Home › Forum Online Discussion › General › Wall Street Crash (October 1929) ; https://www.marxists.org/
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March 16, 2020 at 11:29 am #59832c_howdyParticipant
… 10 years of economic slump with catastrophic levels of unemployment across all the industrialised countries apart from the Soviet Union…Soviet Union was relatively unaffected by the Crash, firstly because it was a planned economy and not dependent on speculation, and secondly because, in any case, it had been more or less isolated from the world economy…
https://www.marxists.org/glossary/events/w/a.htm
The Wall Street Crash was the U.S. Stock Market crash of October 29, 1929, which precipitated a world-wide collapse of share values and triggered the Great Depression – 10 years of economic slump with catastrophic levels of unemployment across all the industrialised countries apart from the Soviet Union.
After the end of the First World War, the world economy was boosted by a period of reconstruction. In the early- to mid-1920s, a series of defeats were inflicted on the workers movement which had been engaged in revolutionary struggles in the wake of the War and the Russian Revolution. These events created conditions for an economic boom which became known as the “Roaring Twenties”. The value of shares on the US stock market rapidly climbed, reaching a peak at the end of August 1929. Prices began to decline in September and early October, while speculation continued, but came to an abrupt end on October 18, when the Stock Market began to fall precipitately. The first day of real panic, October 24, is known as “Black Thursday” – a record 12,894,650 shares were traded. Major banks and investment companies bought up stocks in an attempt to hold up prices and stem the panic, but the panic began again on “Black Monday”, and on “Black Tuesday”, October 29, 16,000,000 shares were sold, and prices on the stock market collapsed completely.
Bankruptcies and skyrocketing unemployment spread from the US to every country in the world, except the USSR, where production continued to expand after the devastation of the Wars of Intervention (1918-1922). The Soviet Union was relatively unaffected by the Crash, firstly because it was a planned economy and not dependent on speculation, and secondly because, in any case, it had been more or less isolated from the world economy. The Great Depression lasted into the late 1930s with 14 million unemployed in the US alone, most with little means of support until Roosevelt’s New Deal was brought in.
Share markets had collapsed before, indeed a ten-year business cycle of boom and bust was quite normal up to that time, but the particularly rampant speculation of the preceding decade of boom, inflating the value of shares, and the proliferation of holding companies and investment trusts and the extent of large bank loans in the U.S. had accumulated a vast mass of fictitious capital, and its collapse made this crash particularly spectacular. The extent of capitalist development meant that the effects of the crash were more devastating than ever before; every sector of the economy was tied up in bank loans and share issues. When the value of stocks fell, those who had invested in them lost money, including banks who had loaned money to failed firms; banks in trouble called in their loans, borrowers were invariably unable to pay and were repossessed and their businesses closed down; employees were put off and creditors remained unpaid, triggering an indefinite chain of bankruptcies and ejecting millions onto the dole queues; when the factories closed down people had no alternative means of livelihood. The preceding rapid growth of the world market meant that, as the saying went, “When America sneezed, the rest of the world caught a cold”, and stock markets crashed across the world in the wake of the Wall Street Crash, plunging the world into the Great Depression.
There have been even larger crashes since 1929 as well, which have not had the same extent of effect. This is mainly because the share market is only one relatively minor avenue for speculation and even a total wipe out on the share market has only a partial impact.
March 16, 2020 at 12:40 pm #59833c_howdyParticipantMost airlines face bankruptcy by end of May, industry body warns
FT Reporters
5 HOURS AGO
https://www.ft.com/content/30a3a26e-674f-11ea-800d-da70cff6e4d3
The airline industry is warning that it must shed jobs and obtain state support to survive the coronavirus crisis, as carriers around the globe grounded the majority of their fleets and took steps to conserve cash.
In the past 24 hours, United Airlines of the US, IAG — parent of British Airways, Aer Lingus and Iberia — Air France-KLM, easyJet, Finnair, Air New Zealand and Aeroflot all unveiled drastic measures to cut costs after several countries, including Germany and Spain, closed their borders.
Willie Walsh, head of IAG, will postpone his retirement to steer the group through the health emergency. Announcing a 75 per cent reduction in capacity over the next two months, Mr Walsh said there was no guarantee that many European airlines would survive.
“The situation is going to be quite dynamic in the next few weeks,” he said. “There are many airlines out there who are severely stressed with little or no cash resources.” There was no guarantee that many European airlines would survive, he said.
His comments came as the Centre for Aviation, a respected aviation consultancy, warned that by the end of May most airlines would be bankrupt due to the unprecedented travel restrictions that are being rolled out by governments around the world.
“Many airlines have probably already been driven into technical bankruptcy, or are at least substantially in breach of debt covenants,” Capa said in a report. “By the end of May 2020, most airlines in the world will be bankrupt. Co-ordinated government and industry action is needed — now — if catastrophe is to be avoided.”
Iata, the industry trade body, estimated that the industry would lose up to $113bn in revenue as a result of the crisis. But that was before the widening international lockdown. The three global airline alliances, Oneworld, SkyTeam and Star Alliance — which represent close to 60 carriers accounting for half the world’s capacity — called on governments, airports, lessors and other stakeholders to help the industry.
Mr Walsh said his group had not asked for state aid. He stressed that the group had total liquidity of €9.3bn and was taking actions to cut costs and preserve cash, such as grounding surplus aircraft, reducing and deferring capital spending and cutting working hours.
Ryanair, Europe’s biggest low-cost carrier, raised the prospect that all of its aircraft could be grounded in the coming months as it joined the ranks of other airlines racing to cut costs and preserve cash in the wake of Europe’s widening border lockdowns. Michael O’Leary, chief executive, said capacity would be reduced by 80 per cent in April and May but “a full grounding of the fleet cannot be ruled out”.
In those countries where the fleet was not grounded, “social distancing restrictions may make flying to all intents and purposes, impractical, if not, impossible”, he said.
Air France-KLM said it would be reducing capacity by 70-90 per cent and had a “sharply deteriorated financial trajectory”. It said it welcomed statements from the French and Dutch governments that they were studying all possible means to support the group. It said a host of emergency measures — ranging from cost savings of up to €200m and plans to cut employee hours — would only offset the capacity reduction by half.
United Airlines in the US and Air New Zealand have told staff that they will begin redundancy processes, as travel restrictions force carriers to slash capacity and ground tens of thousands of aircraft.
Air New Zealand said on Monday that it would reduce international capacity by 85 per cent and cut domestic capacity by almost a third in April and May. The carrier, which employs 8,000 people, said it would consult with trade unions about redundancies.
That followed news from United that it is planning to halve its capacity for April and May, and has warned its nearly 100,000 employees of “painful” cuts to its payroll.
US carriers United, American Airlines and Delta Air Lines have all announced deep cuts to their international services and have begun talking to the federal government about possible assistance.
EasyJet, Europe’s second biggest low-cost carrier, withdrew its guidance for this year and said it was cutting capacity, although it did not quantify the reduction. Like many carriers it is in discussions with financiers to bolster its liquidity position. It said it had cash balances of £1.6bn and an undrawn $500m revolving credit.
Finnair is cutting 90 per cent of its capacity and its dividend amid what the Finnish flag carrier described as the “biggest crisis in the history of aviation” thanks to the coronavirus outbreak. The Finnish airline warned of a substantial financial loss this year and was working urgently on a funding plan including credit lines, loans, and the sale and leaseback of aircraft. Finland’s government, which owns more than half of the shares “will actively support” Finnair, the airline said.
Aeroflot, the Russian airline, also announced that it was suspending flights to several international destinations.
Airlines for Australia and New Zealand, an industry group representing carriers in both countries, said the airline sector was seeking state support including relief on government charges and possible grants that could be made available from government stimulus packages.
Alison Roberts, chief executive of the industry group, said carriers faced a situation that was much more serious than the global financial crisis in 2008.
S&P underscored the perilous state of the industry on Monday by downgrading its credit rating on Australia’s second-largest carrier, Virgin Australia, to B- from B+. The credit rating agency warned that the operating environment “may be deteriorating at a faster pace than Virgin can implement initiatives to protect cash generation and balance sheet health”.
Australia’s Transport Workers’ Union wrote to Australia’s prime minister, Scott Morrison, on Monday urging the government to subsidise airlines and aviation companies, warning that large scale lay-offs or business collapses would hamper economic recovery.
“When the current crisis comes to an end, the Australian economy will need a healthy transport industry in place,” said Michael Kaine, TWU national secretary, in a letter to Mr Morrison seen by the Financial Times.
Reporting by Jamie Smyth in Sydney, Andrew Edgecliffe-Johnson in New York, Peggy Hollinger and Myles McCormick in London, David Keohane in Paris, and Richard Milne in Oslo
Copyright The Financial Times Limited 2020. All rights reserved
Coronavirus
March 16, 2020 at 1:01 pm #59834c_howdyParticipant…we recognize that social isolation for millions of Californians is anxiety-inducing, but … we need to meet this moment head-on and lean in,” Newsom said…
Coronavirus forces radical changes to California with sweeping restrictions on life
By PHIL WILLON, ALEX WIGGLESWORTH, TARYN LUNA, LAURA NEWBERRY
MARCH 16, 20208:59 AM
SACRAMENTO — In a sweeping effort to slow the spread of coronavirus in California, Gov. Gavin Newsom on Sunday urged people 65 and older and those with chronic health conditions to isolate themselves from others — a directive that reflects the fast-moving nature of a public health crisis that threatens the well-being of some 40 million Californians.
Hours later, Mayor Eric Garcetti said Los Angeles bars and nightclubs will close and restaurants must halt dine-in service and limit their business to takeout orders until March 31. The order became effective at midnight Sunday.
Movie theaters, gyms and fitness centers also will be closed, Garcetti said in a video news conference Sunday. Grocery stores, pharmacies and food banks will remain open. And Garcetti announced a moratorium on evictions for renters.
As businesses across Los Angeles took action, more than 50,000 of the city’s government employees are still being asked to go to work.
City employees can’t refuse to go to work out of fear that they’ll be infected with the virus, Wendy Macy, general manager of the city’s personnel department, wrote in a memo to department heads Friday. Telecommuting options are available for some employees and some exceptions are allowed, according to emergency guidelines issued by the city’s personnel department.
Newsom also called on bars and brewery and winery tasting rooms statewide to close their doors to patrons as the number of confirmed coronavirus cases in the state continued to rise.
“We recognize that social isolation for millions of Californians is anxiety-inducing, but … we need to meet this moment head-on and lean in,” Newsom said.
But Newsom again stopped short of using the full force of his authority to mandate response measures to protect Californians from the virus that causes COVID-19, a global pandemic that has resulted in six deaths and 335 confirmed cases in the state.
Instead, the governor said his request of bars and pubs is akin to an announcement he made last week asking for the cancellation of gatherings of 250 people or more. The governor is allowing restaurants to remain open and advised customers to practice “deep social distancing” when dining out — in effect, a recommendation to reduce occupancy by half.
The Centers for Disease Control and Prevention has introduced even more stringent recommendations, suggesting that events of 50 people or more should be suspended for about two months. When feasible, organizers could modify events to be virtual, but in-person events of that size should be canceled or postponed, the agency said Sunday.
The efforts come as more coronavirus cases were reported, including a positive test for a police officer at Los Angeles International Airport. Los Angeles County reported 16 new cases Sunday, bringing the county’s total to 69.
A USC student who had recently returned from international travel but has not been on or near the USC campuses — also tested positive for coronavirus, the university said Sunday. The student was reportedly in good condition and self-isolating at home.
San Luis Obispo, Santa Barbara and San Bernardino counties recorded their first cases of the virus over the weekend. Santa Clara County, which has been the hardest-hit county in the state, announced 23 more cases for a total of 114.
Of California’s confirmed cases, 70 are believed to be from community transmission, the state Department of Public Health said. The rest are a mix of confirmed person-to-person transmissions related to travel or patients returning to the country after contracting the disease elsewhere.
Newsom’s guidelines follow other broad efforts announced in recent days to combat the virus in California. Most of those have been taken on the local level, including the decision by dozens of school districts to shut down for the next two weeks or longer.
The governor said he would issue additional directives on Tuesday to schools that remain open and said he was especially focused on providing support to low-income families.
He suggested some local school officials had not fully thought through the consequences when closing their campuses, including how to continue providing meals to students eligible for free or reduced-price lunches and how to ensure that students with special needs receive adequate care and supervision.The virus also has disrupted college entrance exams. The company that administers the ACT announced Monday that it has moved its testing date from April 4 to June 13 in response to concerns over the pandemic.
“ACT is committed to making every effort to help those students impacted by this test date change, particularly those high school seniors who are facing deadlines for fall 2020 college admission,” ACT Chief Executive Officer Marten Roorda said in a statement.
Newsom estimated that his directive to seniors would affect 5.3 million Californians. While that number includes those most at risk simply due to their age, he said it does not include the millions more who have underlying health conditions that would make them vulnerable.
The governor’s office said his request for seniors to remain at home also extended to residents with underlying health issues, such as chronic kidney disease, asthma, chronic liver disease, pregnancies in the last two weeks, metabolic disorders, heart disease and other conditions that make them more susceptible to serious illness from the coronavirus.
In a statement, Garcetti commended Newsom’s guidance.
“Everything we do right now will determine the outcome of this crisis, and we can save lives if we stay calm, care for one another, and take forceful steps to protect our communities,” Garcetti said. “That’s why we must follow the guidelines laid out by Gov. Newsom, build on them for local needs, and put the health and safety of the most vulnerable above all else.”
The governor also announced that the state’s 108,000 homeless people would be the top priority for mitigation policies, with a significant push to move them indoors.
Though details remained unclear, he said the state had hotels and motels that could be used to provide shelter, along with an additional 450 state-owned trailers sent to “critical points” to supplement those that were deployed in Los Angeles, Stockton, Sonoma and other places before the outbreak.Last week, Newsom issued an executive order allowing the state to commandeer some private properties to provide beds for isolation. Newsom said the goal of the newly announced measures aimed at the unsheltered population was to “get people into environments where we can address their growing anxiety and our growing concerns.”
He stopped short, however, of saying the attempt to bring people indoors would be mandated or require law enforcement intervention.
In recent days, the Department of Housing and Urban Development and the CDC have also detailed guidelines for homeless shelters and encampments, many of which include increasing sanitation and providing detailed suggestions for handling ill people in shelter settings.
“I am not ratcheting up a mind-set of enforcement,” Newsom said.
Sacramento mayor Darrell Steinberg, co-head of Newsom‘s statewide task force on homelessness, said Newsom‘s move to bring homeless people inside was crucial.
“They are very susceptible to disease and infection,“ said Steinberg of unsheltered populations. Leaving them outdoors, he said, is “really an invitation for a more wide spread of the disease.
Randy Simonsen, a 65-year-old homeless man in Sacramento, said that he would like to go indoors during this crisis. He listened to the governor’s speech on a transistor radio and heard the call for older residents to stay home. But “I don’t have one,” Simonsen said.
In L.A. County, Dockweiler State Beach may be used to temporarily house people who have been ordered to isolate or quarantine because of the coronavirus. The beach’s RV park on Vista del Mar is one of several locations the county could use for that purpose, according to a news release from the City of El Segundo. Officials said the public should avoid the area.
Anxious Californians continued to clear the shelves of local grocery stores. The Los Angeles Police Department assured residents on Twitter that there is no food shortage and stores will restock.
“The water supply is clean & safe to drink, so there’s no need to buy water in bulk,” the department said.
Grocery chains have announced changes to deal with the relentless throngs of shoppers.
Ralphs, for example, said it is working with suppliers to replenish high-demand products, and its store hours have been curtailed so employees have more time to restock. Albertsons — which operates the grocery chains Vons, Pavilions and Safeway — said it is taking similar steps.
Starbucks announced new efforts to limit the number of people gathering at its coffeehouses. All of its stores in the U.S. and Canada will move to a “to go” model for at least two weeks and will remove all seating in cafe and patio areas, the company announced Sunday.
As airports across the country were thrown into chaos this weekend because of hastily rolled-out health screenings for travelers returning from Europe, LAX remained relatively calm. But average wait times were still about 30 minutes longer than usual, said LAX spokesman Heath Montgomery.
Though many businesses have been affected by a slower streams of customers, bars in West Hollywood were packed on Sunday afternoon.
At Rocco’s WeHo and Flaming Saddles, drag queens danced to deafening music as they were cheered on by crowds handing them dollar bills on the stage. In these places, at least, life seemed to go on as normal.
Not everyone was proceeding with business as usual. At the Abbey, West Hollywood’s most popular gay bar, the gates were closed. On each door, a sign read: “As we continue to navigate the rapidly changing conditions with COVID 19, the Abbey is closing temporarily. We plan to open as soon as our public health officials tell us it is safe.”
Jimmy Han, who owns Frank ‘n Hank bar in Koreatown, said he decided to close his bar down Saturday after seeing customers not follow the 6-foot social distancing rule he tried to implement.
“I’ll be losing a lot of money and so will my employees, but honestly, that’s the least of our concern right now,” he said. “We’re more worried about public health and how this is going to impact the economy long term.”
Times staff writers Suhauna Hussain, Alejandra Reyes-Velarde, John Myers, Anita Chabria, Benjamin Oreskes and Hannah Fry contributed to this report.
March 16, 2020 at 1:32 pm #59835c_howdyParticipant…we will die’ without more money…
Small businesses drive China’s economy. The coronavirus outbreak could be fatal for many
Analysis by Laura He, CNN Business
Updated 1433 GMT (2233 HKT)
February 14, 2020
https://edition.cnn.com/2020/02/14/economy/coronavirus-china-economy-small-businesses/index.html
Hong Kong (CNN Business)The small companies that drive China’s economy are worried about how much damage the novel coronavirus outbreak will cause. Without help or a reprieve from the disease, many may have only weeks to survive.
While some larger companies are reopening their doors after weeks of lockdowns designed to contain the epidemic, small businesses often can’t comply with the strict health rules now required in many regions and many don’t have the option of letting employees work from home.
A survey of 163 companies of all sizes across China found that less than half were able to get back to work this week, according to investment bank China International Capital Corp, which published the results. Even more alarming: A third of roughly 1,000 small and medium-sized companies surveyed by academics from Tsinghua University and Peking University last week said they could only survive for a month with the cash they have.
That could spell terrible news for China’s entrepreneurs — and an even worse reality for the country’s economy. About 30 million small and medium-sized businesses contribute more than 60% of the country’s GDP, according to government statistics published last September. The taxes they pay account for more than half of government revenue, and they employ more than 80% of China’s workers.It’s not clear how many of those companies will ultimately feel the full impact of the virus. Surveys cover only a tiny slice of the sector, and the full extent of the outbreak’s consequences are still impossible to determine. But many small companies were already struggling before the coronavirus began infecting tens of thousands across the country. The world’s second largest economy has been slowing down due to a combination of rising debt, a slump in domestic demand and a trade war with the United States. Now they face going without business for weeks on end.
“The coronavirus could be the straw that breaks the camel’s back,” wrote Zhao Jian, director of the Shandong province-based Atlantis Research Institute in a research note earlier this month. He warned that if the outbreak doesn’t end soon, unemployment will likely rise as businesses shut down — a problem Beijing had been fighting hard this year to prevent. Job losses could spur a tide of housing foreclosures, Zhao added, compounding the country’s economic woes.Some business owners have gone public with their plight. Beijing entrepreneur Wu Hai wrote on social media app WeChat this week that the outbreak could destroy more than 50 karaoke bars he runs across the country. The pastime has been halted as the government maintains a shutdown of popular entertainment spots where “cross infection risks” are high.
In the post, Wu lamented the closures and said the lack of business puts his 1,500 workers at risk of losing their jobs. He wrote that his company, MeiKTV, has about 12 million yuan ($1.7 million) in cash on hand, giving it about two months to survive if he’s unable to reopen for business.
“That means we will die in April unless investors continue to give us money,” he wrote.Shu Congxuan, chairman of Home Original Chicken, said last Saturday that his fast food chain has shut more than 400 stores since the outbreak began. In a Weibo post, he warned that his company is in danger of running out of cash, since it still needs to pay rent and employees. But he said he would try to make sure his employees keep their jobs, even if he needs to sell his houses and cars.
Other companies appear to be taking desperate measures to recoup at least some of their losses. Beijing-based Meizhou Dongpo Restaurant said on Weibo that its employees have set up stalls to sell fresh vegetables on the street. While the company did not elaborate on the reason for its decision, a local government-run newspaper reported that the restaurant had purchased fresh produce for the Lunar New Year holiday season, but was unable to use it because of the outbreak.
The outcome for many businesses could be dire if the situation does not improve rapidly. According to the Tsinghua University and Peking University survey of firms, 85% of respondents said they would go out of business if the outbreak lasts three months. By the six month mark, 90% of the companies would collapse.Even a recovery in the near future may not come soon enough for some. Before the outbreak, Chinese companies were preparing to pay back or refinance a lot of debt this year, according to analysts at S&P Global Ratings. Given the rising risk to the economy, they may find it harder to borrow.
The S&P researchers warned in a note this week that if the public health crisis stabilizes next month, liquidity will still be under pressure through at least the first half of the year. They added that the outbreak will also heighten the risk of default for Chinese companies.Beijing already knows that it has a major problem on its hands. Before the outbreak, senior officials had characterized the prevention of mass unemployment as their top priority for 2020. Now that the likelihood of mass job losses is increasing, the country is going all out to stop it from happening.
Some of the most prominent companies in China, for example, are taking in workers displaced by the outbreak. JD.com (JD), one of China’s largest e-commerce firms, earlier this week promised to open up more than 20,000 new positions. Alibaba (BABA) announced a similar plan.
The government is also stepping in. Last week, the People’s Bank of China pumped billions of dollars into the money market to shore up banks’ ability to lend money. The central bank also set up a 300 billion yuan ($43 billion) special fund to provide cheap loans to key companies in epidemic prevention. Meanwhile, the finance ministry announced government subsidies to make those loans even cheaper.Local governments in Beijing, Shanghai and several provinces have also rolled out targeted measures to help small businesses, including offering subsidies to landlords so they can reduce rents, and allowing small companies to delay the payment of social security contributions or taxes.
But it’s not clear how helpful some of those policies will be.
Wu, the karaoke bar owner, wrote in his WeChat post that he felt his company was still at a “dead end” even with the policies offered to him. Social security, for example, is still a major expense for employers. Wu suggested that simply delaying those payments would not really help.
“Social Security Bureau, how generous you are,” Wu commented sarcastically. “Our employees are going to lose jobs. The company is going to collapse. You not only don’t want to take some money out, but you still want to collect money from us — not even a penny less!”
Wu did not respond to a request for comment from CNN Business. But in his WeChat post he also criticized the usefulness of giving subsidies to landlords. While he said the policy is “well intended,” he questioned whether landlords would actually reduce the amount their tenants pay.
He also doubted the effectiveness of preferential loans set up by the central bank.
“We have no fixed assets as collateral. We have no operating cash flows — because we can’t open for business — as collateral,” Wu wrote. “Tell me, which small and medium-sized company can get the bank funding?”March 17, 2020 at 6:17 am #59837c_howdyParticipantOn Guy Fawkes Night in London in 1997, a financially desperate 16-year-old, Evey Hammond, sexually solicits men who are actually members of the state secret police, called “The Finger”. Preparing to rape and kill her, the Fingermen are dispatched by V, a cloaked anarchist wearing a mask, who later remotely detonates explosives at the Houses of Parliament before bringing Evey to his contraband-filled underground lair, the “Shadow Gallery”. Evey tells V her life story, which reveals her own past as well as England’s recent history. During a dispute over Poland in the late 1980s the Soviet Union and the United States, under the presidency of Ted Kennedy, entered a global nuclear war which left continental Europe and Africa uninhabitable. Although Britain itself was not bombed due to the Labour government’s decision to remove American nuclear missiles, it faced environmental devastation and famine due to the nuclear winter. After a period of lawlessness in which Evey’s mother died, the remaining corporations and fascist groups took over England and form a new totalitarian government, Norsefire. Evey’s father, a former socialist, was arrested by the regime.
-https://en.wikipedia.org/wiki/V_for_Vendetta#Book_1:_Europe_After_the_Reign-
Even a limited India-Pakistan nuclear war would bring global famine, says study
MARCH 16, 2020
by Columbia University
https://phys.org/news/2020-03-regional-nuclear-war-global-food.html
The concept of nuclear winter—a years-long planetary freeze brought on by airborne soot generated by nuclear bombs—has been around for decades. But such speculations have been based largely on back-of-the-envelope calculations involving a total war between Russia and the United States. Now, a new multinational study incorporating the latest models of global climate, crop production and trade examines the possible effects of a less gargantuan but perhaps more likely exchange between two longtime nuclear-armed enemies: India and Pakistan. It suggests that even a limited war between the two would cause unprecedented planet-wide food shortages and probable starvation lasting more than a decade. The study appears this week in the journal Proceedings of the National Academy of Sciences.
Of an estimated 14,000 nuclear warheads worldwide, close to 95 percent belong to the United States and Russia. India and Pakistan are thought to have about 150 each. The study examines the potential effects if they were to each set off 50 Hiroshima-size bombs—less than 1 percent of the estimated world arsenal.
In addition to direct death and destruction, the authors say that firestorms following the bombings would launch some 5 million tons of soot toward the stratosphere. There, it would spread globally and remain, absorbing sunlight and lowering global mean temperatures by about 1.8 degrees C (3.25 F) for at least five years. The scientists project that this would in turn cause production of the world’s four main cereal crops—maize, wheat, soybeans and rice—to plummet an average 11 percent over that period, with tapering effects lasting another five to 10 years.
“Even this regional, limited war would have devastating indirect implications worldwide,” said Jonas Jägermeyr, a postdoctoral scientist at the NASA Goddard Institute for Space Studies who led the study. “It would exceed the largest famine in documented history.”
According to the study, crops would be hardest hit in the northerly breadbasket regions of the United States, Canada, Europe, Russia and China. But paradoxically, southerly regions would suffer much more hunger. That is because many developed nations in the north produce huge surpluses, which are largely exported to nations in the Global South that are barely able to feed themselves. If these surpluses were to dry up, the effects would ripple out through the global trade system. The authors estimate that some 70 largely poor countries with a cumulative population of 1.3 billion people would then see food supplies drop more than 20 percent.
Some adverse effects on crops would come from shifts in precipitation and solar radiation, but the great majority would stem from drops in temperature, according to the study. Crops would suffer most in countries north of 30 degrees simply because temperatures there are lower and growing seasons shorter to begin with. Even modest declines in growing-season warmth could leave crops struggling to mature, and susceptible to deadly cold snaps. As a result, harvests of maize, the world’s main cereal crop, could drop by nearly 20 percent in the United States, and an astonishing 50 percent in Russia. Wheat and soybeans, the second and third most important cereals, would also see steep declines. In southerly latitudes, rice might not suffer as badly, and cooler temperatures might even increase maize harvests in parts of South America and Africa. But this would do little to offset the much larger declines in other regions, according to the study.
Since many developed countries produce surpluses for export, their excess production and reserves might tide them over for at least a few years before shortages set in. But this would come at the expense of countries in the Global South. Developed nations almost certainly would impose export bans in order to protect their own populations, and by year four or five, many nations that today already struggle with malnutrition would see catastrophic drops in food availability. Among those the authors list as the hardest hit: Somalia, Niger, Rwanda, Honduras, Syria, Yemen and Bangladesh.
If nuclear weapons continue to exist, “they can be used with tragic consequences for the world,” said study coauthor Alan Robock, a climatologist at Rutgers University who has long studied the potential effects of nuclear war. “As horrible as the direct effects of nuclear weapons would be, more people could die outside the target areas due to famine.”
Previously, Jägermeyr has studied the potential effects of global warming on agriculture, which most scientists agree will suffer badly. But, he said, a sudden nuclear-caused cooling would hit food systems far worse. And, looking backward, the the effects on food availability would be four times worse than any previously recorded global agriculture upsets caused by droughts, floods, or volcanic eruptions, he said.
The study might be erring on the conservative side. For one, India and Pakistan may well have bombs far bigger than the ones the scientists use in their assumptions. For another, the study leaves India and Pakistan themselves out of the crop analyses, in order to avoid mixing up the direct effects of a war with the indirect ones. That aside, Jägermeyr said that one could reasonably assume that food production in the remnants of the two countries would drop essentially to zero. The scientists also did not factor in the possible effects of radioactive fallout, nor the probability that floating soot would cause the stratosphere to heat up at the same time the surface was cooling. This would in turn cause stratospheric ozone to dissipate, and similar to the effects of now-banned refrigerants, this would admit more ultraviolet rays to the earth’s surface, damaging humans and agriculture even more.
Much attention has been focused recently on North Korea’s nuclear program, and the potential for Iran or other countries to start up their own arsenals. But many experts have long regarded Pakistan and India as the most dangerous players, because of their history of near-continuous conflict over territory and other issues. India tested its first nuclear weapon in 1974, and when Pakistan followed in 1998, the stakes grew. The two countries have already had four full-scale conventional wars, in 1947, 1965, 1971 and 1999, along with many substantial skirmishes in between. Recently, tensions over the disputed region of Kashmir have flared again.
“We’re not saying a nuclear conflict is around the corner. But it is important to understand what could happen,” said Jägermeyr.
The paper was coauthored by a total of 19 scientists from five countries, including three others from Goddard, which is affiliated with Columbia University’s Earth Institute: Michael Puma, Alison Heslin and Cynthia Rosenzweig. Jägermeyr also has affiliations with the University of Chicago and Potsdam Institute for Climate Impact Research.
More information: Jonas Jägermeyr el al., “A regional nuclear conflict would compromise global food security,” PNAS (2020). http://www.pnas.org/cgi/doi/10.1073/pnas.1919049117
Journal information: Proceedings of the National Academy of Sciences
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