Boris Johnson’s two cheers for capitalism

Boris Johnson saluted fast development of COVID vaccines as a triumph of capitalism, even though he associated, somehow infelicitously, capitalism with greed (on the point, read Eamonn Butler).

It is a bit bizarre that Johnson on the one hand sees R&D as a success of the market system, but at the same time wants to put more government money in it- committing £800 million to a new agency called ARIA (the Advanced Research and Invention Agency.) Johnson is never particularly bothered by consistency, but praising capitalism for its ability to develop and supply new highly complex goods like vaccines, and then calling for more government intervention in R&D seems a bit too much, even for him.

Johnson should perhaps listen to Terence Kealey, who advises him to stop funding research, if he really wants to promote it.

In this piece, Terence makes sense of another interesting oddity. The UK has been disastrous in managing the Covid-19 pandemic from all points of view: a very high death toll, very strict lockdowns, little respect for the rule of law, and myriad failures along the way (consider the different experiments in massive testing that never really took off). But all of that has been redeemed by a remarkable vaccination rollout, which is likely to save Johnson’s reputation- at least for a while.

How come a government that has performed rather badly on most Covid-19 related matters was that good on the vaccine rollout? Terence’s answer is Catherine Bingham, who chairs the UK Government Vaccine Taskforce and previously worked at Schroder Ventures specializing in biotechnology. As Terence writes:

The only bright spark in the last 12 months in the UK, as 126,000 of our fellow citizens have died prematurely, as the economy and our social lives have tanked, and as the Government has been repeatedly exposed as incompetent, has been the vaccine programme run by Kate Bingham.

She has been to vaccines what Lord Beaverbrook, the newspaper proprietor, was to fighter production during the Battle of Britain. In May 1940 Churchill recognised the public sector could never supply Fighter Command with enough fighters, so he installed Beaverbrook as the Minister of Aircraft Production; and Beaverbrook – harnessing the entrepreneurial flair of the private sector – performed such wonders that the RAF was never short of aircraft. Pilots, yes; aircraft, no.

But for Bingham, Britain’s vaccine response would have been like the EU’s: cautious, cost-obsessed, legalistic and slow. But Bingham was imported from the private sector, were she’d worked as a venture capitalist and where she’d learnt to be bold, cost-effective, purposeful and fast.

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Covid Minimizing on One Variable

Back in July or August, I was walking along Alvarado Street minding my own business. Suddenly, someone with a Monterey city government worker logo on his shirt came up to me and told me I had to wear a mask. I asked him to show me in the regulations where it said that. The sign above admits of no exceptions but the regulatory document is pages long. A local lawyer friend only a few days earlier had explained to me that one wasn’t legally required to wear a mask if one were exercising. I was on my daily quick walk.

So he pulled out the regulations to show me that there wasn’t such an exception. I walked over to look over his shoulder do I could show him the exception. He told me he was uncomfortable with my being so close without a mask. That’s fair, I thought, so I donned my mask. Neither Bill (his name) nor I could find the exception that my lawyer friend had told me about. For that reason, I wore my mask for the rest of my walk.

But when I got back to my office and got on line, I did find a 6-foot exception but not the exercise exception. I printed out the regs and started carrying them with me on my daily walk.

A couple of days later, I was starting out on my walk with no other pedestrians nearby when I saw a car with the Monterey city government logo drive by and turn the corner on the one-way street I had just crossed. I thought it might be Bill, the guy who had stopped me a few days earlier, but I couldn’t tell because he had had his mask on when he was walking. I figured I was safe because he was turning down a one-way street. Not wanting another confrontation, I ignored the fact that he was shouting out his window at me as he turned the corner, but I put on my mask just in case.

Then something amazing happened. Even though I couldn’t see him because it was a blind corner, I heard his car back up. He backed up all the way the wrong way on a one-way street and then turned to follow me in the road. He lowered his window to tell me that he had checked the regulations on line after having stopped me and that there was no exercise exception. I waved and thanked him.

But notice what happened. Bill thought that informing me of the absence of the exercise exception was so important that it was reasonable for him to risk backing up the wrong way when a car easily could have come around the corner and rear-ended him.

This was a microcosm of what’s so wrong with the regulatory mindset that so many bureaucrats bring to the Covid issue. Don’t worry about causing an accident because it’s so important to tell this pedestrian (me) what he had already told me a few days earlier: that there was no exercise exception to the Covid regulations.

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The Pandemic in Europe and America

The pandemic evolution now appears to be more worrying in Europe than in America, as illustrated by the graph below reproduced from yesterday’s Wall Street Journal (Marcus Walker, Bertrand Benoit, and Stacy Meichtry, “Europe Confronts a Covid-19 Rebound as Vaccine Hopes Recede,” March 12, 2021). In France, for example, after two very long and restrictive (even tyrannical) national lockdowns, ICUs are close to 80% capacity. The Wall Street Journal explains:

Europe’s efforts continue to suffer from the EU’s slowness in procuring and approving vaccines, production delays at vaccine makers, and bureaucratic holdups in injecting available doses.

The “production delays at vaccine makers” are most likely due to the fact that the EU government has not purchased them in time while, of course, there as in America, individuals and private organizations cannot purchase them.

Those who have read Ayn Rand’s famous novel may wonder if Atlas is shrugging more visibly in Europe than in America. As for those Europeans who put all their faith in an omniscient and all-powerful welfare state, they seem deeply disappointed (although they may be asking for more). In Germany, 30% don’t trust the competence of Angela Merkel’s center-right government and trust even less her center-left parliamentary allies.

The progression of new covid variants in Europe may be an immediate culprit, but a major reason for that is that European governments, under the punctilious EU government, have been slower than the US government in making vaccines widely available to the public.

Yet, the vaccine rollout in America has not been a marvel of federal or state planning. Four months after Pfizer announced the completion of its clinical trial, three months and a half after it started delivering doses to the United States, and three months after the vaccine was approved by the FDA, only 10% of Americans are fully vaccinated and another 10% have received a first dose (according to data from the Wall Street Journal). As far as we can see, this was, although not exactly warp speed, fast enough to prevent the variants from outrunning the building of herd immunity. This relative American success was achieved with much fewer restrictions to individual liberties than in most European countries. Federalism and popular resistance have been a big advantage.

It is notable that Pfizer and its partner BioNTech were not full-fledged participants in Operation Warp Speed. Pfizer did not accept research funding to develop its vaccine. The New York Times explained (“Was the Pfizer Vaccine Part of the Government’s Operation Warp Speed?” November 10, 2020):

In July [2020], Pfizer got a $1.95 billion deal with the government’s Operation Warp Speed, the multiagency effort to rush a vaccine to market, to deliver 100 million doses of the vaccine. The arrangement is an advance-purchase agreement, meaning that the company won’t get paid until they deliver the vaccines. Pfizer did not accept federal funding to help develop or manufacture the vaccine, unlike front-runners Moderna and AstraZeneca.

Pfizer CEO Albert Bourla made that clear (see “Leading Covid-9 Vaccine Makers Pfizer and Moderna Decline Invitations to White Summit ‘Vaccine Summit’,” Stat, December 7, 2020):

Bourla later defended the decision to decline federal research and development funding, citing a desire to “liberate our scientists from any bureaucracy” and “keep Pfizer out of politics.”

Except perhaps for that, the pandemic does not provide a strong confirmation of the benefits of American free enterprise. There may be more free enterprise in America than in Europe, but it’s a matter of degree. In America too, the distribution of the vaccines has been basically a governmental affair. And think about the “price-gouging” laws that have prevented market price adjustments in 42 states, not counting the Defense Production Act at the federal level. (See Rik Chakraborti and Gavin Roberts, “Anti-Gouging Laws, Shortages, and Covid-19,” Journal of Private Enterprise 35:4 (2020), pp. 1-20.)

Perhaps the administrative-welfare state, in both Europe and America, is not as good as we thought?

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Boris Johnson’s reopening plan

On Twitter, Ryan Bourne links to a series of tweets by Ben Riley-Smith, the political editor of the Daily Telegraph, on Boris Johnson’s reopening plan. Ryan’s comment is: “Why are the UK guidance and laws so much more specific and prescriptive than anywhere else? Absurd level of micromanagement”. If you read Riley-Smith’s tweets (which, if I understand correctly, are based upon political rumor), you will indeed be left with a similar question.

It is notable, and troubling, how much “planning” has been going on in these matters. This is the consequence of an approach of fighting the pandemic in which most governments renounced early on the idea of using rules, as general as possible in these difficult times, and choosing instead a discretionary approach. Discretion has two benefits: on the one hand, it allows for faster adaptation as the pandemic situation evolves. On the other hand, it makes it easier for people in power to claim credit for whatever advancement recorded in the struggle with the virus.

But by using prohibitions and bans, rather than rules, and emphasizing the government’s power to impose and revise plans for the whole of society, we are wasting the opportunity to mobilize knowledge and creativity on a larger scale. Your grocer is not an epidemiologist, and his opinions on the virus’ variants, for example, are unlikely to be particularly well-founded. But if you tell him that he can have a certain number of people per hour / per square meter in his shop, or that he can stay open provided he copes with a certain degree of social distancing, he is likely to busy himself in contriving ways to keep open and complying with the rule at the same time.

Since the virus is a collective problem, governments have all somehow assumed that there can be no bottom up solutions. But the “struggle against the virus”, by any practical purpose, is in fact a series of attempts and actions aiming at keeping our lives together and similar to what they were before, as much as possible despite the pandemic. These attempts and actions could benefit a great deal from bottom-up, trial-and-errors endeavor. Governments have chosen to do without them. This may increase the costs of non pharmacological interventions, but it also means that we won’t benefit from tinkering solutions. It is an old story: the government assumes its experts have superior knowledge. When it comes to the virus, it is likely to be true. When it comes to how to adapt our lives to the fact the virus exists, perhaps no.

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Amity Shlaes and the challenges for free market scholars

In 2018, Amity Shlaes had an impressive essay in the City Journal. I’ve read it only now because it was published on the City Journal’s website. That is quite apropos, given the controversy surrounding US history at the moment.

Shlaes’s thesis is outlined in the very first lines:

Free marketeers may sometimes win elections, but they are not winning U.S. history. In recent years, the consensus regarding the American past has slipped leftward, and then leftward again.” Freedom is under appreciated in academia, equality is over appreciated: this is building a narrative that emphasizes political fights for equality at the expense of the springs of economic opportunity.

Shlaes focuses on top political figures. Her hero, to whom she devoted a splendid biography, is Calvin Coolidge, Coolidge is described in the article as a staunch fighter for economic freedom, who put “markets first,” understanding their power in creating prosperity. He reversed the quite inauspicious beginning of the 1920s through tax cuts which worked as they are supposed to, according to the supply-side playbook. A sort of anti-hero is Herbert Hoover (“Hoover thoroughly intimidated business and markets, blaming them for hogging too much of the money”) and an even bigger anti-hero is Lyndon Johnson, who simply “assumed growth”, thinking that free enterprise would produce its marvels whatever the incentives.

The essay finishes with a plea to “fostering of new institutions that will, in turn, nurture economics thinkers who dare to acknowledge the merits of markets.” I’d be interested in Shlaes’s view, two years after her piece, about how we are doing toady. Has the pandemic weakened or strengthened those institutions? Can the intellectual movement for free enterprise flourish after Covid19? Or is it substantially more feeble and less cogent now, both in the fields of history and economics?

 


Editor’s Note: Shlaes recorded a podcast with Law & Liberty focused on her Coolidge biography.

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The Covid election

Over at MoneyIllusion, I did a post discussing some odd election anomalies. Now that I’ve had a chance to look at the detailed election map more closely, certain consistent trends seem to show up.

Let’s start with the basic overview. In 2016, Clinton beat Trump by 2.9 million in the popular vote. In 2020, Biden won by over 7 million votes. So obviously the country shifted substantially toward the Democrats.

But many sub-groups went the other way:

1. Vietnamese-American areas in Orange County shifted dramatically toward Trump, by margins on the order of 40%
2. Working class Asian neighborhoods shifted strongly toward Trump.
3. Hispanic areas shifted strongly toward Trump. (But still Democratic.)
4. In Rockland County, New York, Orthodox Jewish areas shifted strongly toward Trump, with margins not usually seen outside Turkmenistan.
5. While data is sketchy, Amish areas in Pennsylvania seemed to shift substantially toward Trump.
6. African-American areas shifted mildly toward Trump (remaining strongly Democratic in absolute terms.)

I’ve found news articles discussing most of these shifts, and in almost every case the article mentioned resentment against Covid shutdowns.

So if all these groups shifted toward Trump, many quite strongly, how did Biden do so much better than Clinton?

It wasn’t rural white voters.  That was a mixed bag, with no clear trend toward the Democrats. So where did the extra 4.1 million Democratic margin come from?

The detailed election map of vote shifts from 2016 is clear. Look at almost any urban area and you see the same pattern. Red for Hispanic areas (sharp shift to Trump.) Pink for African American areas (mild shift to Trump.) And blue for white suburban areas, (strong shift to Biden.)

All across America, white suburban areas shifted toward the Democrats.

These were often well-educated white-collar workers who worked from home during Covid. Whereas working class minorities resented Covid restrictions, these voters resented the fact that Trump didn’t seem to make much effort to control Covid, discouraging testing, pushing unproven remedies, ridiculing mask wearers, etc.

This might be the first election where the voters who did well under a president turned against him while those that suffered economically turned toward him.

In this post, I’m not taking a stand as to which voters were right, just trying to understand why some parts of the country swung one way while others moved in the opposite direction.

Here’s a map of the vote shift in Philadelphia area, which is typical. The bright red in the north side is Hispanic. The pink area just to the west is mostly black, and the further out areas are mostly white suburbs.  Again, these are vote shifts.  In absolute terms Trump still did fairly well among whites and poorly among minorities.

PS.  You may wish to compare these vote patterns to the racial dot map of America, which is quite informative.  I’m sure people will do regression analyses, but these vote shifts are so obvious you don’t even need to run regressions.

PPS.  I certainly don’t mean to suggest Covid was the only issue.  Various news articles suggest that communities such as Vietnamese-Americans and Orthodox Jews were also motivated by other issues.

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Putting Entrepreneurship on the Menu

Even before the arrival of COVID-19, the restaurant industry was being transformed by a variety of forces, in particular the competition for home delivery among UberEats, GrubHub, DoorDash and others. In addition, pop-ups, test kitchens, and food trucks offered unique dining opportunities at a very small scale and for short periods of time. These acts of entrepreneurship were possible because the food service industry is still largely characterized by “permissionless innovation.” The regulatory costs of entry are low, and physical and human capital are fairly mobile, all of which allows people to try out ideas and see what sticks. As COVID-19 has created new challenges for restaurants, even the innovators have to keep innovating to meet the new demands of consumers, not to mention complying with local public health regulations. Often the most valuable sorts of entrepreneurial innovations are not ones that make big headlines but ones that instead make improvements in existing products and services to better meet the needs of consumers.

Two examples of this sort of entrepreneurial innovation are taking place here in Fishers, Indiana. Although both of these innovations pre-date COVID-19, one is well-poised to take advantage of the changes the pandemic has brought, and the other has demonstrated the kind of flexibility that is often necessary for effective entrepreneurial responses to exogenous shocks like a pandemic.

The first example is a company called ClusterTruck. Based in Indianapolis, they recently opened a second kitchen here in Fishers. They are a nice example of innovating on an innovation. One of the problems with food delivery services like GrubHub is that the drivers are not employees of the restaurants, and the restaurants are dependent on the schedules of the drivers when they promise a delivery time. We’ve all had the experience of our order coming much later, or even earlier, than expected, or having food that was no longer hot. The creators of ClusterTruck were, as Israel Kirzner puts it, “alert” to the opportunity to improve that model. One of the ways they did that was by creating a restaurant that is delivery and pick-up only.

ClusterTruck has integrated the food preparation and the delivery process in two ways. First, the drivers all work for them. But they also won’t start preparing your food until they have one of the drivers committed for that delivery. This prevents food from sitting and waiting for a driver to pick up. And without seating, their whole kitchen is geared to competing and preparing delivery orders. It’s not a sideline. It’s what they do. Their app also has several nice innovations. One of those is the ability to order ahead for delivery at a specified time. With in-house drivers, Clustertruck can meet a pretty tight window that way. The other nice innovation is the ability to share a link to your order that allows other people to piggy-back on the same order but pay with their own account. So offices ordering lunch don’t have to worry about Venmo or other ways of settling up. Everyone can order and pay for their own meal but have it delivered together. And to be able to satisfy groups and families this way, their menu spans a variety of cuisines, from a few Asian and Mexican dishes to pub food and pizza.

This full integration from preparation to delivery, along with ordering ahead and the ability to easily order in groups, puts them a step ahead of the other platform-based delivery services. Nonetheless, like every other restaurant, they’ll have to provide good eats if they are going to expand the way they have planned. As the current big wave of COVID-19 will enhance the demand for home delivery of prepared food, their entrepreneurial innovations seem well-positioned to succeed.

The second example of innovation is illustrative of the flexibility that good entrepreneurship demands. COVID-19 has been devastating for local restaurants, as they operate on such thin margins that the loss of business over the last several months has been too much for them to continue. But how to keep a great menu alive in a different form that can work in the world of COVID? One answer comes from the world of test kitchens. This model, which predates the pandemic, is one in which space is created for a small number of counter-service restaurants to share, while rotating the particular cuisines that occupy the various slots. A particular idea might only be there for a few months while the owners try to discover if their model is workable, hence the “test kitchen” concept. This model allows them to share some overhead costs and work out recipes without having to worry about table service or other elements of a full-service restaurant. We have a test kitchen like this located inside a local brewery, which itself is a nice innovation given the mutual benefits involved.

One of the kitchens at our Fishers Test Kitchen is an Asian street food place called Lil Dumplings. It was opened by the chef from Rook, a very well-regarded Indianapolis restaurant, and served mostly dumplings. The full service Rook was a casualty of COVID, however, going out of business earlier this fall. But that loss also presented an entrepreneurial opportunity. The former chef recently switched the menu at his Test Kitchen location over to ramen and steamed buns, and is serving several items very similar to customer favorites from Rook. The test kitchen model gives entrepreneurs who are alert to changes elsewhere in the market the flexibility they need to quickly switch over a menu and meet that new demand. It also provides a cheap way of discovering whether Rook’s dishes are still valued by its former customers. (I can report that they most definitely are!) And doing it with counter service, carry-out, and delivery options makes the whole thing work in a pandemic.

Too often we think about entrepreneurial innovations as being big, grand things like the invention of the automobile or airplane. In fact, most of what good entrepreneurs do is to take existing products and services and find ways to improve them around the edges. Inventing the cell phone is great, but adding a camera on to it gives it an amazing new range of possibilities. Reorganizing the way in which a product or service is provided, as ClusterTruck has done, is one way to innovate, and taking advantage of a flexible production structure to recover some value from a failed business is another. Good entrepreneurs are people who are alert to these kinds of opportunities and take advantage of them to make consumers better off. Creating environments that allow for permissionless innovation of this sort is the best way for policymakers to attract that entrepreneurial energy and thereby improve their communities.

 

 

For more on competition and entrepreneurship, see Steve Horwitz’s Liberty Classic on Israel Kirzner’s classic work Competition and Entrepreneurship, new this month at Econlib.

 


*Steven Horwitz is the Distinguished Professor of Free Enterprise and Director of the Institute for the Study of Political Economy in the Department of Economics in the Miller College of Business at Ball State University in Muncie, IN. He is also an Affiliated Senior Scholar at the Mercatus Center in Arlington, VA, a Senior Fellow at the Fraser Institute of Canada, and the economics editor at the Cato Institute’s libertarianism.org. He is the author of four books, including most recently Austrian Economics: An Introduction. He is also the 2020 recipient of the Julian L. Simon Memorial Award from the Competitive Enterprise Institute.

For more articles by Steven Horwitz, see the Archive.

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Happy birthday, LvB!

250 years ago today Ludwig van Beethoven was born. Beethoven’s greatness is quite too obvious to comment on it. The great composer had liberal sentiments; he had great hope in the French Revolution and in Bonaparte as a liberator, yet he was disappointed by the Napoleon crowning himself and came to resent him. Jim Powell had an amusing profile of Beethoven for the liberty-minded, here.

Sometimes people remark that Beethoven “wrote only one opera” and could not really play with the human voice as well as he did with music. True, Beethoven wrote only one opera, but it is “Fidelio”. “Fidelio” is first and foremost about marital love, something Beethoven did not enjoy himself. It is the story of the absolute commitment of a wife, Leonore (hence the title of the first version), a noblewoman of Seville who disguises herself as a boy to find her husband, Florestan, a political prisoner. This sort of story, set in a prison, was actually not uncommon during the French Revolution. Jailing opponents happened during the ancien regime and likewise in revolutionary times. Fidelio adapts “Léonore ou l’amour conjugal”, a work by Jean-Nicolas Bouilly, who worked as a prosecutor in the city of Tours during the Reign of Terror.

Leonore/Fidelio wasn’t the luckiest, commercially speaking, of Beethoven’s works. It premiered right after the French army occupied Vienna. The local aristocracy had fled the Austrian capital and the mainly French audience was not particularly receptive to the story. Beethoven kept writing and rewriting it, so we have four magnificent overtures. But to many, the highlight is the chorus of the prisoners. Fidelio/Leonore convinces the jailer, Rocco, to allow the other prisoners a few moments of fresh air in the courtyard. The chorus movingly conveys the emotion brought up by this fleeting glimpse of freedom.

It is hardly original to comment that 2020 was a sad year for most of us. For music fans, it was also sad that we could not enjoy the many beautiful concerts that the Beethoven anniversary had in store for us. To remember Beethoven, my Institute has published (alas, only in Italian) a short piece written in 1953 by Epicarmo Corbino, an Italian liberal economist (and, briefly, Finance Minister after WWII) who fancied writing something on Beethoven. It is a short essay that proves that a social scientist may have some thoughts on music, too. We have also put together a playlist of Beethoven pieces, highlihgting those in which you can better sense his love and passion for liberty. It is accessible here.

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Jeremy Arkes on COVID Externalities and Governor Newsom

 

Jeremy Arkes, one of my friends and Navy School colleagues, who is also a friend and colleague of Judith Hermis, submitted the letter he would have sent to Governor Newsom. I did some edits, all of which he accepted, and here is the result.

Dear Governor Newsom,

I would like to offer a counterpoint to the letter that my good friend Judith Hermis sent you regarding your private-gatherings restrictions. As with Judith, I hope you and your family are well, and additionally I hope that you have learned now to avoid large gatherings yourself in order to continue to keep your family and others safe.

One factor that Judith cited was that our “unalienable rights to life, liberty, and the pursuit of happiness” should prevent the government from telling us what we can do in our own private homes. But there are well-known limits to these rights. People might gain happiness from, in their own homes, sacrificing Sagittarians who watch Gary Busey movies. But they are not allowed to do so because that infringes on others’ right to life. This, of course, is one example of many restrictions on what we can do in our pursuit of life, liberty, and happiness. That said, such a restrictive measure as you are imposing does infringe on liberty and, thus, needs some justification.

Such justification might come from the basic economic concept of an externality, which is a case in which decisions by private parties impose costs on (or create benefits for) third parties not engaged in the transaction. And basic economics states that, in the presence of a “negative externality” (where decisions impose costs on others), the free market (consisting of the private decisions of people) leads to a higher quantity of transactions than the quantity that would maximize efficiency.

And so a party that brings multiple households together has the potential to have negative externalities, as there can be huge costs imposed on people not involved in the party (from the party-goers infecting others, who in turn infect others, etc.). The costs are not just deaths and health-care costs, but also the costs associated with being sick and having the long-term complications that some experience from COVID.

The theory behind negative externalities is that a more efficient outcome would occur if the parties involved in the transaction/decision have to bear those costs imposed on others. If the costs imposed on third parties had to be paid for by the party guests, then a more efficient outcome would ensue.  In the textbook theoretical case of a negative externality, with quantifiable costs imposed on third parties, the efficient outcome could come in the form of a tax on the good or service that causes the market participants to bear those costs imposed on others. The size of the tax would be the monetary equivalent of the costs imposed on others. Imposing that tax would cause the number of parties to decrease to the most-efficient quantity. For those for whom the tax would be just a rounding error (e.g., a party at the French Laundry restaurant), the party would go on.  But for others, the tax would dissuade them from their private gatherings.

Unfortunately, the probabilistic nature of COVID infections and deaths, the imprecision of contact-tracing, and the uncertain monetary-equivalent costs of deaths and illnesses make it impossible to fully internalize the costs. And so this health measure you favor could be justified as a method to correct for an externality when no tax-based solution is available. It could actually bring us to a more efficient outcome.

So if anyone opposes your policy, Governor, a good question to ask that person is: At what point would restrictions be okay? If you had a private party and you knew that it would lead to 1,000 people infected and 100 deaths among people not attending the party, would it be okay to have restrictions on such parties? If not, then it seems that society has no safeguards for something that can destroy us. If so, then the problem isn’t that such a measure is antithetical to economic liberty but rather we have different preferences for the level of safety vs. freedom and perhaps different preferences for the certainty of harm that is required before any preventative measures are taken—and, the elected leaders have the right to impose laws that they believe draw the best balance.

I believe that we need to do our best to protect the brave and dedicated doctors, nurses, and elderly-care providers who are risking their health and mental well-being to do their job—a job that the population has made more difficult by the private decisions they have made (e.g., not wearing a mask and congregating in larger-than-advised groups) that has led to the situation we are in today. And the situation today is that it is much more dangerous to engage in the economy than it was at any other point in this pandemic so far. Basically, we need to think the way our military-service members do and make sacrifices to serve people beyond ourselves.

Another important point is that, paradoxically, restrictions on economic activity in the short run could actually lead to greater economic growth in the medium and long term. In my view, most of the economic decline is due to personal decisions of people to be safe rather than the social-distancing and shut-down policies. For example, people are allowed to take flights, and so the ~75% reduction in air travel is due almost entirely to people’s personal decisions not to travel. The bottom line is that the economy can’t return to normal until COVID is reduced to a level at which people feel safe.  (Supporting this point is that Europe, which had COVID under control at the beginning of the summer, had a much more normal summer of economic activity than we had in the U.S., where we never had the virus under control.)

Finally, let me offer a different characterization of those who are okay with the limitations. Judith considered them “the most frightened,” but that seems to be too much of a generalization. (I’ll admit to being one of the “frightened,” as I have mountains to climb and books to write, and I do not want to be thwarted.)  But there are other reasons than being frightened for why people would support such restrictive measures:

(1) They may have a loved one (who depends on them or whom they hope to visit) who is at risk due to being old or immuno-suppressed.

(2) They might (for religious or other reasons) not want to participate in any activity that has the potential to harm other people (whom they know or don’t know).

(3) They may share my view that taking the strong measures and making personal sacrifices to get COVID under control in the short run is what would return the economy back to normal the fastest.

Good luck,

Jeremy Arkes
Another private citizen (some might argue)

 

 

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