They also believe that the social security systems are good enough to take care of those in dire need.

I am not trying to justify their approach, please be sure of that. I am just sharing an interpretation. My point is simple. If we do not comprehend the reasons, we cannot contribute to a meaningful change of the behaviour.