Early in the Covid-19 pandemic, an influential economic analysis from the University of Chicago concluded that the likely benefits of moderate social distancing would greatly exceed the resultant costs. The New York Times and the Washington Post recently cited that study as evidence that the use of strict lockdowns to control the virus’s spread has been justified, and that current efforts to “open up” social and economic activity around the U.S. are dangerous and irresponsible. That is seriously misleading; the Chicago study is already out of date. More recent research supports the idea that the lockdowns should end.
This is the lead paragraph in an op/ed published in today’s Wall Street Journal. The op/ed is David R. Henderson and Jonathan Lipow, “The Data Are In: It’s Time for Major Reopening,” WSJ, June 15 (electronic) and June 16 (print).
Three things that delight me about it, in order:
1. It was published and I think it’s pretty important.
2. Although I haven’t seen the print version, a friend in the Eastern time zone tells me that it’s the lead op/ed. I’ve had over 50 op/eds in the Journal and this is only about the 4th or 5th time my piece has been above the fold.
3.The editor understands that the word “data” is plural.
Another paragraph:
That finding [that the benefit of the social distancing and lockdowns is only about $250 billion] casts major doubt on the value of lockdowns and even social distancing as a method of reducing the spread of Covid-19. While we can’t yet estimate a specific figure, the economic cost of social distancing and lockdowns will likely be more than $1 trillion. And that’s an understatement of the costs when you consider increased suicides and other social losses not captured in gross domestic product. For example, parents of young children have widely noted their kids’ gloomy outlook when not allowed to be with friends.
As always, I’m contractually obligated not to post the whole thing until 30 days from now. It’s on my calendar.
READER COMMENTS
Gary Yunker
Jun 16 2020 at 2:39pm
Hello Mr. Henderson,
I read your article in today’s WSJ and I thought I would give you some feedback. I’m not qualified to critique your article on its merits. I trust that you and Mr. Lipow have done a good job with your analysis. I’m just not comfortable putting a monetary value on human life, let alone on tens of thousands of human lives. Those who have died include grandmothers and grandfathers, aunts and uncles, mothers and fathers, sisters and brothers, etc. These people were part of the fabric of their families and their communities and their loss affects the lives of many, many people who sadly will go on living without them. I’m sorry for those who have lost their jobs or seen their incomes and financial wealth diminished due to Covid-19 but I’m a believer that their income and financial wealth can be restored in due time. I only wish our state and federal governments had been better prepared and able to act more decisively when the health problem presented itself. Had that been the case, perhaps more lives could have been saved and the financial impact of the economic decline could have been reduced.
Regards,
Gary Yunker
David Henderson
Jun 16 2020 at 5:25pm
Dear Gary,
You wrote:
I’m not comfortable with it either. But we need some measure and looking at how people value their own lives, which is the basis for the value of a statistical life, is a good start.
Without even knowing you, I know that you make tradeoffs between your life and your wealth every day. Now you might object, properly, that that’s a tradeoff you make with your life and wealth but that the current case is more complicated because some will lose their lives so that others will not lose as much wealth. But we already make such tradeoffs. When the government chooses not to erect a stop sign, for example, it’s saying that the cost of the stop sign plus the value of the time people don’t lose by stopping exceeds the value of the small number of lives saved. Now multiply that example by one thousand and you get to highway safety and other safety decisions that governments make every day. COVID-19 is not sui generis.
Matthias Görgens
Jun 17 2020 at 12:02am
To add, refusing to put an explicit price on human life doesn’t make our implicit tradeoffs go away. Worse, usually the implicit prices will be inconsistent.
Inconsistent prices paid mean that we don’t save as many lives as we could for every dollar.
That’s even worse than a price that’s too low. It’s just a pure waste of life and money for no gain.
Richard McCargar
Jun 18 2020 at 3:08pm
How many lives are being lost to the 85% cut in organ transplants, or deaths from despair such as suicide, alcohol and drugs, or the lives lost to cancer screenings not done and cancer treatments not conducted?
Poverty kills more than anything else. Forty-million lost jobs will cause deaths for years.
We would never have shut down the nation based on the death-rate that we now know it to be.
The very moment we learned it was an order of magnitude less deadly, we should have reopened everything, and in doing tell the most vulnerable that like every flu season, they need to be most careful.
B.B.
Jun 16 2020 at 3:00pm
Could you provide links to all the studies you cite? I would like to check them out.
Thanks
Manfred
Jun 16 2020 at 3:16pm
Chicago paper:
https://bfi.uchicago.edu/wp-content/uploads/BFI_WP_202026.pdf
Berkeley paper:
https://escholarship.org/uc/item/5h97n884
IZA paper:
http://ftp.iza.org/dp13265.pdf
MIT/NBER paper:
https://www.nber.org/papers/w27102.pdf
Steve
Jun 16 2020 at 3:03pm
I’m with you on blanket lockdowns, but we’ve really swung the pendulum the other way where “moderate social distancing” is a 4-letter word and masks are “muzzles” or “face diapers”. (Yes, I’ve heard people use both of those terms).
I guess I’m lamenting that we’re too much of an all-or-nothing society. The minor, relatively costless interventions we can take (masks, standing farther apart in line, not crowding a stadium or nightclub), that don’t involve shutting business down, are not being taken, just for the sake of making a point.
David Henderson
Jun 16 2020 at 5:19pm
You wrote:
I agree. It’s a think-on-the-margin thing.
Matthias Görgens
Jun 17 2020 at 12:05am
I guess yet another reason why East Asia is doing better.
But even most of Europe seems to have gotten the virus under control by now.
Dan Garretson
Jun 18 2020 at 9:50am
With all due respect to everyone who supports wearing a mask, it is perfectly legitimate to try to reduce your chances of becoming infected – particularly if you’re in a vulnerable group (primarily aged 65+ with significant underlying health conditions). It is also advisable for anyone who may be infected to wear a mask (or just stay home). As such, I would never presume to berate someone for wearing a mask.
That said, the whole presumption that everyone should wear a mask seems to me to based on a flawed premise: specifically, that there is simply no benefit for the continued spread of COVID-19. And yet, at the same time, virtually every article I read on all sides extols the virtues of achieving so-called “herd immunity” as a means of ending the pandemic while, often in the same sentence, recognizing that we’re almost certainly nowhere close to achieving herd immunity through vaccines and that the only way to achieve that is by having a large percentage of the population have, and recover from, the disease. The disease, in short, is here to stay and cannot be stopped – that ship sailed a long time ago.
So which is it? How can we achieve herd immunity unless the disease spreads and the number of cases continue to rise? The ceaseless narrative that we have to do everything to limit the spread of the disease and yet that we need to achieve “herd immunity” seems to be me to be fundamentally logically inconsistent. Indeed, I’ve had several folks (including doctors) tell me privately that they refuse to wear masks when not treating patients because, in fact, we want the disease to spread as widely and quickly as possible among healthy people while, admittedly, being aware of what we can do to protect vulnerable populations. That is the surest way for us to get past the pandemic, and the only reason that might be a concern is considerations of hospital capacity – but that has been a problem only in very limited situations (e.g., New York), and we’re nowhere close to that being a concern in almost any other location.
So I avoid wearing masks, but I reject the notion that it is simply to “make a point” (even though I actually think that might be a legitimate point to make). While everyone should seriously evaluate their own personal health situation, there are sound reasons for dropping the social expectation (and, in some cases, requirement) that everyone should wear a mask and to reject the dominant narrative that rising cases and the spread of the disease is unequivocally a bad thing.
Tracy Hall
Jun 18 2020 at 2:43pm
“Herd Immunity” is a NONSENSE argument. We don’t even know if the antibodies convey immunity, and if they do convey immunity whether is lasts for any significant period.
The infection levels for Herd Immunity, EVEN IF IT EXISTS, are on the order of 90% of the population. So you’re saying “hey, what the heck, let 3 million to 20 million people die; this has gotten boring”.
And *every* infant born is immediately susceptible – it will be like Polio has returned, each child waiting until they get infected and maybe die.
“Look, the parachute has already slowed us down, but it’s uncomfortable and it chafes. Why should I have to keep it on all the way to the ground? *I* don’t see anybody dying around me, and the parachute is such a hardship…”
What a cruel, fatalistic attitude.
Tracy Hall
mark
Jun 20 2020 at 4:24am
Though I prefer wearing my mask – and others to wear theirs – it IS NOT solid science (yet) and NOT “Nonsense” to think otherwise. If “nobody knows” how much/long of immunity comes with having survived the infection, it might just as well possible that is a strong and long-lasting one. As most other (corona)viruses have that effect, it is actually rather likely. The German top-covid19-expert Prof. Drosten thinks so – he still is pro lock-down, but yeah, virologist have their own perspective.
Herd-immunity might not be needed on a level of 90%, IF (as experience seems to show) a relatively few “super-spreaders” are responsible for most infections. Combined with strong hygiene in hospitals (extremly important to avoid high numbers of deaths) et al. even 15-25% can slow the virus down enough. (Matt Ridley had a post on that on his blog. He is the biologist, not me.)
Not sure about the kid-part of your argument – they do not die from Covid. As do not die about 99,9% of all those infected who are under 50. I am at a higher risk, my chances of survival are only slightly above 98%. But I had a life, a very nice one, thank you.
Kids in Africa or South-Asia have a lower chance to survive even if not infected, just by their parents losing their jobs – as a pretty direct result of our self-centered, egoistical lockdown in the “first world”. – I appreciate our lock-down. I would not call it the moral thing to do!
Plus: In many aspects/places, the rules were that stupid (buy only “needed” stuff, do not take walks, do not drive your car for “fun”) – forgot about potential hot-spots (meat-industry) – symbolical (use a trolly for distancing lol) contradictory: dangerous weeks of “masks do not help” vs. now “all must put on a mask” no matter how ridiculously low the infection rate in your district. -But then: Banning spectator events (concerts/sports/disco …) was a right thing to do, of course . Libertarians may argue, that many people would have stayed away anyway, and that fear of liability lead the NBA to stop – but many would still have gathered/continued.
Alan Goldhammer
Jun 16 2020 at 4:52pm
I don’t think any state will go back to a lock down at this point. That some good public health officials have been hounded out of office (Orange County, CA and the state of Ohio to mention two) is a very sad report. There are some simple steps people can take to insure a safe opening but alas this does not seem to be the case as SARS-CoV-2 infections continue to rise in states where there is reckless behavior. The pathway to 200K deaths by the end of the year from COVID-19 is now realistic even with the dexamethasone research that came out today.
As I close out everyone of my newsletters, “Stay Safe, Mask Up, & Wash Hands” – pretty simple rules to follow.
Thomas Hutcheson
Jun 17 2020 at 7:42am
Why not advise people not to stay safe but to be safe? A healthy 20 year old is probably staying safe even if not wearing a mask. But they are not being safe because they may be an asymptomatic spreader.
Guy Cumbie
Jun 16 2020 at 11:16pm
On the ostensible harsh, crass distastefulness of monetizing the value of human life, a very uncomfortable subject for most of us, I sometimes find it useful to point out that while unlicensed/unpermitted use of ladders accounts for many of our nation’s tragic spinal cord injuries, few advocate passionately for licensure/permitting of ladder use. It’s apparently a cost society doesn’t deem it reasonable to incur to lessen the incidence of crippling and deadly spinal cord injuries.
Such calcs, overt or less so, are facts of economic life. Another example of the fact that not all realities are pleasant.
Thomas Hutcheson
Jun 17 2020 at 7:54am
From the excerpts, your recommendations do not appear to take into account local variations, What policies are needed to achieve optimal behavior in mask wearing, proximity x duration, and how public venues operate, almost surely are not uniform nationally. Cases are rising in some places, falling in others. Health systems have different margins of capacity. Propensity to follow social distancing recommendations are not the same everywhere.
Brian
Jun 17 2020 at 2:18pm
David,
Good job. Lockdowns and SAH orders have been a bad idea from the beginning. I haven’t been able to read your entire piece, but there may be an additional problem with lockdowns that you didn’t address–they may have actually caused more deaths just from COVID-19 (and not from add-ons like suicide). Specifically, SAH orders are never complete; they allow for “essential workers” to keep working and for people to buy food, etc. This means that SAH orders and lockdowns are necessarily leaky.
So here’s the key point: by focusing on social distancing and SAH while discouraging mask use, government officials ensured that the virus would be spread by the essential interactions. I believe that mask use is so effective, in fact, that we could have continued fully interacting economically with masks and achieved much lower rates of infection. In other words, the SAH orders may have directly cost ten-thousands of lives rather than saving them.
(Just to be clear, I say it directly cost lives because a focus on SAH orders discourages mask use, regardless of whether the government promotes it or not.)
Sphere
Jun 30 2020 at 10:38am
Even two weeks later, this hasn’t aged particularly well. Major outbreaks in Arizona, Texas Southern California and Florida with a few hospitals now at maximum ICU capacity and many likely to follow. Even conservative politicians in these areas are having to reinstate some lockdown measures.
The virus is what it is. It’s pretty clear that you have to take rather aggressive measures of social distancing, crowd restrictions, industry restrictions, mandatory mask-wearing etc. to keep the spread from becoming exponential.
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