Monday, April 06, 2020

Apple to ship 1 mn face shields a week for medical workers

AFP/File / Josh EdelsonApple has said it will ship one million face shields a week for medical workers
Apple has said it will soon be producing one million face shields a week for medical workers battling the coronavirus pandemic.
The tech giant had already sourced 20 million surgical masks from around the world to help address a global shortage, chief executive Tim Cook said in a video posted to Twitter on Sunday.
But the company had also designed its own transparent protective face shield and begun mass production at its factories in the US and China, he added.
"We plan to ship over one million by the end of this week," said Cook.
Initial distribution would be focused on the US but the company hoped to "quickly expand distribution" to other countries, he said.
Apple joins several global firms that have modified their production lines to meet demand for protective gear, including Italian luxury brand Prada.
US President Donald Trump last month issued a federal order forcing auto giant General Motors to manufacture ventilators after a shortage of the hospital equipment, which is crucial for treating critical COVID-19 cases.
THIS IS THE CHAOS OF FREE MARKET CAPITALISM, WHERE VOLUNTARISM AND VOLUNTEERISM REPLACE SOCIAL PLANNING AND PLANNED DISTRIBUTION REQUIRED TO FIGHT AND DEFEAT DEADLY PANDEMICS LIKE COVID-19.ONLY SOCIALISM, SOCIAL SOLIDARITY AND MUTUAL AID CAN DEFEAT THIS PANDEMIC AND THOSE APPEARING IN THE FUTURE



Coronavirus: from China to the US, consumer behaviour radically altered as world retreats into ‘survival mode’

FROM PRODUCTIVE CAPITAL (FORDISM) 
TO THE DOMINANCE OF THE CONSUMER (CREDIT CARD CAPITALISM)

The coronavirus pandemic has completely changed patterns of consumer psychology across the world, experts say

Complexity of the crisis, the number of variables and its magnitude make a consumer recovery unprecedented and difficult to predict

Cissy Zhou and Mark Magnier Published:1 Apr, 2020

The coronavirus has caused panic buying around the world as consumers frantically stockpile of goods such as toilet paper, hand sanitisers and masks. Illustration: Brian Wang

Before the coronavirus crisis began rippling through the global economy, Susan Wang had big plans for 2020.

Not only was she going to buy a new Apple MacBook and iPad, plus a projector so she could host friends for movies at home, but she was set on making a career move.

“I was planning to change my job, but my headhunter told me that all recruitment has been postponed to the second quarter,” said the 27-year-old who works for a British company in Hong Kong.

“Our headquarters in London has a plan for redundancy, too. It is better to save some money in case I get laid off.”

As Covid-19 spreads across the world, sending stock markets reeling and prompting big companies to slash jobs, Wang has become increasingly frugal like scores of other consumers from China to the United States.

She has stopped eating at restaurants and now tries to keep her weekly food bill under HK$500 (US$64), whereas in the past she wouldn’t think twice about spending HK$100 per meal.

Amid mounting uncertainty, the coronavirus pandemic – which has claimed the lives of more than 41,000 people and infected at least 842,000 worldwide – is fundamentally changing consumer behaviour in Asia, Europe and North America.

Consumer experts said the 2009 global financial crisis, the Great Depression that started in 1929 and the September 11 terrorist attacks give some clues about how and when global consumption might recover. But the complexity of this crisis, the number of variables and its magnitude make this consumer recovery unprecedented and difficult to predict, they added.

Coronavirus: What impact will the economic fallout from the Covid-19 pandemic have on you?

“The coronavirus pandemic has completely changed patterns of consumer behaviour all over the world. People are afraid, and when people are afraid, they go into survival mode,” said Jesse Garcia, a Los Angeles-based consumer psychologist, who is also the CEO of market consulting firm My Marketing Auditors.

Hong Kong’s retail sales plummeted a record 44 per cent in February and those figures are only expected to get worse, with sales forecast to slump between 30 and 40 per cent in the first half of the year, according to the Hong Kong Retail Management Association.

In the US, retail sales dropped by 0.5 per cent in February, even before many states had issued stay-at-home orders to protect the world’s largest economy. The decline was the biggest fall since December 2018.

Experts say non-essential products and services are set to be worst affected by the coronavirus pandemic, while goods and services that can be consumed at home will see a spike in sales.

The coronavirus pandemic has completely changed patterns of consumer behaviour all over the world. People are afraid, and when people are afraid, they go into survival modeJesse Garcia



“Online consumer behaviour is frenetic,” said Ross Steinman, a professor of psychology at Widener University in the US state of Pennsylvania. “Consumers are refreshing and refreshing and refreshing websites to secure grocery delivery times, purchase paper towels from their usual big box retailer and scavenge for rice and canned soup from third party sellers on Amazon.

“A pronounced spike in coronavirus cases will only amplify the freneticism.”
So far, one of the biggest shortages for consumers is toilet paper. Television stations across the globe have beamed images of empty supermarket shelves and huge queues as people hoard toilet paper rolls, masks and hand sanitiser.

The frantic stockpiling can be explained by a psychological concept called informational conformity, said Vicki Yeung, associate professor at the Department of Applied Psychology at Lingnan University in Hong Kong.

A pronounced spike in coronavirus cases will only amplify the freneticism
Ross Steinman

“When people lack knowledge and are in an uncertain situation, they tend to follow the group’s behaviour and blindly conform, but once they obtain more information, and digest and process the situation, the panic gradually fades away,” she said.

“During this Covid-19 pandemic, people generally feel jittery and anxious because they feel their sense of control has disappeared.”

Unlike other recent global crises such as the September 11 attacks, the coronavirus is less a one-time sharp shock to the system and more of a rolling source of anxiety that could retreat and resurface repeatedly, consumer behaviour experts said.

This was the pattern with the Black Death plague that hit Europe in 1347 and returned episodically over many years, ultimately killing millions of people.

During this Covid-19 pandemic, people generally feel jittery and anxious because they feel their sense of control has disappearedVicki Yeung

“It may be we’ll have to shut down things again in October or August. And this could go on for years,” said Charley Ballard, an economist with Michigan State University in the US. “The more that happens, the more damage it does to buoyant consumer psychology.”

Furthermore, relative to the 2009 financial crisis and even the Great Depression, when much of the damage was concentrated at least initially in the financial sector, this crisis has seen virtually the entire economy grind to a halt all at the same time, devastating employment and consumption.


Last week, a record 3.3 million Americans applied for unemployment benefits within one week, as restaurants, hotels, barber shops, gyms and retail outlets shut down in a nationwide bid to stem the pandemic. The previous record of 695,000 was set in 1982.


On Tuesday, Goldman Sachs predicted the US jobless rate will hit 15 per cent in the second quarter of this year from the coronavirus economic freeze, and could rise further beyond that to near the historic peak of 24.9 per cent seen in 1933 during the Great Depression. Economists at the St. Louis district of the US Federal Reserve projected unemployment could cost as many as 47 million jobs in the US this year, sending the unemployment rate past 32 per cent before making a sharp recovery.


US now has world’s most coronavirus cases, surpassing China
China’s unemployment rate jumped to 6.2 per cent for January and February from 5.2 per cent in December and 5.3 per cent a year earlier. It was the highest level since records began in 2016, but did not include China’s estimated 291 million migrant workers.

Consumer spending accounts for more than 60 per cent of the Chinese economy and drives 70 per cent of the US economy. But with the pandemic causing many people to go into hibernation and likely to lead to cycles of job cuts, economists have predicted a consumer-led global recession by the second quarter of this year.

Just how long it will take for consumer behaviour to return to normal depends on each person’s psychological resilience, including how quickly they can adapt to change, how optimistic they are and whether they can adopt strategies to regain a sense of control, Yeung said.

Anirban Mukhopadhyay, chair professor of marketing at Hong Kong University of Science and Technology, said as long as the coronavirus threat was still present, people would remain fearful to some extent. But he added that people were resilient.

Satellite images show world sites deserted amid coronavirus pandemic

“Human beings adapt to events and stimuli over time,” Mukhopadhyay said. “Research has shown that even people who win lotteries tend to return to their earlier levels of life satisfaction after some months, as do people who have to have amputations.

“So even if the source of the fear does not go away, we learn to live with it.”

Ballard, from Michigan State University, estimated it could take upwards of two years for American consumers to feel secure enough in their jobs and gain enough confidence to fully open their wallets. A longer and more episodic duration for the disease could push that higher, he added.

Further complicating the consumer picture, he said, is that many supply chains are at risk of breaking. And consumers will be wary of spending for a while in many traditional areas, including crowded sporting events and concerts, restaurants and flights.


A new phase of coronavirus blame game: what is the legacy of Covid-19 on global supply chains?

Some experts have even suggested that consumer behaviour may be permanently changed as a result of the pandemic.

“It seems very unlikely that people will get back to life as it was before, once the coronavirus is over,” said Andreas Kappes, a lecturer in psychology at City University of London

“People’s behaviour is extremely orthodox, often referred to as the status quo bias and captured in expressions like ‘past behaviour best predicts future behaviour.’ Now, the crisis forces us to change our behaviour, radically, and we might discover that new way suits us better.”

TIME TO TRY SOCIALISM AND SOCIAL SOLIDARITY
MUTUAL AID


Additional reporting by Simone McCarthy.

This article appeared in the South China Morning Post print edition as: Why we might change the habits of a lifetime

COMMENTS

Cissy Zhou
Cissy joined the SCMP in 2019. Prior to that, she has been a producer at BBC News and investigative reporter at CaiXin Media. She is interested in China's politics and economy.

Mark Magnier
Mark Magnier is a US correspondent based in Washington. Before joining the Post, he worked for the Wall Street Journal in China and for the Los Angeles Times in India, China and Japan. He’s covered the Chinese economy, China and India’s explosive rise and conflicts in Iraq, Pakistan and Afghanistan.

Coronavirus

Sunday, April 05, 2020

Coronavirus: China’s unemployment crisis mounts, but nobody knows true number of jobless

As many as 205 million Chinese workers cannot find jobs or are unable to return to their previous posts, according to one analyst

Debate over China’s unemployment reality amid coronavirus heats up, with holes picked in official government statistics


UNEMPLOYMENT IS THE FINAL NAIL IN THE COFFIN OF THE MYTH OF THE PEOPLES REPUBLIC OF CHINA BEING SOCIALIST OR COMMUNIST IN ANYTHING BUT NAME, IT IS A NATIONALIST PROTECTIONIST STATE CAPITALIST ECONOMY

Frank Tang in Beijing 3 Apr, 2020

Now a debate is raging in China, as statisticians crunch their own numbers, trying to put a figure on how many people in China have lost their jobs due to the lockdown and the stop-start recovery effort. Illustration: Lau Ka-kuen

Yu Zhixiang received his redundancy notice in early-March, while he was on sick leave, weeks after the coronavirus outbreak forced Chinese economy to come to a standstill.

The 47-year-old had worked as a contract translator on Beijing’s Financial Street, home to many of China’s largest banks and the nation’s central bank. He was one of millions, maybe even tens of millions, of Chinese people who lost their jobs during the outbreak, but who were not immediately reflected in national unemployment data.

In the United States, data on the number of Americans filing their first claim for unemployment benefits each week offers a relatively up-to-date reading of the national jobless situation. But in China, jobless indicators are released on a monthly or even quarterly basis, and cover only part of the workforce.
The most widely cited figure, the surveyed urban unemployment rate issued by the National Bureau of Statistics (NBS), jumped to an all-time high of 6.2 per cent in January and February combined, up from 5.2 per cent in December. This roughly equated to an additional 5 million people thrown out of work.

The indicator, however, almost certainly underestimates the real jobless picture in the world’s second largest economy, since it excludes the many migrant workers who lost their jobs or could not return to work because of the travel restrictions put in place to prevent the spread of the coronavirus.

Now a debate is raging in China, as statisticians crunch their own numbers, trying to put a figure on how many people in China have lost their jobs due to the lockdown and the stop-start recovery effort.

Liu Chenjie, chief economist at fund manager Upright Asset, wrote in an article this week that the pandemic may have pushed 205 million workers into “frictional unemployment”, where they want to work but cannot or are unable to go back to work.

If true, that figure would represent more than a quarter of China’s 775 million workforce and would be vastly higher than the 6.2 per cent figure posited by the government’s survey.

It is not a like-for-like comparison, but Liu’s calculations emphasise the limitations of the official data, which only cover the urban workforce, of 442 million, but exclude the
290 million migrant workers often more vulnerable to economic fluctuations.

In addition, China’s monthly survey is conducted using a small sample base of about 120,000 households, only 0.03 per cent of the nation’s urban workforce.

At 6.2 per cent, the official jobless survey of urban workers would mean 27.4 million people are out of work, according to South China Morning Post calculations, compared to Liu’s 205 million nationwide figure.


The article, published by Caixin magazine, said that in the first two months of the year about 5 million jobs were cut at large industrial enterprises, those with annual revenue over 20 million yuan (US$2.8 million). Another 20 million job losses took place in small industrial firms, Liu wrote.

Coronavirus: Chinese companies cut salaries and staff in industries hit hardest by Covid-19
But the bulk of job losses in China took place in China’s service sector, where employment conditions are highly dependent on consumers’ willingness and ability to spend, which has been sharply curtailed by the pandemic.

In total, about 180 million service sector jobs disappeared due to the coronavirus outbreak, Liu calculated, based on a series of government statistics.

“Employment in industrial production and services may improve as the Chinese economy gradually returns to normal,” Liu wrote. But the speed and degree of improvement could be hindered by the spread of Covid-19 across the globe, he warned.

Another government metric, the urban registered jobless rate, is published quarterly and measures only the urban residents willing to file tedious reams of paperwork to register as being unemployed. This indicator has been stable at a rate of around 4 per cent for years, with few fluctuations over economic cycles.

Due to the lack of official data covering China’s entire workforce, economists and analysts have started to rely on private surveys, online job listings, anecdotal reports and even indicators such as subway rides in major cities to get a clearer view of the impact of the coronavirus outbreak on the unemployment situation in China.

It is not yet certain if these workers have lost their jobs, but the uncertainty over their job situations has become apparent
Hao Hong, Bocom International

Hao Hong, the head of research at Bocom International in Hong Kong, wrote in a research note last week that up to one-third of Chinese workers have not gone back to work, even though many have returned to the area where their job is located, partly based on urban subway ride statistics.

“It is not yet certain if these workers have lost their jobs, but the uncertainty over their job situations has become apparent,” Hong wrote, warning that the job losses could be more severe in China’s smaller cities, because they have generally fewer employment opportunities.

A visit by the Post to Dongguan, a manufacturing hub in the Pearl River Delta, found many factories cutting jobs and recruitment, as export orders have begun to vanish. Many of China’s 180 million export-oriented jobs will be at risk if global consumer demand continues to shrink as the pandemic spreads.

It is too early to say how many of those who were temporarily unemployed in February or March will suffer from extended unemployment. But it is clear that China is facing its largest unemployment challenge since the ruling Communist Party recognised that “unemployment” did, in fact, exist in the early-1990s. Before that, Beijing considered unemployment a product of capitalism.

Unlike two previous rounds of mass unemployment, when China laid-off tens of millions of state-owned factory workers in the late-1990s as it restructured its economy, or when the global financial crisis in 2008 left 20 million migrant workers out of work, the coronavirus shock is hurting employment across almost all sectors in the economy.


The few exceptions, such as online shopping and live streaming industries, have prospered as people have been forced to stay at home.

As the worrying employment outlook became clear, the Chinese government
shifted its focus. In March, Premier Li Keqiang said the economic growth rate is “not a big deal”, as long as China can maintain a stable jobs market.

Behind Beijing’s relentless pursuit of economic growth has been the desire to create enough jobs, thereby maintaining social stability.

However, with the economy set to contract in the first quarter, it is unclear whether there will be enough jobs created to accommodate the 9 million new graduates joining the workforce this summer, never mind the millions of migrant workers looking for work.
Beijing’s challenge is particularly severe given the lack of an adequate social safety net in China.

Unemployment benefits are small and reserved for only a few – a maximum of 2.5 million people claimed unemployment benefits in each quarter over the past decade, in a country of almost 1.4 billion.

In the late-90s, China’s private sector boom absorbed those laid off by the state, while following the financial crisis the booming service sector and government stimulus spending created jobs for migrant workers. Now, there does not appear to be any quick-fire solution for China’s hoards of newly unemployed citizens.

Lu Zhengwei, chief economist at Industrial Bank, said China’s “hidden unemployment” will become more visible in 2020.

“Rural migrant workers who lost their paid work are generally not included in government data,” Lu said. “Many of them may find it hard to maintain their previous living standards. Many migrant workers will have to go back to their farmland to support a basic lifestyle.”

Yu, the former contract translator who has no farmland to tilt, said he wouldn’t bother applying for unemployment benefits but would instead try to find freelance work.

“There are still some opportunities,” he said. “But wages are apparently lower than before.”

This article appeared in the South China Morning Post print edition as: Can China handle historic crisis in unemployment?



Frank Tang joined the SCMP in 2016 after a decade of China economy coverage and government policy analysis.
USD$2 trillion package a ‘good start’ but economic recovery relies on coronavirus containment, US economist says
BOURGEOIS POLITICAL ECONOMIST
Larry Summers, former US Treasury secretary, applauds the federal government’s swift reaction but warns there are limitations to what policies can achieve


Jodi Xu Klein in New York Published: 2 Apr, 2020

Larry Summers, former US Treasury secretary. Photo: Bloomberg
A top American economist said on Wednesday that the federal government’s economic package is a “good start” but complete recovery relies solely on containing the spread of the coronavirus.

“Success in controlling growth [of] the disease and, ultimately, putting it behind us is going to be the single most important determinant of the economic consequences of the Covid episode,” said Larry Summers, former US Treasury secretary, at a virtual event hosted by the Economic Club of New York.

Summers applauded the efforts by the Federal Reserve, Congress and the executive branch to pass legislation to stabilise the economy.

“They have made a strong start by acting with what by the context of previous crises is remarkable rapidity,” said the former director of the White House National Economic Council of the Obama administration, adding that the passage of the US$2.2 trillion package “dwarfs the Recovery Act in the spring of 2009” after the financial crisis.

Homeless in Las Vegas placed in outdoor parking lot for social-distancing

While applauding the federal government’s swift reaction, Summers warned that there are limitations to what policies can achieve.

“What happens here is ultimately going to be determined by the disease,” said Summers. “No matter how negative the interest rate, no matter how voluminous the fiscal policy, if people cannot leave their houses to work at a job or go to a store, there is going to be a very substantial limit on what the GDP can be.”

Summers warned that “the single greatest mistake that we could make would be a premature declaration of victory”.

Many New York coronavirus patients are young, surprising doctors
2 Apr 2020



He said the economy will take an even bigger hit if “we all resumed lives of relative normality and then had to return to a situation like the present”.

The massive US$2.2 trillion economic package would add to the United States’ total debt – the amount owned by the US government – that has already ballooned to a record US$23.5 trillion this year.

Summers was not concerned about the debt on Wednesday.

“If we were not to borrow, if the depression were to become that much more serious and continue that much longer, our solvency as a country would not be improved,” he said. “At this moment, the risks of under investing in our future far exceed the risks of over borrowing.”

ne challenge Summers pointed out is how to implement the massive economic plan that covers individuals and businesses with loans and grants.

“The overwhelming priority should be the protection of employees and not the protection of shareholders or bondholders who had been compensated for the risks that they have taken,” Summers said.


Pence tries to blame China and US health agency for slow virus response
2 Apr 2020


When we put Covid-19 behind us, Summers said he would expect to see a recovery that is going to take place “faster than the conventional wisdom”.

But in the short term, the outlook remains grim as about one-third of the labour force is not working, he said.

As of Wednesday, Covid-19 has infected more than 200,000 Americans and claimed more than 4,000 lives in the country. More than 75 per cent of Americans have been ordered to stay at home, keeping social distancing to contain the spread.

This article appeared in the South China Morning Post print edition as: economic recovery ‘hinges on containment of virus’



Jodi Xu Klein is an award-winning business journalist with 20 years of experience. She joined the Post in 2017, after a decade based in the US reporting for The Wall Street Journal and Bloomberg. She was part of the Time Magazine team that won the Henry R. Luce Award, breaking the China SARS story.

ECONOMIC IMPACT OF COVID-19 ON CHINESE ECONOMY VIDEOS




Confirmed Covid-19 cases UPDATED DAILY


World at risk of second Great Depression due to coronavirus, says Chinese central bank

Zhu Jun from the People’s Bank of China says the risk is small, but the world must be alert to the threat

Economies around the world have been hit by the measures taken to stop the spread of Covid-19

Karen Yeung 5 Apr, 2020 SCMP

Measures to curb the spread of Covid-19 are likely to take
 a serious economic toll.  Photo: Xinhua

China’s central bank has warned the international community to be alert to the risk of a “Great Depression” in the wake of the Covid-19 outbreak, although it said the chances of this occurring was low.

“The possibility of a ‘Great Depression’ cannot be ruled out if the epidemic continues to run out of control, and the deterioration of the real economy is compounded by an eruption of financial risks,” Zhu Jun, director of the international department of the People's Bank of China, was quoted by local media as saying last week.

The difficult trade-off between the need to protect public health and the economic cost of shutting almost all face-to-face human activity has prompted warnings from many economists that the economic shock from Covid-19 may be more severe than the 2008 global financial crisis or even the Great Depression.


The latter, which began with the Wall Street Crash of 1929, saw credit markets freezing up, massive bankruptcies, US GDP falling by more than 10 per cent and unemployment rates that touched 25 per cent.


Professor Terence Chong Tai-leung from the department of economics at the Chinese University in Hong Kong, said he was optimistic the global contraction would not be as severe as the 1930s slump.

“Governments are likely to decide to ease off restrictions by July. They need to prevent disruptions that would cause food shortages, social unrest or greater damage to human lives and the economy than if the restrictions continued,” Chong said. “The economy will naturally rebound when restrictions are lifted.”

But there is evidence the major toll this crisis is already having a massive impact on the US employment situation. US initial jobless claims of 6.65 million last week, up from 3.3 million the week previous week, highlighted fears of mass unemployment.

Currently global markets are already down 35 per cent, credit markets have seized up to 2008 levels. Even mainstream financial firms such as Goldman Sachs, JP Morgan and Morgan Stanley expect US GDP to fall by an annualised rate of 6 per cent in the first quarter, and by 24 per cent to 30 per cent in the second.


Moody’s has warned that 30 per cent of US home loans may stop being serviced as a result of job losses and a lack of support for small businesses.

Zhu from the Chinese central bank said the biggest market uncertainty came from the fact that central banks’ swift and forceful actions could not directly help to control the epidemic but stopping its spread would help market confidence.


He said the policies of advanced economies had helped stabilise stock market sentiment but hidden risks continued to exist in the global financial system.

For example, stock markets in developed countries have been rising for many years so their valuations are under pressure.

If the market panics due to the intensifying impact of the epidemic, that could lead to tighter market liquidity, triggering market contagion across different asset classes.

The corporate sector, which has a relatively high level of debt, could also see an increase of defaults on banks’ non-performing assets and corporate bonds.


Nouriel Roubini, professor of economics at New York University's Stern School of Business, said the public-health response in advanced economies has fallen far short of what is needed to contain the pandemic and so the risk of a “greater depression” was rising by the day.

He warned that if a series of virus-related negative supply shocks reduced potential growth, the fiscal response of many countries could hit a wall as they would not be able to borrow enough in their own currency.

“After the 2008 crash, a forceful (though delayed) response pulled the global economy back from the abyss. We may not be so lucky this time,” Roubini said. “Who will bail out governments, corporations, banks and households in emerging markets?”



Despite a US$349 billion government backstop, US banks are refusing to lend to struggling small businesses at 0.5 per cent, and choosing to make the loans at 1.0 per cent instead.

Michael Every, global strategist at Rabobank said, in reality these financial packages can be hard to access, and may not be really effective.

“That is a Great Depression happening in the blink of an eye,” Every said. “Who knows where the damage will spread to, and when, if we are going to see 25 per cent unemployment across much of the developed world for an extended period?”


---30---
How World War II got Japan and the US hooked on amphetamines, ‘the ultimate military performance enhancing drug’


In this second excerpt of Peter Andreas’ book Killer High, the author recounts how a post-war surplus of the drug triggered addiction epidemics on both sides of the Pacific
Published: 23 Feb, 2020
https://www.scmp.com/magazines/post-magazine/long-reads/article/3051418/how-world-war-ii-got-japan-and-us-got-hooked

In The Art of War , Sun Tzu wrote that speed is “the essence of war”. While he, of course, did not have amphetamines in mind, he would no doubt have been impressed by their powerful war-facilitating psychoactive effects. Amphetamines – often called “pep pills”, “go pills”, “uppers” or “speed” – are a group of synthetic drugs that stimulate the central nervous system, reducing fatigue and appetite and increasing wakefulness and a sense of well-being.

Methamphetamine is a particularly potent and addictive form of the drug, best known today as “crystal meth”. All amphetamines are now banned or tightly regu­lated. The quintessential drug of the modern industrial age, amphetamines arrived relatively late in the history of mind-altering substances – commercialised just in time for mass consumption during World War II by the leading industrial powers.

Few drugs have received a bigger stimulus from war. As Lester Grinspoon and Peter Hedblom wrote in their 1975 study The Speed Culture, “World War II probably gave the greatest impetus to date to legal medically authorised as well as illicit black market abuse of these pills on a world­wide scale.” The story of this drugs-war relation­ship is there­fore mostly about the proliferation of synthetic stimulant use during World War II and its speed-fuelled aftermath.

While produced entirely in the laboratory, amphetamines owe their existence to the search for an artificial substitute for the ma-huang plant, better known in the West as ephedra. (AKA MORMON TEA) This relatively scarce desert shrub had been used as a herbal remedy for more than 5,000 years in China, where it was often ingested to treat common ailments such as coughs and colds and to promote concentration and alertness, including by night guards patrolling the Great Wall of China.


Japanese chemist Nagayoshi Nagai.

In 1887, Japanese chemist Nagayoshi Nagai successfully extracted the plant’s active ingredient, ephedrine, which closely resembled adrenaline, and in 1919, another Japanese scientist, Akira Ogata, developed a synthetic substitute for ephedrine. But it was not until amphetamine was synthesised in 1927, at a University of California at Los Angeles laboratory by young British chemist Gordon Alles, that a formula became available for commercial medical use.

Alles sold this formula to Philadelphia pharmaceutical company Smith, Kline & French, which brought it to the market in 1932 as the Benzedrine inhaler (an over-the-counter product to treat asthma and congestion) before introducing it in tablet form a few years later. “Bennies” were widely promoted as a wonder drug for all sorts of ailments, from depression to obesity, with little apparent concern or awareness of their addictive potential and the risk of longer-term physi­cal and psychological damage. And with the outbreak of another world war, it did not take long for such large-scale pill pushing to also reach the battlefield.


The Japanese imperial government sought to give its fighting capacity a pharmacological edge, contracting out methamphetamine production to domestic pharmaceuti­cal companies for use during World War II. The tablets, under the trade name Philopon (also known as Hiropin), were distributed to pilots for long flights and to soldiers for combat. In addition, the government gave munitions workers and those labouring in other factories meth­amphe­ta­mine tablets to increase their productivity. The Japanese called the war stimulants senryoku zokyo zai, or “drug to inspire the fighting spirits”.

Workers in the defence industry and other war-related fields were compelled to take drugs to help boost their output. Strong pre-war inhibitions against drug use were pushed aside. The introduction of what is now the illegal drug of choice in Japan therefore began with state-promoted use during the second world war.

It is not difficult to understand the appeal of metham­phetamines in wartime Japan. Total war required total mobilisation, from factory to battlefield. Pilots, soldiers, naval crews and labourers were all pushed beyond their natural limits to stay awake longer and work harder. As one group of scholars notes, in Japan, “taking stimulants to enhance performance was a mark of patriotism”.

Kamikaze pilots in particular took large doses of meth­amphetamine via injection before their suicide missions. They were also given pep pills stamped with the crest of the emperor. These consisted of methamphetamine mixed with green-tea powder and were called Totsugeki-Jo or Tokkou-Jo, known otherwise as “storming tablets”. Most kamikaze pilots were young men, often in their late teens. Before they received their injection of Philopon, the pilots undertook a warrior ceremony in which they were presented with sake, wreaths of flowers and decorated headbands.

A kamikaze pilot tries to crash his plane loaded with bombs onto the deck of a US warship. Photo: Getty Images

Although soldiers on all sides in World War II returned home with an amphetamine habit, the problem was most severe in Japan, which experienced the first drug epidemic in the country’s history. Many soldiers and factory workers who had become hooked on the drug during the war conti­nued to consume it post-war. Users could get their hands on amphetamines because the Imperial Army’s post-war surplus had been dumped into the domestic market.

At the time of its surrender in 1945, Japan had massive stockpiles of Hiropin in warehouses, military hospitals, supply depots and caves scattered throughout the islands. Some of the supply was sent to public dispensaries for distribution as medicine, but the rest was diverted to the black market rather than destroyed. The country’s Yakuza crime syndicate took over much of the distribution, and the drug trade would eventually become its most important source of revenue. Any tablets not diverted to illicit markets remained in the hands of pharmaceutical companies

The drug companies mounted advertising campaigns to encourage consumers to purchase the over-the-counter medicine. Sold under the name “wake-a-mine”, the product was pitched as offering “enhanced vitality”. According to one journalist, these companies also sold “hundreds of thou­sands of pounds” of “military-made liquid meth” left over from the war to the public, with no prescription required to purchase the drug. With an estimated 5 per cent of Japanese between the ages of 18 and 25 taking the drug, many became intravenous addicts. The presence of United States military bases on the islands contributed to the epidemic.

National newspaper Asahi wrote that US servicemen were responsible for spreading amphetamine use from large cities to small towns. Indeed, the country’s Narcotics Section arrested 623 American soldiers for drug trafficking in 1953. However, most drug scandals involving US soldiers garnered little coverage by the major papers out of “defer­ence” to “American-Japanese friendship”.

By 1954, there were 550,000 illicit amphetamine users in Japan. This epidemic led to strict state regulation of the drug. The 1951 Stimulant Control Law banned methamphetamine possession, and penalties for the offence were increased in 1954. In 1951, some 17,500 people were arrested for amphetamine abuse, and by 1954 the number had spiked to 55,600. During the early 1950s, arrests in Japan for stimulant offences made up more than 90 per cent of total drug arrests. In a 1954 Ministry of Welfare anonymous survey, 7.5 per cent of respondents reported having sampled Hiropon. Meanwhile, the Asahi published an estimate that 1.5 million Japanese used methamphetamine in 1954.

US troops in the Korean War. Photo: Getty Images

The high rates of amphetamine use in Japan began to subside by the late 1950s and early 1960s as economic growth began to create jobs. Nevertheless, it is striking that metham­pheta­mine would remain the most popular illicit drug in Japan for decades to come. Germany, meanwhile, did not experience the same post-war surge in stimulant use found in Japan, in part because the occupation dismantled domestic production.

The area where Temmler Werke had produced Pervitin came under Soviet occupation, and the factory was expropriated. At the same time, American pharmaceutical companies bought up the firm’s production facilities in the western zones, and it would take years for Temmler Werke to restart production in its new Marburg location. Moreover, Germany had already imposed tighter controls on Pervitin during the war, making it less accessible even before the war came to an end.

In contrast to tapering off in post-war Germany, amphe­ta­mine consumption in the US took off. Pharmacologist Leslie Iversen writes that “the non-medical use of ampheta­mines spread rapidly in the 20 years after the second world war. This was partly due to the attitude of the medical community to these drugs, which continued to view them as safe and effective medicines, and partly due to the wide­spread exposure of US military personnel to D-ampheta­mine during the war”.

By the late 1950s, pharmaceutical companies in the US were legally manufacturing 3.5 billion tablets annually – equivalent to 20 doses of five to 15 milli­grams for every American. Of all major powers in the decades after World War II, the US stood out for its conti­nued heavy military use of speed. Indeed, although ampheta­mines had been widely available to US service members during World War II, they became standard issue during the Korean war (1950-1953).

Smith, Kline & French was more than happy to be the supplier of choice once again, although this time it was supplying the military with dextroamphetamine (sold under the brand name Dexedrine), which was almost twice as potent on a milligram basis as the Benzedrine used during World War II. The manufacturer insisted that the drug had no negative side effects and was non-addictive.

Police officers in Harrisburg, Pennsylvania, pour 15,000 amphetamine pills into the city incinerator, in 1960. Photo: Getty Images

In addition to coming home hooked on speed, some service­men returning from the Korean war also introduced to the US new methods of ingesting the drug. Dr Roger Smith, who ran the Amphetamine Research Project at the Haight-Ashbury Free Clinic, notes that the first reported case of Americans engaging in intravenous methamphetamine abuse involved servicemen based in Korea and Japan in the early 1950s. It is perhaps no coincidence that East Asia was at that time “awash in supplies of liquid meth left over from World War II”.

Returning soldiers may have been some of the first to build meth labs in the US. Following numerous arrests in 1962 of California doctors who were illegally prescribing injectable methamphetamine to patients, and pharmaceu­ti­­cal companies’ voluntary withdrawal of the drug from stores, those looking for a profit or a fix came up with a solution. Several Korean war veterans reportedly got together in the San Francisco Bay Area to build the first meth labs to take advantage of the scarcity of the drug after the recall of Methedrine and Desoxyn.

High levels of amphetamine use among the US armed forces persisted into
the Vietnam war. Although the recommended dose was 20 milligrams of Dexedrine for 48 hours of combat-readiness, the reality was that the drug was handed out, as one soldier put it, “like candies”, with little attention to dosage or frequency of use.

Elton Manzione, a member of a long-range reconnaissance platoon, acknowledged: “We had the best amphetamines available and they were supplied by the US government.” A navy commando noted, “When I was a SEAL team member in Vietnam, the drugs were routinely consumed. They gave you a sense of bravado as well as keeping you awake. Every sight and sound was heightened. You were wired into it all and at times you felt really invulnerable.”

The US military supplied its troops with more than 225 million doses of Dexedrine (and the French-manufactured Obestol) during the war. Soldiers could also buy ampheta­mine over the counter in many cities and towns in Vietnam. Grinspoon and Hedblom argue that all the attention given to illicit drug consumption by soldiers during the Vietnam war glossed over the more severe problem of amphetamine addiction.

US Army helicopters attack a Viet Cong camp, in 1965. Photo: AP

A key source of information on amphetamine use in Vietnam was the 1971 Inquiry into Alleged Drug Abuse in the Armed Services, a report of the House of Representatives Committee on Armed Services. The report noted that due to increased safety concerns, amphetamines had been removed from survival kits by 1971, and prescrip­tions of these drugs had sharply declined: in 1966, the US Navy issued the equivalent of 33 million 10-milligram capsules of amphetamine, but by 1970 this number had dropped to 7 million capsules. Though these numbers demonstrated reductions in usage over time, they also revealed the high rates of amphetamine use in the US military during the Vietnam war.

According to another report published in 1971, The Fourth Report by the Select Committee on Crime, “Over the past four years, the Navy seems to have required more stimulants than any other branch of the services. Their annual, active duty, pill-per-person requirement averaged 21.1 during the years 1966-69. The Air Force has flown almost as high by requiring 17.5 10-milligram doses per person in those years. The Army comes in last, averaging 13.8 doses per person per year.”

Grinspoon and Hedblom point out that these figures suggest that from 1966 to 1969, members of the US Army alone took more amphetamines than all British or American armed forces in the second world war. They note that even as the military launched a campaign against heroin, it continued to overlook amphetamine use, and indeed routinely supplied the drug to the troops in Southeast Asia as late as 1973.

In the following years, even as amphetamines came to be tightly controlled at home, the US Air Force kept dispens­ing them to pilots. Dexedrine was given to the crews of F-111 aircraft for their 13-hour-long missions to Libya during Operation El Dorado Canyon in mid-April 1986. The drug was again given out in late December 1989 during Operation Just Cause in Panama, and during the 1990-1991 Gulf War, almost two-thirds of fighter jet pilots in Operation Desert Shield and more than half in Operation Desert Storm took amphetamines.

Operations Desert Shield and Storm saw the deploy­ment of aircraft from the continental United States to the Arabian Peninsula, a trip that required a 15-hour flight across five to seven time zones. One pilot admitted, “Without go pills I would have fallen asleep maybe 10 to 15 times.” In 1991, Air Force Chief of Staff General Merrill McPeak temporarily banned amphetamines, saying the pills were no longer needed with the ending of combat operations in Iraq. But in 1996, Air Force Chief of Staff John Jumper quietly reversed the ban.

Short of an unlikely epidemic of [attention-deficit/hyperactivity disorder] among our soldiers, the military almost certainly uses the stimulants to help fatigued and sleep-deprived troops stay alert and awakeRichard A. Friedman, psychiatrist

At the turn of the century, supplying ampheta­mines to US aircrews remained standard practice, though the air force had its crews sign a consent form emphasising that taking the pills was volun­tary. The form appeared to both leave the decision of whether to take Dexedrine up to the pilot and compel the pilot to take the medication with him on the flight.

A study of dextroamphetamine use during B-2 combat missions in Operation Iraqi Freedom revealed high rates of amphetamine use among pilots. The pilots flew B-2 bombers from either Whiteman Air Force Base in Montana or a forward deployed location to targets in Iraq. Pilots on the shorter missions used dextroamphetamine on 97 per cent of their sorties, while those on the longer missions used the drug in 57 per cent of sorties. The puzzling differ­ence between these two rates was partly explained by the fact that napping was more often possible on longer flights, reducing pilots’ need for the drug.

Moreover, the US military’s spending on stimulant medications, such as the amphetamine drugs Ritalin and Adderall, reportedly reached US$39 million in 2010 alone, up from US$7.5 million in 2001 – a jump of more than 500 per cent. Medical officers were writing 32,000 prescriptions for Ritalin and Adderall for active-duty servicemembers every year, up from only 3,000 five years earlier. It remains unclear whether these prescriptions were to counter attention-deficit/hyperactivity disorder (ADHD) or fatigue, but, as psychiatrist Richard A. Friedman notes, “short of an unlikely epidemic of that disorder among our soldiers, the military almost certainly uses the stimulants to help fatigued and sleep-deprived troops stay alert and awake.”

Meanwhile, US Air Force researchers continued to insist that pilot use of amphetamines enhanced their fighting capacity while decreasing accidents. Dr John Caldwell, writing in Air & Space Power Journal, defended ampheta­mine use by arguing that for pilots in the “war on terror”, “around-the-clock operations, rapid time-zone transitions, and uncomfortable sleep environments are common on the battlefield; unfortunately, these conditions prevent personnel from obtaining the eight solid hours of sleep required for optimum day-to-day functioning.”

Amphetamines have been the ultimate military performance enhancing drug ever since World War II. That war was not only the most destructive in human history but also the most pharmacologically enhanced. It was literally sped up by speed, with tens of millions of pills doled out to combatants to keep them fighting more and sleeping less. Despite their shift from being widely accessible to being strictly controlled in later decades, the pills have become the drug of choice for many combatants in the most war-ravaged region of the world and continue to be prescribed by the world’s leading military power.

EXCERPT FROM
Killer High: A History of War in Six Drugs is published by Oxford University Press.

Peter Andrea is the John Hay Professor of International Studies. He is the author, co-author, or co-editor of eleven books, including his most recent, Killer High: A History of War in Six Drugs (Oxford University Press, 2020), which explores the relationship between warfare and mind altering substances, from ancient times to the present. Andreas has also written for a wide range of scholarly and policy publications. Other writings include congressional testimonies and op-eds in major newspapers, such as The New York Times, Washington Post, and The Guardian.

His new book, Killer High: A History of War in Six Drugs (Oxford University Press, 2020), explores the relationship between warfare and mind altering substances, from ancient times to the present.
Jan 3, 2020 - In a newly released book, “Killer High: A History of War in Six Drugs,” Peter Andreas, a professor of international studies at Brown University, has drawn from an impressive and eclectic mix of sources to give psychoactive and addictive drugs a fuller place in discussions of war.

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