In June 1348, people in England began reporting mysterious symptoms. They started off as mild and vague: headaches, aches, and nausea, and escalated to high fevers and then death. Originating in Central Asia, soldiers and caravans had brought bubonic plague to ports on the Black Sea. The highly commercialized world of the Mediterranean ensured the plague’s swift transfer on merchant ships to Italy, and then across Europe. The Black Death killed between a third and a half of the population of Europe, alone, with the huge number of deaths accompanied by general economic devastation. 

Although the death rate from COVID-19 is far lower than that of the Black Death, the economic fallout has been severe due to the globalized, highly-integrated nature of modern economies. Add to this our highly mobile populations today, which – unlike the plague – have caused the coronavirus to spread across the globe in a matter of months, not years.

One of less-often discussed consequences of the Black Death is an important one: the rise of wealthy entrepreneurs and their ventures. Although the Black Death caused short-term losses for Europe’s largest companies, in the long term, these businesses concentrated their assets and gained a greater share of the market, as well as increased influence with governments. This has strong parallels with our current COVID-19 reality. While small companies are being forced to rely upon government support to prevent collapse, others, such as giants like Amazon, are profiting handsomely due to the new trading conditions.

The mid-14th century economy is too removed from the size, speed, and interconnectedness of the modern market to give exact comparisons, but we can certainly see some parallels with the way that the Black Death accelerated the domination of key markets by a handful of mega-corporations, which is likely to ensue in the wake of the COVID-pandemic.

Black Death Business

The sudden loss of at least a third of Europe’s population did not lead to an even redistribution of wealth for everyone else. Instead, people responded to the devastation by keeping money within their families. Wills became highly specific and wealthy businessmen, in particular, went to great lengths to ensure that their patrimony was no longer divided up after death, replacing the previous tendency to leave a third of all their resources to charity. Their descendants benefited from a continued concentration of capital into a smaller and smaller number of hands. This concentration of wealth greatly accelerated a pre-existing trend: the emergence of merchant entrepreneurs, who combined trade in goods with their production on a scale only available to those with significant sums of capital. 

For example, silk, once imported from Asia and Byzantium, was now being produced in Europe. Wealthy Italian merchants began to open silk and cloth workshops. These entrepreneurs were uniquely positioned to respond to the sudden labor shortage caused by the Black Death. Unlike independent weavers, who lacked the capital, and unlike aristocrats, whose wealth was locked up in land, urban entrepreneurs were able to use their liquid capital to invest in new technologies, compensating for the loss of workers with machines. 

Meanwhile, in southern Germany, which became one of Europe’s most commercialized areas in the late 14th and 15th centuries, companies such as the Welser family combined growing flax with owning the looms on which workers span that flax into linen cloth, which they then sold. The trend of the post-Black Death 14th and 15th centuries was a concentration of resources – capital, skills, and infrastructure – into the hands of a small number of corporations.

The Age of Amazon

Rolling forward to the present, there are some clear similarities. Certain large organizations have stepped up to the opportunities provided by COVID-19. In many countries across the world, entire ecologies of small restaurants and retail establishments have suddenly been closed down. The market for food, general retail and entertainment has gone online, and cash has pretty much disappeared.

Restaurants have been overtaken en masse – at least for the time being – by supermarkets, and much of this supply has already shifted into the hands of massive supermarket chains. They have plenty of large properties and lots of staff, with the HR capacity to recruit more rapidly, and there are many underemployed people who now want jobs. They also have warehouses, trucks and complex logistics capacity.

The other big winner has been the giants of online retail, such as Amazon, which runs a grocery service in the U.S., India and many European countries, Walmart, Target, and co.

High street shops have been suffering from price and convenience competition from the internet for years, and bankruptcies are regular news. Now, much “non-essential” retail space is closed, and our desires have been re-rerouted through to the likes of Amazon and similarly-situated giants. There has been a clear spike in online shopping, and retail analysts are wondering whether this is a decisive move into the virtual world, and the further dominance of big corporations.

Keeping us distracted as we wait at home for our parcels is the streaming entertainment industry – a market sector which is dominated by big corporations including Netflix, Amazon Prime (again), Disney, and others. Other online giants, such as Google (which owns YouTube), Facebook (which owns Instagram), Twitter, and TikTok provide the other platforms that dominate online traffic.

The final link in the chain is the delivery companies themselves: UPS, FedEx, Amazon Logistics (again), as well as food delivery from Just Eat and Deliveroo. Through their business models are different, their platforms now dominate the movements of products of all kinds, whether your new Toshiba branded Amazon Fire TV, or your stuffed crust from Pizza Hut (a subsidiary of Yum! Brands, which also owns KFC, Taco Bell and others).

The other swing to corporate dominance has been the move away from state-backed cash towards contactless payment services. It is obviously a corollary of online marketplaces, but also means that the money moves though big corporations that take their slice for moving it. Visa and Mastercard are the largest players, but Apple Pay, PayPal, and Amazon Pay (yet, again) have all seen increases in their transaction volume as cash sits unused in people’s purses. And if cash is still imagined to be a vector for transmission, then retailers will not take it and customers will not use it.

Small business has taken a really decisive hit across a wide range of sectors as COVID-19, like the Black Death, results in big companies gaining market share. Even those working at home to write pieces like this are working on Skype (owned by Microsoft), Zoom and BlueJeans, as well using email clients and laptops made by a small number of global organizations. Billionaires are getting richer while ordinary people lose their jobs. Jeff Bezos, Amazon’s CEO, has increased his wealth by $25 billion since the start of the year. 

Popular Resistance

As the 14th and 15th centuries progressed and corporations gained a greater share of the market, popular and intellectual hostility grew. In the longer term, this was to have incendiary results. By the 16th century, the concentration of trade and finance into the hands of corporations had evolved into a near-monopoly upon royal and papal banking by a small number of companies who also held monopolies or near-monopolies over Europe’s major commodities – such as silver, copper, and mercury – and imports from Asia and the Americas, especially spices. 

By the 21st century we have become used to the idea that capitalist firms produce concentrations of wealth. Whether Victorian industrialists, U.S. robber barons or dot com billionaires, the inequalities generated by business and its corrupting influence over governments have shaped discussion of commerce since the industrial revolution. For critics, big business has often been characterized as heartless, a behemoth that crushes ordinary people in the wheels of its machines, or vampirically extracts the profits of labor from the laboring classes.

If you look to luxury goods conglomerate LVMH Moët Hennessy Louis Vuitton and its founder Bernard Arnault, you will see this narrative in play, one that characterizes the French businessman, who currently holds title of the second richest man in the world, and his empire as in the business of “aggressively monetizing creative talent” and operating as a “barbarian at the gilded gates” – the New York Times’ choice of words. Mr. Arnault, himself, has been coined “ruthless,” “able to exploit,” and “famously litigious,” by global media, with his “ruthless approach to acquisitions has earned him the nickname ‘the wolf in cashmere,” according to the Financial Times. 

By way of a string of mergers and acquisitions, at least some of which have been ugly, Arnault has built a group that consists of more than 70 luxury brands, and which boasts a market capitalization of nearly $200 billion. 

After the Coronavirus

The long-term result of the Black Death was the strengthening of the power of big business. The same processes are happening during and are expected to continue in the wake of the coronavirus lockdown, as consumers increasingly look to giants like Amazon and as conglomerates like LVMH, Kering, and Richemont, among others, are likely to continue to consolidate the industry, with such groups “benefitting from economies of scale, centralization of capabilities, access to capital, as well as access to an exclusive network of suppliers,” as Katrin Zimmermann, managing director for the Americas at TLGG Consulting, told Glossy. 

Because “the pandemic has only increased conglomerates leverage over the industry, it puts them in a perfect position to snap up independent brands” in the meantime. 

Beyond the industry’s luxury-leaders, a wave of consolidations will likely come from the string of mass-market retailer and department store bankruptcies. Amazon was said to be eyeing bankrupt J.C. Penney, for example, while Authentic Brands Group, the company that has purchased retailers such as Aeropostale, Barneys New York and Forever 21 out of their respective bankruptcies, is said to be contemplating its next purchases in light of the many COVID-induced filings. 

Nonetheless, we should be cautious of easy historical lessons. History never truly repeats itself. The circumstances of each time are unique. COVID-19 will not kill a third of any population as the Black Death did, so though its effects are profound, they will not result in the same shortage of working people. If anything, it has actually strengthened the power of employers.

The most profound difference is that the virus comes in the middle of another crisis, that of climate change (and in light of a budding fight against racial injustice in the U.S.). There is a real danger that the policy of bouncing back to a growth economy will simply overwhelm the necessity of reducing carbon emissions. This is the nightmare scenario, one in which COVID-19 is just a prequel to something much worse. 

But the huge mobilizations of people and money which governments and corporations have deployed also shows that big organizations can reshape themselves and the world extraordinarily rapidly if they wish. This gives real grounds for optimism concerning our collective capacity to re-engineer energy production, transport, food systems and much else – the green new deal which many policy makers have been sponsoring.

The Black Death and COVID-19 seem to have both caused concentration and centralization of business and state power. That is interesting to note. But the biggest question is whether these potent forces can be aimed at the crisis to come.

Eleanor Russell is a PhD Candidate in History at the University of Cambridge. Martin Parker is a Professor of Organization Studies at the University of Bristol. (Edits/additions courtesy of TFL)