Bryan Caplan has a post on Covid-19 that is full of sensible ideas. But I disagree with one of his claims:
18. Alex Tabarrok is wrong to state, “Social distancing, closing non-essential firms and working from home protect the vulnerable but these same practices protect workers in critical industries. Thus, the debate between protecting the vulnerable and protecting the economy is moot.” Moot?! True, there is a mild trade-off between protecting the vulnerable and protecting the economy. But if we didn’t care about the vulnerable at all, the disease would have already run its course and economic life would already have strongly rebounded. Wouldn’t self-protection have stymied this? Not if the government hadn’t expanded unemployment coverage and benefits, because most people don’t save enough money to quit their jobs for a couple of months. With most of the workforce still on the job, fast exponential growth would have given us herd immunity long ago. The death toll would have been several times higher, but that’s the essence of the trade-off between protecting the vulnerable and protecting the economy.
From my vantage point in Orange County, that just doesn’t seem feasible. People here are taking quite aggressive steps to avoid getting the disease, and I believe that would be true regardless of which public policies were chosen by authorities. Removing the lockdown will help the economy a bit, as would ending the enhanced unemployment insurance program. But the previous (less generous) unemployment compensation program combined with voluntary social distancing is enough to explain the vast bulk of the depression we are in.
In many countries, the number of active cases is falling close to zero. In those places, it will be possible to get people to return to service industries where human interaction is significant. Speaking for myself, I’m unlikely to get a haircut, go to the dentist, go to a movie, eat in a crowded restaurant, or many other activities until there is a vaccine. (Although if I were single I’d be much more active.) If I were someone inclined to take cruises, I’d also stay away from that industry until there was a vaccine. I’ll do much less flying, although I’d be willing to fly if highly motivated. For now, I’ll focus on outdoor restaurants (fortunately quite plentiful in Orange County) and vacations by automobile. Universities are beginning to announce that classes will remain online in the fall.
If you think in terms of “near-zero cases” and “herd immunity” as the two paths to normalcy in the fall of this year, I’d say near-zero cases are much more feasible. Lots of countries have done the former—as far as I know none have succeeded with the latter approach. Unfortunately, America has botched this pandemic so badly (partly for reasons described by Bryan) that it will be very difficult to get the active caseload down to a level where consumers feel safe.
Don’t get me wrong, both the lockdown and the change in unemployment compensation create problems for the economy. But they are not the decisive factor causing the current depression. If the changes in the unemployment compensation program were made permanent, then at some point this would become the decisive factor causing a high unemployment rate. But not yet.
BTW, I am not arguing that it wouldn’t be better if people had a more rational view of risks, as Bryan suggested in a more recent post. This post is discussing the world as it is.
Here’s a selection of countries with 35-76 active cases (right column), followed by a group with less than ten. Many are tiny countries and some have dubious data, but not all.
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READER COMMENTS
Brian
Jun 2 2020 at 3:24pm
Scott,
You are absolutely right that herd immunity is not a feasible option. I’ll go further. It would be a completely insane option. When Bryan says that it would result in a death toll “several times higher,” he’s probably wildly underestimating how many more deaths would occur and, even worse, ignoring the fact that several times higher means several hundred thousand more deaths. That’s not something to shrug off. The better approach by far is to limit the number of cases as much as possible and protect the most vulnerable.
That said, I think you underestimate the economic impact of mandated social distancing. It’s true that people socially distanced on their own and that was enough to tank the economy, but the behavior of people after the relaxation of SAH orders shows that many were willing to participate in the economy but weren’t permitted. And many businesses were willing to open and serve even a fraction of their usual clientele but were not allowed.
At the very least, I think a no-data position would attribute half of the economic carnage to self-quarantining and the other half to government-mandated SAH orders. From that perspective, doubling the economic pain due to government mandates cannot be waved off or dismissed any more than several hundred thousand more deaths can be waved off by Bryan.
Scott Sumner
Jun 2 2020 at 8:21pm
Maybe, but I don’t think you can trace all of the recent rise in economic activity to the ending of mandates. I plan a trip soon that has nothing to do with the end of mandates. I’m just tired of being cooped up.
Also, I predict the depressions in Norway, Denmark and Sweden will end up being quite similar, when all the data is in (say at the end of the year.)
Brian
Jun 3 2020 at 2:35pm
” I don’t think you can trace all of the recent rise in economic activity to the ending of mandates”
Scott,
I never said “all,” but it’s clear a large portion of the recent increases in activity is caused by the relaxation of mandated social distancing. People don’t like to break the law if they don’t have to. And in the case of businesses, where they face fines or loss of licenses, their opening is likely almost entirely due to relaxation of government guidelines.
Scott Sumner
Jun 4 2020 at 3:31pm
Actually, the evidence linking lockdowns and economic activity is very ambiguous.
Brian
Jun 5 2020 at 3:39pm
Scott,
Is there any evidence either way? I doubt there are any reliable studies at this point. My statement is based on logic and what I observe around me. If businesses want to open (as they say they do) but can’t because of government rules, how could that not significantly affect the economy?
robc
Jun 2 2020 at 3:27pm
I have gone to the beach a few times, got my haircut, have been eating out, although almost entirely outside (inside seating is opening up), and had an elective surgery.
I wear a mask when required (hospital, costco, haircut) and not the rest of the time. My church small group had our last virtual meeting last night (and 4 of the 5 couples were ready to meet in person – outside, and social distancing, but in person).
I just don’t get it. Maybe it is because my county of 400k people has had 12 deaths. But I think Caplan is overstating the risks.
I think the biggest mistake made in the US was shutting down the schools. Schools are both very low risk and a big kick start to herd immunity.
Lock down nursing homes, cancel large gatherings, be reasonably safe seems to be enough in most places. I was going to say “except NYC”, but they violated all 3 of those.
Scott Sumner
Jun 2 2020 at 8:23pm
Who takes care of the people in nursing homes? Isn’t it younger staff members?
robc
Jun 3 2020 at 11:59am
Yes, and it would have been reasonable for them to quarantine themselves. That would be a part of locking down the nursing homes.
That and testing employees every day starting in Nov 2019 (or whenever the virus got to the US).
Miro
Jun 5 2020 at 8:50am
Do those people not have school-aged children? Should they quarantine themselves from their children?
Tsergo Ri
Jun 2 2020 at 6:51pm
I doubt you are correct regarding regarding the claim that official policies don’t change people’s behavior.
Public parks and outside seating in cafe’s are now open in Paris, and they are literally crowded.
Scott Sumner
Jun 2 2020 at 8:24pm
You said:
“I doubt you are correct regarding regarding the claim that official policies don’t change people’s behavior.”
I agree that claim would have been incorrect, which is why I never made it.
Yaakov
Jun 2 2020 at 8:00pm
From what I see and hear I totally agree with Tsergo Ri. I think the minute the mandates are removed most people return to their normal life.
I note that I am in Israel which has a much younger population, so the risk is much lower.
Scott Sumner
Jun 2 2020 at 8:25pm
Where I live, people ended their “normal lives” even before the mandates took effect.
RPLong
Jun 3 2020 at 7:18am
It may be worth considering that you live in a place that is not generally representative of people elsewhere. People’s behavior here in Texas is quite dramatically different from what you describe. Still, I try to keep in mind that Texas is an odd place by national standards, odder still by international ones, so I am reluctant to draw nationwide conclusions about what I see around me.
Michael S.
Jun 3 2020 at 1:35pm
(most) people stayed at home before government mandated it, and would have gone back before they were allowed to. It’s neither clear government action was/is ineffective, nor that it’s beneficial
Alan Goldhammer
Jun 3 2020 at 9:52am
My sister and her family live in Israel. The country imposed a stringent lock down (roads were blocked preventing any travel and even leaving one’s apartment was stringently regulated) and I think they still require any international visitors to quarantine for 14 days. Just because the population is young does not mean that this cohort are not at risk.
P Burgos
Jun 2 2020 at 10:40pm
I would argue that herd immunity isn’t feasible as an explicit strategy. But if we don’t find effective treatments (including vaccines and anti-vitals) in the next few years, then herd immunity (or viral mutation) is likely to be the only thing to end the pandemic crisis.
Scott Sumner
Jun 2 2020 at 11:29pm
I agree.
RPLong
Jun 3 2020 at 7:28am
I concluded early on that there is probably no stopping COVID-19. Data suggests that the virus has been far more widespread than what is indicated by case numbers, with thankfully a large number of cases being “asymptomatic.” I doubt “herd immunity” will ever be achieved; on the contrary, I think we’re living with a new virus, one that is certainly scary but not as deadly as feared.
Thus, I think the rational response will be to makeover a lot of public interaction and personal hygiene. Open-concept office buildings, while pretty to look at, are miserable to work in and untenable in a world of highly infectious coronaviruses. Americans’ abject refusal to do simple things like use bidets, and our over-reliance on things like port-a-potties and “customer service personnel” is becoming a national liability. We live in the largest, wealthiest, and in some ways most technologically advanced economy in the world. Reducing the spread of coronaviruses is a social and technological problem. Everyone is interested in the policy and technology sides of this issue, when we ought to be more concerned with the social side.
Scott Sumner
Jun 4 2020 at 6:06pm
You said:
“one that is certainly scary but not as deadly as feared”
I see absolutely no reason to assume it is not as deadly as feared. Note that 13 died of the illness on a single cruise ship. That’s a pretty high rate for a society that will ground an airliner because of a one in a million risk of crashing.
RPLong
Jun 5 2020 at 10:15am
On a separate cruise ship, only 1 died, and 80% were asymptomatic. But as you said, “a pretty high rate for a society that will ground an airliner for a one in a million risk.” The problems here are social. I believe the best course of action is to address those social problems, rather than waiting for doctors to cure a novel disease so that we don’t have to confront our social problems.
The newly expanded prevalence of hand sanitizer and hand-washing is a welcome example of the direction we ought to be headed, socially. Contactless purchases. My not having to rub my fingers all over a communal touch-screen when buying groceries. And, to your point, responding to credulous risk in rational ways would be another great social change in American society.
Thomas Hutcheson
Jun 3 2020 at 9:08am
One has to consider that mandates affect peoples’s perception of the risk they run both of becoming infected (and of infecting others, a risk Caplan ignores in his analysis). As we find lower cost ways of reducing the risks (faster and lower cost ways of approaching herd immunity), people will adjust their perceptions of risk and behavior.
Thomas Hutcheson
Jun 3 2020 at 11:26am
Achieving herd immunity (equilibrium level of prevalence) is the only strategy. A widely available, widely used vaccine is just one way of speeding up achievement of herd immunity. The best way of achieving that depends on the cost of the measures (including messaging to inform people of their risks of infecting and becoming infected and creating expectations of NGDP growth at 4-5% pa) needed to minimize morbidity until herd immunity is achieved.
[Sorry to bring this up again, Scott, but the spam filter over at TMI as of this morning is still snagging my comments.]
Tyler Wells
Jun 3 2020 at 12:26pm
Is this consistent with what we are seeing going on in the world outside us? Memorial Day weekend vacations and demonstrations and rioting?
What I am seeing is that social distancing is over for those under the age of retirement. Most people agree with Bryan, although perhaps they don’t think it through like he has and few can express their reasoning as eloquently as Bryan does.
Whether or not it is the ideal, the low-risk people are not going to stay isolated. The only option to stop them is to take as many opportunities to meet physically away as possible, primarily through closing public places.
ricky
Jun 3 2020 at 8:30pm
Not everyone lives in fear. People have already begun to return to work in many states, and we’ve seen photos of people attending summer parties.
When you say “botched” it’s unclear what you are referring too. If you are suggesting the federal govt could have quarantined the country, as Vietnam did, then I believe you are misinformed. The federal government has no right to enforce a national quarantine. Indeed, states were lining up lawsuits in February when it was first mentioned by the Huffington Post.
Additionally, there were debates on February 7th, February 19th, and February 25th. Not once was the virus mentioned. Since you don’t like videos, I highly suggest reading the transcript. The point, in case you didn’t get it, is that hindsight is always 20/20. Using that as a way to vent, or twist the facts, is misleading.
Speaking of facts, many economists have always had an interesting relationship with real world. I remember when Ross Perot warned us about job exodus, economists like Krugman were calling him an “old man” who simply didn’t understand the “neo classical” model.
But I’m pleasantly surprised that Krugman finally admits his analysis was misguided. Hopefully other economists will also start looking at the facts, follow suit, or better yet, find other jobs! May I suggest Mathematics, or Physics. Maybe Philosophy! Something a bit more meaningful. 🙂
Scott Sumner
Jun 4 2020 at 6:16pm
Your comment is so full of errors that there’s no point in me responding, it would take too long.
Robin Hanson
Jun 4 2020 at 7:56am
You must have high confidence in an effective treatment soon. I don’t share that belief. We are still very early into this pandemic, with plenty of time for infections to spread widely. Strong lockdown is very expensive, and if we allow it to continue much longer will cause far more harm than would herd immunity. We could greatly cut the cost of herd immunity if only we’d allow trials to test variolation, which could plausibly cut death rates by x3-30.
Scott Sumner
Jun 4 2020 at 6:14pm
I don’t favor either herd immunity or strong lockdowns. Countries with sensible policies have been able to avoid both.
Mark Z
Jun 5 2020 at 7:58am
Hasn’t that ship already sailed? “Do what Taiwan did” isn’t useful unless we have a time machine.
Scott Sumner
Jun 5 2020 at 5:00pm
Yes, but we can still prevent 100,000s of deaths with smart policies that do not involve lockdowns.
Todd Kreider
Jun 6 2020 at 1:51pm
We should also figure out how to 1) move North America to Asia since that is where no country has a high death toll compared to the West and 2) develop a pill that turns the 10% of extreme.y obese Americans (BMI>38) into Asians where extreme obesity almost doesn’t exist.
robc
Jun 5 2020 at 9:36am
What country is that? I want to make sure privacy rights are part of the sensible policy, so I think we are looking at an empty set.
robc
Jun 4 2020 at 10:32am
Headline from St Louis newspaper:
No new COVID-19 cases from Lake of the Ozarks crowds, Missouri health director says
Not sure exactly what it means, but seems like a good sign to me.
I still haven’t seen any stories following up on the spring break beach crowds and how that spread covid everywhere and how many it killed. Probably because it doesn’t fit the narrative.
Peter Gerdes
Jun 11 2020 at 11:53am
There is a problem in what one means by Herd Immunity. What it takes for the virus to stop transmitting because enough people are immune depends on people’s behavior.
I agree the idea that we reach the point where enough people are immune for the virus to cease circulation given pre-pandemic levels of social interaction is implausible. But that’s a different claim than that we will reach levels of immunity relative to face masks, reduced going out and other maintainable levels of social minimization isn’t and it matters if we are trying to reach an equilibrium or not.
For instance, if we are resigned to reaching herd immunity relative to any level of social interaction we ought to be encouraging early infection among the lest vulnerable. In particular, sending kids to college to live in dorms where they are removed from the elderly and can gain immunity.
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