The economy vs. our lives

Saving lives versus saving the economy is not a binary choice. And yet…

The economy vs. our lives? It’s a false choice – and a deeply stupid one
The Guardian, 26 March 2020

Siva Vaidhyanatham criticises Donald Trump’s eagerness to get all US businesses back up and running by mid-April and his attitude that the economy is more important than people’s health. Trump acknowledges that some people – primarily the old and the vulnerable – will be sacrificed, but claims that it is for the greater good.

“This is beyond immoral,” says Vaidhyanatham. “It is profoundly stupid.”

He explains that it is not a binary choice between saving lives and saving the economy. If people are allowed to die or become very ill in huge numbers, the economy will be battered. “No one would trade with anyone for years. Trade would grind to a halt because of mourning, fear of infection, society-wide trauma and social unrest.” Saving lives does help save the economy.

The hard choices covid policymakers face
The Economist leader and briefing, 4 April 2020

The Economist agrees with Vaidhyantham that it is not a zero-sum game between saving lives and saving the economy. (“A government trying to privilege the health of its economy over the health of its citizenry would in all likelihood end up with neither.”) However, it says, there are certain trade-offs, and the time will come when policymakers have to grit their teeth and start considering getting the economy moving again, even at the cost of people’s lives and health.

In the early stages of the pandemic, public pressure on politicians will overwhelmingly be to save lives, even if this requires an economy-battering lockdown.

However, the longer the lockdown goes on, the more its economic toll will be felt, and uncomfortable questions will arise about trade-offs between people’s lives and the economy:

“Faced with experts saying that a lockdown will save umpty-hundred-thousand lives, it is hard for a politician to answer ‘At what cost?’ … But as time goes on, ‘At what cost?’ will become easier to voice, and harder to duck. … It sounds hard-hearted but a dollar figure on life, or at least some way of thinking systematically, is precisely what leaders will need if they are to see their way through the harrowing months to come.”

This shifting of the ground will be due in part to the fact that it will become clearer that letting the economy stagnate is not just economically damaging; it also entails a health cost. When people lose their incomes, this causes “not just widespread misery, but ill health and death”. There is therefore likely to be a public-health benefit to getting the economy moving again.

And suppressing the economy doesn’t just cause people short-term economic hardship. It also does long-term structural damage – and the longer the economy is suppressed, the worse this damage is. The longer people are out of work, the harder it is for them to re-enter the workforce as they lose their connections with it and their skills atrophy. Older workers, meanwhile, may decide after an extended period out of work to retire rather than to try and re-enter the job market.

It won’t be easy to identify the moment when the costs of lockdown become high enough to justify lifting it. Estimates of its costs vary widely because so little data is available. There is still uncertainty over how contagious covid-19 is and how great the risk is of asymptomatic transmission. There is also a lack of useful data from previous epidemics.

When the time comes, there needs to be a plan in place for lifting the lockdown. Much of the population will still be susceptible to the virus, especially if a vaccine is not yet available, so if everyone just snaps back to normal activity, the virus will run riot. (Also see the post You can’t come out.)

The lockdown measures should therefore be released bit by bit, and an effective testing and contact-tracing programme should be put in place so that transmission can be tracked and curbed.

It is also worth putting in place programmes to help people who have lost their jobs get back into the workforce.

2 thoughts on “The economy vs. our lives

  1. These are very scary thoughts. You’ve summarised the economy-vs-health dialectic so succinctly and so coherently.

    In your pen-penultimate paragraph, you’ve written: ” When the time comes … for lifting the lockdown, … if everyone just snaps back to normal activity, the virus will run riot.” So, presumably, the plans for lifting lockdown would have to incorporate some kind of formula for ensuring that NOT “everyone just snaps back to normal activity.”

    Well, one thing is now for sure, and that is that it won’t be Boris devising that formula. And that’s probably just as well.

    Like

  2. Great post! And I love that the people who say they are willing to put their lives on the line for the sake of the economy are probably the ones who won’t even get sick from the virus. It’s just pure insanity. I think Trump is starting to get away from that argument now, but he’s still in way over his head.

    I agree with what you said: is there going to be a moment when the costs of the lockdown justify lifting it? And who has the foresight to really make that decision? I am starting to read up a bit more on the Spanish flu (incidentally, they called that Spanish, which was the reason Trump gave for calling CoVid-19 the Chinese Flu) to see what kinds of precedents there are.

    Our mayor called us for one of his prerecorded messages yesterday. He said he thinks things are going to get back to normal within the next week or two, or three. I thought that was very optimistic of him. Maybe he’s just sick of sending out the prerecorded calls? Anyway great blog! love reading it!

    Like

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