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How a coronavirus epidemic in China could ripple through the global economy

An international outbreak of respiratory illness sparked by a novel coronavirus has spread from its origins in central China to at least 11 countries, with more than 1,200 confirmed cases — including a presumed case in Canada — and over 40 deaths.

Like previous outbreaks, including the SARS virus 17 years ago, the flu-like disease poses a risk to economies around the world as fear and confusion lead to abrupt changes in behaviour, decreased economic activity and a ripple effect across sectors that threatens everything from productivity to consumer prices.

The Severe Acute Respiratory Syndrome pandemic of 2003 cost the Chinese economy up to US$20 billion, according to the Asian Development Bank, as travel warnings and transit shutdowns discouraged consumption, foreign tourists stayed away and local residents stopped going out.

“The travel and tourism sectors were most obviously hit, although that ripples through the entire economy,” said Richard Smith, a professor of health economics at the University of Exeter Medical School.

“But many effects are short-lived during an outbreak as once the panic is over people go back to business as usual.”

Chinese authorities clamped down on mass transit during the SARS outbreak, hampering commutes, shopping runs and social outings. The national securities regulatory commission closed stock and futures markets in Shanghai and Shenzhen for two weeks to prevent viral transmission. And Beijing ordered movie theatres, internet cafes and other venues to shut down temporarily while hotels, conference centres, restaurants and galleries saw visitors almost disappear completely.

China’s response to the current crisis appears to be swifter, and the disease less virulent, but the country now boasts a far more extensive high-speed rail network than it did in 2003, and its economy is six times larger, upping the risk of transmission and the repercussions of an epidemic.

“China is the engine of the global economy, churning out goods,” said German health economist Fred Roeder.

Its critical role in international shipping may be thrown into disarray as authorities begin to hold back some ships from entering the port at Wuhan, a key hub on the Yangtze River.

“If they cannot leave it creates huge delays in the supply chain and value chain of businesses all across the world,” Roeder said. “It could actually hit the latest generation of smartphone if ports are shutting down.”

Manufacturing could also feel the crunch as supply chains stall, he said.

Roeder has felt firsthand the disruptive power of a pandemic. In the summer of 2003 the teenage Berliner was eagerly gearing up for a United Nations youth conference that would take him to Taipei, but the event was cancelled a few days beforehand due to SARS.

The epidemic also sparked layoffs and time away from work. At one point Singapore Airlines asked its 6,600 cabin crew to take unpaid leave. Children stayed home from school, prompting more parents to shirk their job duties and further reducing productivity, said AltaCorp Capital analyst Chris Murray.

“I was losing guys left, right and centre as people were quarantined,” recalled Murray, based in Toronto — the epicentre of the SARS pandemic outside of Asia. The disease infected 438 Canadians in total and caused 44 deaths in the Toronto area.

The economic damage culminated with World Health Organization’s one-week travel advisory for the city in April 2003, costing the Canadian economy an estimated $5.25 billion that year.

The outbreak of H1N1, or swine flu, in 2009 also sparked work “dislocations,” Murray said. “It went from, ‘Maybe it’ll be okay,’ to sheer panic.”

Freelancers and gig economy workers such as musicians or ride-hail drivers may feel the pinch more acutely, since they can’t rely on a steady wage when demand shrinks.

“It’s something that unfortunately has happened before in a similar way and it tends to affect areas like retail,” said Carolyn Wilkins, senior deputy governor of the Bank of Canada, said this week.

“People don’t go out, they don’t fly in planes, they don’t do as much tourism to the affected areas,” she said.

The fallout makes workers ranging from servers to wholesale bakers to non-unionized hotel staff more vulnerable. Meanwhile spending or investment plans by larger companies may have to be delayed, said Roeder.

It is not clear how lethal the new coronavirus is or even whether it is as dangerous as the ordinary flu, which kills about 3,500 people every year in Canada alone.

Originally published here.


The Consumer Choice Center is the consumer advocacy group supporting lifestyle freedom, innovation, privacy, science, and consumer choice. The main policy areas we focus on are digital, mobility, lifestyle & consumer goods, and health & science.

The CCC represents consumers in over 100 countries across the globe. We closely monitor regulatory trends in Ottawa, Washington, Brussels, Geneva and other hotspots of regulation and inform and activate consumers to fight for #ConsumerChoice. Learn more at 
consumerchoicecenter.org

How Estonia’s cybersecurity strategy can help the EU cope with China

Fred Roeder, a German health economist and the managing director of the Consumer Choice Center, proposes Estonia to lead the European Union to a coherent cybersecurity strategy in order to protect consumers and businesses not only from cyberattacks from Russia but also from potentially much larger attacks and espionage from China.

Within the past twelve years, Estonia has emerged as a leading nation in the field of cyber defence and security. The cyberattacks of 2007 made Tallinn much earlier aware of the massive threat of online attacks compared with its larger NATO allies.

Especially under EU commissioner, Andrus Ansip (nominated by Estonia, Ansip was the European Commissioner for Digital Economy and Society from 2014 until July 2019 – editor), Estonia has been a driving force behind the European Commission’s new cybersecurity agenda. Estonia now needs to lead the European Union to a coherent cybersecurity strategy in order to protect consumers and businesses not only from cyberattacks from Russia but also from potentially much larger attacks and espionage from China.

China’s backdoors

The adoption of Internet of Things solutions and the highly anticipated rollout of very fast 5G networks will make consumers’ privacy even more vulnerable. The recent events in Hong Kong and the Chinese Communist Party’s reluctance to keep its commitments towards the rule of law are reasons why we must heed caution.

Some governments and manufacturers tend to be mostly concerned about competitiveness through low prices, which is important for consumers. However, we also care about privacy and data security. Therefore, a smart policy response is needed that would incentivise market players to give enough weight to consumer data security in Europe, all the while achieving that goal without undue market distortions and limiting of consumer choice.

n more than just one instance, the Chinese leadership has put legal or extra-legal pressure on private firms to include so-called backdoors in their software or devices, which may be exploited either by government agents alone or with a manufacturer’s help. As a response to threats like this, countries like Australia and the US went so far as to ban the Chinese network equipment manufacturer, Huawei, from its 5G networks.

Pressure on non-European suppliers to adopt the security-by-design approach

While some governments see bans as the best way to protect national security and consumer privacy, we know there is no single silver bullet solution for safeguarding privacy and data security. A mix of solutions is needed, and this mix will likely change over time.

Healthy competition between legal jurisdictions and between private enterprises is the best mechanism for the discovery of the right tools. But those working on cybersecurity solutions should also consider consumer interests. Keeping new regulation technology-neutral, and thus not deciding by law which technological solution is best, allows an agile framework for consumer privacy.

A Huawei phone (the image is illustrative/Pexels).

The EU’s current legal rules, like the General Data Protection Regulation, for example, do not provide sufficient clarity regarding liability of network operators for privacy violations made possible by hardware vulnerabilities. Thus, a clear standard of supply chain security must be defined.

Emphasising liability rules for using or reselling software or devices with vulnerabilities would give those rules more teeth and thus incentivise telecommunications operators and others to think about their customers’ privacy during their procurement decisions. This should, in turn, put pressure on non-European suppliers to adopt the security-by-design approach and to take pains to show that they have done so.

Smart regulation needed to prevent autocratic governments from spying on us

In solving the problem of unclear and ineffective legal rules on data security, we must take into account that technical standards should be as technology neutral as possible. Manufacturers from countries that are under scrutiny – such as China – might want to provide purely open-source technology in order to rebuild trust in their products.

Instead, the rules should be focused on outcomes and be as general as possible while still providing sufficient guidance. These standards should be possible to identify and adopt not just by the biggest market players who can easily devote significant resources to regulatory compliance. A certification scheme must be thorough in order to minimise the risk of any backdoors or other critical vulnerabilities.

5G 3.5 GHz cell site of Vodafone in Karlsruhe, Germany (the image is illustrative/courtesy of Tomas Freres/Wikimedia Commons).

The debate around 5G reminds us how vulnerable consumers are in a technologically and politically complex world and that cyber threats originate usually in autocratic countries.

Therefore, smart regulation is needed in order to protect consumers from data breaches and to prevent autocratic governments from spying on us. By continuing the legacy of commissioner Ansip’s leadership and strengthening the liability of network operators for technological vulnerabilities, both consumer choice and privacy can be ensured. Blunt instruments like total bans based on country of origin or regulators picking the technological champions should be seen as measures of the last resort.

Originally published here.


The Consumer Choice Center is the consumer advocacy group supporting lifestyle freedom, innovation, privacy, science, and consumer choice. The main policy areas we focus on are digital, mobility, lifestyle & consumer goods, and health & science.

The CCC represents consumers in over 100 countries across the globe. We closely monitor regulatory trends in Ottawa, Washington, Brussels, Geneva and other hotspots of regulation and inform and activate consumers to fight for #ConsumerChoice. Learn more at consumerchoicecenter.org.

Im Kreuzfeuer: 5G, China, Sicherheit und Datenschutz

Schneller und billiger Rollout von 5G vs. Verbraucherschutz?

Nie war Mobilfunk so politisch wie heute. Während die EU-Kommission Vorschläge für ein abgestimmtes Vorgehen der EU zur Sicherheit von 5G-Netzen vorlegt, kritisiert das amerikanische Consumer Choice Center – nicht ohne Ironie -, dass man in der Datenschutzhochburg Europa bei 5G ausgerechnet auf Technologie aus einem Land (= China) setze, in dem der Datenschutz mit Füßen getreten werde.

Nach allerlei Winken mit dem sprichwörtlichen Zaunpfahl seitens der US-Regierung oder regierungsnaher Stellen setzt sich nun auch die liberale Lobbyorganisation Consumer Choice Center kritisch mit dem wachsenden Einfluss chinesischer Anbieter von Mobilfunktechnologie auf dem europäischen Markt auseinander.

Fred Roeder, ein studierter Ökonom, ist Managing Director des Consumer Choice Center in Arlington (Virginia).

Fred Roeder, ein studierter Ökonom, ist Managing Director des Consumer Choice Center in Arlington (Virginia). (Bild: Consumer Choice Center)

Für Fred Roeder, Geschäftsführer des Consumer Choice Center, sollte die Privatsphäre der Verbraucher in dieser Debatte an erster Stelle stehen. “5G bietet eine völlig neue Art der Konnektivität und verspricht enorme Vorteile für das Internet der Dinge. Dies wird begrüßt, aber gleichzeitig sollten sich die europäischen Verbraucher des potenziellen Gepäcks bewusst sein, das einige Infrastrukturanbieter mitbringen”, so Roeder.

“Während die EU eine der strengsten Datenschutzbestimmungen der Welt hat die DSGVO die Geschäftstätigkeit vieler gesetzestreuer Unternehmen in der EU erheblich erschwert hat, sollten wir uns Sorgen machen, dass Technologieunternehmen mit Sitz in Ländern ohne Rechtsstaatlichkeit ein potenzielles Datenschutzrisiko für Verbraucherdaten darstellen. Während ein schneller und billiger Rollout von 5G für einige ein großer Sprung nach vorne sein könnte, müssen wir sicherstellen, dass wir nicht in dunklere Zeiten zurückkehren, wenn es um den Datenschutz der Verbraucher in Europa geht”, erklärt Roeder.

Read more here

Illiberal regimes are exploiting the pandemic to attack the foundations of democracy

It took us 75 years to rebuild freedom in some parts of Europe after the totalitarian horrors of World War Two, and less than three weeks to bring it to its knees again.

With coronavirus looming in the background, worrying erosions of the freedom of speech and media are being rushed through Europe.

On March 30, Hungary’s parliament passed a law that allows the leader of the country’s nationalist movement, Viktor Orban, to rule by decree indefinitely. The law makes it possible for Orban’s government to imprison anyone who publicises false facts that interfere with the “successful defence” of public health, or can create “confusion or unrest” related to the coronavirus.

The witch-hunt after personal freedoms followed and led to a number of arrests. Such a sweeping amount of discretion on the side of government is a death sentence for freedom of speech, the cornerstone of democracy.

Freedom of speech plays an essential role in establishing accountability between the government and its electorate, and it facilitates indiscriminate, back-and-forth communication. When governments monopolise this freedom, democracy can be extinguished.

Orban chose the right target. Even though it is claimed that these laws will be relieved once the pandemic is over, his record suggests the opposite. Since his victory in 2010, Orban has tightened state control over the media to suppress any opposition and eroded, step-by-step, institutional checks and balances. According to him a state need not be liberal to be a democracy.

But it’s not just Hungary. In Serbia, the government’s decree about the centralisation of information during the coronavirus emergency gave rise to arrests. On April 1, after reporting about a shortage of protective medical equipment available for staff at a medical centre in Serbia, Ana Lalić, a Serbian journalist, was detained. Lalić was charged with causing public unrest by spreading fake news during the emergency.

In a similar fashion, the Polish Ministry of Health made it illegal for medical consultants to issue independent opinions on the epidemiological situation, the state of hospitals, and methods of protection against infection. Speaking up about the lack of protective equipment can cost Polish doctors a job.

Meanwhile both Slovenia and the Czech Republic have announced that they are ending the presence of journalists at official press conferences altogether. According to Dunja Mijatović, the Council of Europe Commissioner for Human Rights, a Slovenian journalist who requested information about the measures adopted by the government to address the pandemic has been the target of a smear campaign by media close to the political party leading the government coalition.

Despite the growing number of cases in Russia, Vladimir Putin continues to push for a nationwide vote on constitutional reform which could enable him to stay in power until 2036. On May 13, Russian lawmakers passed a bill that allows Russians to vote by mail or online for Putin’s constitutional amendments. Most likely Putin will get it his way since, similar to the direction chosen by Hungary, speaking up against the government automatically makes you a heretic.

Where people are pushed into choosing between the protection of their life and that of their loved ones and an act of political resistance, most opt for silence. Yet forcing such a choice is inhumane, manipulative and, in the end, will lead to the demise of those governments that do so.

An ardent admirer of China’s measures to halt the coronavirus, Putin has also resorted to outright totalitarian measures. The Financial Times and New York Times might soon be banned from Russia for revealing the truth about the death rate in the country. However, the first target of Russia’s anti-fake news campaign has been its own citizens, who are being fined for spreading ‘fake information’ about Covid-19. The already very small number of civil freedoms in Russia is under enormous threat.

Free elections are a key trait of democratic regimesm but are not sufficient in themselves. Genuine democracy cannot exist without civil rights and, in particular, the right to resist through protests, free speech, and a free media.

One could hardly imagine a better excuse to quickly proceed with illiberal agenda than a public health emergency. There is a reason why illiberal governments invest so much in propaganda. The very root of their power lies in artificially created and frighteningly powerful narratives that are repeatedly and consistently spread whilst censoring every voice of dissent. Freedom of expression is to democracy what property rights are to the economy. The monopolisation of either leads to disruption.

So we’re at an impasse. On the one hand, this pandemic might dissuade us from taking cues from the unfree world and its tactics.

On the other, the emergency nightmare might turn into our permanent reality by giving governments carte blanche to enforce severe restrictions on our liberties. It’s hard to imagine a more effective way to suppress every potential disobedience than through the appeal of fear for our health, not to mention that of our parents, friends, and literally everyone dear to us. This provides illiberal democracies with a once-in-generation opportunity to camouflage their totalitarian pursuits as part of emergency packages to stop the pandemic.

Let us hope that for the best but be prepared to fight back in case of the worst. Democracy is rooted in freedom of speech and media and we have to defend it at all costs.


The Consumer Choice Center is the consumer advocacy group supporting lifestyle freedom, innovation, privacy, science, and consumer choice. The main policy areas we focus on are digital, mobility, lifestyle & consumer goods, and health & science.

The CCC represents consumers in over 100 countries across the globe. We closely monitor regulatory trends in Ottawa, Washington, Brussels, Geneva and other hotspots of regulation and inform and activate consumers to fight for #ConsumerChoice. Learn more at consumerchoicecenter.org

Public Health Agencies Care More About Controlling You Than Prepping For Pandemics

Public Health Agencies Care More About Controlling You Than Prepping For Pandemics

What were public health officials at every level of government doing last year? Were they preparing for a pandemic? Or were they using their office to meddle with your lifestyle choices?

The partisan political sniping over Covid-19 is completely predictable and counter-productive. There’s plenty of fault to go around, but the blame-gaming should be ignored or discounted for what it is: self-aggrandizing grandstanding.

It is, however, worthwhile to examine a tension that has been brewing in the public health world for decades. That dichotomy is: should we focus on communicable diseases, as has long been the mission of public health institutions, or do we have enough bandwidth and resources to venture out into the much more controversial area of non-communicable diseases (NCDs)?

To get to the answer, think about this. What were public health officials at every level of government doing last year? Five years ago? Were they first ensuring that their track and trace systems were in place for a pandemic? Or were they using their office to meddle with your lifestyle choices?

The discipline of public health has long been rooted in fighting contagious diseases. For the most part, it has done very well. Notwithstanding the current Covid-19 pandemic, sanitation, vaccines and therapies—mainly drugs—have dramatically reduced the toll of communicable diseases.

That success has led many in public health agencies, especially in the United States, to argue that we must now use our limited resources to combat NCDs, and that we can address both effectively. It isn’t exactly working out that way.

Efforts to fight non-contagious diseases such as heart disease and diabetes frequently raise questions about individual liberty, including the freedom to make poor choices. All too often, the politicized debate causes both sides to overstate or manipulate the science supporting their viewpoints.

When former New York City Mayor Michael Bloomberg, the biggest booster of today’s public health movement, campaigned against sugary drinks like soda, it landed the city’s health department in hot water. For instance, a taxpayer-funded ad campaign created by the Department of Health showed a photo of a man purportedly with amputated legs. The city’s ad agency had Photoshopped his legs out of the photo to support the valid claim that Type 2 diabetes can lead to amputations.

The Bloomberg administration’s antics, which even elicited criticism from within the health department, indicates the degree to which his wing of the public health movement has lost sight of its most primary and unifying functions: preparedness.

This lack of preparedness is not partisan. It exists in the current Republican administration, as it did in the prior Democrat administration. Cities, counties, and states long governed by each party were equally ill-prepared for a pandemic.

Commentators on the left and the right have referred to Coronavirus and Covid-19 as a “black swan event.” But it doesn’t meet the definition. A pandemic of this type was not only predictable, it was something communicable disease experts have warned about rather specifically for many years. The warning signs were ignored, and we were ill-prepared.

A 2007 review article in the American Society for Microbiology’s publication, Clinical Microbiology Reviews, entitled, “Severe Acute Respiratory Syndrome Coronavirus as an Agent of Emerging and Reemerging Infection,” concluded: “Coronaviruses are well known to undergo genetic recombination, which may lead to new genotypes and outbreaks. The presence of a large reservoir of SARS-CoV-like viruses in horseshoe bats, together with the culture of eating exotic mammals in southern China, is a time bomb. The possibility of the reemergence of SARS and other novel viruses from animals or laboratories and therefore the need for preparedness should not be ignored.”

Rather than marshal finite resources towards preparedness for a coming communicable disease, lots of public health resources, including taxpayer dollars, media attention, and legislative priorities, were deployed to address non-communicable diseases, from domestic violence to gun regulation.

Think back to a different time not so long ago. During the second half of 2019, federal, state and city health officials throughout the country were busy confronting a new and scary lung disease. The health reporters covering them churned out news articles, regularly garnering front-page placement. Major charities such as Bloomberg Philanthropies were making large public health grants. So it should come as no surprise that the American public and political leaders were keenly focused on this emerging health threat.

The disease wasn’t Covid-19, of course. It was a something the Centers for Disease Control called e-cigarette or vaping product use-associated lung injury, or EVALI.

At the time, public health activists were, for years, calling for bans on the types of e-cigarettes used to quit smoking. Despite strong evidence that nicotine e-cigarettes are 95 percent less harmful than smoking and can help smokers quit, public health agencies treated e-cigarettes as the most important threat to public health. Yet they still failed to convince policymakers to institute widespread bans on the most popular e-cigarettes.

But as consciousness of EVALI reached a crescendo, states began to ban most flavored e-cigarettes, and the FDA further tightened the regulatory screws on nicotine-containing e-cigarettes.

It turned out that none of these nicotine e-cigarettes were ever responsible for the lung disease that bears their name. It took until late December for the Centers for Disease Control to (partly) acknowledge that the lung injuries were caused not by vaping liquid nicotine e-cigarettes such as Juul, but by the use of THC oil contaminated with vitamin E acetate.

Public health agencies were so ideologically opposed to e-cigarettes as a tool for tobacco harm reduction that they sowed panic, promulgated misinformation, and actually caused a failure to identify the true culprit in a life-saving and timely way. Still, nobody has been held accountable.

So, back to the question about communicable and non-communicable disease: Has public health been able to “do both” well? It turns out, that when purportedly trying to do both, public health hasn’t been able to do either effectively.

I’m not suggesting that public health’s EVALI scandal was the only or even primary culprit for the failure of public health departments around the country to ensure that their communities had an adequate supply of personal protective equipment in the event of a predictable communicable disease outbreak, or that the CDC was otherwise preoccupied. Instead, the EVALI episode was more of a symptom of something wrong in public health.

The institution of public health has largely been co-opted by those with a desire to control individual choices to such a degree that it has largely lost sight of its fundamental role of pandemic preparedness. At this point, taxpayers should realize that we are giving the keys to the public health car to people who have long been driving in the wrong direction.

Originally published here.


The Consumer Choice Center is the consumer advocacy group supporting lifestyle freedom, innovation, privacy, science, and consumer choice. The main policy areas we focus on are digital, mobility, lifestyle & consumer goods, and health & science.

The CCC represents consumers in over 100 countries across the globe. We closely monitor regulatory trends in Ottawa, Washington, Brussels, Geneva and other hotspots of regulation and inform and activate consumers to fight for #ConsumerChoice. Learn more at consumerchoicecenter.org

Can you sue the ski hut where you contracted coronavirus?

European nations may be opening up their economies throughout the month of May, but that grand opening is likely to be dogged by the wave of COVID-19-related lawsuits.

We learned over the weekend that over 5,000 international tourists to the ski town of Ischgl, Austria are in the process of filing a lawsuit against the town and public officials. There are also being considered against ski resort owners in the area.

The lawsuit is being prepared by the Austrian Consumer Protection Association, which claims health authorities and the bar owners were “negligent” in not shutting down ski huts and restaurants earlier. They launched a website asking potential plaintiffs to share their information in order to join a future class-action lawsuit.

Often described as the “Ibiza of the Alps,” Ischgl made international headlines as an epicenter of the coronavirus crisis. At one particular venue, Kitzloch, a German bartender reportedly tested positive for coronavirus on March 7th. The bar closed its doors two days later. The town went into lockdown on March 13th. Tyrolean Governor Günther Platter then issued a province-wide quarantine on March 18th.

By the end of March, nearly 1,000 cases across Europe could be traced back to the resort town, and as many of 1,500 to the region itself.

The complaint states that the delay from the first known case until the ski town was ordered into lockdown was “negligible” and that authorities should have “known of a threat of mass infection”. Some have even blamed “greed” and “toxic business” as the reason local officials and business owners waited before shuttering doors. But as covered above, ski lodges and restaurants shut before provincial and national lockdowns ordered them to.

The first death in Austria from the coronavirus wasn’t until March 12, after which the town of Ischgl went into complete lockdown. The national lockdown went into effect four days later.

Is this enough to make a case against ski huts and villages where tourists contracted coronavirus?

As my colleague Linda Kavuka has pointed out, the current pandemic is a living and breathing example of Force Majeure, an Act of God that indemnifies certain parties in lawsuits and breaches of contract because it is simply “beyond the control” of any person or organization.

That said, there are legitimate questions to be asked: should ski towns have shuttered their doors and closed down bars and restaurants earlier? Likely. But we simply didn’t have the same information then as we do now.

And considering the very disturbing revelations about obfuscation of information by both the Chinese Communist Party and the World Health Organization at the outset of this crisis, it’s hard to place blame solely at the feet of local mayors and ski hut owners in the Alps.

(That’s why the U.S. states of Mississippi and Missouri have filed lawsuits against China.)

Of course, the fact that any skier or holiday goer would contract the coronavirus at a place where they were supposed to be enjoying themselves is a tragedy. Many people unknowingly spread the virus, were hospitalized themselves and died as a result. No one can excuse that loss of life and the grief that ensues.

But what we must hold uphold, in this situation and many more to come, is the facts and cases we allow to enter our legal system and our courts.

Classifying or assigning claims of negligence in the pandemic could likely mean thousands of unwitting public officials, business owners, and individuals will be held liable for what they didn’t know at the time. That would be a dangerous precedent.

We’ve often covered the incredibly litigious culture in the United States’ tort law system and articulated to reasons to reform it. Now, it seems, we’ll have to spread that same message throughout the European continent.

The Covid-19 Response isn’t a Vindication for Socialism

The pandemic is not a crisis of capitalism, if anything it proves we will need free markets more than ever before, argues Joey Simnett

National emergencies are a breeding ground for those who claim it confirms their worldview, who use them to push their own agenda long after the crisis passes. And now, during Covid-19, they once again slither out of the woodwork.

There has been no shortage of state apologists who feel vindicated by this unprecedented event, and wish to keep it this way. Once again our decadent individualist culture and corrupt capitalist system have apparently failed us, and now big government has stepped in to save the day.

BBC Newsnight described Chancellor Rishi Sunak’s rescue package as “embracing Keynesianism”. Professor Mariana Mazzucato posited that we should use this crisis to “think about capitalism differently”, and recent resignee Jeremy Corbyn had a “told you so” moment where he stated he was “right” about public spending.

But this commentary on the government’s countermeasures fundamentally misses the point and the nature of the program.

What has happened with Covid-19 is a truly exogenous (i.e. non-economic) supply side shock. In fact, it behoves the government to actively and explicitly “freeze” the labour force until the crisis passes. And, until it does, it is imperative to maintain the intricate web of market relations that form the economy, as this crisis is not a result of them being inherently rotten.

There is no “crisis of capitalism” or traditional economic recession here; there have been no bad investments, malignant animal spirits, or popped bubbles. There is no need to “right the wrongs of the market” like Keynesians and socialists desire to do, nor has the Chancellor done so.

This is simply a case of governments spending money, as governments of all stripes do. But the key distinction lies in when, how, and why they do so.

The highlight of the Chancellor’s plan is to pay a portion of people’s wages for a period of time. Direct cash transfers are some of the most economically neutral interventions a government can perform. It does not remotely resemble the kind of top-down Soviet economic planning or the grotesque market distortions we’ve witnessed both preceding and proceeding economic crashes.

But, the critics say, we do see mass mobilisation in the production and acquisition of medical equipment under Matt Hancock—surely this demonstrates the effectiveness of government-led planning?

It does in one respect, in the same way conscription was necessary in World War II. But this does not mean it’s a good idea in day-to-day life. Governance involves learning, choices, and trade-offs, which means we shouldn’t forever sit in our bunkers with a rifle aimed at the door in anticipation of all manner of hypothetical events.

Who wants to see our dear comrades at the Department for Environment, Food and Rural Affairs decide who produces our food, how much food to produce, and who to give it to on an on-going basis—one brief glimpse at Maoist China suggests that governments are simply incapable of managing such complex and ever-changing economic processes.

But while there’s nothing inherently revolutionary about how our government is functioning, there’s certainly a risk that it could be as soon as Covid-19 is out of the picture.

The horrors of World War II didn’t stop after the flattening of Nagasaki. Rather, an ideological battle emerged between those who wished to return to normalcy, and those who saw merit in a state-led society. It was the darlings of 20th century progressivism, the Attlee government, who pushed to make food rationing and identity cards a permanent feature in day-to-day life.

In fact, it would take nine whole years to finally lay them to rest under Churchill’s second shot as Prime Minister.

Sunak stated that “this is not a time for ideology or orthodoxy”, but given the dramatic shift to the left in both the Conservative and Labour parties in recent years, it may well be once we are all fit and healthy again.

Author: Joey Simnett is a UK policy fellow at the Consumer Choice Center, and has previously written for American physicians on the US healthcare system, and on fiat alternatives in the payments world

Originally published here.


The Consumer Choice Center is the consumer advocacy group supporting lifestyle freedom, innovation, privacy, science, and consumer choice. The main policy areas we focus on are digital, mobility, lifestyle & consumer goods, and health & science.

The CCC represents consumers in over 100 countries across the globe. We closely monitor regulatory trends in Ottawa, Washington, Brussels, Geneva and other hotspots of regulation and inform and activate consumers to fight for #ConsumerChoice. Learn more at consumerchoicecenter.org

Five measures that could prevent future lockdowns

That the World Health Organisation hasn’t exactly shone in the coronavirus crisis is now well-documented. It should remind us of the dangers of following one centrally-guided approach to tackling the disease. Thankfully, given how even experts have been unsure about how to respond to this enormous challenge, there was no unified EU response to Covid-19. Instead, European countries have been dealing with the virus using trial and error.

As a result, looking at the responses of European and Asian countries, we can now distinguish five important things that seem to have worked to prevent the need for a strict, economically devastating lockdown.

1. Testing people with mild symptoms

Even though Germany’s first locally transmitted Covid-19 case was before Italy’s, Germany has had almost six times fewer deaths – with a 30 per cent larger population. There are caveats: Germany is lucky that the average age of its Covid patients has been only 49, compared to 62.5 in France and 62 in Italy. And it should also be noted that counting the number of deaths from Covid-19 is anything but straightforward.

But Germany’s testing practices have been singled out by the UK government’s chief medical officer, Chris Whitty, as key and in the last two weeks, Germany’s curve of infection growth has been flattening.

From the moment it became clear that a Chinese woman – dubbed ‘Case #0’, had visited Bavaria at the end of January, a medical manhunt was launched to trace, test and isolate those she had infected, giving Germany crucial time to prepare. The workplaces of those infected were shut down and all those who tested positive were sent to hospital.

Crucially, testing does not just seem to be about quantity. Last week Italy had conducted 807,000 tests since 21 February, which isn’t that much below Germany’s 1.3 million tests, when compared per capita. But Italy mostly tested people with severe symptoms that were in hospital. Germany also tested those with less severe symptoms and was therefore able to detect clusters of infection much earlier.

It’s important to note as well that German testing wasn’t the result of a conscious government decision but thanks to its many private laboratories. Christian Drosten, Director of the Institute of Virology at Berlin’s Charité Hospital explains that ‘Germany does not have a public health laboratory that would restrict other labs from doing the tests. So we had an open market from the beginning.’ In other words, the private sector elements of Germany’s health care system have played a very important part in its success.

German healthcare policy expert Frederik Roeder, who directs the Consumer Choice Center, highlights how in contrast to the UK, which has a centralised testing system with no room for mistakes, ‘a decentralised and independent system… allows for some parts in the chain to fail and the others still to perform, and crucially allows room for innovation.’ Worryingly, EU regulation will centralise this process from 2022 onwards.

Early, widespread testing was also performed in South Korea, but it was the result of conscious government action. The country has the world’s most expansive and well-organised testing programme, including drive-thru testing stations.

comparison between more than forty European and Asian countries has found a statistical correlation between having a high positive test rate – meaning mainly testing those with severe symptoms – and a high number of deaths per capita. This correlation is especially strong for Spain and France.

2. Sufficient intensive care capacity – enabled by the private sector

The whole point of imposing economically devastating lockdowns was to avoid overburdening the health care system, so people that could otherwise be saved would not have to die. South Korea did not impose lockdowns, while Germany imposed what could be called ‘lockdown light’. It did not order people to stay at home, apart from in Bavaria and Saarland. There was only a recommendation to respect strict social distancing measures, issued on March 22, more than a week later than other European countries like France or Belgium. Public gatherings of more than two people were banned, while restaurants and non-essential shops were shut. But all in all, the restrictions were modest, given that German manufacturers are still running at up to 80 per cent capacity.

The reason that those two countries, which also were successful in curbing the pandemic, were able to avoid the enormously expensive measures imposed elsewhere is that they believed their healthcare systems would be able to cope.

Before the Covid crisis, Germany already had the highest number of intensive care beds per capita in Europe. It then used the time it gained from ‘testing and tracing’ to increase the number of its ICU beds from an estimated 28,000 to more than 40,000. This also enabled German hospitals to take patients from other European countries. Before the crisis Germany had more than four times the intensive care capacity of the NHS.

In Germany and South Korea, the private sector plays an important role in healthcare. In Germany, only 28 per cent of hospitals are government owned. German healthcare economist Frederik Roeder notes that private hospitals in Germany ‘receive the same amount of reimbursement per case as the public ones’ but also have higher investment, which leads to ‘more state-of-the-art treatment and newer medical equipment.’

In South Korea, 80 per cent of people have private health insurance, at an average cost of about $120 per month. Hospitals are able to charge patients more than what the government will refund.

3. Masks or scarves in crowded places

The WHO initially recommended that only medical workers and ill people should wear masks, before making a U-turn. Now, as a spokesman recently stated, the organisation believes ‘we can certainly see circumstances on which the use of masks, both home-made and cloth masks, at the community level may help with an overall comprehensive response to this disease.’

There now seems to be a consensus that disposable masks will not prevent you from catching coronavirus, but – given that surgeons wear them when treating patients – they will help prevent you from infecting others. Logically, if everyone wears them, at least in crowded places, everyone will be better protected than otherwise.

4. Imposing border checks in time

Just as supporters of economic globalisation and relaxed migration restrictions should oppose uncontrolled migration and its chaotic side-effects, it should be clear that during a pandemic, other rules apply. It makes no sense whatsoever to ‘test and trace’ while increasing hospital capacity, when people are allowed to cross borders unchecked.

This harsh reality is what ultimately led countries to shut their borders, after some hesitation. Where firm restrictions were instated early on, for example in Taiwan, the results in fighting Covid were positive. Here, South Korea acted more slowly, and did not restrict travel from China as firmly as Taiwan, which banned nearly all visitors from mainland China and ended up with less than 400 Covid cases, despite its proximity to China. Taiwan did not see the surge in cases South Korea witnessed before it controlled the virus – although one third of South Korea’s cases did originate from a secretive cult.

5. Transparent communication about social distancing

Social distancing is hard to police. Some countries, like Spain, have gone as far as preventing citizens going out for a walk or exercising outside, and have shut down ‘non-essential’ industry. In most European countries with a lockdown, such extreme measures were not necessary, as the public generally respected their recommendations. It’s clear, however, that trust in government can be bolstered by transparent communication. Belgium’s lockdown followed a U-turn by authorities, who had first claimed that Covid-19 was similar to a ‘mild flu’. Distrustful citizens ended up organising ‘lockdown parties’ before the start of the restrictions. When people feel something is being hidden from them, they will not cooperate with future measures.

Treating the public as adults and communicating in a transparent manner is absolutely key. A comparison between South Korea and China or European countries with tough lockdowns illustrates this. 

South Korea’s handling of the outbreak was all about transparency, while relying heavily on public cooperation, to ask for social distancing. The South Korean authorities have reserved extreme confinement to those infected and those they were in close contact with, while recommending everyone else to stay indoors, avoid crowded places, wear masks and practise good hygiene. A similar lockdown-free approach has worked in Hong Kong, Singapore and Taiwan, as well as Germany. For an example of the way public trust was diminished by the authorities, we need only look at the mismanagement of the Chinese government. 

Avoiding draconian lockdowns was perhaps not possible for many countries with insufficient testing or intensive care capacity during this crisis. Precisely because of this, countries wanting to avoid lockdowns in future need to improve these measures, while introducing early border restrictions, recommending masks and making sure government strategies are transparent, next time a crisis like this occurs.

Originally published here.


The Consumer Choice Center is the consumer advocacy group supporting lifestyle freedom, innovation, privacy, science, and consumer choice. The main policy areas we focus on are digital, mobility, lifestyle & consumer goods, and health & science.

The CCC represents consumers in over 100 countries across the globe. We closely monitor regulatory trends in Ottawa, Washington, Brussels, Geneva and other hotspots of regulation and inform and activate consumers to fight for #ConsumerChoice. Learn more at consumerchoicecenter.org

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