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Why Central Planning by Medical Experts Will Lead to Disaster
Why Central Planning by Medical Experts Will Lead to Disaster
A great deal of the coverage of the COVID-19 crisis has been apocalyptic. That is partly because “if it bleeds, it leads.” But it is also because some of the medical experts with media megaphones have put forward potentially catastrophic scenarios and drastic plans to deal with them, reinforced by assertions that the rest of us should “listen to the experts,” because only they know enough to determine policy. Unfortunately, those experts don’t know enough to determine appropriate policies.
Doctors, infectious disease specialists, epidemiologists, etc. know more things about diseases, their courses, what increases or decreases their rate of spread, and so on than most. But the most crucial of that information has been browbeaten into the rest of us by now. Limited and imperfect testing also means that the available statistics may be very misleading (e.g., is an uptick in reported cases real or the result of an increasing rate of, or more accuracy in, testing, which is crucial to determining the likely future course COVID-19?). Further, to the extent that the virus’s characteristics are unique, no one knows exactly what will happen. All of that makes “shut up and listen” advice less compelling.
More important, however, may be that in making recommendations to address COVID-19, those with detailed knowledge of the disease (the experts we have been told to obey) do not have sufficient knowledge of the consequences of their “solutions” for the economy and society to know what the costs will be. That means that they don’t know enough to accurately compare the benefits to the costs. In particular, because of their relative unawareness of the many margins at which effects will be felt, the medical experts we are being told to follow will likely underestimate those costs. When combined with their natural desire to solve the medical problem, however severe it might get, this can lead to overly draconian proposals.
This issue has been brought to the fore by the increasing number of people who have begun questioning the likelihood of the apocalyptic scenarios driving the “OMG! We need to do everything that might help” tweetstorms, on the one hand, and those who are emphasizing that “shutting down the economy” is far more costly than planners recognized, on the other.
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Markets Rely on Accurate and Honest Information — But Governments Want the Opposite
Markets Rely on Accurate and Honest Information — But Governments Want the Opposite
Have you ever worked with people you couldn’t trust to tell you the truth? It isn’t pretty. Without the ability to rely on what you’ve been told (or that you’ve been told everything relevant), effective cooperation at almost every margin of choice is reduced, because its foundation has been undermined. A new episode of To Tell the Truthmust precede every decision.
That problem of effective cooperation is exponentially increased when we expand our horizons to the many margins of choice at which people in society, the vast majority of which do not even know each other, interact. In a modern economy, all of us are dependent on multitudes of strangers not just for our prospering, but our survival.
The reason people don’t always communicate truthfully is that our reason serves our self-interest. Sometimes we perceive a strategic advantage at other people’s expense from intentionally deceiving them. Our words are also often ex post rationalizations to ourselves and others of why whatever we chose or did was a good idea. But that often makes what people say a frail reed to rely upon. And when political power is involved, the incentives for such deception and self-delusion are put on steroids, because the payoffs are far greater when backed by government’s coercive power.
As a consequence, accurate information about the issues most important to our ability to co-operate with others is often among the scarcest and most valuable of goods. Making it worse, the unknowably vast amount of potentially useful information—the infinite permutations of who, what, when, where, why and how–exceeds any individual or group’s ability to comprehend and integrate it. But voluntary market arrangements based on private property rights provide a powerful mechanism of cutting that problem down to manageable size.
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Economics Is Not Rocket Science — It’s Even More Complicated
Economics Is Not Rocket Science — It’s Even More Complicated
Over the years, I have heard multiple different things described as “not rocket science.” The implication was always that rocket science was just about the hardest thing to do, making virtually everything else easy by comparison. As an economics professor over many of those years, I have increasingly come to object to that characterization. I think the questions of social coordination that economics addresses may not require “rocket science,” but are in many ways much more complex and difficult, especially when it comes to imposing control. After all, we have successfully sent rockets to many places in our planetary neighborhood, demonstrating a tolerable ability to solve enough of the relevant problems, yet economic policies remain known for causing more harm than help. As Peter Boettke once led off a post, “Political economy ain’t rocket science. But it is a discipline that forces one to focus on ideas and the implementation of ideas in public policies.” And the more one tries to control, the more those ideas and implementation issues stack up against the possibility, much less the probability, of effectiveness.
In one important sense, rocket science is simply vector addition of the relevant forces. And the relevant relationships for generating rockets’ thrust are governed by physical laws and relationships that are stable and mathematically expressible. That is why one website deviated from rocket science orthodoxy, under the title “Rocket science is easy; rocket engineering is hard.” The problem is one of accurately measuring the needed information and controlling the relevant forces—that is, engineering things (often with millions of parts) so that they work as intended.
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Misleading with Numbers: It’s Worse When the Government Does It
Misleading with Numbers: It’s Worse When the Government Does It
Major international comparisons have long concluded that Americans’ ability to effectively utilize mathematics is inadequate. Such conclusions divide students, parents, teachers and administrators into camps that share little more than blaming others for the problems. However, it is unclear whether all the finger-pointing indicates a real desire to overcome our innumeracy. In fact, we systematically misuse numbers to distort reality because we want to fool ourselves, making our ineptitude no surprise.
One of today’s most obvious misleading number games is grade inflation. Teachers have accommodated student desires for higher grades to the point that the median GPA of graduating college seniors has risen around a full grade point since it was about 2.2 in 1965. At some schools, almost everyone now gets As and Bs, and who is valedictorian has become a question of how many “perfect” students will share that title. Students have also pushed to allow A+ grades that count more.
High schools have gone even further. Many make advanced placement or community college courses worth an extra grade point. This has created a competition among students to take as many such GPA-padding courses as possible, especially ones they discover are actually easier than the corresponding high school courses. These and other policies (e.g., statewide comparisons crafted to show that, as in Lake Woebegone, all children are above average) have, however, thrown away much of the useful information such evaluations once contained.
Price inflation is another form of ego-building by manipulating comparison numbers. For most of us, if we want to brag that, say, we make more than our parents did, enough years of inflation can make it so. On the other hand, older Americans use it to “prove” how much better things used to be (e.g., “I remember when bread was a nickel” or “I only paid $22,000 for my house”).
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Why Special Interests Sacrifice the Future for Short-Term Gain
Why Special Interests Sacrifice the Future for Short-Term Gain
The special interests that dominate politics dominates to produce a form of economic warfare. The more some can manipulate the political machinery, the more they can feather their own nests. They even use similar propaganda techniques.
In wartime, we are always defined as the good guys, ennobled by our moral cause. “They” are the bad guys, to be demeaned and dehumanized, so few will be bothered by what is done to them. Similarly, in domestic politics, representatives of each group paint themselves as particularly worthy or needy, making their advocacy morally superior, contrasted with their opponents whom they tar as selfish or unprincipled.
However, advocates for such causes do not always occupy the moral high ground they try so hard to create. They advocate coercing those who have done no harm to others to justify it. Further, the policies proposed often benefit existing members of a group, but harm those who will be members of that group in the future.
In such cases, justifying the political plunder to deliver a group’s demands because they are particularly deserving is self-contradictory. If membership in a group justifies special treatment, the same must apply to future members as well. Therefore, policies that benefit current members, while harming equally deserving future members, necessarily violate their own rationale.
The first example of how this works is the use of minimum wage laws.
Much in the news of late, these laws are promoted as helping low-skill workers. It is true that those lucky enough to keep their existing jobs, hours, working conditions, on-the-job training, promotion possibilities, etc., can gain. But other low-skill current workers, who lose jobs, hours or training, are harmed.
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