Friday, April 3, 2020

COVID-19: 50 Suggestions for Reopening the Economy in a Responsible Way

COVID-19 poses a very serious threat: Many more people could die, either from COVID-19, the disease caused by the coronavirus, or from other conditions that could not be properly treated because hospitals are running at or over capacity due to the influx of COVID-19 patients. 

The current strategy that many Western countries follow to deal with the problem is to try to ‘flatten the curve’. In practice flattening the curve requires extreme forms of social distancing and shutting down large sectors of the economy. This too, however, has severe negative consequences: Tens of millions of people could lose their jobs, businesses will go under, retirement accounts lose value etc. All these developments are likely to cause significant health, social, psychological and institutional problems.

At this point it is not obvious that the ‘flatten the curve’ strategy is effective. Judging from results in South Korea, Japan, Taiwan, Singapore, Sweden and other countries, shutting down the economy may not be necessary to deal with the virus in a harm-minimizing way. And looking at countries such as Italy, on lockdown since March 9, it may not even be sufficient.

In addition, when it comes to reducing mortality rates the strategy has severe limits: Unless a vaccine and/or effective treatment is found in record time, a lockdown is not going to stop the virus. It will just distribute the deaths from the virus over a longer period of time. The lockdown is only intended to prevent the additional deaths that could result from hospitals being overloaded.

At the same time, this strategy is likely to cause a significant number of additional deaths due to the before-mentioned severe economic, social and psychological consequences of the lockdown itself. 

But what is the alternative? Are there effective ways to contain the pandemic or at least reduce the number of deaths as much as possible without imposing a lockdown?

First note that shutting down large parts of the economy is incredibly costly, almost unfathomably so. A lockdown means that large parts of the economy simply stop producing. That means billions of dollars worth of goods and services that could have been created are now not being created. Moreover, the stimulus packages intended to enrich politically connected corporations at the expense of everybody else cushion the blow of shutting down the economy are incredibly expensive too, and it will quickly become simply impossible to compensate people for lost wages and revenue if the lockdown continues for much longer.

This means that it is worthwhile to spend considerable sums of money on measures that could help to end the lockdown sooner rather than later.

With this in mind, below are some ideas for how to responsibly end the lockdown and reopen public life. This document will continue to be updated.

[Please note that this document is written by somebody with no expertise in any of the relevant areas. It is purely intended as a starting point for much needed discussion and research. Corrections, suggestions etc are very welcome at @koenswinkels or Please share and feel free to use any content, with or without attribution. 
For an alternative take on the COVID-19 crisis, see this interview with prof Knut Wittkowski who argues not just that the lockdown cure is worse than the disease but that the disease is not as big a problem as commonly thought and that a lockdown makes the disease itself worse.]