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Health before Wealth
We know what to do to bring back our economy back to life. What we do not know how to do is to bring people back to life.
—His Excellency William Addo Dankwa “Nana” Akufo-Addo, President of Ghana, March 26, 2020
Everything is awful. The virus is awful. The immediate choices are awful. The future may be even more awful.
We should have been more prepared. For almost a decade, one of the most popular apps was Plague Inc. (120 million downloads and counting). It showed us how diseases broke out and did their damage. When the COVID-19 outbreak hit, the app surged back to number one in China and was promptly banned in the country.1
In Plague Inc., you play the virus and your goal is to wipe out humanity. To the extent they have a goal, that isn’t the goal of most viruses. Instead, it might be survival of its genetic structure, which would end should it wipe out its hosts. But never mind; from humanity’s perspective, we would want to tool up on the tactics for viruses that would lead to extinction.2
COVID-19 is not that species-ending virus. But it does have some of the characteristics you would employ in Plague Inc. if you wanted to destroy us all. An inexperienced player normally goes for a highly infectious and deadly disease. But that is not the best course of action. First, because the virus is deadly, human scientists start working extra hard to stop the plague. Second, if you kill people too quickly, you actually slow down the rate of infection. Instead, what you want to do is find a way of infecting many people preferably without any symptoms that would get the infection noticed. Then you want to ramp up the disease after each infected person has spread it around so that you overwhelm health centers before the world shuts down travel. COVID-19 fits that bill. People become infectious, many with no or just mild symptoms, but then there is a deadly movement into pneumonia, which takes some weeks of hospitalization to treat. It would do well but not necessarily win Plague Inc.
One thing that COVID-19 does, which was not an option for players of Plague Inc., is that it impacts different demographics in different ways. While anyone appears to be able to carry the virus and infect others, those who become very sick—requiring hospitalization—tend to be the elderly. That means that in dealing with COVID-19, the costs associated with reduced economic and social activity will disproportionately fall on the young, precisely the group that is less personally impacted. That is a recipe for a virus being able to divide and conquer those who need to mount a response by creating a debate regarding whether that fight was worth it. All this means that the real game is likely to last some time.
An Awful Choice
In normal times, economists focus on the fact that we have limited resources and can do only so much. If we direct expenditures toward, say, public health, we are giving up something else. Thus, it is not surprising to see some economists reminding people of those trade-offs.
“We put a lot of weight on saving lives,” said Casey Mulligan, a University of Chicago economist who spent a year as chief economist on Mr. Trump’s Council of Economic Advisers. “But it’s not the only consideration. That’s why we don’t shut down the economy every flu season. They’re ignoring the costs of what they’re doing. They also have very little clue how many lives they’re saving.”3
This has the effect of causing some politicians and business leaders to embrace the notion that in dealing with a pandemic, we need to be conscious that if we push for public health, we are trading that off against a loss in economic health.
The technique of “thinking at the margin” often serves us well. This is because we can narrow the argument and think in terms of tweaking or fine tuning where we are now. In dealing with trade-offs the economist asks, If we get a little more of something, how much of something else do we have to give up? In this case, thinking at the margin would ask, If we want to open up the economy a little more during a pandemic, how many lives would that cost? However, even in normal times, there is a strong argument, recently voiced by Paul Romer,4 that economists, at least, should stay away from trying to trade off economic costs with lives lost. Trade-offs (especially at the margin) are the economist’s bread and butter. So, it really shouldn’t surprise us to see this being voiced during a time of pandemic.
However, this misses a critical issue: pandemics are not the time where trade-offs at the margin are appropriate. This book is about seeing the pandemic through an economics lens. So, I am going to begin with the question of how to balance the needs of the economy with the needs of public health. The good news is that this can be done by integrating a simple epidemiological model5 with basic economic analysis.
The starting point is to understand that at any given point in time, there is only so much we can produce. Broadly speaking, if we want to have better public health outcomes, we need to take resources from elsewhere, and so we can imagine that we get less of other stuff—which we would broadly call “the economy.” What makes these trade-offs easy to grasp is that when we talk about producing some more public health, we can then think about how much less of the economy we get. Moreover, we are also confident that as we push for each extra bit of health, the more of the economy we have to give up each time. So, if our public health is poor, it is relatively “cheap” (in terms of a reduction in the economy) to get more of it. When our public health is already prioritized, pushing the system further to gain even more health is relatively “expensive” in terms of reductions to the economy. Thus, we do end up balancing and we don’t have the best imaginable public health outcomes because, frankly, we have decided not to pay the price. (In the technical interlude at the end of this chapter, I put all of this discussion in graphical terms that might be familiar to an Econ 101 student—the production possibilities frontier. You can delve into that or skip as you see fit.)
One reason a pandemic is awful is because it constrains even further what we can do with our scarce resources. We can neither sustain the level of the economy we had before without a decline in public health nor vice versa. That in and of itself would not pose an issue for our ability to fine tune. Instead, there are two factors that fundamentally mean that we can no longer fine tune and instead face a choice between prioritizing public health or the economy without the ability to balance those choices. Those two factors are (1) that a pandemic hollows out our ability to maintain the same balance between health and the economy and (2) that our choice of priority changes our options going forward; that is, they can drift.
Let’s begin with hollowing out. Recall that our ability to obtain our current balance of health and the economy is that we recognize that having a little more health or a little more economy is not worth the price in terms of what we give up for each. Absent other innovations—say, a vaccine or, as I will discuss later, testing—the way to achieve our previous level of public health in the face of a pandemic is to socially distance. That means that we cannot physically interact with one another, and, therefore, to a very large extent, we can no longer produce the economic outcomes we once could.
The problem is that the pandemic now changes the price of obtaining a little improvement in the economy. In order to do that, we must now give up a large degree of health as the infection rate of COVID-19 is high. Being able to have slightly larger groups of people interact or have a few workplaces open poses a potentially high risk to public health because of the way the coronavirus can spread. Put simply, the option of sacrificing a little public health for having a little more economy is no longer open to us.