Northern Italy’s coronavirus lockdown will serve as a blueprint for surviving with no movement of goods or people

Finally, we will learn about people’s behaviour under conditions they have never had the misfortune to experience before, writes Hamish McRae

Italy is carrying out a huge economic experiment: what happens if you stop people moving around? (Alberto Pizzioli/AFP/Getty)

The lockdown of Northern Italy due to the coronavirus changes everything. Up to now, the response of the west has been one of establishing good public health practice. Individual cases are identified and treated, patients’ movements tracked, groups of contacts quarantined, and we are all pushed to wash our hands.

At present, however, no developed nation has attempted to take the radical action of cutting off movement into and within a huge area of the country. Now Italy is attempting to do what China did with the province around Wuhan. It is doing it to a quarter of the country’s population, to its richest region, and to its financial capital, Milan. We all have to hope that its efforts meet with success, but we also have to accept the possibility that this will be just the first of several similar lockdowns across the developed world.

This is about public health but it is also about economics, for Italy is doing something that has not been done before, at least in peacetime. It is carrying out a huge economic experiment: what happens if you stop people moving around?

We have no idea. We don’t even know if it can be done; whether it is possible in a democracy to sustain such an authoritarian policy. We will not know for a week or two whether people are prepared to do what they are told, or whether they will ignore the government, deeming its policy unnecessarily draconian and carrying on their daily lives as before.

But assuming that the policy does hold, there are some things to look for, including perhaps some lessons that may be useful once the emergency is past.

This first thing will be to what extent a sophisticated economy can function with very limited movement of people. Obviously people have basic needs, especially food, that have to be supplied.

We know a bit from the experience of China and to some extent South Korea, that people switch from going out to restaurants to having meals delivered to their homes. What we don’t know is whether there will be a once-and-for all shift in distribution patterns: that the move to online will continue after shops can attract customers again.

We humans are gregarious. We like to eat out together in groups. So I suspect the bar-restaurant trade will recover just fine from the ban on people being within one metre of each other. I suspect too that international tourism will recover for much the same reasons. But it would be naive to think that people who have become accustomed to having groceries delivered will go back to the weekend supermarket shop.

It follows that some businesses will be devastated. If airports close, it is not just the airlines that lose business. Shutdowns move right through the economy, with (as a general rule) service industries more affected than manufacturing ones. So Italy is carrying out an experiment on which businesses are worst hit, and what measures are needed to support them.

We will also learn about shifts to work patterns. Many of us can do at least part of our work from home, thereby avoiding the costs (and the physical proximities) of public transport. What we will learn from what happens in Milan in particular is the extent to which sophisticated commercial dealing can be done without people meeting in person. Some work can be done online, but not all. The experiment is to discover what can and what can’t.

This will be really interesting. We all know that many business meetings are a waste of time. An orderly exchange of emails preparing the ground, plus a conference call to agree on the way forward could do the job more efficiently and perhaps with a better outcome. But it is hard to change established procedures unless you have to. Now people in Milan are being forced to do so.

Finally, we will learn about people’s behaviour under conditions they have never had the misfortune to experience before. No one under the age of 80 will have much memory of the limits of movement placed on people, and the shortages of basic goods including food, that our parents and grandparents experienced during the Second World War. By wartime standards, these restrictions are mild. But they are a reminder of the interdependence we have with each other – and, well, maybe that is a useful reminder too.