Friday, June 12, 2020

Neoliberalism Kills?

However you "solve" the problem, the pandemic was always going to be very expensive. Government mandated lockdowns might be framed as the point at which the government disrupts market forces, decides to transfer some costs away from individuals, and to strongly shape the future trajectory.

The costs of lockdown vs no-lockdown in terms of both lives and money were probably not that well understood by the decision makers. While epidemiological models can easily predict 100s of thousands of deaths they assume no changes in behaviour by citizens. Rich countries with low inequality may reasonably hope for auto-lockdown by its citizens without such a massive interference by the government.  This has probably helped Japan, and perhaps to a lesser extent Sweden (Sweden has plenty of deaths but has also possibly kept more of its economy going..?). On the other hand, in many countries most people cannot afford to lockdown, and people not at such high risk (in this case, younger people) may feel much lower motivation to do so.

But instead of really thinking any of this through it seems that our dimwitted politicians simply applied their rubbish political ideological theories. They aren't scientists and do not know that theories have to make testable predictions in order to be worthwhile.

And what happened?! In this case socialism wins while neoliberalism both kills lots and lots of people and crashes the economy (because early lockdown => shorter lockdown). Ooops!

I would think it isn't always the case; socialist governments have surely fucked up very badly in the past when faced with other problems. That's the problem with random theories based on no evidence - they only work every so often. But I am still a bit worried that perhaps neoliberalism always kills and that this is just first chance to do a proper job of it.

The big caveat in all this is that we do not know what the endgame is. If herd immunity remains the inevitable consequence, then lockdown might be viewed in terms of the effect on quality of life in terms of months rather than in total lives saved. But those months are still pretty valuable, aren't they?


cynicus said...

"(Sweden has plenty of deaths [1] but has also possibly kept more of its economy going..? [2])."

Via Bloomberg:
[1] "At 43 deaths per 100,000, Sweden’s mortality rate is among the highest globally and far exceeds that of neighboring Denmark and Norway, which imposed much tougher lockdowns at the onset of the pandemic."

[2] "there’s so far limited evidence that Sweden’s decision to leave much of its society open will support the economy. Finance Minister Magdalena Andersson recently warned that Sweden is facing its worst economic crisis since World War II, with GDP set to slump 7% in 2020, roughly as much as the rest of the EU."

William M. Connolley said...

> They aren't scientists and do not know that theories have to make testable predictions in order to be worthwhile.

Very science-y. But science also requires good definitions. Can you provide any criterion for NL-ness? If you use the's "economic freedom index" then there's a relation (for Europe) and it even goes in the direction you want, but it isn't very convincing:

Jean-Francois said...

William M. Connolley +1

James Annan said...

I don't think that neoliberalism is particularly the right hook to hang this on. Whatever Trump, Johnson, Bolsonaro have in common, that's what's at fault. Populist nativism perhaps? It would be a sad irony that the populists are those who care the least for their people.

izen said...

It is the nature of populist leaders to care deeply about what the populous thinks of them, that is the extent of their care for the people.
The correlation, if not causation, is between populist leaders and a ideological inclination towards a minimalist form of governance which at the most, acts, or refrains from acting, in the interests of business.