What can be learned from this experience? How can a return of the worst consequences of the global financial crisis be avoided? Measures commonly used by governments and central banks, such as lowering interest rates or implementing fiscal stimuli, have only limited effect. At most, they can mitigate the effects. Here we propose three sets of measures that, we believe, can help societies recover once this pandemic is over.

Save lives

This is the first and most obvious priority. The spread of the causative virus must be contained and the deaths associated with it must be reduced, as quickly as possible. The scale of the measures taken to achieve such a containment will influence the stage of the pandemic and the capacity to intervene, in particular whether healthcare workers and laboratory facilities are available to respond to the increased workload. Now is not the time for penny-pinching—finance ministries and donor agencies must recognize that this will require additional funding, obtained from reserves or by borrowing. Crucially, those designing these public-health countermeasures must recognize that there will be direct and indirect health effects, affecting in particular those living alone, those who are elderly or those who have mental illness, or those who are homeless or in institutions such as care homes, prisons, and migrant detention centers. Importantly, a new study of the 1918 influenza pandemic finds that in the 43 US cities studied, those that imposed restrictions on social interactions earlier and retained them longer experienced a stronger subsequent recovery18. Hence, the authors reject the idea of a trade-off between strict public-health measures and economic damage.

Protect financial risk, now

Because there is a collapse in demand within the economy, the responsibility to protect financial risk must fall on the governments. Just as governments accept that they must find additional money in time of war, they must rally against this common enemy—a microorganism, rather than a foreign power—because the threat to their population is no less. Politicians in many countries have responded to the challenge, often throwing long-established fiscal rules out of the window19. The US$2 trillion package enacted in the USA is unprecedented, but many European countries, including the UK, France, and Denmark, have stepped in to pay a large proportion of the wages of those who are at risk of losing their jobs. This is critical to stave off permanent damage and prevent a recession from escalating into a full-blown depression. The concerns about high levels of government debt that were used to justify austerity a decade ago20 have been set aside.

Prepare for recovery

This means securing the future of companies, particularly of the small and medium enterprises that play such an important role in the economy, so that they are ready to meet the demand that will someday return. In preindustrial times, economies simply needed a large supply of labor.

The modern knowledge economy, in both manufacturing and services, depends on a highly skilled and often specialized workforce. Once those skills are lost—for example, because those who have reached middle age, who are unlikely to return to the workforce, are forced into redundancy—then recovery can be almost impossible.

This requires measures to provide companies with financial lifelines, such as the interest-free loans being provided by some governments, as well as those that reduce the costs falling upon businesses. Examples of this include deferment of tax payments, interest on loans, and utility bills, and financial support to enable employees to be furloughed21.

This protection must also take heed of those who seek to benefit from a crisis. Throughout history, crises have encouraged the emergence of profiteers22. In this outbreak, there have already been many accounts of substantial markups on products such as hand sanitizers and protective equipment. Others exploiting a crisis include lenders who ramp up interest rates. These phenomena point to the importance of government controls on prices. Another group that stands to benefit is other speculators in the financial markets. Some people have already made enormous profits from this pandemic, which has in some cases led to questions about insider knowledge. However, it is important to remember that their profits are someone else’s losses, and it is often the pension funds of some of the poorest in society that are hit hardest.

Then there are those who will appear in the aftermath of the pandemic, just like the carpetbaggers at the end of the US Civil War, taking advantage of those who are desperate for money and have no option but to sell their businesses. A leading private-equity firm has already explained how “During and post this crisis, [private-equity] firms will be presented with unique opportunities to invest,” taking advantage of companies unable to pay their debts23.

Finally, as described by Naomi Klein in her book The Shock Doctrine24, there is a danger that politicians, often linked to powerful vested interests, will use a crisis to undermine labor, health, and environmental protections, with long-term consequences for health. This seems to be happening already in the USA, with important environmental regulations being repealed25.