Illustration by David Plunkert

Illustration by David Plunkert

Edited by Dan Morrell

What can historical economic recoveries teach us about our current crisis?

One of the things that makes the pandemic so tricky is that there is no precedent that feels quite like it. People keep talking about the Spanish flu epidemic, but that doesn’t seem to have had the economic impact that this one is likely to have. So I think when you’re looking for precedents, you're really looking for other global catastrophes—and particularly catastrophes that were long-lived. I am afraid we find ourselves looking at things like the Great Depression, which was another moment when the world stood still, and you had the uncertainty that you see surrounding us right now.

So if you take that as a precedent—and put aside World War II for a moment—what that precedent would suggest is that we’re going to need a coordinated, wide-ranging, government-led response, which sadly is not what we’re seeing right now. But as the timing of this extends, we're going to have to rely on structural remedies—things like income support, continued payments to individuals, payments to small businesses, and probably some deeper-seated reforms—if we're going to be able to get the economy back strongly on track.

[Franklin Delano] Roosevelt is someone who's been on my mind a lot recently. In a moment of great crisis, Roosevelt—at least as the short version of history goes—reformed capitalism when many people wanted to think about much more radical solutions. I think that’s what this moment calls for, but I fear that we're not going to be out of the woods for many more months. And if we find ourselves still in these dark and dreary woods, we are going to have to be thinking about much more structural reforms to move ahead.

 Courtesy Debora Spar

“We’re going to start seeing many businesses wanting to bring their supply chain much closer to home in ways that will probably make goods more expensive, but hopefully will help drive employment as we replace outsourcing with local workers.”
—Debora Spar

You've written a good deal about globalization and the global economy. How do you think globalization as a movement will ultimately be impacted by the pandemic? And are there other useful historical precedents there?

I think you have to go back to the early days of the 20th century, when globalization declined from what had then been its peak, looking at the range of tariffs that killed that first great bout of globalization. I do think globalization will be fundamentally shifted and stalled by this pandemic, and we’re seeing it already. Global travel, a thing we’ve all just gotten so incredibly used to, has slowed. We’re going to have to do business in fundamentally different ways. The days of jumping on a plane to go for a two-hour lunch meeting to close a deal? Those days are over.

People are discovering that you really can close that deal on Zoom, and it’s probably better for your family life and better for the planet if you’re not jumping on that plane. But the friendships we’ve formed and the lives that many people have led that reach across boundaries, the lives of families that cross international boundaries—that’s the sad part that I think will really, really slow down.

In a more mundane but crucial area, supply chains are going to shift fundamentally. We’re going to start seeing many businesses wanting to bring their supply chain much closer to home in ways that will probably make goods more expensive, but hopefully will help drive employment as we replace outsourcing with local workers.

You're senior associate dean of Harvard Business School Online and the former president of Barnard College. What lessons can educational institutions take from the economic impact of the pandemic?

I suspect that this moment is going to be existential for higher education. The pandemic is coming at a time when the sector was already reeling from a whole range of other problems. I fear that a significant chunk of higher education is not going to survive this moment in time. That’s the bad news. The good news is that the pandemic is also revealing what is most special about higher education and what pieces of higher education can be done through distance technologies—through Zoom, through different kinds of online media—and what pieces can’t.

It’s been touching and poignant and sad to see how this country is mourning being off campus. Watching commencements on Zoom was heart-wrenching, and I think we're really seeing amongst our students—and in colleges across the country—that students want to be on campus. Education in this country is part of a broader experience, so the test for us, and particularly for us at HBS and HBS Online, is to figure out what parts of the magic of education that you can capture, perhaps even improve, in the online experience and what you really need to do in person. And I think we’re figuring that out now.

Debora Spar is the MBA Class of 1952 Professor of Business Administration and senior associate dean of Harvard Business School Online

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