COVID-19 Vs. The Economy: The Fallacies of Government Control
The “Coronavirus Crises” rages on. As of this writing, the number of cases in the US is increasing and shows few signs of stopping. Total worldwide cases recently surpassed 1 million. The White House has issued a report estimating between 100,000 and 240,000 total deaths as a result of COVID-19 and complications from it. Congress has done its best to try and alleviate the situation, recently passing the massive stimulus package intended to give monetary relief to both businesses and individuals. Hopes that the alleged dangers of coronavirus were simply hype have all but faded.
To help combat the spread, large swaths of the US economy have been effectively shut down. Any “Non-Essential” workers and businesses are closed. Those that remain open struggle to keep revenues up. Accordingly, the stock market has suffered, with the Dow Jones recorded its worst quarter in its 124-year history.
Individual households have been hit equally as hard. From March 15–28, over 10 million Americans filed for unemployment. There is little doubt that number will only go up. Given that only 41% of Americans had enough savings to cover an unexpected $1000 bill, even a short period with no virtually chance for employment could be devastating.
The government seems to be at an impasse. Coronavirus is still not under control and infections are still rapidly rising, even after many states’ imposition of “Stay-at-Home” orders. However, the economy, and the people in it, are suffering financially. What to do? So far, Federal and State governments have maintained a strong course of quarantining the population. Even so, how much longer can this course continue? Eventually, savings accounts run dry and credit cards max out. At what point in dealing with COVID-19 can we start to return to normal life?
This is the choice inherent in the paradigm of state-organized pandemic response. The government must at some point, because of its granted responsibilities in fighting against COVID-19, decide when the risk of increased outbreaks is low enough to justify turning the economy on again. This is one single decision. A single mandate that applies to the entire United States, or in the case of state governments, the entire state. It makes a decision for all when they are allowed to return to work or to stay indoors. Each individual, however, has their own assessment of the risk of falling sick versus the rewards of gaining income. No matter the overarching decision of the state, there are always countless individuals who would have acted differently, if given the choice. Some might have never stayed at home, valuing the income much higher than the potential costs of falling ill or death. Some might never leave the relative safety of their homes until all cases are cured.
What is the correct decision for the state to make? What is the acceptable risk to justify the reward? Fundamentally, there is no correct answer. The answer depends completely and utterly on how one values the risk involved and how one values the rewards involved. If the state where to put the upmost importance on insuring that there is no chance of further infection, quarantine measures could last for many months. One could say those measures are extreme, but if one values avoiding any further infection, these measures are necessary.
This is not a question based on a fact, but rather, based on valuations. Collections of infection statistics and the percentage of GDP lost do not reveal the correct course of action, but rather, the state’s answer will depend on how its leaders value the lost GDP versus the potential risk of increased infections.
The state must make a decision based on its own judgements that universally applies. This begs the question: why should the state’s valuations override the valuations of each individual? What justification exists for the state to decide for all what is best for all?
If we were to step outside the paradigm of government-organized response, what would society look like at a time like this? No one can know for sure, because no one can know how each individual would react to the potential threat of the Coronavirus versus the rewards of earning an income. However, we know there would not be a single and unified response. It would be up to individuals and individual communities to decide what precautions they might take in response to the raised threat of disease. Certainly, some might stay isolated because of an increased risk of death if they fall ill or a fear of the disease. Others would continue on as best they can with normal life, seeing the virus as little concern.
A non-unified response to the threat of COVID-19 might sound extreme to some readers. However, there are already many threats to our lives that exist every day that there is no central organized response to. Heart Disease kills more Americans every year than any other single cause. However, there exists no centralized response to the threat of heart disease. Individuals, knowing that heart disease is a possibility later in life, might choose to lead healthy lives and exercise often to stay in shape. Others might forgo any attempts to prevent heart disease and accept the risk. Regardless of what they chose, they chose according to their own judgements of the potential rewards versus the potential costs.
The debate over the correct time for the federal and state governments to reopen the economy with undoubtably continue until the end of this crisis. This is to be expected. Those that wish to see an end to restrictions on the economy point to the loss in incomes and overall production. Those that wish to keep these restrictions, or even to tighten them, point to the potential for more outbreaks and increased infections. Again, there is no right answer.
It is not a necessary and immovable fact of life that the government must bear the responsibility of containing a disease. There are many threats that the government makes no response to. Indeed, a response based on the individual level away from centralization allows for the greatest amount of freedom for each individual and the ability for each person to respond to the threat of disease as best they see fit.
If you have gotten this far, thank you for reading! If you have anything to add, the comments are always open below. If you like my work and would like to be notified when new content is posted, you can subscribe to the blog with your email above.
Originally published at https://www.thejwrich.com on April 5, 2020.