The Time Crucible, Perception of risk in the age of Corona Virus
Scott Dennis 10 April 2020
Why do we pay our rent or mortgage at the beginning of the month? How long will it be necessary to self-quarantine during the corona virus pandemic? When will experts be able to provide the public with a vaccine for covid-19? Will the number of dead and infected begin to reduce once the curve is flattened over the next few weeks?
As I write the world is in the grip of a global pandemic related to a novel virus, but perhaps even more essentially- a worldwide panic about time and uncertainty. As this article moves forward with age and is looked back upon, the major question that will be answered is what trade-offs society was willing to make to relieve the anxiety around uncertainty and what changes took place during what I would call the “time crucible”, where waiting for all of us is the daily focus. For too many people in society there is no time to philosophize on this question because as the popular expression says “there ain’t nothing going on but the rent” and this has been an ongoing problem for most of their lives. Now the circle has widened and a much larger group of citizens are putting in jobless claims and are asking themselves if this cycle of work and money attached to time is really sustainable?
The confusion with our present system can be demonstrated in any typical New York apartment building with a mix of rent stabilized and market rate rents. One individual who has lived in the building for twenty years can be paying $500 a month; the new neighbor next door can be paying $3000 a month for the same size flat but feel like they are getting a deal in comparison to other rental prices in the area. It is common for a management company in our example to offer the twenty year resident one hundred thousand dollars to move out of the building because they know in time they will make a return on the new market value of rent. Perhaps the building owner is shielded by all of this volatility because the mortgage on the building was paid off thirty years ago. Everyone in this story has their own perspective of time and its effect on value. Suddenly during the pandemic period everyone in our apartment building scenario is now in limbo because the activity of society that greased these gears of simple capitalism has stopped and the time crucible has formed around all the parties involved. I could write ten thousand words on the history of rent control in New York during the 20th century, it is a bitter tale of legislative struggles against unfettered rentier capitalism. Basically all blue ribbon committees that have studied rent in densely populated cities have found the obvious, when real estate rent is not controlled; the prices will skyrocket to the benefit of the few over the many. In normal times one might throw their hands up in resignation of this fact but I submit that during this pandemic there will be more scrutiny by the middle class and the weighing of risk in the economy may change.
Fairly soon unique social trade-offs will have to be made, basically society will have to venture out with some new protocols but without a proven solution to the virus. Some of us will continue to stay inside until they see our friends and family (masks on) at the park or restaurant and the urge will be too much not to join in. Already there are images of people in China who were hit early on by the virus out and about. There will still be individuals that get sick and die but the media will move on to the next thing to worry about, getting the economy working again. Here is the take away however; people will begin to realize that this tight rope walk has been the same one they have been on for many years. Families in America have been one major health crisis away from disaster for a generation or more. The rationale for the time and money system that prevails on us now begins with perception management, the idea that financial capital is the heart of all risk and then the enforcement of financial instruments like debt and rent payments must be upheld to make the risk profitable. A by-product of rejoining the rat race may well be the awakening of the average citizen to their own risk and reward scenario. Their own health and the ability to produce work may begin to be more clearly viewed and valued as their own source of capital at least as important as an investor’s equity. Only time will tell.