Doug Garnett’s Blog

Menu

 

What level of death makes self-inflicted economic disaster appropriate?

What level of death makes self-inflicted economic disaster appropriate?

Over the past few days I’ve become incredibly frustrated with the discussion around the Corona Virus. But don’t get me wrong:  This is serious and my household has taken serious steps to hunker down and limit contact. We are very careful.

My concern isn’t that we’re taking serious steps. It’s what our society isn’t doing while that happens: engaging in the important discussion:

What level of death makes self-inflicted economic disaster appropriate?

My first truth: I don’t know the answer. And we can’t necessarily wait to answer the question fully before taking any steps — there just isn’t time. At the same time, a process like this (where we make decisions on the fly) is a classic case of managing amid complexity.

Societies fail in situations like these by focusing on only one question — two or three makes our heads spin. Today, that question seems to be:  How do we minimize death.

Unfortunately, while I am emotionally pained to say it, that isn’t the only question. We must be aware of all the costs around minimizing death and make smart choices in the area of gray where perhaps we minimize or maximize nothing — and end up with the most successful answer.

The following is merely a stumbling attempt to frame a discussion. I look forward to hearing all kinds of opinions in response. Let’s frame it with three points:

This Corona Virus appears quite virulent. If the death rate is high than we’re facing very large loss of life

This corona virus is incredibly virulent (although not as virulent as the measles from what I read).

So it appears that most of us will come in contact with the virus — a very large % of every society on earth will at some point be sick.

We don’t know the death rate. It appears likely to be between 0.5% of infected and 4% of infected. But it could be higher and might be lower.

That is a huge gap. I’m not going to bemoan the fact we don’t know. We don’t and we can’t at this point — not enough time has passed.

When a complex, emerging reality like a pandemic arrives, we won’t know much and have to make decisions on the fly with heavily imperfect data. Yes. As imperfect as this is.

I’m not quoting anyone in that rate of death — I’m just bringing together rates from a range of articles I’ve read on the subject.

Eventually we will know. But we can only know with any certainty once testing for the virus is widespread. That isn’t going to happen soon.

The economic impact of measures to control the virus are also unknown, though clearer.

As governments around the world take measures to control the spread (the primary one unfortunately called “social distancing”), those measures are causing economic impact. Small business. Large business. Consumer goods. B2B. Stores. Online stores. All these businesses will suffer. And when the businesses suffer, the people who work for them suffer badly.

At an extreme, we could project forward and suppose the economic impact turns out far worse than predicted and realize that keeping a stronger economy while absorbing a higher death rate would have left the world in a better place.

That’s just theorizing. But I hope it helps frame the discussion.

Can we engage a discussion?

I’m not naive enough to think it’s an easy discussion to have. But let me posit some sub-questions:

    • Suppose it ends up that the death rate is 0.5% (about 5X that of the ordinary flu). How much economic cost should be incurred to reduce the spread of the virus?
    • Suppose it ends up that the death rate is 4% (about 40x that of the ordinary flu). Will the economic cost pile on top of the death rate to make things worse? Or will controlling the flu reduce the % of society who dies to have been worth it.

Atul Gawande wrote in his book “Being Mortal” about the tendency in the US to value “survival” above all else — above the elderly enjoying the lives they live. We essentially make this “priceless”. That means, as a society, we extend lives with treatments which make that life barely worth living.

I hope that frames a question or starts a discussion

Maybe the question is well framed. Maybe it’s just ranting.

But can we, for once, begin talking about the really important issue:

As a society, how do we trade off economic disaster and human disaster? And at what mid-point should our society live?

Stay safe out there. I’m hunkered down and planning ways for my remote teaching next quarter to succeed. And I’ve offered a couple of other observations below but didn’t want to clutter the main question with them.

©2020 Doug Garnett — All Rights Reserved


A few additional thoughts:

This isn’t a new question.

Certainly philosophers have circled around this idea with “thought games” for centuries. Those endless navel gazing interest me very little. This isn’t a theoretical question — our society deals with it daily.

Take the endangered species act. From what I read about the act, there’s no attempt to balance the needs of human society (and potential damage therein) with the needs of the species.

Don’t get me wrong. It has saved some incredible species and done incredible things. But failing to balance the needs of human communities with animal populations seems a classic human failure.

We never ask the question.

Throughout government, we very rarely ask the question and almost never get to a shared answer.

I took an economics class from an ardent socialist in college. What he saw (with frustration) was that Roosevelt’s safety nets had preserved society because we had never descended into the chaos of those countries where ardent socialism took strong hold. Of course, I like the way it turned out here.

But notice:  Liberals argue for a safety net based on morality — not on the truth that it’s important for a stable society. Conservatives and libertarians argue against it with accusations of “do-gooders”.

There are valid questions on both sides. Yet the question remains:  If supporting the poor makes our society more stable, shouldn’t we admit that and make “stability” our goal rather than do-gooding or claiming everyone should bootstrap?

 

 

Categories:   Business and Strategy

Comments