Mises Wire

The State Has Seized Many New Powers. It Won’t Let Go of Them Easily.

“Restaurants sit empty in Chinatowns. Parents keep children home from school in Toronto. Asian hotels and airlines reel at dramatic drops in bookings. Just as the media recently gave us a new and particularly intimate experience of war, we’re now getting a new and particularly fearsome experience of a public health crisis….It is one of a large number of viruses that suddenly infect the human population….Given what’s happened thus far, the appropriate response is to pursue targeted and aggressive public health measures, while the 99.9% of us not conceivably at risk go on with our lives. This is where China’s shocking cover-up has proven so costly. In any viral outbreak, early identification and containment is essential.” If you think that this is the news from the trenches of the unfolding coronavirus warfare, you will be mistaken. This is an excerpt from a 2003 Wall Street Journal article by David Baltimore, one of the leading American epidemiologists and a Nobel laurate.1  His paper deals with the contemporary SARS epidemic (who remembers it now?) and the short-term panic it unleashed.2

Baltimore “diagnosed” the government and popular response to the then unknown “beast” as a “media-transmitted epidemic” that outpaced the risk to public health from the actual virus. Just like the present coronavirus, the SARS virus (along with many other earlier brands) originated in the “unsafe space” where humans were butchering, eating, and closely interacting with exotic animals. In fact, as early as 2007 a group of immunology scientists from the Hong Kong University warned, “The presence of a large reservoir of SARS-CoV-like viruses in horseshoe bats, together with the culture of eating exotic mammals in southern China, is a time bomb.” Just like any other virus, SARS infected the human population and, just like others, it eventually burned itself out. In daily news we see running lines with the numbers infected (353,692 confirmed) and dead (15,429 as of March 23).3  Unfortunately, the news hardly provides us with the number who have recovered.4  You need to do a special search to find out the number of people who have recovered, which is 100,443 people as of March 23. Neither does the news tell you the health state of the deceased or their ages.

What is clear now is that the “media-transmitted epidemic” has severely infected us with another powerful “time bomb” of statism. Peter Klein and Darren Nelson stressed this last week.5  In the present hysteria environment, any government is naturally prompted to act or show that it is doing something. Many probably know that coronavirus literally means “crown virus.” And that is exactly what we are witnessing now in real time: the epidemic empowers the governmental crown. One trillion dollars in financial injections, including the useless inflation-boosting $1000 cash allowance to each family (which the White House has recently increased to $1,200), are expected to bring the economy to where it was prior to the panic. The notorious “deep state” has been progressively flexing its muscles.6  Trump already treats the epidemic as a war. Sounds familiar? Yes, it is a rerun of the 1933 Great Depression rhetoric; I have no doubt that when the self-inflicted economic damage kicks in, the same government will again step in to “save” us from the crisis. No wonder such leftist congresspeople as Ilhan Omar have begun to praise Trump for finally acting presidential, especially praising his cash payments and regulation of private businesses.7

We are seeing now how the activities of governmental bureaucrats are taking us down the path of economic self-destruction. Self-quarantines or similar precautions are understandable during an unfolding pandemic. What is hard to understand is shutting down businesses and penalizing them with fines, as has been done in California, New Jersey, and New York City. For example, California prescribed all working people to stay at home.8  I wonder how Amazon, which cheerily hired one hundred thousand more people to counterbalance the suppression of retail trade and restaurant business,9  will be able to organize delivery service under these draconian conditions. Informed people know that during the peak of flu season they need to wash their hands often, gargle with alcohol, keep distance, and avoid crowded places. We continue doing these things each year without any governmental decrees or orders.

An act of nature, the pandemic-to-panic situation has been snowballing “organically.” At first, Trump brushed off the news of the virus as a regular flu. This immediately contributed to the decline of his popularity. Populism includes not only rants against the deep state but also the skillful use of an emergency crisis and state power. Trump soon stepped in and did show himself to be an assertive leader. As a result, his approval rating has risen from 43 to 55 percent.10  Yet for those who are concerned about economic liberty, the aggressive reliance on central state power poses clear and present danger. With international airlines being shut down and international travel terminated, we are now rapidly sliding down the slippery slope of shutting down out the entire economy. Economic isolationism, which sped the 1929 Great Depression, had already come into vogue both on the right and on the left prior to January 2020 as a reaction to globalism. The pandemic simply eased that drift.

In a situation of escalating panic, as Baltimore stressed, reason and rationality usually evaporate. Instead, there reigns what Ludwig von Mises described as “planned chaos.” During a war or epidemic-driven frenzy, people rarely ask themselves if they will gain more from a shutdown of the economy or by continuing their regular activities while exercising reasonable preventive health measures. Both governments and people usually opt for the first biopolitical solution. Again, in a snowball manner, both bureaucrats and “lay people” double down, “infecting” each other with panic. I am afraid that famous flu saying will adequately describe the net effect of the emergency measures in terms of health: when you treat a flu with a good medicine, you will recover in seven days. If you do not, you will recover in a week. In addition to the tremendous economic self-destruction, we might face a ratchet effect, so well described by Robert Higgs: emergency institutions will continue to linger and shapeshift after an emergency situation is long gone.11  Like viruses, which have a habit of mutating and staying with us forever, temporary bureaucracies too tend to mutate, multiply, and find new hosts to settle in. After all, we know full well that after the current “crown virus” there will be more viruses. Since governments have already tasted the power of pandemic regulation, will we experience another economic shutdown and state of emergency during the 2020–21 flu season or coronavirus pandemic?

Still, I want to be optimistic. Strange as it may sound, a liberty-loving individual can benefit from the present seemingly grim situation. On the one hand, shutting down working spaces disrupts our economy. Yet, on the other hand, I see in the current prolonged self-quarantine a good liberation potential. As we know, the expanding practice of working from home is making obsolete the old centralized “crowd-” and “factory-like” system of labor (laboring under the same roof), and the panic speeds up the whole process. It is a good thing. The Department of Education, a useless bureaucracy created by Jimmy Carter in 1977, too is losing ground: quarantined parents and children are temporarily switching to homeschooling. In New York City, which is notorious for its worship of public schooling, parents are now turning to homeschooling resources.12  Suddenly people have received the freedom to choose! Let’s make this temporary practice into a liberty “ratchet effect” and gradually dethrone the public school system, much of which is specialized in babysitting and indoctrinating young minds. Scared to death by the epidemics, practically all US universities have shifted to online education; I will start streaming my lectures next week. This is a great thing, and it makes sense to continue this practice. Leftists, nationalists, and other socialists thrive when they congregate, march, and attack in packs. The ongoing panic and the individualization of education might “cancel” ideologically toxic campus activism and relegate it to online groups. While the deep state is seeking to empower itself, let’s declaw it by exploiting the loopholes that are emerging in its underbelly during this pandemic. As they say: never let a “good” crisis go to waste.

  • 1David Baltimore, “SAMS-Severe Acute Media Syndrome,” Wall Street Journal, Apr. 28, 2003, https://www.ph.ucla.edu/epi/bioter/sams.html.
  • 2Vincent C.C. Cheng, Susanna K.P. Lau, Patrick C.Y. Woo, and Kwok Yung Yuen, “Severe Acute Respiratory Syndrome Coronavirus as an Emerging and Remerging Infection,” Clinical Microbiology Review 20, no. 4 (2007): 683, https://cmr.asm.org/content/cmr/20/4/660.full.pdf.
  • 3Johns Hopkins Coronavirus Resource Center, Johns Hopkins University, https://coronavirus.jhu.edu/.
  • 4For examples, see the map and statistic updates maintained by the Seattle Times. The most recent one is “Coronavirus daily news updates, March 21: What to Know Today About COVID-19 in the Seattle Area, Washington State and the Nation,” Seattle Times, last modified Mar. 22, 2020, https://www.seattletimes.com/seattle-news/health/coronavirus-daily-news-updates-march-21-what-to-know-today-about-covid-19-in-the-seattle-area-washington-state-and-the-nation/.
  • 5Darren Brady Nelson, “The ‘Bootleggers and Baptists’ of the Coronavirus Crisis,” Mises Wire, Mar. 20, 2020, https://mises.org/wire/bootleggers-and-baptists-coronavirus-crisis; Peter Klein, “Never Let a Good Crisis Go to Waste,” Mises Wire, Mar. 19, 2020, https://mises.org/power-market/never-let-good-crisis-go-waste.
  • 6Gregory Gordon, “Coronavirus Panic: From Trillion-Dollar Paternalism to ‘Cash for Bunkers,’” Mises Wire, Mar. 21, 2020, https://mises.org/wire/coronavirus-panic-trillion-dollar-paternalism-cash-bunkers.
  • 7Gregg Re, “Ilhan Omar praises Trump’s ‘incredible’ response to coronavirus pandemic,” Fox News, Mar. 19, 2020, https://www.foxnews.com/politics/ilhan-omar-praises-trumps-incredible-response-to-coronavirus-pandemic.
  • 8Faith Karimi, “California orders its nearly 40 million residents to stay home to prevent the spread of coronavirus,” CNN News, Mar. 20, 2020, https://www.cnn.com/2020/03/19/us/california-coronavirus-stay-home-order/index.html; ‘We Are All in Quarantine’: 100% of NY Work Force Must Stay Home, Cuomo Puts State on Pause,” CBSN News, Mar. 20, 2020, https://newyork.cbslocal.com/2020/03/21/coronavirus-new-jersey-shuts-down-businesses-orders-stay-at-home/; Phil Murphy, “Coronavirus Update: New Jersey Shuts Down Businesses, Orders Residents To ‘Stay At Home,’” CBSN News, Mar. 21, 2020.
  • 9Dana Mattioli, “Amazon to Hire 100,000 Warehouse and Delivery Workers Amid Coronavirus Shutdowns,” Wall Street Journal, Mar. 17, 2020, https://www.wsj.com/articles/amazon-to-hire-100-000-warehouse-and-delivery-workers-amid-coronavirus-shutdowns-11584387833.
  • 10Kendall Karson, “Coronavirus Upends Nation, as Three in Four Americans’ Lives Changed By Pandemic: Poll,” ABC News, Mar. 20, 2020, https://abcnews.go.com/Politics/coronavirus-upends-nation-americans-lives-changed-pandemic-poll/story?id=69696172.
  • 11Robert Higgs, Crisis and Leviathan: Critical Episodes in the Growth of American Government (Oakland, CA: Independent institute, 1987).
  • 12Mike Smith, “Coronavirus Has Parents Looking at Homeschooling,” Washington Examiner, Mar. 13, 2020, https://www.washingtonexaminer.com/opinion/op-eds/coronavirus-has-parents-looking-at-homeschooling.
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