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Is there a better alternative to lockdowns?

Summary:
In the effort to contain Coronavirus, Italy has chosen a policy of lockdown (here’s an interesting report by Flavio Felice for the City Journal). Some people have commented that the Italian strain is considerably milder than the Chinese one. Comparisons are seen as fit, because Italy is roughly the same size, population way, of Hubei, the Chinese region where Covid19 started its journey. Advocates of the Chinese strategy sometimes forget that, with all its faults, Italy is still a Western democracy, and that makes a difference. You cannot lock people down, flat by flat. You need to appeal somehow to their sense of responsibility, doing whatever you can to contain the virus, but keeping the economy trudging on too. Social distancing, as important as it might be,

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In the effort to contain Coronavirus, Italy has chosen a policy of lockdown (here’s an interesting report by Flavio Felice for the City Journal). Some people have commented that the Italian strain is considerably milder than the Chinese one. Comparisons are seen as fit, because Italy is roughly the same size, population way, of Hubei, the Chinese region where Covid19 started its journey.

Advocates of the Chinese strategy sometimes forget that, with all its faults, Italy is still a Western democracy, and that makes a difference. You cannot lock people down, flat by flat. You need to appeal somehow to their sense of responsibility, doing whatever you can to contain the virus, but keeping the economy trudging on too. Social distancing, as important as it might be, ought to be by and large a measure that individuals understand they need to take.

After basically two weeks of lock down, in Milan, it seems to me that these measures are on a sort of slippery slope. You are seizing people’s liberty as the only way to win the war against the virus. The goal is to flatten the curve, but it does not flatten in a very short time. This makes people paradoxically demanding a further curtailment of their own liberty.

A national lock down, which purportedly concern as many as 60 million people, is naturally less effective of the lock down of a small town (that has been successful: see this insightful piece by two scientists on what happened in the town of Vo’, near Venice). You can send policemen and servicemen to check that commercial activities are actually closed, but policemen and servicemen are in limited supply too and will never be sufficient to knock at each door.

A perhaps unsurprising ally of the government is a chunk of the population, which is ringing authorities to denounce their fellow citizens that they consider disobedient. Since March 11, police forces claim they checked on 1.4 million Italians and they have received 63,000 such reports. This is impressive, but it also signals a kind of social frenzy, of the Jacobin sort. The boundary between civic spirit and the urge to tell your fellow man what to do is a rather thin line.

The government enjoys widespread support and is asked to force more activities to close down. Starting March 25, most of businesses will be shut down. This is the input of the community of experts, particularly public health scholars. These experts see things from their own perspective, using the analytical instruments they forged in a life of scholarship, and deserve respect and gratitude in proving expertise in a crucial moment. They are rightly trying to prioritize the need to remove stress from the shoulders of the national healthcare system, which at the very same time should be better equipped by adding new ICUs. This is an admirable goal for a civilized and free society. But experts, whatever their skills, always only have a partial perspective on reality.

So we hear famed epidemiologists who suggest to shut everything down until the summer, which presumably still begins on June 21. Instead of imagining that after reaching the peak of the contagion, and after presumably learning more about the virus (including what are the more vulnerable and affected groups in society), we shall try to open shops and businesses up again, inasmuch as we can. The idea is that we prolong these measures, for approximately three months altogether. I am happy to refer to epidemiologists and virologists for their understanding of the way in which the virus works, but this seems to be a splendid plan to reduce the risks of death by coronavirus, by increasing the risk of death by hunger. The relationship between GDP and mortality seems to be a pretty straightforward one: if we impoverish a country massively, it is unlikely that it will stay healthy.

The problematic thing is that such a turn of the screw over economic activity seems to be highly supported by the population. Trade unions and workers begin to start not to be actively protected with the necessary equipment to carry on, as they should, but to stay home altogether. Life under siege tends to affect the psychology of people and I fear we are already seeing that. Myopically, we do not understand that for most of us, beginning with elders and children, to stay home, we crucially need people to work. Government actions everywhere tend to focus on providing cash: that is certainly a relief in the short time but tends to create perception problems. Literally, the problem is not cash, but having stuff you can spend cash on. From electronic equipment to cookies and yogurt, these things do not just “happen”: somebody makes them.

For this reason, I really wish smarter people than me read and ponder the Wall Street Journal editorial urging to reconsider the lockdown in the US. It makes some very important points:

… the costs of this national shutdown are growing by the hour, and we don’t mean federal spending. We mean a tsunami of economic destruction that will cause tens of millions to lose their jobs as commerce and production simply cease. Many large companies can withstand a few weeks without revenue but that isn’t true of millions of small and mid-sized firms
… Our friend Ed Hyman, the Wall Street economist, on Thursday adjusted his estimate for the second quarter to an annual rate loss in GDP of minus-20%. Treasury Secretary Steven Mnuchin’s assertion on Fox Business Thursday that the economy will power through all this is happy talk if this continues for much longer.
If GDP seems abstract, consider the human cost. Think about the entrepreneur who has invested his life in his Memphis ribs joint only to see his customers vanish in a week. Or the retail chain of 30 stores that employs hundreds but sees no sales and must shut its doors.
Or the recent graduate with $20,000 in student-loan debt—taken on with the encouragement of politicians—who finds herself laid off from her first job. Perhaps she can return home and live with her parents, but what if they’re laid off too? How do you measure the human cost of these crushed dreams, lives upended, or mental-health damage that result from the orders of federal and state governments?
… Even America’s resources to fight a viral plague aren’t limitless—and they will become more limited by the day as individuals lose jobs, businesses close, and American prosperity gives way to poverty. America urgently needs a pandemic strategy that is more economically and socially sustainable than the current national lockdown.

Alberto Mingardi
Mingardi, one of the rising stars of European libertarianism, is the founder and Director General of the Italian free-market think tank, Instituto Bruno Leoni. His areas of interest include the history of economic thought and antitrust and healthcare systems. He is particularly well known for popularizing the work of past scholars under-appreciated by today’s libertarians. Currently an adjunct scholar at the Cato Institute, Mingardi has also worked with the Heritage Foundation, the Atlas Economic Research Foundation, the Acton Institute, and the Centre for a New Europe.

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