The precautionary principle was in vogue some years ago in the context of the climate debate. However, the argument is a general one. It turns on the outcome of something being so bad that even a small probability of it occurring is unacceptable. In other words, its expected cost (the probability of it occurring multiplied by the costs it would impose if it were to occur) would almost certainly exceed any costs of putting in place measures to prevent it from occurring.
The precautionary principle has a frailty as a guide for taking preventive action. The costs of taking action are real and tangible, whereas the costs of not taking action are speculative. What has this to do with combatting the coronavirus pandemic? It provides a foil. The situation facing us effectively stands the precautionary principle on its head.
To explain. Whereas the costs of inaction on the health of the population due to the virus can be calculated with a fair degree of confidence by epidemiologists, albeit along a scale; the costs of taking a range of aggressive actions to curb the spread of the virus are speculative. At worst, the social and economic costs of such actions could be so high as to outweigh their public-health benefits. And this is what I would like to discuss in light of an influential report (“Impact of non-pharmaceutical interventions (NPIs) to reduce COVID-19 mortality and healthcare demand”) issued on March 16 by the Imperial College London on behalf of its Covid-19 Response Team. The “IC Report” is based on epidemiological modelling.
It is clear that governments were taking action consistent with recommendations in the IC Report before it was issued. The report will steel them in continuing broadly on their present course. At the same time, it is worth pointing out, and I will come to this, that the report does not in its recommendations support some of the more drastic actions being taken by governments around the world.
It is noted in the IC Report that only two “fundamental strategies” are possible to combat the spread of the virus and thus its impact on public health services. One is referred to as “mitigation” and the other as “suppression”, which is identified as the “preferred policy option.” As stated in the report, “We therefore conclude that epidemic suppression is the only viable strategy at the current time.” To one degree or other, governments are currently pursuing suppression.
Mitigation consists of isolating suspect cases at home and quarantining those living in the same household (“household quarantine”) and of social distancing of the elderly and others at pronounced risk of being made seriously ill, if they were to catch the virus. This strategy or policy focuses on slowing but not stopping the spread of the virus, while protecting those at most risk.
Suppression consists also of isolating and quarantining suspect cases and those living with them but, additionally, requires the social distancing of the entire population, not just those at particular risk. This, the IC Report notes, may need to be supplemented by school and university closures. Children and young people are not thought to be at significant risk of developing severe symptoms, but they might well infect each other with asymptomatic or very mild infections, which they will then carry home to family and friends. Social distancing is not defined in the IC Report. But it is broadly understood to mean working from home if this is possible, avoiding unnecessary travel, staying away from pubs, clubs, theatres and the like, and avoiding gatherings with friends and families.
The objective of suppression is to reduce the secondary cases that each infected person generates (the transmission rate) to below 1. This will progressively reduce the number of those infected and, thus, lessen the spread of infection to those most vulnerable.
Mitigation also reduces the rate of new infections, but not nearly to the same extent. In fact, it is assumed, under mitigation, that each infected person would pass on the virus to between 2 and 2.6 other people. This is based on evidence from Wuhan, on estimates of the period during which infected persons can pass on the virus, and on the likely extent of social contact, despite restrictions. Such a transmission rate would lead to a rapid geometric spread of the virus, and to a significantly higher rate of infection among vulnerable groups.
To cut to the chase: it is predicted, in the absence of any counter measures, or changes in behaviour, that the epidemic would cause “510,000 deaths in Britain and 2.2 million in the United States.” The demand for critical-care beds in both countries “would be over 30 times greater than the maximum supply.”
The mitigation strategy is predicted to reduce the demand for critical-care beds by two-thirds and halve the death rate. However, this would still result in “250,000 deaths in Britain, and 1.1-1.2 million in the US.” And an “8-fold higher peak demand” for beds than can be provided. Adjusted for population, this would put deaths in Australia at approximately 90,000. Clearly, these outcomes are unacceptable and unmanageable, which is why the suppression strategy is preferred.
The suppression strategy can be implemented to varying degrees. The form which is predicted to be necessary to reduce the transmission rate to close to or below 1 consists of “case isolation, social distancing of the entire population and either household quarantine or school and university closures.” This strategy, it is estimated, would likely ensure critical-care bed requirements would remain within surge capacity. As noted in the report, even better results would be achieved by implementing both household quarantine and closing schools and universities, rather than one or other.
There is a lot of data still to be gathered about this virus and its spread. Projections of what might occur under different scenarios are therefore best estimates in the circumstances. However, we can’t wait for better data. Governments must act on expert public-health advice, of which the IC Report forms a timely and important part; and, as is noted in the report, “Results in this paper have informed policymaking in the UK and other countries in the last weeks.” At the same time, in acting on public-health advice, governments have to serve the national interest by weighing and balancing different and competing imperatives. One of these is the economic and social wellbeing of the population.
In bringing economic and social matters into the equation, it is important to note that the IC Report focuses quite appropriately on reducing the spread of the virus and not on wider matters, to wit:
We do not consider the ethical or economic implications of either strategy here except to note that there is no easy policy decision to be made. Suppression, while successful to date in China and South Korea, carries with it enormous social and economic costs which may themselves have significant impact on health and well-being in the short and longer-term.
It is also worthwhile drawing attention to two recommendations which are not made in the IC Report.
At one point it is noted that “stopping mass gatherings is predicted to have relatively little impact because the contact-time at such events is relatively small compared to the time spent at home, in schools or workplaces and in other community locations such as bars and restaurants.” Yet Boris Johnson said this, at the time the report was released: “It remains true — as we said in the last few weeks — that this sort of transmissions of the disease at mass gatherings such as sporting events are relatively low, but obviously, logically, as we advise against unnecessary social contact of all kinds, it’s right that we should extend that advice to mass gatherings as well.”
I am at a loss to understand why it is “right” to ban something which creates jobs for so many people when, according to the IC Report, such bans will have little impact. And, of course, all countries have now banned sporting events.
A “complete lockdown which additionally prevents people going to work” is also not a recommended part of the suppression strategy. True, the obvious is noted in passing in the IC Report, which is that such a lockdown would increase the impact of suppression. But it is not recommended. Yet, for example, California has just implemented such a step and it would be surprising if some other US states did not follow. And, as another example, North American car manufacturers have closed down their plants, affecting hundreds of thousands of their employees. While they were not operating under instructions from government, they almost certainly took their lead from government.
When you look at what governments are doing worldwide, except perhaps the Dutch government, they all have tended to increase restrictions week by week, even day by day. It is a moving feast. This applies in Australia as it does elsewhere. Not all of what some governments are doing — stopping people going to work or banning sporting events — can be read from the IC Report; although it is also fair to point out that the Australian government and numbers of others have, as yet, stopped short of implementing a full-blown suppression strategy.
Various estimates are being floated in the media about the degree of unemployment which will result from implementing a suppression strategy. And, to emphasise, a suppression strategy which is being made more stringent and far-reaching each day, by government after government. Take all such estimates with a grain of salt. They give new meaning to guessing.
Quite simply we are in virgin territory. Nothing like it has ever happened before. There is no precedence to use for guidance. True, the Spanish flu of 1918-19 caused some communities in the US to restrict social contact, but nothing occurred which is remotely similar to today’s situation.
Central banks and treasuries all have models of their national economies. None of these models works too well at the best of times. The complexity and shifting parameters of the actual economy are too hard to model. And no model, in any event, is capable of handling a black-swan event; like, say, the economic crisis centred in 2009. But, at least thus far, all economic crises have shared some common features and none is without parallel.
Economists Carmen Reinhart and Kenneth Rogoff analysed economic and financial crises over eight centuries, from the 13th century onwards. The ironic point of the title of their resulting book, This Time is Different (2009), is that “this time” (whatever the character and dimension of the event) isn’t different. Let me say, they will have to reassess their position. This time it really is different.
Governments are taking action to shutdown large segments of their economies and giving no hint as to when they will be allowed to re-open. This is unprecedented. As I said at the start, any prediction of where this might lead is purely speculative. Economic models can’t help. Governments are flying blind with their whole populations in the passenger seats.
The assertion I am about to make is not one based on economics. It is based on common-or-garden common sense. The policies being adopted by governments are not tenable. They will bring about unquantifiable and crippling economic and social (and quite possibly serious health) consequences. Make no mistake, governments will be forced to reverse course, and the sooner they do that, and adopt a different strategy, the better chance economies and populations will have to recover without incurring long-lasting deleterious effects. As it is, many businesses which have closed down will not open up again.
Let me give context to my assertion by going back to the IC Report and the suppression strategy. The suppression strategy, if successful, will prevent herd immunity. Thus, unless every trace of the infection is gone, it will spring back up again when the strategy is relaxed. That is why the strategy has to be kept in place for an extended period. According to the report, “for at as long as the virus is circulating in the human population, or until a vaccine becomes available.” It is estimated that “it will be at least between 12 to 18 months before a vaccine is available.” Elsewhere in the report it is estimated that the strategy might need to be maintained for more than 18 months, “until large stocks of the vaccine are available.” It is noted that the strategy might possibly be implemented intermittently; but this, surely, would be totally impracticable.
Now, in questioning my assertion, consider the economic and social impacts, and the health impacts, of keeping economies locked down for six months. Now extend that to twelve or eighteen months or longer. I will take a step back.
Assume that governments were able to calculate for each business and sole trader the weekly revenue loss flowing from this pandemic, and consequential government action, and exactly offset this with government funds. This would allow all wages and bills to be paid. It would lead to black markets developing and price gouging for products in short supply, but it would not, I think, lead to any generalised inflation. People generally cut back their spending in stringent times. Moreover, I think, central banks have the tools to counter any material inflation which might result from pent-up demand once the crisis is over.
Leave aside the malaise attendant on making large swathes of the population idle and dependent on government funds for a year and more. The problem is the enormity of the funds required and the high degree of finesse required in their distribution. Governments have neither the required knowledge nor the administrative capacity.
What we are seeing are blunt instruments. Some cash (a lot but not nearly enough to make up for the loss of revenues and incomes) is being dispensed to some businesses and segments of the population. Credit markets are being supported. Helpful, though these measures might be, they did not prevent Qantas laying off 20,000 employees, nor prevent Powell’s bookshops in Portland, Oregon, closing and laying off 300 workers, nor prevent Compass, a coffee chain in Washington DC, laying off 150 workers, nor prevent Volkswagen in Spain putting 14,000 employees on unpaid leave, nor prevent Cineworld from closing all its 102 cinemas in the UK and laying off an unknown number of staff. And they will not prevent mass unemployment from sweeping across the world.
Mass unemployment, and who knows, of Great Depression proportions, will cause mass misery. Data from that time (1929-1933) does not show any marked overall lift in ill-health or in deaths, suicides excepted. However, we should not take much comfort from this data. Then, more than now, unemployed and destitute people would not have sought hospital treatment for a range of physical illnesses; never mind mental traumas. Depression, apathy, loss of hope, fear, anxiety, poor sleeping would have been contained inside homes (provided homes had not been lost) and neighbourhoods.
The misery of mass unemployment cannot be deliberately inflicted on people by their governments. It is unthinkable and, to repeat myself, it is not tenable. But, then, we cannot have health services overwhelmed and many resulting deaths. Usually, I am not averse to talking about trade-offs. For example, in every country, at some time, someone is complaining about a shortage of hospital beds or of ambulances taking too long to reach patients because there are too few of them. When resources are limited, as they always are, trade-offs are an inevitable part of life. In this case however, the health impacts are much too great to accept. So, we have a dilemma. Health experts are saying that people must distance themselves from each other to save many lives, while implementing that strategy locks down economies and causes the misery of mass unemployment. What to do?
Hopefully, an effective treatment for the virus will be soon discovered — a vaccine will take too much time. Apparently, among other anti-viral medicines, the anti-malarial drugs chloroquine and hydroxychloroquine show promise. But short of that we need to again go back to the health experts; and to the discussion in the IC Report about the mitigation strategy.
Recall, this strategy consists of socially distancing only those who fit in the category of being particularly vulnerable to the virus, and quarantining those with the infection and those living in the same households. If that were done, it would cause some economic dislocation – e.g., for the travel and tourism industries — but it would allow most everyone else to get on with life as normal, albeit while practicing good hygiene. That is the economic and social advantage of mitigation.
The medical advantage is that it leads to a rapid spread of the virus and to herd immunity, “leading to an eventual rapid decline in case numbers and transmission dropping to low levels.” Unfortunately, in the meantime, under assumptions about its transmission to vulnerable groups (because of the likely degree of contact despite encouragement of social distancing) and the number of available critical-care hospital beds, it overwhelms health services and causes many deaths.
The key lies in the assumptions. The more effectively older and sicker parts of the population can be protected from the transmission of the virus and the more beds that can be brought into service, the more mitigation would become a viable option. I am not saying that this is the answer; I don’t have special insight. What I am saying is that if a suppression strategy proves to be untenable, if it causes insufferable harm, as it surely will, another strategy has to be found.
A lot more could be done to encourage and incentivise (not coerce) the older and sicker who are in their own homes to stay isolated, and to ensure that those who must come into contact with them wear face masks and otherwise take appropriate steps to avoid transmission. Those housed in institutional settings of one kind or another can surely be effectively protected. Remember, we know, in this crisis that money is no object. Not to put a fine point on it, perhaps (maybe) those at home and at risk could be paid a generous allowance to avoid all social contacts for a set period of say six weeks. They would also need to be given the ability to have meals, food and other items, including pharmaceutical items, delivered to them in ways which were speedy, convenient and safe (i.e., infection proof).
Equally, this lack of any monetary constraint, applies to doing absolutely everything that could be done to rapidly increase the availability of critical-care beds and whatever else is needed. Defence forces can be brought into play to build the equivalent of field hospitals. The production or purchase of required medical equipment can be fast-tracked. Where it is safe and prudent, retired nurses and doctors can be brought back into service; something which is already happening in parts of the world. In other words, combatting the disease through mitigation could be put on a war footing, but one which is targeted. A country which is fully employed, or close to, is in a better position to fight an emergency than one in the midst of an impending recession or depression.
A problem, if there were not enough of them, in pursing any strategy out of sync with the rest of the globe, is the interconnectedness of the world. With most countries locking down their economies no single country can escape economic hardship. So, if the strategy of combatting the virus were to change for any one country, the degree of its success would depend a good deal on whether it had the company of numbers of its trading partners. Nevertheless, simply keeping sporting events going – and, as I’ve noted, this is not countermanded by the IC Report — would make a difference to many lives. Add to that the entertainment industry, and others which are hostage to requirements to keep people apart, and it would make a material economic difference, as it would to public morale.
A strategy of closing things down is in keeping with medical advice. No argument about that or about the professionalism and good intent of that advice. At question, however, is whether such a strategy is sustainable; whether it can be kept in place for a year and more. At issue, is the harm that would be done to human wellbeing. There is a need, I believe, to reconsider; and, if at all possible, to change course and adopt a different strategy which better protects those at risk from the virus while freeing up the economy.