How the coronavirus crisis is ushering in a ‘survivalist’ economy

A sign on a shop window indicates the store is closed in Ottawa on Monday March 23, 2020. THE CANADIAN PRESS/Adrian Wyld

Food. Drugs. Ventilators. Welcome to the survivalist economy, where production is stripped down to the bare bones — the things that people cannot do without or they will literally die. Governments have declared your local Loblaws an essential service, drug companies are racing to find treatments and vaccines, and auto manufacturers are retooling their plants to produce life-saving medical equipment.

If you’re in these businesses, you’ve never been more vital. But what about the rest of the economy?

Already, Amazon has stopped accepting deliveries of “non-essentials” at its warehouses. Little luxuries, like organic room fresheners and two-colour markers, won’t make the cut. Neither will other things we take for granted, like wall art stickers, flameless candles and refills for 3Doodler pens. That’s all stuff our household has ordered in the last year — stuff that made life more pleasant but that we could, in retrospect, have easily lived without.

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Not just because it won’t be available but because even if it were, we won’t be able to afford it in a world where nearly 1 million Canadians have applied for employment insurance since March 16. That number could rocket higher, given that 2 million Canadians are without permanent work arrangements, according to RBC Economics. Money will be beyond tight. No more racking up the credit card. For all but the wealthy, every purchase will have to be weighed and calibrated. Middle-class people who took casual consumption for granted will tell their kids to use both sides of every piece of paper and save every leftover bit of dinner in the fridge.

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The impact of this change cannot be overstated. It goes beyond businesses, economies and borders. It goes to the very core of our consumption-fuelled society. It will affect not only the people and companies who produce goods and services but our world view as well. Reusing and repurposing will not be virtues, they will become necessities.

Click to play video: 'This is what cities across Canada look like during the coronavirus outbreak'
This is what cities across Canada look like during the coronavirus outbreak

While anti-consumerists may rejoice at this reckoning, they should be careful what they wish for. This will not be an Instagrammable world of canned, home-grown produce and upcycled clothing. This will be a mean, lean time of anxiety and fear.

Whether it will represent a short-term period of personal austerity or a permanent paradigm shift remains to be seen. But for the next few months, or even years, it will be a new reality. And it will see many casualties, from the jewelry designer posting his stuff to Pinterest to the mompreneur sewing diaper bags in her garage. Small businesses will go under in droves as demand for their products dries up and delivery channels are shut down.

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But the biggest casualty of this new reality could be the future of work itself: the digital economy.

Click to play video: 'Coronavirus: Health minister wants Canadians to understand seriousness of COVID-19 crisis'
Coronavirus: Health minister wants Canadians to understand seriousness of COVID-19 crisis

The most obvious victims will be online services for which demand precipitously declines, such as ridesharing and travel apps, when you have nowhere to go. But bigger actors will be impacted as well. Google and Facebook rely on ad revenue to drive their platforms. According to marketing agency Tinuiti, Amazon has now slashed its shopping and text ads on Google. Travel ads have all but disappeared, according to Needham and Co., punching a billion-dollar hole in ad revenues this quarter and $3 billion in the second quarter of the year.

This will also affect online media platforms, YouTubers and anyone who relies on clicks for a living. No products, no money, no ads, no jobs. It is a sad paradox that the only thing keeping many people connected right now — social media — could also struggle to remain a viable business.

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Of course, not everyone will suffer in the new economy. Indeed, some sectors — including some arguably “non-essential” industries — may actually thrive.

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With the onset of the Great Depression in 1929, for example, the movie business did very well. People flocked to theatres to distract themselves from their everyday misery. In an age of social distancing, with crowded theatres not an option, people will turn to the small screen. Netflix, Prime and other streaming services will cash in. There is probably enough content already streaming to keep eyeballs occupied for years, but creators will still want to produce new work. Watch for an explosion of pay-per-view programming. Photoshop and editing will put people in the same space even when they aren’t. Creativity won’t be crushed but will find new ways to flourish.

As with everything, however, there is a dark side. Something else that will also grow exponentially is the online sex industry. People will be confined to their homes, many of them alone. But people still have urges, needs and wants. If lockdowns drag on for months, watch for an explosion of video sex content. Mobile dating apps will morph into virtual hookup services. People desperate to earn money will turn to online prostitution. Police forces will have to increase cyber monitoring to protect the most vulnerable from exploitation — namely, children.

This new reality is thus not an immediate, wholesale economic shutdown. It is more akin to a series of dominoes; as each one falls, another gets taken down and another rises, provoking a cascade of further consequences. This raises important considerations for politicians and policy-makers as they attempt to navigate this new reality and staunch the bleeding.

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Click to play video: 'Coronavirus: Small businesses struggling to stay open'
Coronavirus: Small businesses struggling to stay open

Rather than aid every sector equally and immediately, they need to monitor and project where the fallout lands and target help accordingly as each wave of dislocation moves through. They need to consider social impacts, including crime, that could flourish in this new environment. And they need to sustain people so they do not have to make harmful choices to survive, choices that could have long-term personal and social consequences once the virus is subdued and lockdowns are lifted.

For make no mistake: this new reality will also, someday, end. Human ingenuity and our desire to survive are two constants that have triumphed over the direst of challenges, from plagues to famine to wars.

But what our lives look like after the COVID-19 crisis recedes will depend on the choices we make as we navigate it. From staying at home to staying afloat, citizens and governments need to work together to come out better on the other side.

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Tasha Kheiriddin is the founder and CEO of Ellipsum Communications and a Global News contributor.

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