What is the role of the state in the virus crisis?
1. As an individual, as I engage in more economic activity, I run more risk of contracting the virus (as well as other risks). The more risk I am willing to take, the more likely I am to get sick. The less risk I am willing to take, the more I will contribute to economic dislocation. This is an unavoidable trade-off for every individual. Then when you add up all of the individual choices, the overall results for society will be that some people will get sick and some economic activity will be disrupted. We cannot avoid all sickness, nor can we avoid all economic disruption.
2. It is not the role of the state to prevent all of us from ever getting the virus. That is not possible. If and when an effective vaccine becomes available, we can talk about the role of the state in possibly eradicating the virus, but for now we have to assume that it will be present in the population.
3. It is not the role of the state to eliminate all of the economic dislocation and make everyone whole. The state does not have a separate source of wealth with which to do this. The state can only transfer wealth from some people to give to others.
4. Because many people cannot seem to accept (1) – (3), we are allowing the state to take unprecedented powers over our freedom and over the economy, with no mechanism in place to limit the scope of those powers, to set a date by which those powers must no longer be used, or to evaluate what is being achieved by state exercise of these powers.
I am particularly worried about the lack of an end date. I would rather have a strict two-week shutdown than an indefinite period of infringement on basic liberty that includes clever “plans” and “phases” and “gradual re-opening.”
I am also worried that we have no basis for evaluating what is to be achieved. In the aftermath of the financial crisis of 2008, there was a lot of high-fiving and back-slapping that was not rigorously justified concerning the Fed, TARP, and the “stimulus.” This created incentives for even more grandiose interventions today.
5. I think we should start with a general presumption that individuals can make their own trade-offs. Rather than have government decide for me, I can decide which economic activities to curtail based on their perceived risk.
6. One public good that our taxpayer dollars can help provide is information. I would like to be able to make an informed decision about the virus. Unfortunately, the government is doing very little to undertake the sort of rigorous studies of how the virus is transmitted, how viral load effects outcomes, how many people have the virus, and how many have antibodies for it. If it were up to me, the government would focus on obtaining this information and offering advice based on it.
7. An important rationale for government intervention is that officials may be able to identify situations in which individual incentives lead to bad outcomes. For example, if I want to engage in activities without taking into account the possibility that I may be causing suffering to others, then we want to use government to change my incentives. Note that the government can change incentives by threatening people who disobey with fines, imprisonment, or taking away one’s license to do business, but there are also less harsh ways of changing incentives. For example, to encourage people to wear masks, you could fine people for not wearing them, or you could use taxpayer money to supply masks to households and businesses.
8. Government efforts to change people’s incentives should be based on a reasonable estimate of the extent to which individuals would otherwise impose excess costs on others. If the worst problem that I can cause by eating in a restaurant is giving someone a mild flu-like illness, then this risk does not warrant government intervention. On the other hand, if by eating in a restaurant I impose a high risk of some unknown person suffering death or long-term disability, then we probably want to use government to change my incentives.
9. Just as better information would enable me to act more wisely as an individual, better information is needed for government to act more wisely. I know a lot of us have our favored solutions to the crisis. For me, it’s masks and scarves. For some, it’s test, track, and trace. For some, it’s hurrying toward herd immunity. But nobody has a sound empirical basis for their preferred approach, and public health “experts” don’t seem to be in any hurry to improve our understanding. Unfortunately, their incentive is that the less we know, the longer they can exercise power.
This is easily your best post so far. Thank you.
“We cannot avoid all sickness, nor can we avoid all economic disruption.”
1) the problem is that the deaths get nearly all of the headlines (the tangible seen), while loss of jobs for millions gets very little of the headlines (the intangible unseen).
2) And most public policy to date is primarily focused the tangible part.
3) All utilitarian or other ethical models to help resolve this conflict are completely off the table.
“Unfortunately, their incentive is that the less we know, the longer they can exercise power.”
1) Absolutely. And notice how they furtively moved the goal posts recently. It used to be about not overloading the healthcare system and now its about something else entirely.
Good post. I doubt that masks-and-scarves is very effective, but I probably know even less about it than you do.
You write, “The state can only transfer wealth from some people to give to others.” Yes, sort of; but the state, by ill-advised policies, can make the total amount of wealth less than it would have been with better policies.
Good post:
1) It does seem like the goal of state governments is to ensure the health care system does not get overloaded as the spread grows exponentially here. The leader with the best answer is Merkel below.
https://qz.com/1839030/angela-merkel-explains-how-coronavirus-transmission-works/
2) I still think TARP & Fed was better than the 1930s Great Depression in which everybody was assuming was turning from 1929 – 1932 but never did. Sure it was an over-reaction in 2008 but you can’t discount 1932 realities.
3) Again, government spending a lot to analyze and test this, just like every other disease, but good rigorous results come from years of testing. I know you hate FDA but good medical testing years not weeks.
Of course, look at the original estimate of 100k to 240K deaths in the US and we are at 30K after two and 1/2 months. Actually that estimate is fairly good as I bet we reach 100K deaths around December 2020.
Do you think the spread of the virus would remain contained by depending on an emergent order personal responsibility approach with government only providing incentives and information?
So long as individuals who negligently risk infecting others face legal liability for any injuries they cause, absolutely.
How in the world would you prove this in a court of law?
You are just being sarcastic, right?
Luckily Bob plans to remain self quarantined for life because God forbid he transmit a cold. He will also live in a sterile bubble to ensure neither pollen nor dust generated from his property could kill somebody. As a bonus that bubble will contain all the greenhouse gases he emits to ensure nobody is injured via global warming. We appreciate your dedication man to non-aggression and self liability.
Caveat to 1. There appear to be significant externalities to my individual choices vis-a-vis COVID.
Caveat to 2. While no action can currently eradicate the virus, a variety of actions may reduce the risks of spreading and the costs of disease.
Disagreement with 3. The critical function of the state in this case has less to do with the transfer of wealth and more to do with the establishing the rules and circumstances for the creation of new wealth.
Different conclusion than 4. It is not because people refuse to accept (1) – (3), but that there is a true coordination and uncertainty problem regarding the proper response.
I largely agree with the rest of the post, but I would simplify it down to a basic principle:
I. All activities that were formerly allowed should be allowed unless there is an obvious and disproportionate sort of risk involved. So the main task is identifying and mitigating these disproportionate risk situations seem
Example: The most difficult problem I see at the moment is that of high-density work environments (schools) and institutional living environments (nursing homes, hospitals), and transportation networks (subways, buses). These are already government dominated areas, so it doesn’t surprise me that they’re among the worst situations.
But regardless, these are typically places that are small in number but high in traffic. Consider how each of these type of places can be turned into a castle. How do we fortify it against the virus? The methods will vary, but that seems to be an obvious step.
II. While we expect them to be taken regardless, the government should certainly help identify, encourage and potentially enforce low-cost, high-benefit strategies. Masks, fewer trips out, fewer large groups, etc.
1. Completely agree. What’s interesting is that people seem to be able to accept 1) in other circumstances. For instance, the externalities imposed by driving. I don’t remember the citations, but there have been several papers that have claimed to measure the externalities we impose on others by driving on public roads. These come as costs of waiting in traffic, higher risk of being in a traffic accident, etc. The economic benefits of having people driving must obviously outweigh the externalities across society. Maybe that’s not a good example; my point is that many people don’t seem to be willing to consider any tradeoff in the current situation.
4) Lack of evaluation. Government does not tend to evaluate itself unless there is an outcry from constituents. The preferred government form of evaluation is whatever will play well in the press and make it look like the correct actions were taken. I agree that it’s unlikely we will see a solid end date for these interventions based on this observation.
#1
In cases where driving is particularly dangerous relative to the benefit, such as driving drunk, we don’t allow it. This despite the fact that drunk driver don’t intend to hurt anyone, and can often get where they are going without an accident. The risk profile is deemed so not worth it that we made it illegal.
You appear to be confusing fantasy with special interest laws. Drunk driving laws have absolutely nothing to do with public safety or risk profiles outside PR. I bet you think Amber Alerts are amazing as well and the drug war is about helping the user.
Given that there is a link with obesity and likelihood of death from Covid-19, what if states banned junk foods and sugary items that contribute to obesity? This could help keep the death rates lower.
Thank you, I made that point earlier today tongue-in-cheek to my state senator. “If your actual intent is to save lives from Chinese Flu as you say, why are you not implementing strict food rationing and restaurant mandatory limits on calories per customer per day as well as exercise regimes at the barrel of a gun instead of mandating fashion accessories.”.
No response ofc but it’s because we all know, including her, it’s security theater.
The role of the state in delivering health care might be considered as well. The famously “laissez faire” health care system of the USA in which the federal government provides certain groups each with their own direct care hospital system, one for veterans, one for military retirees, one for the indigenous people, one for prisoners, and other a couple of dozen different insurance plans one each for various interest groups, and then different tax treatments governing the self-employed, employed by large employer, employed by small employer, might work well as an employment program, but leaves much to be desired in terms of efficiency.
Instead of Medicare-for-All, replacing the current Byzantine farrago with a bare bones direct delivery system, as a basic minimum health care source accessible to all, without outlawing private health insurance but doing away with tax preferences, would be in keeping with what most people probably believe is the role of the state. Of course we should learn from our mistakes and this next time around incorporate democratic accountability, perhaps by creating elected positions to manage system regions. This would likely prevent the whole sale waste we see with our current insulated and unaccountable bureaucracy and prevent idiocies like current requirements that a fixed percentage of a new VA hospitals (I think I remember it as 5 percent) goes to purchasing “art.”
“Be Prepared”
Franklin said, “Those who would give up essential liberty to purchase a little temporary safety deserve neither liberty nor safety.”
We want more liberty and prosperity instead of state controls, but because the state isn’t good at whatever level of control is right, we are getting neither liberty, nor prosperity.
If the virus was worse, we would need he state to do a lot more. To be able to do more, a state should have been able to nip this one in the bud before it got out of control. If we nipped it in the bud, life would be much more like normal. We missed our window, and even if we hadn’t missed it, we didn’t have the right stuff. We weren’t prepared.
I’m said before that we got lucky with this one, since, as bad as it is, it’s still not as contagious as measles, chickenpox, or mumps, and it’s not nearly as fatal as things like ebola or marburg, which can be 100 times more deadly. And it looks like people who make it get lifelong immunity, unlike some other diseases.
Let’s call “As contagious as measles and as fatal as ebola” (Mea-bola) a 10/10 on the plague scale. That could kill a billion people quick, and we’d be lucky to have a billion left by the time it was done with us. Meabola is the kind of thing the existential risk people worry about.
This might be as high as a 2/10 compared to that.
At 2/10, we have the luxury of these discussions and debates about balancing values and what is best to do, and that’s perfectly appropriate. We have the luxury of giving a single thought to matters of economic dislocation greater “How do we accomplish the production required to keep the few survivors alive?”
At 8/10 and above, Murray Rothbard and Ayn Rand would be complaining that martial law wasn’t declared soon enough, that the state should have forcibly moved everyone to their own designated acre surrounded by razor-wire, making the whole country one big “distancing camp” grid, that the border should literally be nothing but a giant berm of landmines with a poisoned no-man’s land extending from Tuscon to Tampico, and that we should have immediately nuked any city with suspected cases.
But they wouldn’t complain for long. Because they would be dead.
Because everyone in America would be dead.
Face it people; you know it’s true. Sad, but true.
We know this, because America wasn’t able to handle a 2/10 even remotely well, and with plenty of warning. Well, lots of other countries would be all dead too, so we wouldn’t be all alone in our complete and total annihilation.
Maybe it is too much to ask the state to handle anything higher than a 7/10, which is like a giant asteroid too big to blow up, but I’d like to live in a place that could deal with, I don’t know, maybe a 4/10 or 5/10. I tremble a little when I wonder what level of surprise outbreak the US could presently deal with above the level of normal flu. 0.5? 0.1?
This is like building a 600 ship Navy, because you should be able to threaten the Soviets with a two front war, and then finding out that all your ships put together can’t repel a couple of kayaks.
Here’s the thing. The 10-year floods are both practice and tests for the ability to handle the 100-year floods. The 100-year floods for the 500-year floods, and so on. Sooner or later you are going to get a 500-year flood. If the 10-year floods are totally kicking your butt and causing lots of death and devastation, that 500-year flood is going to completely wipe you out. If getting wiped out is not acceptable, you need to be able to do better.
Here’s another thing. We didn’t – probably couldn’t – know this was a 2 and not a 4 or 5 or higher, for a while. In such circumstances, the state should probably react like it’s potentially a really bad one, try to find out as much as possible as quickly as possible, and relax once it’s clear that it’s safe to do so. And it should be able to act that way, quickly, rationally, effectively.
If it is willing and able to do this, then that protects not just lives, but also liberty and prosperity, since crushing a bug good and early means restoring those values to normalcy as soon as possible.
Hope for the best, but plan for the worst. One can hope that individual decisions and incentives are good enough to deal with the next crisis. One should plan and be prepared for the state to do a lot more, if those are not good enough.
My thoughts on your points:
[1] – This is a great point. As someone else (that I suspect was also an economist) stated: ‘The optimal amount of pollution is not [literally or exactly] zero.’
I imagine that lots of people are struggling to figure out how to adjust to this tradeoff. Unfortunately, we’re all ‘trapped’ to varying degrees in our existing patterns of specialization and trade. Besides obvious financial rigidities, like rental leases on commercial or residential units, we have a lot of stuff designed for different (i.e. non-pandemic) circumstances, e.g. the designs of homes, apartment buildings, offices, grocery stores, trains, buses, and meat processing plants.
All of the interconnected systemic crises act as additional constraints on top of the costs of adjustment under non-pandemic circumstances.
I still think your slogan – ‘easy to fix over hard to break’ – is a great lodestar for weathering shocks like this, and I don’t think anyone doesn’t want to be able to weather shocks. The difficulty tho remains convincing (or coercing) others about the relevant costs and benefits (and in detail).
One particularly costly element is that our basic ‘social infrastructure’ for making these kinds of adjustments has itself been massively disrupted. We need certain minimal activities and interactions to be able to make any other adjustments socially. And besides the difficulty of handling all of the new issues, the volume of issues is its own problem. There are so many issues to resolve that even all of the critical issues can’t be addressed.
One frightening example is that we can’t safely police ourselves, i.e. avail ourselves of our official police organizations. Is it safe – in the full sense you describe – to allow or require police officers to investigate possible murders? Or should we defer that somehow and ask the police to focus on a minimal set of priorities that doesn’t include that?
[2] – This is another good point worth keeping in mind.
[3] – I think this is a good point, but, sadly, unlikely to be heeded by anyone that doesn’t already agree (or understand it). No state is literally trying to do this, but it certainly seems possible that some, if not most, will self-destruct trying to eliminate too much dislocation.
[4] – I’m unsure whether this is new versus the situation being new. I suspect that, at least effectively, people gave up (or never wanted to originally) limiting the scope of state power generally.
I’m really unsure personally what ‘basic liberty’ is admidst a global pandemic. A libertarian Utopia might ‘look the same’, e.g. if the entities that own roads or commercial real estate, refuse you access to their property.
One thing I suspect might be helpful thinking about all of this is imagining all the ways our thoughts and opinions and principles change (or not) assuming the pandemic was much worse, e.g. an airborne Ebola. My vague impression is that this pandemic is probably spread via close contact for extended periods, i.e. higher exposure to an infected person’s aerosols, and not so much via shared contact of surfaces. What if the fatality rate was 100% but the virus persisted forever on surfaces?
I’m very sympathetic to people that did or still want to just ‘go back to normal’ – and let the virus spread however it does. That’s impossible now – some people will refuse to go back to normal – and thus probably never possible anytime earlier either. But the adjustment would be quicker and facing the danger directly seems like it might be preferable than being paralyzed by uncertainty.
[5] – I’m sympathetic philosophically, but pandemics spread via networks, so everyone’s risks are correlated.
[6] – I think there *are* a lot of studies being done, tho many of little rigor, but I don’t think governments have any particular *specialization* in performing studies themselves. I think the relevant constraint is probably the pandemic itself, e.g. the ability of government and researcher’s to coordinate and to perform the research safely. Any by “safely”, I mainly mean seeming safe enough for researchers to volunteer to perform these studies. Unless governments start testing their own members or employees, or coercing private individuals into participating in studies, I don’t think there’s likely much else they could be doing. Greater capabilities in this vein, by governments themselves, would be extremely useful ‘social infrastructure’ to have.
[7] – This is a great point. I worry that the positive incentives are too constrained, like everything else, to be feasible. I think the negative incentives are probably much weaker than one might expect because the mechanisms by which they’re enforced are themselves constrained, e.g. because police officers are put at risk by interacting with others, they may become sick, or even die, and might eventually refuse to carry out orders.
[8] – I agree this would be ideal. I’m not sure how feasible it is to expect given the huge amount of uncertainty about so much.
Interestingly, I wonder how people will others – after this pandemic ends – when they eat in a restaurant exhibiting symptoms of a ‘regular’ cold or flu-like illness. Arguably, our previous norms weren’t very good in this regard. The regular flu regularly kills a lot of people!
[9] – This crisis – these interconnected crises – are a real test, for everyone, for reasoning under uncertainty. I’m totally with you in wanting to focus on, and prioritize, reducing uncertainty. That’s a common theme I’ve noticed among the people I like and follow online.
I really empathize with almost everyone, even the “public health “experts””. Maybe there are researchers just waiting to be told what to study, and they’re already ready to study a lot of possibly important aspects of the pandemic, and their only constraint is not having been told what to study. But I think it’s more likely that researchers are fairly autonomous and that the chief constraint is the capacity to peform research, either inside or outside hospitals or clinics. A lot of studies seem to be based on medical records and I’m very sure that that’s not perfect data. Another huge constraint is medical professional’s willingness to experiment, and to do it in both a random and controlled manner so as to maximize the information we could learn. That’s a hard tradeoff to ask them to make!
I saw a photo posted online of protestors – in Michigan I believe – that had blocked roads around some state capital building with their cars. Apparently they’d also blocked access to a nearby hospital. They were protesting their state’s lockdown and the devastating economic consequences imposed upon them. The organizers had asked the protestors to remain in their cars, but many of the protestors refused and gathered on the steps of the capital building. The comments on the photo were incredibly nasty. I shared the commenter’s fears but I also share the protestor’s fears. Sadly, I don’t think there’s much we – everyone – can do, even ideally, beyond muddle thru as we have been.