Coercion Made the Pandemic Worse (WSJ + AIER)

I wanted to make sure this WALL STREET JOURNAL article was saved in my feed (Hat-tip to Todd A):

Freedom is the central component of the best problem-solving system ever devised.

By David R. Henderson and Charles L. Hooper

The online Merriam-Webster dictionary defines “anti-vaxxer” as “a person who opposes the use of vaccines or regulations mandating vaccination.” Where does that leave us? We both strongly favor vaccination against Covid-19; one of us (Mr. Hooper) has spent years working and consulting for vaccine manufacturers. But we strongly oppose government vaccine mandates. If you’re crazy about Hondas but don’t think the government should force everyone to buy a Honda, are you “anti-Honda”?

The people at Merriam-Webster are blurring the distinction between choice and coercion, and that’s not merely semantics. If we accept that the difference between choice and coercion is insignificant, we will be led easily to advocate policies that require a large amount of coercion. Coercive solutions deprive us of freedom and the responsibility that goes with it. Freedom is intrinsically valuable; it is also the central component of the best problem-solving system ever devised.

Free choice relies on persuasion. It recognizes that you are an important participant with key information, problem-solving abilities and rights. Any solution that is adopted, therefore, must be designed to help you and others. Coercion is used when persuasion has failed or is teetering in that direction—or when you are raw material for someone else’s grand plans, however ill-conceived.

Authoritarian governmental approaches hamper problem-solving abilities. They typically involve one-size-fits-all solutions like travel bans and mask mandates. Once governments adopt coercive policies, power-hungry bureaucrats often spout an official party line and suppress dissent, no matter the evidence, and impose further sanctions to punish those who don’t fall in line. Once coercion is set in motion, it’s hard to backtrack.

Consider Australia, until recently a relatively free country. Its Northern Territory has a Covid quarantine camp in Howard Springs where law-abiding citizens can be forcibly sent if they have been exposed to a SARS-CoV-2-positive person or have traveled internationally or between states, even without evidence of exposure. A 26-year-old Australian citizen, Hayley Hodgson, was detained at the camp after she was exposed to someone later found to be positive. Despite three negative tests and no positive ones, she was held in a small enclosed area for 14 days and fed once a day. Even the U.S. Centers for Disease Control and Prevention says quarantine can end after seven days with negative tests. Why didn’t the government let her quarantine at home? And why doesn’t it exempt or treat differently people who can prove prior vaccination or natural infection?

Although U.S. authorities haven’t gone nearly that far, early in the pandemic the Food and Drug Administration used its coercive power to discourage the development of diagnostic tests for Covid-19. The FDA required private labs wanting to develop tests to submit special paperwork to get approval that it had never required for other diagnostic tests. That, in combination with the CDC’s claims that it had enough testing capacity, meant that testing necessitated the use of a CDC test later determined to be so defective that it found the coronavirus in laboratory-grade water.

With voluntary approaches, we get the benefit of millions of people around the world actively trying to solve problems and make our lives better. We get high-quality vaccines from BioNTech/ Pfizer, Johnson & Johnson and Moderna, instead of the suspect vaccines from the governments of Cuba and Russia. We get good diagnostic tests from Thermo Fisher Scientific instead of the defective CDC one. We get promising therapeutics such as Pfizer’s Paxlovid and Merck’s molnupiravir.

With authoritarian approaches, we get solutions that meet the requirements of those in power, regardless of how we benefit. Consider this hypothetical example:

Policy A ends with 1,000 Covid-19 cases, 5,000 people who have completely lost their liberty for two weeks, 1,000 lost jobs, and 300 missed key family events, such as the funeral of a loved one.

Policy B ends with 1,020 Covid-19 cases, 4,000 who have lost some of their liberty for one week, 1,000 who have completely lost their liberty for two weeks, 300 lost jobs, and 100 missed family events.

The government may prefer Policy A because it is focused on one aspect of the problem. You might prefer Policy B because many aspects of life matter to you—not only coronavirus cases—and B is much better on the other dimensions. But your preferences don’t count.

With coercive solutions, you’ll often deal with an official who will absolve himself of responsibility by pinning the rule on those giving the orders. With voluntary solutions, if it doesn’t make sense, we usually don’t do it. And therein lies one of the greatest protections we have to ensure that the solution isn’t worse than the problem.

The supposed trump card of those who favor coercion is externalities: One person’s behavior can put another at risk. But that’s only half the story. The other half is that we choose how much risk we accept. If some customers at a store exhibit risky behavior, then we can vaccinate, wear masks, keep our distance, shop at quieter times, or avoid the store.

Economists understand how one person can impose a cost on another. But it takes two to tango, and it’s generally more efficient if the person who can change his behavior with the lower cost changes how he behaves. In other words, to perform a proper evaluation of policies to deal with externalities, we must consider the responses available to both parties. Many people, including economists, ignore this insight.

By what principle do we throw out the playbook of the more successful country, ours, and adopt one from less successful, more authoritarian countries? The authoritarian playbook has serious built-in weaknesses, while solutions based on free choice have obvious and not-so-obvious strengths. Freedom is beneficial in good times; it’s even more crucial in challenging times.


Mr. Henderson is a research fellow with the Hoover Institution at Stanford University. He was senior health economist with President Reagan’s Council of Economic Advisers. Mr. Hooper is author of “Should the FDA Reject Itself?” and president of Objective Insights, whose clients include pharmaceutical companies.


AIER Bonus


A Perfect Storm of Incentives

It is not yet clear whether history will remember the 2020s more for an outbreak of a deadly virus, or for an outbreak of mass psychosis. No doubt, both were at play, the former because the virus was novel and deadly, the latter because we had no idea how much so. In March of 2020, the World Health Organization estimated Covid’s case fatality rate to be over 3 percent. Some outlets reported case fatality rates above 10 percent. By comparison, the case fatality rate for the common flu is a mere fraction of a percent.

But the early information ranged from sketchy to biased. In the early days, the number of Covid tests was limited, so physicians only tested those who were sick enough to show up at hospitals. This skewed the early data toward showing Covid as being deadlier than it actually was. With no randomized testing, the actual lethality was impossible to know.

This bias interacted with the media and politicians’ incentives to create a perfect storm of incentives. The media had an incentive to repeat the worst fatality projections and to play down the bias behind the projections because bad news attracts viewers, and viewers attract advertising dollars. Heavy media coverage of the worst Covid projections alarmed voters, and that forced politicians to respond. But the politicians’ incentives were skewed toward a heavy-handed response.

[….]

By late 2020, it became clear that early case fatality rates were overstated, but it was too late for politicians to change course. A feedback loop had ensued wherein the media sold advertising by spotlighting the Covid danger. This made people fearful, and the people pushed politicians to act. Politicians acted and then hid the potential error of unnecessary lockdowns by emphasizing the danger of Covid. This gave the media more material to spotlight and more advertising to sell. Social media then jumped into the fray by anointing itself the arbiter of what was and wasn’t “misinformation.” But social media was as motivated as the mainstream media to attract eyeballs and sell advertising, and so anything that contradicted the official line on Covid was deemed “misinformation.”

The result was mass psychosis in which people’s behaviors toward the real threat of Covid became inconsistent with their behaviors toward other real threats.

[….]

As with all things, lockdowns do not come without tradeoffs. Some people died of cancer, kidney disease, and other non-Covid causes because they were afraid to go to hospitals out of fear of contracting Covid. In Canada, cancer screening was suspended so that hospital resources could be devoted to Covid care. Early estimates show up to a 10 percent increase in cancer deaths as a consequence. In the US in the early days of Covid, there was a 30 percent decline in the number of people seeking initial treatment for kidney disease.

At the start of the pandemic, calls to suicide hotlines spiked across the country, as did instances of domestic violence. The Centers for Disease Control estimates that the total number of deaths in the US was 450,000 larger than it should have been in 2020. That 360,000 of those were directly due to Covid means that the remaining 90,000 were due to Covid only indirectly or due to the lockdowns themselves.

In addition to the lockdowns costing lives, we expended unprecedented resources maintaining them. These came initially in the form of unemployment and business closures, and later in the form of supply chain problems and inflation and higher taxes to pay for massive stimulus spending. In late 2020, economists estimated that, provided it ended by the fall of 2021, the pandemic will cost the United States around $16 trillion over the next decade. That’s around $40 million for every life saved.

But how many more lives might we have saved had we done something different with those resources? Around 660,000 people die each year of heart disease in the US. The National Institutes of Health spends around $5 billion each year researching cures for cardiovascular diseases. Americans spend another $330 billion each year for hospitalization, home health care, medication, and lost productivity associated with cardiovascular diseases.

Suppose that, over the next decade, it turns out that the 2020-21 lockdown saved a total of 1.1 million US lives (including people who may have contracted Covid in 2020-21 but died over the subsequent decade from lingering complications). This is three times the 370,000 the lockdown appears to have saved in 2020 alone. We will have spent $16 trillion in direct costs and lost productivity to save those 1.1 million people. But, over the same decade, 6.6 million people will have died of cardiovascular diseases. To save them, we will have spent $3.3 trillion. We are dedicating one-fifth the resources to fighting a disease that kills six times the number of people. That makes no sense.

Of course, Covid and cardiovascular diseases are very different in that heart disease isn’t contagious. And yet, that criticism cuts both ways: because heart disease isn’t contagious, we can’t develop a herd immunity, and so heart disease will remain with us for generations whereas Covid will not.

[….]

As Omicron looms, and as surely as Pi, Rho, and Sigma will follow, voters should meet their fears with reason, view the media with a skeptical eye, and demand that politicians discuss tradeoffs openly and honestly.


Antony Davies is the Milton Friedman Distinguished Fellow at the Foundation for Economic Education, and associate professor of economics at Duquesne University. He has authored Principles of Microeconomics (Cognella), Understanding Statistics (Cato Institute), and Cooperation and Coercion (ISI Books). He has written hundreds of op-eds appearing in, among others, the Wall Street Journal, Los Angeles Times, USA Today, New York Post, Washington Post, New York Daily News, Newsday, US News, and the Houston Chronicle.