Economists pay a lot of attention
to policy choices and trade-offs. Genuine free lunches are a rarity. The coronavirus
pandemic has spurred a lot of comment on trade-offs, from economists and non-economists
alike. Are governments, by effectively putting large parts of their economies
into deep freeze to combat Covid-19, paying too high a price in terms of lost
business, work and incomes to save what might prove to be a relatively small
number of lives?
This seems like a horrible question
to pose at this time of crisis but it is not completely unreasonable. As I say,
trade-offs are part of the very stuff of economics. Indeed, implicit trade-offs
are always being made within health systems. Available resources are finite and
concepts like ‘quality of life years’ play a role in determining how to allocate
care to different groups of people. It’s also likely that during the current
crisis some medical practitioners will be faced with the distressing choice of
which Covid-19 patients to help if hospitals run short of life saving equipment.
However, acceptance of this kind
of micro choice doesn’t mean we should apply a similar calculus at the
macro-level. The utilitarian principle of ‘the greatest good of the greatest
number’ is of limited practical value when, as at present, we simply don’t have
sufficient information to assess the trade-offs involved at the point when
policy decisions have to be made.
Even when the crisis is over, any post hoc assessment
of the trade-off will be questionable because we’ll never know the counterfactual.
UK epidemiologists think that without the lockdown and other measures the
government has taken the death toll from coronavirus could potentially hit
500,000 in the UK alone. If, as we pray, the outcome is far better than this it
will be highly misleading to simply weigh the economic cost against the actual
number of deaths.
I fully understand why, with so many
people suffering financial hardship as we battle Covid-19, some ask ‘is it
worth it?’ I can’t answer that question but when pondering it my conclusion is
that policy makers should favour the humanitarian response over the
utilitarian.
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