Economics and Covid 19

James Dingley

08 April 2020

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Times of pandemic fears and health scares, like covid 19, immediately grip all of us, we can feel the potential threat hovering over us, especially when told of ‘at risk’ groups inevitably containing people we know, if not ourselves. (Fortunately I am 6 months off being in such a group.) And typically we immediately think of medical aid and health care professionals as our natural defence, to whom we must defer against all other judgements. Hence, criticisms of both the UK and US governments have concerned them deferring medical and scientific advice in lieu of economic concerns. 

It seems obvious that in facing a killer disease we should respond medically first and foremost: the economy can recover but those killed by the pandemic cannot: reasonable, and accurate as far as it goes. However, that fails to take into account the number of people likely to die as a result of an economic lockdown and possible recession. Of course these people won’t die from a single disease at one go but in small numbers or singly, many not in hospital, but at home or in homes; their deaths will not be part of a dramatic event with emotive pictures of hospital wards over-flowing. But die they will and probably mostly the same people, the already vulnerable.

To discuss the economy now sounds callous, but one must to remember, it is the economy that enables us to live, pays the bills and sustains the NHS (one of the greatest political achievements of any UK government). Consider this: Prof Thomas (Risk Management, Bristol University) on BBC Radio 4, One o’clock News (25/3/20) warns that the current lockdown in 12 weeks could lead to a recession exceeding 6.4% decline in GDP, some forecasts are of up to 15%. The result of that could be a loss of life (up to 400,000) due to economic recession that would exceed the number of lives saved via the current medically induced lockdown.

Unemployment and poverty are known killers, which is what a recession implies. Poor diet for struggling families reduces resistance to disease, the stress and strain of long term unemployment impacts upon health and longevity. Meanwhile, those who survived economically may be saddled with enormous debts, adding stress and strain to that already incurred in trying to restart a business or get back on their feet. Concurrently, businesses that survived by going into debt will be less attractive for future investors and lenders. Lost savings and devalued investment plans to pay for our retirement will be eaten up, leading more people to rely more heavily on the state or lapse into poverty. This in turn adds to the problems of raising funds, i.e. taxes, to pay for the health and social services ‘survivors’ will probably need even more. All of these are ‘hidden’ killers, years off lives.

The Institute for Public Policy estimated that 130,000 preventable deaths occurred due to austerity: that poverty kills is a well known fact, but does not have the immediacy of country-wide lockdowns or the medical drama that attracts the media, but it still kills.

Current government policy depends heavily on Imperial College, London’s, research on how to suppress covid 19 and like all research it depends on assumptions; here that the suppression tactics now employed will work over the next 12 weeks, but there is no guarantee. They also recognise that suppression carries major economic implications, although they have not calculated it, which brings one back to Prof Thomas (whose work has yet to be published), he has calculated the potential loss of life vis-a-vis current government strategy.

Any strategy relating to any pandemic will inevitably have to look at a variety of options, all of which involve having to let some people die to save others, the problem is in identifying which kills the fewest. Unfortunately, the best strategy is not always the one that is the most immediately and emotionally satisfying or makes the best headlines. The PM (who will almost certainly recover) contracting covid 19 makes good headlines, a statistical increase in the number of children dying who live in poverty on the Falls Rd or Lower Newtownards Rd in a couple of years time probably won’t even register. The same will apply to working class adults dying at a younger age than in previous decades.

Ultimately, the economic costs will probably kill more people than covid 19 itself, which is a reality that government, media and electorate has to consciously take into account if we are to minimise deaths. This may mean having to re-open the economy and reverse lockdown at the cost of increasing short term deaths for decreasing long-term deaths: not pleasant, but it saves lives.

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