THE HIGH COST OF ILLNESS.

From the moment news of the sars epidemic broke, analysts have been busy trying to calculate its economic costs. The absence of tourists and shoppers in places like Hong Kong and Singapore means billions of dollars in lost sales. Beijing has closed its theatres and discos, and Shanghai and Shenzhen have shut down their stock exchanges. A recent Goldman Sachs report said that if sars remains a problem in East Asia it has "real potential to disrupt industrial production and foreign trade."If the disruption were to become bad enough, it could hobble the global economy, since everything we buy these days seems to be made in that part of the world.

Still, epidemics aren't what they used to be. No modern epidemic is likely to reshape social and economic systems in the manner of premodern plagues. The Black Death helped undermine feudalism. The population decline was so severe that the individual's labor grew more valuable, which enabled serfs to abandon their lords and become tenant farmers or urban workers. And a couple of centuries later smallpox transformed the Western hemisphere by wiping out native populations and clearing the way for European settlement.

Starting in the late eighteenth century, though, epidemics tended to hit economies with containable shocks. In 1793, yellow fever cut off Philadelphia from world trade and brought its economy to a near-standstill, but the city bounced back soon enough. In the nineteenth century, a series of cholera pandemics virtually emptied New York, shut down London's river trade, and in Hungary prompted riots by peasants who believed that their landlords were poisoning them. A century ago, breakouts of bubonic plague stalled San Francisco's economy and threatened to isolate it from the rest of the country. The Spanish-flu epidemic of 1918, which killed more than twenty million people worldwide, caused waves of business failures across the nation and helped provoke a short recession. And in the past two decades, despite the great advances in public health since the Second World War, infectious diseases have become a problem again. In 1994, for example, an outbreak of pneumonic plague in the city of Surat, in western India, curtailed trade and tourism, crippled the city's diamond-cutting industry, and cost India more than a billion dollars.

Devastating as modern epidemics can be, the economic damage they do--much of it the result of panic and of restrictive public-health measures--is usually short-lived. Modern economies are remarkably resilient. (Not long after the Spanish-flu epidemic, the U.S. economy entered one of the biggest booms in its history.) At least in economic terms, epidemics are much less destructive than endemic diseases like malaria and tuberculosis, which afflict hundreds of millions of people in the developing world. Epidemics may have a kind of dark glamour, but it's the old workaday diseases that do the real harm.

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