ebola

If you own stocks you will no doubt be aware of the recent tumble in the stock market. Partially this has been attributed to the uncertainty presented by ebola. People are starting to wake up to the fact that ebola is seriously bad news.

In a slightly morbid way I’m quite interested in the destructive effects of ebola. As far as we know the infection rate is still rising exponentially which means that it’s likely to get much worse before it gets better, and it still has the potential to kill huge numbers of people in Africa. The numbers so far are relatively small, but if you can’t control it while the numbers are small you’re going to have a much worse time when they become large. However, the growth may now become limited as countries start to get scared and take it more seriously.

I am curious what percentage of a country it needs to affect before an unprepared country fails. I’m guessing the number is probably smaller than you’d expect. Most small companies do not operate with much or any spare capacity on a day to day level, so I would guess that incapacitating 5% of people would probably cause a lot of small companies to collapse or at least heavily struggle, and that has some pretty bad economic implications. The effect would snowball – once infrastructure starts failing, healthy people would find it more difficult to keep up their daily life and more and more companies and services would come to a stop.

If you look back to the second world war you notice that many countries somehow managed to continue operating in hostile circumstances, but I suspect there is an important difference in that women were typically not economically active and therefore the country had a lot of slack it was easily able to call upon, thereby suddenly expanding its capacity. In modern times there isn’t a large body of reserve workers who can step in.

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