Coase and Covid — AIER

Lyle AlbaughLyle D. AlbaughboudreauxDonald J. Boudreaux

Despite claims to the contrary, the case for most of the covid-related, government-orchestrated interventions was never made with scientific rigor. People accepted too quickly the need for mandated school and business closures, social distancing, mask-wearing, sheltering in place, and other nonpharmaceutical interventions (“NPI”s). We do not here refer to the quality of the epidemiology, virology, or other physical sciences that served as justification for these mandates. Nor do we have in mind the various statistical models used to predict fatalities. Our complaint is that an important economic aspect of contagious diseases and government responses was largely ignored. The cost of this ignorance might well prove to be astronomical.

[…]

Mandated NPIs Are Not the Only Option

…An implicit assumption undergirding the mandated NPIs is that ordering people to be confined at home and “socially distant” from each other, despite the resulting massive disruption of economic and social activities, is the lowest cost means of protecting individuals from covid. But even if we grant here that mandated NPIs are an effective means of reducing the physiological harm caused by covid, they are not the only means of achieving this worthwhile outcome. And so, because mandated NPIs are not the only means, they are justified only if they are the means that likely cost the least.

In a follow-up essay we will argue that the option of relying on individuals each to protect himself or herself from covid was too quickly dismissed, to the extent that this option was considered at all. We’ll make the case that, certainly in principle and perhaps also in practice, the best way to deal with covid is to rely on decentralized individual decision-making rather than on government-orchestrated collective action.

Coase and Covid — AIER

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