Posted by on June 10, 2020 8:14 am
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By Nicolas Marques, courtesy of the Institut Molinari

 

 

We often hear it said that managing a pandemic such as the coronavirus depends on societal choices. The alternative would be to save lives or savings. Health and economic data show that the reality is far more complex than this caricatural dilemma. Some countries are able to reconcile these challenges. Others, such as France, record both high mortality and a significant decline in the economy.

 

 

The French love moralizing approaches. Too often, problems are seen as opportunities to position themselves, according to predefined reading grids, even if it means obscuring the concrete issues. For example, we have heard many times that managing a pandemic such as the coronavirus depends on societal choices. Anglo-Saxon countries would tend to focus on economies, with less concern for health issues. Countries with a strong social tradition would tend to do the opposite, by privileging the safeguarding of human lives and paying less attention to the economic consequences. France would have made the “right choice” by giving priority to “lives” rather than “profits”.

 

 

Health and economic data show that the reality is far more complex than this unfounded dilemma. Most of the European countries register a mortality lower than 400 deaths per million inhabitants and an economic contraction lower than 2.5 points of GDP in the 1st quarter. This is also the case of the United States, whose positioning is at this stage fairly close to the Netherlands and Sweden. The French, Spanish, Italian or Belgian situation is atypical. There is higher mortality and also a very pronounced decline in activity. The issue is much more complex than choosing between saving human lives or saving the economy. One can suffer from both high mortality and a significant decline in economic activity.

 

 

Of course, these figures are to be taken with reservations. Some countries are more comprehensive than others in counting mortality. Belgian statistics attribute all the excess mortality to COVID-19, while other countries only account for part of the deaths.

 

 

The fact remains that observation of the data does not demonstrate that a choice should be made between lives and profits. Worse, this Manichean conception does not help us to understand societal issues.

 

 

Austria, Germany, Denmark and Norway show that it is possible to preserve profits and lives. Both are not contradictory.

 

 

Effective preventive measures, with upstream management of health issues, have made it possible to save hospital services, by avoiding overcrowding and putting a stop to social and economic life. This is also what has been observed in a number of Asian countries, and especially in South Korea.

 

 

This was not the case in Italy, the first European country to be affected by the pandemic. This was not the case either in France. In France, the public authorities have ruled out inexpensive barrier measures, such as wearing a mask, and placed public hospitals on the front line. This hospital-centric strategy has favored the overcrowding of technical platforms, with disappointing health results. Care at advanced stages is known to be the most expensive, in medical means as in human lives. Due to a policy of Malthusian deployment of tests, the authorities were forced to manage the congestion of the public hospital by using undifferentiated confinement. This traditional medieval method was the only one left,

 

 

Experience shows that this calculation, human and economic, has failed us. It did not give contradictory, but convergent results. The challenge was not to designate who would be sacrificed, but to minimize the effects. We may think that “life is priceless” and that the economy must disappear, but this unfortunately does not protect against excess mortality. Viruses don’t care about our ideological reading grids, they are pragmatic in nature.

 

 


Nicolas Marques is Managing Director of the Institut économique Molinari (IEM). Holding a doctorate in economics (Université d’Aix-Marseille) and a diploma in management (EM Lyon), he began his career teaching economics before taking on marketing and commercial responsibilities at large French asset management groups. An Associate Researcher since the IEM was established in 2004, he became its Managing Director in 2019. He is the author of several works on tax issues, public finance, social security and the contribution of business. His writings appear frequently in La Tribune and Capital.