Covid Commentary

Economic voices have been conspicuously absent from discourse since the beginning of covid. Except for reasons of scientism, is there any reason epidemiologists and other health experts should have all the fun? We don’t think so. You don’t have to agree with everything economists say about covid to agree that they bring a unique and valuable perspective.

Here’s a compilation of economists on covid:

My co-blogger, Caleb, from the beginning of the pandemic:

“…the distinction between “essential” and “non-essential” businesses  ignores the fact that the social order is a highly complex system. In order to enjoy our remarkable standard of living, we rely on an extensive division of labor, which contains millions of goods, tasks and production processes. Interrupting this complex system at any point will certainly have ripple effects on supply chains throughout the economy—including for those businesses deemed “essential.” For example, hospitals require tens of thousands of products to operate optimally, and many of these products are produced by “non-essential” businesses. Related, someone who loses their income because their “non-essential” business was shuttered will find themselves less capable of buying “essentials” such as food or medicine.”

Doug Allen on a meta-analysis of the (economics) covid literature. His abstract:

An examination of over 80 Covid-19 studies reveals that many relied on assumptions that were false, and which tended to over-estimate the benefits and underestimate the costs of lockdown. As a result, most of the early cost/benefit studies arrived at conclusions that were refuted later by data, and which rendered their cost/benefit findings incorrect. Research done over the past six months has shown that lockdowns have had, at best, a marginal effect on the number of Covid-19 deaths. Generally speaking, the ineffectiveness of lockdown stems from voluntary changes in behavior. Lockdown jurisdictions were not able to prevent noncompliance, and non-lockdown jurisdictions benefited from voluntary changes in behavior that mimicked lockdowns. The limited effectiveness of lockdowns explains why, after one year, the unconditional cumulative deaths per million, and the pattern of daily deaths per million, is not negatively correlated with the stringency of lockdown across countries. Using a cost/benefit method proposed by Professor Bryan Caplan, and using two extreme assumptions of lockdown effectiveness, the cost/benefit ratio of lockdowns in Canada, in terms of life-years saved, is between 3.6–282. That is, it is possible that lockdown will go down as one of the greatest peacetime policy failures in Canada’s history.

Bryan Caplan on the aforementioned cost-benefit calculus. He writes:

Casual readers will be tempted to declare that the cure has been much worse than the disease.  The right cost-benefit comparison, however, is not to weigh the cost of prevention against the harm endured.  The right cost-benefit comparison is to weigh the cost of prevention against the harm prevented.  You have to ask yourself: If normal life had continued unabated since March, how many additional life-years would have been lost?  I can believe that the number would have been double what we observed, even though no country on Earth has done so poorly.  With effort, I can imagine that the number would have been triple what we observed.  There’s a tiny chance it could have been five times worse.  But fifteen times?  No way.

Peter Leeson and Louis Rouanet on the use and abuse of “externalities.” From their conclusion:

COVID-19 externalities are less prevalent in the absence of government intervention and less
costly to society than is often supposed. That is so for three reasons. (1) Unlike externality-creating behaviors in many classical externality contexts, such behaviors are often self-limiting in the context of COVID-19. (2) In market economies, behaviors that may create COVID externalities typically occur at sites that are owned privately and visited voluntarily. Owners have powerful incentives to regulate such behaviors at their sites, and visitors face residual infection risk contractually.

David Henderson in dialogue with Justin Wolfers.

Robert Higgs and Don Boudreaux on the Higgs Ratchet. They write:

We should be thinking seriously about where all our emergency actions will leave us in the long run. Will the quarantine of millions of people become a precedent? Will broad-scale distributions to the general population without a means test become an enduring public demand even when normal times return? Will the Fed’s exchange of trillions of dollars for rotten securities become a lasting feature of its monetary policy?

Ben Powell on getting out of the way of entrepreneurs.

This is just a sampler, but it does demonstrate the shift in perspective that accompanies a focus on basic economic concepts like trade-offs and off-setting behavior.

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