The State Pension Fund of Finland

The State Pension Fund of Finland (VER) was established in 1990 to balance state pension expenditure. VER invests pension assets and helps the state to prepare for financing future pensions. VER is a long-term investor characterised by a high standard of professionalism and an ethical code of conduct. VER operates as part of the prefunded Finnish pension system.

 

 

The pandemic 1918

2020-10-30 at 13:51 Timo Löyttyniemi

A book about a crisis is seldom published before it happens. Normally, a large amount of writings are released after the fact. An exception to this rule is ‘Pale Rider – the Spanish flu of 1918 and how it changed the world’ by L. Spinner which deals with the ‘Spanish flu’ of 1918. It was published in 2017, a couple of years before the eruption of the coronavirus. A lucky coincidence with the publication date was that the interpretation of the 1918 pandemic presented in the book is not distorted by the 2020 COVID-19 pandemic. It can be read as a book in its own right.

The book deals with a period when World War I was still going on. At that time, the main means of transport over longer distances was the railway and ships, and news travelled via the telegraph. While globalisation had not reached the point in which we are today, people’s movements were affected by the war. The world was different in many ways. Another factor complicating the comparison of these two diseases is that World War I ended in November 1918 at a moment when the second wave of the pandemic was still spreading.

The Spanish flu of 1918 helps us understand the current coronavirus crisis. Here are a few conclusions drawn in the book:

  • People had no idea of what was going on

The Spanish flu started spreading extensively in March 1918, first in the United States. Even today we do not know where the disease first appeared geographically, but a bird-pig-man infection chain seems likely. In 1918, the disease was wrapped in mystery. Physicians lacked the necessary information and skills. People disagreed on the use of face masks and were advised to try tobacco or alcohol as a remedy, as well as aspirin, which led to an excessive intake causing further problems.

  • The disease spread across the world at different times

Since one hundred years ago the disease and information did not travel as fast today, the pandemic surged at different times in different parts of the word, causing confusion every time this happened.

  • The disease spread in three waves

The first wave came in spring 1918, followed by the second in autumn 1918 and by the third right after that.

  • The pandemic varied in how dangerous it was

The second wave was the most lethal while the first was the mildest. The third was something in between. The virus only posed a serious risk to a proportion of those infected. For most people, it was no different from a seasonal flu.

  • Went away without a vaccine

After the waves of infections, the virus disappeared. Of course, the end of a virus cannot be declared in the same way as that of a war.

  • The havoc the virus wreaked was massive

Over the decades, the death toll figures have varied. The current estimate is around 50 million dead, most of them in Asia.

  • The Spanish flu did not start in Spain

When the disease erupted in Spain, the Spanish thought it had originated in their country. As the neighbouring countries were content with this explanation, the term ‘Spanish flu’ stuck.

  • President Trump as a common denominator

One thing the two pandemics have in common is President Donald Trump. His grandfather died unexpectedly of a viral disease in May 1918. According to the book, the indemnity received by his grandmother under a life insurance policy gave a capital infusion for the expansion of the family’s real estate business in New York. And the rest is history.

  • The pandemic gave new momentum to the development of public healthcare

According to the book, governments launched major projects to improve public healthcare systems after the pandemic in the 1920s. Even the origins of the World Health Organisation can be traced back to that period.

  • Baby boom

Wars tend to be followed by baby booms. According to scientists, the end of the pandemic also contributed to the post-war boom.

  • The advice given in the book was not heeded

The book lists a number of tips – in 2017 – on how to prepare for future pandemics. An international report (GHRF) had previously, in 2016, proposed that EUR 4 billion of public and private funds be invested annually in four areas to prevent a pandemic. The money was to be spent on skilled and motived public healthcare personnel; a disease monitoring system; an efficient network of laboratories; and local cooperation.

We see that despite their differences, the 1918 and 2020 pandemics have a lot in common. One hundred years is a long time. A lot has been written about war, but surprisingly little about pandemics. However, the destruction they cause may be of the same order of magnitude, both in financial and human terms. As a result, the scales of the ‘probability’ and ‘impact’ indicators used in the risk management context reach a new levelas far as pandemics are concerned. But first we need to overcome this pandemic.

Source:

Laura Spinney ”Pale Rider – the Spanish flu of 1918 and how it changed the world”, Penguin Random House, 2017.

The writer is VER's CEO Timo Löyttyniemi.

TLö blogi 2020

Recent posts

2024-10-25 at 10:56
2024-10-10 at 13:15
2024-09-20 at 14:20

Tags

acceleration active investing added value AI alternative investments asset classes austerity measures authoritarian governments baby boom baseline capitalism carbon border tax carbon emissions carbon footprint carbon intensity carbon neutrality carbon risk carbon tax carbon-neutral economy carbon-neutrality career central banks choices circular economy climate change climate commitments climate crisis CO2 emissions collateral commercial paper market commodities concentrated markets contingency plan contrarian corona crisis coronavirus coronavirus crisis countermeasures covid crisis covid economy crises crisis crypto currencies currencies debt burden debt structures decision-making defence industry defence policy defence technology degrowth democracy demographic trends demography dependency ratio depression derivatives development digital money digitalisation dilution disease monitoring system diversification Draghi ECB economic competition economic development economic growth economic policy economic system economy effective treatment electricity exchanges emergency measures employment figures energy export energy exports energy imports energy prices energy war environmental policy equity market equity markets escalation ESG EU EU elections euribor Europe exchange rates expected returns external borrowing FAAMG Fed financial crisis financial market financial markets financial stability Finnish Centre for Pensions (ETK) fiscal policy fixed income investments fixed-income investments forecasting fossil fuels free trade funding ratio funds GDP geopolitics global trade globalisation globalization government debt government finances green growth green technology green transition Growth healthcare systems hedge funds illiquid assets increase in prices indebtedness index investing index weighting indices inflation Innovations institutional investor institutional investors interest level interest rate interest rate level interest rates internal market international trade investment investment beliefs investment environment investment returns investment risk investments investments contribution approach joint debt Kauppalehti level of risk liberalism long-term return low-carbon economy market crash market economy market forces market interest rate market movements market portfolio market rallies market reaction megatrends miracle momentum monetary policy ownership policy pandemic pension investments pension investors pension liability pension promise pension system pension systems planning political decision-making portfolio structure positive side effect predatory traders pre-funding preparedness presidential elections price fall private equity private markets protectionism real estate investment real estate investments real estate market real estate sector rearmament recession regulation renewable energy renewable natural resources rescue packages responsibility restrictions retirement retirement age returns on investments risk bearer risk level risk management risk profile Russia sanctions scenarios security investments short squeeze sovereign debt spill-over effect stagflation state state ownership stimulation stimulation packages stock exchange stock market stock markets stock prices stock-exchange markets stocks strategic allocation strategic autonomy strategy success support measures supportive actions sustainability target retirement age taxation taxes technology the leading powers timeframe for liabilities timing totalitarianism transition risk uncertainty venture capital virus war war of aggression wealth welfare state