In the midst of increasing pressure for a “hands-off” method for pandemic controls, Professor John Quiggin explains the real costs of the “let her rip” strategy.
BACK in 1953, the founder of the American nuclear program, Admiral Hyman Rickover, drawn a striking contrast between “paper reactors” and “real reactors”:
Rickover’s insight has been confirmed many times, as a long series of new reactor designs, which promise power “too cheap to measure”, have come in over time and over budget. The latest such paper reactor, Small modular reactor developed by NuScale Power recently received design approval from US Nuclear Regulatory Commission. Quietly hidden in the announcement was the prediction that the first 12-module facility was developed for Utah Associated Municipal Power Systems would be operational until 2030. Until last week, the goal was announced 2027. And when the project was first financed, commercial operation was planned 2023.
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The contrast from Rickover applies just as well to the policies proposed by critics of the policies of elimination and repression adopted around the world in response to the COVID-19 pandemic.
The paper policy of these critics has all or most of the following characteristics:
they do not impose significant restrictions on business or business activities; they do not involve significant unemployment and business failure they do not require significant government spending. they do not need coercion; the growth of infections is slow enough for the hospital system to provide optimal treatment for all; they result in very low deaths; they have no long-term negative effects on people who get the virus but survive; and old people are protected from contact with infectious young people (9) there are no negative psychological effects.
Unlike Rickover’s paper reactors, these theoretical policies are not usually described in detail. Rather, the negative effects of real policies are pointed out, such as the difficulties associated with travel restrictions and the financial costs of locking in, and it is argued that it would have been much better to accept some deaths, mostly of old people will die soon anyway.
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Implicitly, the paper alternatives mean a slow and controlled spread of the disease without the need for any controls to achieve this and without sufficient public concern to produce a decline in economic activity and an upsurge in psychological problems such as depression.
But as with Rickover’s paper reactors, the policies advocated by critics have never actually been implemented. In most countries, national governments have acted – sometimes quickly and sometimes not – to prevent or stop the catastrophic outbreaks, with overwhelmed hospital systems, seen in the early stages of the pandemic in places like Bergamo. Where national governments have failed to act, as in the United States, states have imposed their own restrictions and where both have failed, people have responded by staying at home as much as possible.
In general, the earlier and more comprehensive the control policy is, the better the results will be both in terms of (market) economic activity and health outcomes. (With a proper understanding of economics, health outcomes are economic outcomes, whether they affect market activity or not).
To the extent that critics will praise any country, it is Sweden. Sweden can reasonably be compared with other Scandinavian countries and with Australia and New Zealand – all of which had more warning than Western Europe or the USA. Within this comparison group, Sweden is approximately average in terms of reduced market activity, but much worse when it comes to deaths. There is nothing surprising about the market result.
Sweden did not adopt the “let er rip” strategy that some imagined. The restrictions were less severe than in other jurisdictions but remained in full force while locking was lifted elsewhere. The most distinctive feature of Swedish politics was dependence on voluntary compliance rather than coercion. This was very effective – state epidemiologist Anders Tegnell says his modeling indicates that Swedes on average have about 30 percent of the social interactions they did before the pandemic.
The cost of the practical approach to controls was the enormous death rate among older Swedes during the first months of the pandemic. But for proponents of paper policy, as Rickover puts it: ‘If a mistake is made, it can always be erased and changed.’
Critics of lockdown policies in Australia and elsewhere envision an improved policy in which infectious young people are kept separate from vulnerable ones. This, despite the failure to achieve such a result in Australian outbreaks and the inherent difficulty of the data.
It is easy to point out shortcomings in the governments’ real political response. It is more difficult, but not impossible, to point to adjustments that can reduce the cost of maintaining a particular health outcome. It is much less useful to base a critique of real politics on the basis of a “paper” model that has never met the reality test.
Pro-lifer became lifetime Tony Abbott AC, IPA, RC, PE, GWPF, WTF ?!
John Quiggin is a professor of economics at the University of Queensland and the author of ‘Zombie Economics and Economics in Two Lessons’. You can follow John on Twitter @JohnQuiggin.
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Source: sn.dk
