Some people have been “pushing back” against the panic over the Chinese Coronavirus (Winnie the Flu), noting the damage these overreactions are doing, and will continue to do, to the economy. But you know what else leads to people dying? A faltering, let alone crashing, economy. Which brings up this Blast from the (quite recent actually) Past.
It never fails. When I (or a lot of other people) talk about the economic cost of some policy we always get “how can you think of economics when we’re talking about people’s lives here” or “you can’t put a price on human life” or the big one “if it saves just one life, it’s worth it.” “If we don’t do this, people will die!”
The problem is that economics translates into lives. And while whatever folk want to “solve” with their economically unviable proposal might “cost lives” impoverishing people, either as individuals or as the economy as a whole also costs lives.
Consider, that an Earthquake of a severity that might kill a dozen people in California, would kill hundreds, or even thousands, in someplace like Bangladesh. Wealthier societies are more likely to have buildings built of sufficient strength to withstand earthquakes and, thus avoid crushing their inhabitants. Wealthier societies are more likely to have networks of roads that allow sick and injured to reach hospitals or aid stations quickly–and the more quickly you can treat, the better the chances for recovery.
Or, never mind Earthquakes. In wealthier societies more people have shelter from weather that can threaten their health, and not just against storms, but heat is a known killer, as is cold. Having a draft-free dwelling with adequate heating and cooling for the weather saves lives. Sure, for a lot of people it’s about comfort but many of the very old and very young, or the sick and injured, are less able to deal with temperature extremes. Heat waves and cold snaps are invariably accompanied by rising death rates (with cold being by far the worse killer of the two). Adequate heat and air, and modern, high-tech clothing meant to protect the wearer from temperature extremes make a big difference.
Ordinary illnesses and injuries? People have accidents, get sick. Once again, that extensive network of roads–a feature of wealthier societies–allows people to get their sick and injured to doctors and hospitals quickly. And not just via ambulance. That might be arranged by some government program which allows people to…
Oh, I can’t do it. The simple fact is that many times, a person can get a sick or injured loved one to the hospital faster than an ambulance can get to them. At least they can if they have their own car, which is something that is not common except in wealthy nations.
Look, some economists have tried to study this, to try and figure how many dollars (or whatever monetary unit you care to use) of GDP equates to how many lives saved. Because of the complexities of such analysis results vary. After all, there are other things that affect death rates than just the wealth of society. The basic principle, however, is so universal that it’s not even controversial–people live longer, and better, in wealthier societies.
The results of all this is that you cannot dismiss economic realities–the cost of doing whatever “good thing” you want to do via government comes at the expense of no longer being able to do something else with those resources. After all, Economics is the study of cause and effect relationships in the allocation of scarce resources that have alternative uses. Scarce, meaning you never have enough for everyone that wants it. And so, use them for one thing and lose the ability to use them for something else.
In politics, people tend to make categorical decisions. We must do this, regardless of the cost. And doing “this” means we don’t do “that.” Political solutions tend to miss the incremental tradeoffs. How much of “that” are we willing to give up for how much of “this”?
And when the “that” is something as nebulous to most people’s thinking as a Gross Domestic Product, particularly when a lot of that product is in other people’s hands rather than ones own, the very real effects of trading “that” get lost in the shuffle.
It’s very short-sighted and we need to work hard to not do that.
Unless, of course, you want people to die.