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

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.

Read more 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

Millions of Americans are in the penalty box as we speak.

They have followed the advice of state and local officials and they have stayed home to stop the spread of COVID-19.

Businesses are on hold, birthdays are canceled, travel is limited, and we are glued to our screens to see how this all ends. While some of us have been able to carry on work, essential or not, during this trying time, that’s just not possible for most.

More than 16 million Americans have filed for unemployment benefits since lockdown orders went into effect in mid-March, and economists say we could face as high as 20 percent unemployment by summer.

It is certainly true that many states and cities have saved lives by ordering us to stay home. But blanket lockdowns are now flattening our livelihoods in a way that’s more dangerous than this pandemic.

Danish political scientist Bjorn Lomborg says that by closing all schools and jobs, we are “actually creating more damage, more long-term death, more long-term unemployment and unpleasantness for the whole population compared to what you’re achieving in saving lives.”

He’s right. It’s why Austria and Denmark have already begun to relax their lockdowns and open up their economies, but with social distancing rules still in effect. European leaders see the real damage that has been done to societies, and it is time to turn the tide while remaining responsible.

That is exactly what the American people can do as well.

We can still be responsible by socially distancing where necessary, wearing facemasks, quarantining at-risk groups, and using technology to track the spread of the virus. That is what countries going back to work have done since the start.

That will be more effective than forcing businesses to shutter, driving many of our compatriots to foodbanks or the brink of homelessness.

We have to look no further than our own hospitals.

It is true that many health facilities in major cities are overwhelmed, and we should be sending them every resource where possible.

But by canceling elective surgeries and operations that feed their budgets, rural and county hospitals have ironically begun laying off hundreds of thousands of health professionals and administrative staff. This is not because they are overwhelmed with COVID-19 patients but rather because they do not have any patients at all.

If we are losing health professionals during a pandemic, then we are doing something wrong.

A one-size-fits-all-approach is usually misguided in our federal system, and it’s wrong now. There are 27 states that have had less than 100 fatalities, yet are still imposing crushing lockdowns. It is no wonder so many are itching to get back to work.

It is time to admit lockdowns are not a universal answer to the crisis we face.

Many criticize President Trump for his desire to open up the American economy. But his anxiety is a signal to workers and entrepreneurs everywhere: the pain and suffering of the novel coronavirus are real, but losing your income and prospects for feeding your family is just as bad or sometimes even worse.

Americans are a robust, strong and resilient people. We understand that things may never be the same, but we should be trusted to continue our lives while following the guidance of our scientists and doctors. That is the balance we need to protect our livelihoods and save those most vulnerable.

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