As more and more governors are considering or enforcing shutdowns of their entire states many are wondering if we are going to far?
The Wall Street Journal Editorial Board argues, “no society can safeguard public health for long at the cost of its overall economic health. 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.” WSJ
David Katz at The New York Times writes, “The path we are on may well lead to uncontained viral contagion and monumental collateral damage to our society and economy. A more surgical approach is what we need.” NYT
John Tamney at Real Clear Markets writes, “Free people naturally prosper, and they do precisely because their individual wellbeing means so much to them. Had governments done nothing in response to the Coronavirus, individuals and businesses would have done much more, and done so without going out of business.” RCM
Denis Prager at The Daily Wire writes, “We can only be certain that shutting down virtually every part of society will result in a large number of people economically ruined, life savings depleted, decades of work building a restaurant or some other small business destroyed.” DW
Matthew Continetti at The Washington Free Beacon writes, “The economic self-isolation of America can continue only for so long as American society permits…If the coronavirus overwhelms America’s social capacity, our government won’t be in a position to choose between an economic crisis or a pandemic. It will have both.” WFB
None of the writers are arguing that we shouldn’t do everything we can to save as many lives as possible. Their premise, instead, is based on finding the equillibrum point. how can we save as many lives as possible without also destroying our economy or society?
It reminds me of a great debate between Milton Friedman and a college student over Ford’s decision to not recall the Pinto because of a faulty gas tank. Here is the clip. In the clip, Friedman makes a very important argument. He correctly notes that the student’s main problem with Ford’s calculation is the low dollar amount that they have placed on each life that could be lost to their faulty gas tank. Which is very similar to the argument we are having today about the novel coronavirus.
Let’s say the low mortality predictions are correct and we choose to do nothing and 100,000 people die. To use the worst-case economic numbers lets say in order to prevent 100,000 lives lost we shut down the world’s largest economy causing it to lose 10 trillion dollars in value. Using these numbers we are valuing those 100,000 lives at 100 million dollars. As heartless as it sounds, could we be overvaluing these lives?
However, let’s reverse the numbers and the cost of doing nothing is 3 million dead but had we stopped it the economic losses would have been smaller and closer to 3 trillion. We are now valuing these lives at 1 million dollars. Adjusting for inflation that is slightly more than the amount that Ford calculated for with the faulty gas tanks.
It’s hard to put a price on human life because we are all told that human life is priceless. However, as Friedman notes in the video above, “nobody can take the principle that an infinite value can be placed on an individual life.”
Does this mean we shouldn’t lock down cities and state or promote social distancing and good hygiene? No, I am simply pointing out that those asking questions about our economic health are just as necessary as those asking questions about our overall health. As difficult as this debate is, it is a debate that we need to have.