Pandemic: The Shortcut to Serfdom
Let me make one thing clear—I’m not downplaying the importance of a strong response to this virus. I believe there is a good reason to be overcautious in the short term before we understand the disease better and are able to apply a more surgical approach to its management and eradication.
Social distancing, working from home, avoiding travel, all of those things help us to avoid the overwhelming and potential collapse of the healthcare systems such as we are witnessing in Italy and Spain.
However, all of that comes at a cost. Many people will lose their incomes. Lack of social contact will only worsen the impact of the continuous flow of bad news. Anxiety and depression will spike and have real consequences to people's health and lives.
There is a point beyond which to many people these tradeoffs become unacceptable. People, especially the young ones will rather risk getting the disease than losing their income or even missing out on their gym or their flat white fix. The elderly, who are aware of their limited lifespan even under normal circumstances, might be willing at some point to accept the risk for a chance to hold their grandchildren, to travel, or to socialize with their peers.
And although some of those decisions from some angles will look reckless, they have to be made at the individual or community level so that the people who make them for themselves and their loved ones are the ones with the most information about their personal situations, their risk appetites, and their time preference.
Because. in the end, every individual has the means to protect himself or herself against the virus, but when states get involved and introduce top-down measures across the society at large, there will necessarily be massive unintended consequences that hit everyone, many of the most vulnerable especially.
Currently, US governors and European governments are outbidding each other in the strength of the measures they impose, throwing all principles that the Western society was built on out the window for the sake of political showmanship. Curfews and lockdowns have shown no correlation with success in fighting the disease, yet some governments ban people from even going out in nature or to their own backyards. The surveillance state is growing rapidly, using this rare opportunity to a maximum.
Although all of those things are wrong in principle and create a very dangerous precedent, they also potentially introduce unintended consequences that will make the situation worse in the long and perhaps even short run.
Where it is forbidden to freely move around outside. even where it is not only completely safe but beneficial, some people will congregate in hidden places, which are necessarily much more confined. The Swiss government forced ski centers to close down even though it is very easy to avoid contact with others and by doing that sent everyone home at the same time overnight, potentially increasing what would otherwise have been lower, more natural public transport occupancy. Miami and other places did the same thing with their beaches and hotels, sending everyone onto planes in much more concentrated numbers.
The perfect storm of central banking induced an everything bubble, the economy brought to a screeching halt by overzealous governments. The unprecedented fiscal and monetary interventions keeping it on life support while the measures last will be felt not for months, but probably years. Given the dependency of health and life expectancy on economic prosperity, this impact might end up costing more life years than the disease itself.
And finally, the massive infringements of our privacy, our basic human and property rights, might not fully scale back for years, if ever, because of how convenient they will be for the states. Imagine the next time Catalonians so much as utter a thought about independence—how long will it take for the central government to diagnose a person in Barcelona with something and lock the city down?
We have a long battle for our liberty and prosperity ahead of us. As Philip Bagus wrote earlier in this space, there is a shortcut to serfdom. It’s called fear. When we have good reasons to stop being afraid of the virus, we will have to constantly remind those around us of the freedoms they gave up in fear. Otherwise we will not get anywhere close to the imperfect state of affairs before this crisis. It will become this generation’s 9/11, and those under the age of ten will not even believe the levels of freedom we had before it started.