That we face incredible challenges over the next weeks and months is obvious. Events that ensure a world-wide recession have already happened. The only questions that remain are how deep and how long will the crippling of the world’s economies be.
Since the onset of the COVID-19 crises, we have all been witness to extraordinary steps taken by the Federal government headed by the President, and by state governments headed by their Governors. Private businesses have been ordered to close normal operations. Schools have shut down. The governors of California and New York have ordered that citizens remain in their homes, except for “essential” activities. Other Governors have ordered less drastic actions, but may soon follow suit. In short, civil and commercial society is being ordered to shut down, all in the name of slowing the spread of COVID-19 and the loss of life the contagion may entail.
Put aside all talk and thinking of who to blame. Put aside all talk and thinking of violations of the civil rights of Americans. There will be time enough for such talk and thinking after America emerges from this crises. Of critical importance now — right now without a day’s delay — you, the President and Governors of every state, must think clearly about what must be done to avert absolute catastrophe.
The ordered shutdown of businesses and lockdowns of citizens must be lifted. Americans must be told that they can and should get back to work.
I know this advice is contrary to what you are being told by epidemiologists and others whose expert credentials give them voice and credibility. These people are intelligent, well-meaning. They are no doubt correct about the contagion and how to “flatten the curve.” The problem is that flattening the curve by shuttering businesses and locking down citizens has unintended consequences that will be absolutely catastrophic for American citizens.
Large modern economies are interconnected in unfathomable and incomprehensible ways. There are no “nonessential” businesses. No one, no collection of experts — regardless of intelligence and training — can know what goods and services to produce, how to produce them, or how much of them to produce. The information required to know resides in millions of individuals, each going about the business of making a living and making individual choices.
Americans must keep working at whatever they do. We must not be told to “shelter in place.” If we are not allowed by the President and the Governors of states to do so, the human misery that will follow is unthinkable.
I am unqualified by training or knowledge to predict the spread and mortality of COVID-19. But I am qualified by training and knowledge of economics and history to predict that even if the COVID-19 pandemic were as much a threat as the H1N1 pandemic was, it doesn’t matter — if we continue on the path of killing our economy and depriving individuals of the opportunity to go about their business, whatever their business is.
Now, a silly story to illustrate my claim. Surely, production and distribution of food is essential; all would agree. Therefore, we must allow farmers to produce; we must allow food processing businesses to continue to operate; we must allow truckers to carry food to market; we must allow grocery stores to remain open so that people may buy the food.
But surely we can and should require bars to close; we can and should require restaurants to close or serve only carry-out orders; we can require that computer technicians stay home; we can require auto mechanics stay home; we can require that office workers in corporate offices work from home; we can and should require that golf courses close; we can and should require that all “nonessential” activities cease. Surely we can and must, because we simply must slow the spread of COVID-19, so that fewer people will die of the comorbidities the virus will bring on.
And then the unforeseen, unconsidered linkages and interdependencies of an economy kick in.
A network technician cannot repair the digital network used by the Walmart distribution warehouse, resulting in a one day lag in deliveries to hundreds of Walmarts in a region of the country. The one day delay leads to even more panic buying from people who have every right to fear the next day. A fight breaks out in one of the affected Walmarts. Ten people are arrested and one man is so badly beaten he must be hospitalized.
The mechanic sheltering in place in California does not do a repair on a truck broken down on I-5, which results in a load of pharmaceuticals going undelivered for two days. Tens of people suffer ill effects of not getting their medication; three people die.
The nonessential office worker working from home for the ISP company, Spectrum, fails to see an email due to looking after her seven year old who is not in school. Unfortunately, the oversight causes thousands of others working from home to lose their Internet connection for eight hours. Ten of those who lost their connection also lose their streaming TV service and fail to see news warning them to take shelter in a tornado watch zone. All ten are struck by the tornado. Fortunately, only one dies.
Multiply my silly little story by literally millions of similar incidents that can be imagined without end. None of us can think of but a handful of such fanciful stories and interconnections. But any good economist knows that the unrecognized, unseen interconnections number literally in the millions of millions for any modern economy.
Mr. President and Governors of the fifty United States, please end the shutdowns and the sheltering in place orders. Instead, encourage all Americans to get back to work. Yes, the threat of COVID-19 is real. Yes, we will face risk. Millions of us might contract the virus; thousands might die. The epidemiologists do not know.
Maybe this contagion will be as bad as the N1H1 outbreak was in 2009. No one really knows. But Americans face down far worse and more deadly risks every day. By now, most of us have learned that tens of thousands of Americans will die of flu this year. About 90 Americans died yesterday on our highways. And so it goes.
Ultimately, the consequences of Americans not working and not functioning as a free society are going to be far worse than the risks posed by COVID-19.
We know that some people are at great risk of dying due to the virus. We are all concerned about protecting these people. We have learned how to do that, thanks to instruction from the good people of the world’s public health institutions. We can and must do everything to shield those people from exposure to the virus. They can be and should be sequestered, with help from us all. Regardless, some of them will contract the virus, and they will die. Reality is not always kind; it is still reality.
But we can know and must understand that shutting down our economy and sequestering ourselves is a certain path to catastrophe. Mr. President, Governors, I beg you to save us from that catastrophe.
Friedrich A. Hayek won a Nobel Prize in economics teaching us this truth. In his words, “The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.” He was talking about central planning of economies. Whether we recognize it or not, our experts are imagining that they can design an easier way out of the COVID-19 pandemic. They are well meaning, but they cannot.
Since the onset of the COVID-19 crises, we have all been witness to extraordinary steps taken by the Federal government headed by the President, and by state governments headed by their Governors. Private businesses have been ordered to close normal operations. Schools have shut down. The governors of California and New York have ordered that citizens remain in their homes, except for “essential” activities. Other Governors have ordered less drastic actions, but may soon follow suit. In short, civil and commercial society is being ordered to shut down, all in the name of slowing the spread of COVID-19 and the loss of life the contagion may entail.
Put aside all talk and thinking of who to blame. Put aside all talk and thinking of violations of the civil rights of Americans. There will be time enough for such talk and thinking after America emerges from this crises. Of critical importance now — right now without a day’s delay — you, the President and Governors of every state, must think clearly about what must be done to avert absolute catastrophe.
The ordered shutdown of businesses and lockdowns of citizens must be lifted. Americans must be told that they can and should get back to work.
I know this advice is contrary to what you are being told by epidemiologists and others whose expert credentials give them voice and credibility. These people are intelligent, well-meaning. They are no doubt correct about the contagion and how to “flatten the curve.” The problem is that flattening the curve by shuttering businesses and locking down citizens has unintended consequences that will be absolutely catastrophic for American citizens.
Large modern economies are interconnected in unfathomable and incomprehensible ways. There are no “nonessential” businesses. No one, no collection of experts — regardless of intelligence and training — can know what goods and services to produce, how to produce them, or how much of them to produce. The information required to know resides in millions of individuals, each going about the business of making a living and making individual choices.
Americans must keep working at whatever they do. We must not be told to “shelter in place.” If we are not allowed by the President and the Governors of states to do so, the human misery that will follow is unthinkable.
I am unqualified by training or knowledge to predict the spread and mortality of COVID-19. But I am qualified by training and knowledge of economics and history to predict that even if the COVID-19 pandemic were as much a threat as the H1N1 pandemic was, it doesn’t matter — if we continue on the path of killing our economy and depriving individuals of the opportunity to go about their business, whatever their business is.
Now, a silly story to illustrate my claim. Surely, production and distribution of food is essential; all would agree. Therefore, we must allow farmers to produce; we must allow food processing businesses to continue to operate; we must allow truckers to carry food to market; we must allow grocery stores to remain open so that people may buy the food.
But surely we can and should require bars to close; we can and should require restaurants to close or serve only carry-out orders; we can require that computer technicians stay home; we can require auto mechanics stay home; we can require that office workers in corporate offices work from home; we can and should require that golf courses close; we can and should require that all “nonessential” activities cease. Surely we can and must, because we simply must slow the spread of COVID-19, so that fewer people will die of the comorbidities the virus will bring on.
And then the unforeseen, unconsidered linkages and interdependencies of an economy kick in.
A network technician cannot repair the digital network used by the Walmart distribution warehouse, resulting in a one day lag in deliveries to hundreds of Walmarts in a region of the country. The one day delay leads to even more panic buying from people who have every right to fear the next day. A fight breaks out in one of the affected Walmarts. Ten people are arrested and one man is so badly beaten he must be hospitalized.
The mechanic sheltering in place in California does not do a repair on a truck broken down on I-5, which results in a load of pharmaceuticals going undelivered for two days. Tens of people suffer ill effects of not getting their medication; three people die.
The nonessential office worker working from home for the ISP company, Spectrum, fails to see an email due to looking after her seven year old who is not in school. Unfortunately, the oversight causes thousands of others working from home to lose their Internet connection for eight hours. Ten of those who lost their connection also lose their streaming TV service and fail to see news warning them to take shelter in a tornado watch zone. All ten are struck by the tornado. Fortunately, only one dies.
Multiply my silly little story by literally millions of similar incidents that can be imagined without end. None of us can think of but a handful of such fanciful stories and interconnections. But any good economist knows that the unrecognized, unseen interconnections number literally in the millions of millions for any modern economy.
Mr. President and Governors of the fifty United States, please end the shutdowns and the sheltering in place orders. Instead, encourage all Americans to get back to work. Yes, the threat of COVID-19 is real. Yes, we will face risk. Millions of us might contract the virus; thousands might die. The epidemiologists do not know.
Maybe this contagion will be as bad as the N1H1 outbreak was in 2009. No one really knows. But Americans face down far worse and more deadly risks every day. By now, most of us have learned that tens of thousands of Americans will die of flu this year. About 90 Americans died yesterday on our highways. And so it goes.
Ultimately, the consequences of Americans not working and not functioning as a free society are going to be far worse than the risks posed by COVID-19.
We know that some people are at great risk of dying due to the virus. We are all concerned about protecting these people. We have learned how to do that, thanks to instruction from the good people of the world’s public health institutions. We can and must do everything to shield those people from exposure to the virus. They can be and should be sequestered, with help from us all. Regardless, some of them will contract the virus, and they will die. Reality is not always kind; it is still reality.
But we can know and must understand that shutting down our economy and sequestering ourselves is a certain path to catastrophe. Mr. President, Governors, I beg you to save us from that catastrophe.
Friedrich A. Hayek won a Nobel Prize in economics teaching us this truth. In his words, “The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.” He was talking about central planning of economies. Whether we recognize it or not, our experts are imagining that they can design an easier way out of the COVID-19 pandemic. They are well meaning, but they cannot.
4 comments:
I am totally on board with every sentence of your letter. It filled with commonsense advise and recommendations. you are a prophet speaking to people that cannot hear it. I hear it and believe you are correct on every count.
Some people are at great risk of dying or suffering due to the virus. Others are at great risk of suffering due to the global recession.
- Governments and we should protect older people who has chronic illness by all methods,
- All people need to wear masks indoor and outdoor public areas,
- People need to get antibody tests fastly so they can learn about their immune status
We can not let the global economy suffer until an effective vaccine be discovered.
I am 73 yrs old and have retired 3 times but seem to find myself working more. No Mask no intentional distancing but I was not in every-bodies face before and washed my hands to often unknowingly. I am amazed that people are so afraid of dying that they have forgot to live..
This article is also an essay on the absolute folly of Central Planning. Those in government who think they know how best to run things are idiots. Only the man and woman at the local level know best what to make and how much to produce, what resources to use, what products and services are needed, when to cut back production, etc.
Clueless bureaucrats only gum up the works with their ideas and proposals. They increase costs, reduce quality, and tie the hands of productive citizens with their edicts from on high.
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