November 9, 2020 Reading Time: 5 minutes

I love books. Physical books. I buy plenty of them. 

Needing another bookcase, on Saturday I drove twenty-seven miles to the nearest IKEA store to seek one out – one to match another that I bought from IKEA not long ago. Should have been a snap. 

Upon walking into IKEA, I felt my spirits lift. The capacious store was crowded with people doing commerce! Wonderful, peaceful, mutually advantageous commerce! Were it not for the universal mask-wearing and the many people frantically slathering their hands with sanitizer, the scene looked like any normal, pre-Covid Saturday at this splendid capitalist furniture emporium. 

Alas, my spirits didn’t remain high for long. When I arrived among the bookcases on display, I soon found the floor model of the one I wanted. But a little tag, dangling beneath the price and product information, read “Temporarily Unavailable.” 


So I looked around for other bookcases on display that might catch my fancy. Happily, I found three other styles that I like. Unhappily, each was “Temporarily Unavailable” – as were many of the other styles. 

I left the store empty-handed. 

Insidious Inflation

Driving home in disappointment I reflected on the fact that the prices marked on the bookcases seemed normal and reasonable – that is, at levels that, pre-Covid, I would have expected. But a bookcase unavailable at a “reasonable price” is worse than one available at an exorbitant price. 

Further reflection called to mind a keen insight offered recently by my colleague Tyler Cowen: During the Covid calamity, inflation measures are highly unreliable, perhaps even meaningless, when used to gauge changes in our standard of living. Monetary prices might remain largely unchanged, but if the quantity or quality of what can be gotten at those prices declines, then consumers are victims of inflation. 

This inflation – call it “insidious inflation” – is every bit as real as is the overt inflation that occurs when monetary prices rise. With both kinds of inflation each consumer dollar buys less than it would otherwise. Yet insidious inflation is worse than overt inflation. Unlike overt inflation, which allows consumers to get exactly what they want by paying more money, insidious inflation often results in consumers being denied the opportunity to purchase at any price exactly what they want. 

Once you’re aware of its existence, it’s impossible not to notice the prevalence today of insidious inflation. Seating availability at restaurants and bars is reduced. Masks make waiters’ words more difficult for diners to hear. Although better stocked now than in the Spring, supermarket shelves aren’t yet as full as they were pre-Covid. Because “social distancing” norms cause some checkout lanes to remain closed, checkout times at supermarkets are longer. And at the risk of being too personal, while at IKEA I had to wait an extra long time to use the restroom because some of the urinals were blocked off in order, as a helpful sign informed me, “to ensure proper social distancing.” Ugh. 

It’s now more difficult to get face-to-face appointments with physicians, Apple Genius Bartenders, and other service providers. 

Many retailers and restaurants have reduced hours of operation. 

Most obviously from my vantage point, the quality of instruction that students receive online is horrendous compared to what they receive face-to-face from teachers in actual classrooms. Indeed, even today’s relatively rare face-to-face classroom instruction is worse than was such instruction pre-Covid: masks muffle teachers’ voices, and students must endure the discomfort of wearing masks during class. 

Little or none of this product unavailability and consumer inconvenience shows up in higher posted – “nominal” – prices. Measured inflation, therefore, remains low. But real inflation – now largely insidious – is much higher. How could it not be given that governments continue to arbitrarily obstruct the production and supply of goods and services? 

Covid-19 Is Not Cataclysmic 

This outcome was avoidable. It occurred only because of the maniacal and utterly unwarranted overreaction to Covid-19. On this matter, I strongly disagree with Tyler Cowen. 

As Matt Ridley recently noted, “Covid is not a very dangerous disease for most people. The death rate is probably around 0.2 per cent of those infected, and most who die are elderly and suffering from other medical conditions.” Indeed. And then there’s this further reality: As of November 6th, all U.S. deaths in 2020, from all causes, are 112% of total expected deaths. This higher-than-expected number of deaths is indisputably sad and regrettable. But it’s hardly so far out of the ordinary as to justify the so-extremely-far-out-of-the-ordinary hysteria and response. 

I’m convinced that Covid’s reality – especially Covid reserving its dangers overwhelmingly for old people – justifies neither the level of fear still surrounding Covid nor governments’ unprecedented disruption of economic and social life. Not even close. 

Tyler, in contrast, argues that the age distribution of Covid fatalities is unimportant, at least for crafting policy responses. The headline attached to his Bloomberg column on this matter asks about Covid’s disproportionate impact on the elderly “So What?” Although Tyler likely didn’t compose the headline, it accurately captures his column’s letter and spirit. 

He writes there, for example: “But the event itself is so cataclysmic that ‘downgrading’ those deaths by saying many of the victims were elderly doesn’t make a big difference in terms of formulating an optimal response.” 

Tyler’s mistaken. A disease that poses almost no danger to the overwhelming majority of the population, while reserving its dangers overwhelmingly for the old and infirm, is not cataclysmic. Tyler, though, apparently starts with the presumption that Covid is cataclysmic, and concludes from this presumption that, therefore, attempts to counsel moderation in the response to Covid by noting its disproportionate impact on the elderly are misguided. His thinking seems to be that responses to cataclysms shouldn’t be moderated by attention to details such as the age distribution of victims. 

What Tyler misses is that those of us who point out that Covid is overwhelmingly a threat only to the old and infirm are thereby identifying an important reason for rejecting the belief that Covid is cataclysmic.

To contend that Covid isn’t cataclysmic is not to contend, or even to imply, that Covid’s dangers aren’t real. They are real, but almost exclusively for old and ailing people. And because of this fact, Tyler is wrong to argue that failure to respond as radically and as indiscriminately as most governments have done would have dangerously discredited governments in the eyes of their citizens. Surely the most credible – surely the “optimal” – response by government is one that is proportionate to the danger posed. And such proportionality requires taking into account relevant realities such as large age-group differences in mortality rates. 

But by failing to take account of Covid’s differential impact on people according to their age, governments have compromised their credibility. By falsely treating everyone from kindergartners through college students and even middle-aged folks in normal health as if they all are as imperiled by Covid as are residents of nursing homes, governments signal a disregard for relevant facts. They reveal that they’ll seize upon any crisis, inflate it opportunistically, and use it as an excuse to grab more power regardless of the underlying realities. 

In short, contrary to building up its citizens’ trust in the ability and willingness of government to respond effectively to crises, each government that ignored or discounted the importance of the reality that Covid is overwhelmingly a danger to the elderly has given its citizens very good reason to distrust it to respond effectively to future crises.

Tyler advocates “state capacity libertarianism.” The basic idea is that, in addition to having liberty, individuals should also have competent governments with the capacity to deal with crises, including pandemics. I’m emphatically not a state-capacity libertarian. I’m simply a libertarian, without prefix or suffix. But if I were a libertarian of the state-capacity sort, I’d oppose, perhaps even more strongly than I already do, the Covid-inspired widespread government lockdowns.

Donald J. Boudreaux

Donald J. Boudreaux

Donald J. Boudreaux is a Associate Senior Research Fellow with the American Institute for Economic Research and affiliated with the F.A. Hayek Program for Advanced Study in Philosophy, Politics, and Economics at the Mercatus Center at George Mason University; a Mercatus Center Board Member; and a professor of economics and former economics-department chair at George Mason University. He is the author of the books The Essential Hayek, Globalization, Hypocrites and Half-Wits, and his articles appear in such publications as the Wall Street Journal, New York Times, US News & World Report as well as numerous scholarly journals. He writes a blog called Cafe Hayek and a regular column on economics for the Pittsburgh Tribune-Review. Boudreaux earned a PhD in economics from Auburn University and a law degree from the University of Virginia.

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