Three Cheers for the Coronavirus???
I don’t propose to cheer for the death, financial loss, or other impairment of anybody (sorry if I weep less for rulers), but I do find a silver lining in three benefits of the current Covid-19 epidemic or pandemic. These benefits are not net benefits and certainly not net benefits for everybody: only public goods, by definition, provide net benefits to everybody.
First, the epidemic illustrates the benefits of free speech, even for a tyrant such as president Xi Jinping and the Chinese state. The Economist published an obituary of Li Wenliang, the Wuhan ophthalmologist who tried to alert people to the new epidemic and later caught the virus and died (“Li Wenliang Died on February 7th,” February 13, 2020). It is worth reflecting on what happened just before he became ill:
[On] January 3rd he was summoned to the police station. There he was accused of spreading rumours and subverting the social order. He then had to give written answers to two questions: in future, could he stop his illegal activities? “I can,” he wrote, and put his thumbprint, in red ink, on his answer. Did he understand that if he went on, he would be punished under the law? “I understand,” he wrote, and supplied another thumbprint.
As I previously argued on this blog, free speech is often useful for an autocrat because independent news and opinions can warn him of what his minions don’t know or are scared to reveal (“The Autocrat and the Free Press: A Model,” October 25, 2019).
Second, the epidemic shows that there is no reason to fear economic competition from a planned economy, notwithstanding Donald Trump’s or Peter Navarro’s scaremongering. Attorney General Bill Barr floated the idea of creating a large state corporation by purchasing private producers of communications equipment in order to compete against Huawey. In other words, let’s become socialist in order not to be overtaken by socialist competition! Larry Kudlow, one of the very few economists around the president, declared, in one of his most daring defenses of capitalism thus far, that the administration was not considering this plan. (See Eric Boehm, “Corporate Socialism? Bill Barr’s Suggestion That the U.S. Should Buy Nokia or Ericsson To Counter China Is a Terrible Idea,” Reason Magazine, February 12, 2010.) The management of the epidemic by the Chinese government, which, like all dirigiste governments, is much better at coercion than at entrepreneurship and efficiency, might help counter these fears.
Third, the epidemic shows the benefits of economic growth and international trade. By strangling Chinese growth (“deepening economic damage,” says the Wall Street Journal of yesterday) and perhaps also, if it becomes a pandemic, economic growth in other countries, and by slowing down international trade, the coronavirus will give a hand to the autarkic and zero-sum-game vision of the US administration. No need for a trade war if a pandemic does the job. Trump, of course, will claim that the economic problems he has created were instead caused by the epidemic: untruth does not require coherence. Let’s hope that many people will see that the lessons of the epidemic are quite different.