– May 29, 2020

Anybody who wishes to argue for a government monopoly which will “centrally plan” any industry or service (in this case public health during a pandemic) needs to come up with some very good reasons. So far, looking at both the theory and reality, I’ve seen no strong case for government to exercise monopoly controls during a pandemic, to say nothing for lockdowns, closures, travel bans, and controls on the population generally. Nothing about the presence about a virus, whether mild or severe, negates the problems with coercive central planning. 

In fact, all the sound reasons why central planning does not and cannot work in the case of the general economy apply equally in this case, along with a few other reasons which are specific to epidemics. 

Here are some of those reasons. 

1. The Knowledge Problem. Central Planners need to know an almost infinite amount of knowledge concerning consumer demand, the resources controlled by producers, the level of prices, production processes, and the infinite variables of time and place. This they can never and will never have for good Hayekian reasons

Central Planners of Public Health need to know who is sick, where they are, how sick they are, what strain of the virus they are suffering from, what are their other physical conditions, what medical facilities they have access to, how they will change their behaviour once they know they are sick, how they got sick, how to stop the spread, and what happens to the virus if it is stopped (since viruses don’t just disappear). 

The nightmare we have been watching unfold about the inadequate and often contradictory, and certainly partial information available to Central Planners of Public Health all over the world should be a warning to us that the knowledge problem here is as insurmountable as anything faced by the Stalinists and Maoists in the past.

2. The Weakness of Mathematical Models. It was a pipedream of the original Central Planners that computers would solve the knowledge problem, or at least make a good fist of processing the huge amount of data that governments and state managers had collected. This was never able to be put into practice because the amount of knowledge was too great (even for computers) and it kept changing faster than they could process it, and because the models they drew up were flawed and did not (could not) adequately describe how the economy worked. 

The same is clearly the case with the mathematical models which have guided the decisions made by the Central Planners of Public Health. The Imperial College London models have had an abysmal track record going back nearly 20 years; their predictions have been astronomically wrong, and it is astonishing that they would have been used today to make such important decisions. The incompetence of the data gatherers in the US and Europe is breathtaking, not to mention the dodgy data being given out by the Chinese government. How do we (could we) know that any future Central Planners would do any better? Would they (could they) come up with a better model? I would say never in a million years.

3. The One-Size-Fits-All Problem. Given the national, regional, ethnic, behavioural, and climatic differences which exist (Hello! it was summer in Australia and not the winter flu season when all this began!) it is again not surprising that the “one size fits all” solution hasn’t worked. It is always the first choice of the Central Planners because it is the most manageable one. If one wants to argue that the future Central Planners would allow more local solutions to be tried and implemented then it would no longer be a “central” plan or a (central) government monopoly, depending on how granular you wanted it to be. 

For a “government” solution to the problem to work, what is the optimum geographical area for this to work: the “empire” (the US or the EU), the nation, the state, the region, the city (the big city or the small city?), the county, the street, the household? What the bumbling of the past couple of months has clearly revealed is that the solution which might suit Brooklyn in NYC is not suitable for the lakeshore town of Dunkirk in upstate NY.

4. The Problem of Cost and Expenditure. Like any Central Planner, Public Health Planners would not know what to spend what amount of money on what district to do what things or on/for whom, not to mention when to start and when to stop. They might say something as general as a “lockdown” or quarantining only the sick would not cost much, but anything beyond that becomes so complex and politicized as to be almost impossible to carry out. All sorts of public choice issues will (and have) occurred, such as Cuomo’s political ambitions, Trump’s hubris, Fauci’s reputation, pharmaceutical manufacturers, the high voting turnout of the elderly, Neil Ferguson’s sex life, etc. Not to mention the irrational panic among the general public fanned into flames by an irresponsible and ignorant mainstream media.

5. The Problem of Unintended Consequences. How do the Central Planners of Public Health calculate the cost-benefit analysis of their proposed measures? At present it seems they were too panicked to give this a second thought, or even if they had the thought to begin with (which I doubt). The all-seeing, all-knowing Planners would have to show how they could do this in a just and reasonable way, which I believe would be impossible to do. They would have to make calculations on how to spend scarce resources which might mean some officials (elected or appointed?) making some Benthamite calculation about who or what constitutes “the greatest number” and what their “greatest happiness” would look like. 

As part of this calculation, you have to consider missed surgeries and medical appointments, deaths from suicide and drug overdoses, depression and famine in other parts of the world, far-reaching economic costs of shutting down businesses, layoffs, enforced isolation, ending freedom of movement, explosion in the debt, monetary expansion and resulting distortion, the “ratchet effect” of the increase in government power, and other effects of the plan. 

6. The Problem of Political Responsibility. If there is one day a government monopoly in the provision of public health, will the Central Planners of Public Health be held legally liable for the mistakes they are bound to make? If their mathematical model of the epidemic is wrong, if the unintended consequences (the costs in money and lives lost) is worse than the disease, can they be sued in court for damages, or at least voted out of office if they are elected officials)? Governments are not good at admitting error much less arranging compensation for the victims of their policies. 

7. The Problem of Individual Liberty. I won’t say more on this than state it. To me it seems rather obvious. 

David Hart

David Hart, Consulting Scholar of the American Institute for Economic Research, was born and raised in Sydney, Australia and has degrees from Stanford University and King’s College, Cambridge. He taught history at the University of Adelaide from 1986-2001 and was the Director of the Online Library of Liberty Project at Liberty Fund in Indianapolis from 2001-2019. His research interests include the history of classical liberal thought in general, and the French classical liberal tradition in particular. He is the Academic Editor of Liberty Fund’s translation of the Collected Works of Frédéric Bastiat. Recent publications include a chapter on “The Paris School of Liberal Political Economy, 1803-1853” for the Cambridge History of French Thought (2019) and the anthology Social Class and State Power (Palgrave, 2018) on classical liberal class analysis. In his spare time, he has also written a screenplay for a film on the activities of Frédéric Bastiat during the 1848 Revolution in Paris.

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