Mitigated Disaster

There is a debate to be had regarding the competing ravages on society from both the decline of economic output and the spread of Covid_19. A recession will likely lead to financial hardships that will in itself costs lives. At what point of economic decline will more lives be lost to future austerity than to the virus? Do we also consider the quality of life? What other factors do we include?

Even if we can produce a reasonable estimate to answer these questions, we might also perhaps look at the type and value of lives being lost. Is one non productive 70 year old worth the same as a 21 year old entering the workforce?

Currently, governments are answering that question with policy that is essentially a binary choice. Mitigate (apply greater value to the economy) or Suppress (apply greater value to lives lost to the virus). Most countries opted for Suppress very quickly. 

The UK hedged towards Mitigate, but changed tack at the last moment. The US seems to have done the same, but there are voices (I need mention no names) suggesting an imminent return to Mitigate will be in order. The graph above shows how that might work out. 

It’s complicated, isn’t it. I can see the appeal of ‘taking it on the chin’, and I have joked about the Covid Dividend, but there are some factors which I think are going to be both very difficult to predict in scale and in their consequence. The UK’s original mitigation strategy was described from the outset as ‘a rather big gamble’. Here’s five potential pitfalls of a mitigation strategy off the top of my head.

• Millions will die. They’ll die from the virus. They’ll die from normally treatable conditions that cannot be treated by a swamped health system. They’ll die because health care professionals have died. The health system itself may take years to recover.
• Productivity will not return to anything close to normal. Millions will be off sick at any given moment for months and months. Business won’t know who or when, making planning and mitigation impossible.
• Millions who are not sick will still stay away from work out of fear. Tens of thousands of people dropping dead every day will have an impact on the mental health of everyone. It won’t matter if the mortality rate is less than 1%. Everyone with a sniffle will become the enemy.
• Societal breakdown may occur. Crime and civil disobedience may become uncontrollable. Do you think trust in government is already on the low side?
• A country going this policy alone may become an international pariah, cut off from the world. This will have both short term impacts and long term loss of business – trading communities will find alternatives.