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Contra Caplan on Covid caution

Summary:
Bryan Caplan has a new post that contests some of the claims I made in my recent post about the regulation of safety.  I do agree with Bryan on several points.  First, most of the Covid regulations were misguided.  Second, today many people are foolishly being far too cautious about Covid.  (I’d add that many people are not cautious enough, i.e. unvaccinated adults.)  But I also disagree on a number of points: 1.  It’s not obvious to me that the widespread Covid caution during 2020 was unwarranted. 2.  I think Bryan underestimates the risk posed by Covid and overestimates the hardship of Covid caution. 3.  I think Bryan puts too much weight on regulatory differences between jurisdictions, which played only a very modest role in Covid caution. 4.  While I oppose

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Bryan Caplan has a new post that contests some of the claims I made in my recent post about the regulation of safety.  I do agree with Bryan on several points.  First, most of the Covid regulations were misguided.  Second, today many people are foolishly being far too cautious about Covid.  (I’d add that many people are not cautious enough, i.e. unvaccinated adults.)  But I also disagree on a number of points:

1.  It’s not obvious to me that the widespread Covid caution during 2020 was unwarranted.

2.  I think Bryan underestimates the risk posed by Covid and overestimates the hardship of Covid caution.

3.  I think Bryan puts too much weight on regulatory differences between jurisdictions, which played only a very modest role in Covid caution.

4.  While I oppose some of their draconian restrictions, I’m not convinced that the lifestyle sacrifices in places like Australia were any greater than in America.

Part of this post will address specific claims of Bryan, but another part will address claims I’ve seen made by others in the comment section.  So for instance when I talk about “innumeracy”, I’m certainly not talking about Bryan.

Bryan suggests the costs of reaction may be 15 times as high as the cost of the pandemic:

By my math, the total cost of the reaction for the U.S. was roughly fifteen times the total cost of the pandemic itself.  (Similar calculations for Canada here).  But that’s fifteen times a genuinely enormous cost of 800,000 lives, implying many trillions of dollars of overreaction.

He links to a November 24, 2020 post, which cites this estimate:

A few weeks ago, the NYT reported that “The Coronavirus Has Claimed 2.5 Million Years of Potential Life.”

The earlier post then discusses Caplan’s poll of how much regular life people would trade off for one year of living under Covid restrictions.  He estimates that the average person views a year of Covid life as worth about 5/6 years of regular life, and then makes this claim:

So what?  Well, we’ve now endured 8 months of COVID life.  If that’s worth only 5/6ths as much as normal time, the average American has now lost 4/3rds of a month.  Multiplying that by the total American population of 330M, the total loss comes to about 37 million years of life.  That’s about 15 times the reported estimate of the direct cost of COVID.

As I’ll explain later, I don’t accept that claim.  But even if it were true, the claim would be meaningless.  To see why, consider this analogy.  Suppose the US could have been 100% shielded from Covid with one small intervention—say a travel ban from China until a vaccine was developed.  (Yes, in practice that wouldn’t have done the job, but consider it as a thought experiment.)  Also suppose that this China travel ban reduced social welfare in America by $1 billion.  Don’t you think most Americans would support it?  Remember, I’m assuming this one small intervention would have reduced Covid deaths in America to zero.  But Bryan’s cost approach would suggest that it’s a bad idea.  Because in that case you’d have a billion dollars in regulatory restrictions weighed against zero Covid costs.  Obviously the correct comparison is with the number of people who would have died without Covid restrictions, not with the restrictions.

How could Bryan have made such a basic error?  He didn’t.  In the November 24, 2020 post he added the following:

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.

When he wrote this post, the US death toll was under 275,000.  Long time readers know that I have often argued that Covid would have killed 2 million Americans if people took absolutely no precautions to avoid the illness.  A year ago, commenters seemed to view my claim as being far fetched, even though that’s the implication of the 0.6 IFR.  There are two complications, which push the estimate in opposite directions.  Herd immunity might have kicked in at 80% or 90%, somewhat lowering the death toll.  But most of the deaths would have occurred quite rapidly, overwhelming hospitals and before best practices for treatment had been fully worked out.  So I still think 2 million is a ballpark estimate.  We already have over 800,000 dead, and would have had far more if not for the fact that a very high proportion of older people were vaccinated in early 2021

So yes, there is only a “tiny chance” that it could have been 5 times worse, but that’s because it likely would have been 7.5 times worse.

In Bryan’s recent post he cites the “15 times” figure without this qualification from the 2020 post.  I’d argue that even if his estimate of Covid costing the equivalent (in utility) of 37 million life years were accurate, the correct ratio would be 2 to 1, or perhaps 5 to 1 if you account for living through 21 months of Covid (although restrictions became less onerous after vaccines, and in my view we should have gone “back to normal” at that time).  But I don’t think the poll results he cites have any value at all, for all sorts of reasons:

1. Most people are whining drama queens

2. Most people focus on costs and forget benefits

3.  Most people are innumerate

4.  Talk is cheap

If someone asked me this question in a bar, I might also have thrown out a figure like 5/6ths.  But when I really think about it, that can’t be right.  Most of the costs I faced in 2020 were small.  I wore a mask when visiting the grocery store.  I cut my own hair.  I did takeout rather than in-person dining.  But I still visited my mom in Arizona.  Missing a teeth cleaning was no big deal.  Not having to fly to the office in DC was a big benefit in terms of my utility.  (How many people take into account avoiding all those annoying commutes to work.)  Honestly, there are lots of other things in my life that affect my utility far more than Covid caution–such as health problems.

I get that I was one of the lucky ones, and don’t doubt that the average person was more adversely affected.  But I don’t trust their self reported estimates of life equivalents.  I’m not saying that Bryan is clearly wrong, just that these estimates are very unreliable.

BTW, if I were a crude utilitarian, I might argue we’d all be better off (in aggregate) if everyone lived a wild, hedonistic, risk-taking lifestyle, which reduced life expectancy by 5% on average.  Then bump up the birthrate enough to prevent any decline in the aggregate flow of life years for the total population.  What do you think of that idea?  Plan to get your son a motorcycle and lifetime cocaine supply for his birthday?  That may seem like a ridiculous analogy, but Bryan isn’t discussing the cost and benefits of specific governmental regulations, his thought experiment involves a world of zero private voluntary Covid caution.  So I can also do far-fetched thought experiments.

One problem with the motorcycle and cocaine idea is that it ignores the pain a parent suffers when their son dies in an accident.  Similarly, if I died of Covid, the loss of utility for my (8 years younger) wife would be at least 10 times greater than the loss of utility for an old curmudgeon like me.  (Of course if you take the hedonic set point hypothesis seriously, then almost nothing matters—so ultimately I’m agnostic on all these calculations.)

When I read critics on Covid caution (not Bryan), I see a lot of innumeracy.  People talk about a 1% chance of dying as if it’s a small risk.  Only a bit over 2% of US soldiers died in the Vietnam War, and an even smaller percentage in Iraq.  Yet war is pretty risky.  If you had a 1% risk of being bitten by a mosquito, that’s no big deal.  A 1% risk of dying is actually pretty large.  Even worse, at least some of the people who make this claim will also say things like “That horribly dangerous Boeing 737 Max never should have been allowed to fly!”  Really?  Why not?

Some argue that the Covid death figures are overstated, even though the alternative excess death data suggests that the official Covid death figures are understated.

Or they talk as if there are only two types of people.  “Old people” at high risk of dying and “young people” at extremely low risk.  It’s not that simple.  Old people are more likely to die, but it’s a continuum.  Roughly 200,000 Americans under the age of 65 have died of Covid.  That’s a lot!  Only about 5000 people were under the age of 30, but high school students are often taught by 60-year old teachers.  (That’s not to deny that school closings were greatly excessive, especially after vaccines.)  Or they’ll suggest that society could have been neatly partitioned between “young” and “old”, with the young going on with their lives.  But if my daughter caught Covid, very likely I would have as well.  She was cautious for that reason.

Am I old?  I guess at age 66 the answer is yes.  But when I think of my 95-year old mom, I don’t feel like I have one foot in the grave.  Some talk about the risk for the under 65 group being merely people with pre-existing conditions, as if those people are sickly invalids.  But I often see pictures in the media of healthy looking cops who have died of Covid.  On closer inspection, some of them looked a bit overweight.  And of course obesity is a major a pre-existing condition.  I’m rather thin, and play tennis three times a week.  So I’m healthy, right?  Actually I’ve had crappy lungs my entire life, with several bad cases of pneumonia in my 30s. (If I’d been born before antibiotics, I doubt I would have lived to age 40.)  So am I at higher risk?  I honestly don’t know.  But I really don’t see the point of people saying Covid is only a problem for the old and those with pre-existing conditions.  Lots of people have at least one pre-existing condition.  Obesity is not exactly rare in America.

And death is not the only risk; people get flu vaccines because getting the flu is unpleasant.  NBA player Joel Embid said after recovering from Covid that he’d felt so sick he thought he was going to die.  Other NBA players have struggled for many weeks to get back to normal.  And these are some of the healthiest people on the planet.

Bryan also compares America to other countries:

I’m now convinced that the U.S. had the least-bad Covid response of any major English-speaking country.  The United Kingdom, Canada, Ireland, Australia, and New Zealand all beat us in terms of fatalities/population.  But almost no part of the U.S. ever put innocent people under house arrest.  For most of Covid, I lived in one of the strictest regions of the U.S., yet there was never a day I couldn’t walk outside with my family, mask-free.  I never even had to pretend to shop or exercise.

I don’t necessarily disagree here, but this issue is trickier than it looks at first glance.  Based on what I’ve read, there are places such as Western Australia where daily life went on normally all though the pandemic, with the exception of travel.  From a utilitarian perspective, it’s not easy to weigh the costs of very strict actions taken against some people, which allow the majority of people to live under much fewer restrictions than in the US.  I tend to oppose most of the restrictions imposed by governments, but I also am not a fan of governments that don’t do enough to control the pandemic, but do have enough restrictions to make our lives more frustrating.  We don’t have the worst of both worlds, but we have the pretty bad of both worlds, whereas Western Australia is worse in one respect and far better in most others—even from a libertarian perspective.

And finally, as I’ve previously argued I think people tend to grossly overestimate how much of the response reflects government restrictions, and underestimate how much reflects private actions.  There’s a reason that Sweden’s economy was hit just as hard as the other Nordic countries.

When I travel to more restrictive states (Washington) and less restrictive states (Arizona), I hardly notice the difference in government policies at all.  Rather what I notice is different cultures.  Even within California, people in the Bay Area are much more Covid cautious than down here in Orange County.   I’ve never paid any attention to mask mandates.  Like Matt Yglesias, I just look in the window.  If people are wearing masks, I put one on before entering.  If not, then I don’t.  No big deal.  (Wearing a mask is a pain?  All I can say is if you think that’s a major problem, I wish I could have your life!!)  In the spring of 2020, I recall hearing about some sort of “stay at home order”.  But when I went outside, people were strolling along the sidewalk just like normal.

To reiterate, I think we are often overreacting to Covid (especially after vaccines), and I am a libertarian who opposes government restrictions except in a few extreme cases.  If a travel ban from China really would have protected us from Covid long enough to help us prepare, I would have reluctantly favored it.  In most cases, however, government regulations have made the problem worse.  But I don’t buy the argument that Covid caution is some sort of huge problem, not when compared to 400,000 Americans being in prison for violating drug laws, and not even compared to residential zoning restrictions.  Most Covid caution in 2020 was justified.

Scott Sumner
Scott B. Sumner is Research Fellow at the Independent Institute, the Director of the Program on Monetary Policy at the Mercatus Center at George Mason University and an economist who teaches at Bentley University in Waltham, Massachusetts. His economics blog, The Money Illusion, popularized the idea of nominal GDP targeting, which says that the Fed should target nominal GDP—i.e., real GDP growth plus the rate of inflation—to better "induce the correct level of business investment". In May 2012, Chicago Fed President Charles L. Evans became the first sitting member of the Federal Open Market Committee (FOMC) to endorse the idea.

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