Ryan Bourne on the Economic Fallacies of the Pandemic Policymakers
How does one attempt to see the unseen? The question may seem more like a Zen koan than vital concern of economists. The idea of tracing hidden consequences of different policies, however, must be discovered anew with every generation of policymaker and economic adviser.
Frederic Bastiat is credited with the original framing of the “seen” vs the “unseen,” using the parable a broken window to expose the common fallacy that destruction begets economic growth. Later, Henry Hazlitt would demolish the recycled Keynesian ideas in his time, arguing that government can stimulate “aggregate demand” by spending tax dollars on make-work projects like digging holes. In both cases, the resources used to stimulate spending come out of the pockets of people who would have otherwise spent the money more productively.
This year, Ryan Bourne continues the noble tradition of Bastiat and Hazlitt in his new book Economics in One Virus — a clever spin on Hazlitt’s famous “Economics in One Lesson.” What can COVID teach us about the pitfalls of government intervention? Bourne lays out the high costs and murky benefits of policies such as lockdowns and mandatory masking, when voluntary alternatives would likely had achieved the same if not better results in terms of mitigating spread, without the devastating effects on small business.
Almost two years into “two weeks to slow the spread,” we will revisit the problem of the pandemic from an economic standpoint. Bourne reminds us that economics is not all about dollars and cents — it’s the stuff of our daily lives, including the trade-offs that determine our fundamental well-being. To ignore costs simply because they cannot be measured, such as the relationships weakened or business lost, is to commit the oldest economic fallacy in the book.
Our discussion points this week:
- Why citizens don’t want to spend their lives studying government regulations
- How government fails to consider the incentives that different policies create for human behavior
- Since the pandemic affected far more people economically than medically — why didn’t our executives consult a Ph.D. in economics, as they did with medical professionals? How would our executives’ decisions have changed had they decided to listen to both economists and public health professionals?
- Where did the CDC mess up its own test? How did the FDA throw sand into the gears? What slowed down the test rollout?
- How did the US compare to countries like South Korea in testing, and what economic consequences did that bring along?
- Efficacy of masks and tests from a medical and an economic standpoint
- How did government interference influence supply and demand?
- The concept of a (mask) shortage — and why it doesn’t exist.
- An economist’s view of the tool of lockdown: How does the lockdown’s collective harm compare with that of the epidemic itself?
- How would an economist have advised the chief executive to approach a lockdown?
- Why are many people so reluctant to engage in a direct cost-benefit analysis of the first lockdowns? Which benefits of a lockdown were overestimated?
- Why you shouldn’t estimate cost by comparing a downturn in GDP against the value of lives saved
- Consequences of the lockdown on potential lifetime earnings and entrepreneurial thinking
- Why the government needs to make sure that we fulfill our duties on an informed basis
- How the economic principle of an externality problem relates to our decision-making during COVID
- Should we have engaged in focused prevention rather than focus protection?
- How much must you spend to save one life? Is that public expenditure worth the money?
- The cost of risk at work, and thus human life, according to Vanderbilt, and why it doesn’t necessarily apply to COVID
LINKS:
- Ryan Bourne (@MrRBourne) / Twitter
- Ryan Bourne | Cato Institute
- [AMAZON] Economics in One Virus: An Introduction to Economic Reasoning through COVID-19
- Randy E. Barnett: Restoring the Lost Constitution: The Presumption of Liberty.
RELATED SHOWS:
- John Tamny on Experts vs. the Wisdom of Markets, May 8, 2020
- Never let a good crisis go to waste with Randal O’Toole, April 24, 2020
- Did California Just Declare Itself a Nation-State?, April 17, 2020
- Unprepared: Government Failure at the CDC/FDA with Alex Tabarrok, April 9, 2020
- The Single Most Common Economic Fallacy in COVID-19 Reporting, with Don Boudreaux, April 5, 2020
- How to Stay Sane as a Libertarian on Lockdown, with Jacob Sullum, March 30, 2020
- Big government can’t save us from coronavirus with Jeffrey Tucker, February 13, 2020
- The Other War on Drugs, with Jessica Flanigan, August 10, 2018
- Local Leviathan: Clint Bolick on Grassroots Tyranny, September 22, 2018
