March 16, 2020 Reading Time: 5 minutes

No, AIER is not breaking science news. The parasites its scholars have in mind infest the body politic, looking to extract resources from others for little or nothing in return. This organization has long complained about these rent-seekers and rent-extractors for decades and it is not about to stop now. 

We are not fair-weather libertarians but classical liberals dedicated to truth, justice, and an American Way that seems increasingly under threat. But from the COVID-19 crisis could emerge a new America and a better world if it helps people to perceive reality more clearly. The prospect of death and depression does tend to focus the mind.

Forget about socialism and capitalism. Those terms are simply oversimplifications concocted by academics and activists too lazy or dull to think deeply about economic policies. 

Forget, too, about Republican and Democrat politicians. Most stand for nothing but themselves, seeking power for its own sake, or to enrich themselves or their friends and families. Their party platforms are bundles of logical contradictions aimed at electoral victories rather than reforms.

The key to human flourishing is maximizing competition on price and quality on the one hand and on the other minimizing competition for political favor, a.k.a. parasitism.

To paraphrase a great American statesman, evidence of this dual mandate is written, as with a sunbeam, in the whole volume of human history. To see, just open your mind, let the partisan rage ebb out of your heart, and don’t quibble. The claim is not that markets are always perfect and governments always flawed but rather that competition tends to encourage flourishing while parasitism tends to encourage disease.

Only in the last few hundred years have humans flourished en masse and only in those places where they managed to kill, evict, chasten, or scotch the biggest parasites of all, the sundry monarchs and dictators who had lorded over most of humanity from the beginning of history. The sundry economic revolutions you may have heard of (agricultural, business, financial, industrial, management, market, technological, transportation, urbanization) were merely the salutary effects of shedding mega-parasites and the consequent redirection of much economic activity away from rent -gathering, -seeking, and -avoidance toward competition on price and quality.

Today, denizens of the world’s wealthiest nations all enjoy the benefits of the reformers, revolutionaries, and thinkers who rid their countries of those most obvious and tyrannical parasites. Many lesser worms, however, emerged in the entrails of every body politic, where they have waxed ever larger and more pernicious.

When one country confronts another infected by similar parasites, the tolls the parasites exact largely cancel out and hence remain barely noticeable. One bungling military eventually defeats another (perhaps after years of botched campaigns and millions of deaths) or the lethargic industry of one country gives way to the slightly more vigorous industry of another.

But when humans confront the natural world, the effects of economic parasitism become obvious. Natural disasters decimate nations, like Haiti, still ruled by mega-parasites. Wealthier nations fare better but the weaknesses their lesser worms create or exacerbate remain palpable. Hurricane Katrina, for example, almost completely destroyed one of North America’s gems, New Orleans, because of an ill-fated attempt to centrally plan the Mississippi River and Delta development.

What exactly are these lesser worms and how have they helped to spread COVID-19?

Foremost is a government that has strayed from its original, limited mission of providing pure public goods, services that people want that private producers cannot profitably provide. What goods that entails is not always clear but controlling pandemics is a much better candidate than most other services American governments currently try to provide. 

Instead of identifying and focusing on its core mission, the government, like any good parasite, has bloated and stretched itself into so many areas that it is over-extended. Instead of doing a few key things well, it does many, many things it shouldn’t be doing at all, and usually poorly at that.

If the U.S. government did not waste so much money on, for example, higher education financing, it could fund the CDC sufficiently to ensure the development of technologies that would automate and speed up viral analysis and vaccination. It should be able to discern in days, not weeks or months, if the best reaction to a new threat is quarantine, herd immunity, or simply information dissemination. This is no pipe dream. It took the Human Genome Project years to sequence the DNA of Homo sapiens but it can now be done in about an hour (which is about where we got with old-fashioned pictures before digital cameras came along).

The fact that medical researchers still do not understand basic tradeoffs between variables like host mortality and viral transmission rate is astounding. Basic science, an area claimed by government, is clearly some combination of insufficiently funded and inefficient, the former due to mission creep and the latter due to the incentive problems endemic in most government endeavors.

The healthcare system is another parasite. Like the government, it gorges itself on an increasing percentage of GDP every year but does not offer an equivalent in return. Both healthcare and higher education work with government to ensure maintenance of the status quo, especially restrictions on open competition in terms of price and quality.

Most COVID-19 deaths in the United States to date have occurred in a single facility, one of our nation’s numerous poorly run nursing homes. Such facilities abound because of CONs, or certificates of need, i.e., government limitations on the number of nursing home beds. If you don’t like the way the nursing home is treating granny, or feel that $8,365 a month for room, board, and a little medical attention is too much, too bad! In many states, nobody can lawfully step in to provide a superior service or lower price despite clear empirical evidence that CONs suck the life out of the elderly and cash from their families.

Other problems are more difficult to diagnose. For example, I cannot find anti-viral gloves for sale anywhere. They do exist, though they seem to have found only niche acceptance by HCPs and little general public recognition. For some reason unknown to me, nobody had sufficient incentive to develop an affordable commercial product that would actively kill a virus when people voluntarily wearing such gloves automatically clean frequently touched surfaces simply by going about their business.

Regular medical gloves help to protect the wearer and can slow the spread of a virus if worn by a carrier. They can transfer nasties from one surface to another, however, which is why HCPs discard them after each use. A glove treated with an anti-viral agent (or anti-bacterial as the case may be), by contrast, would not only prevent transfer, it would micro-clean elevator and other buttons, bathroom doors, and other frequently touched surfaces. And if some genius could get the gloves to work on increasingly ubiquitous touchpads, another source of disease transfer would bite the dust. 

Instead, many Americans think effective the human cleaners charged with disinfecting subways and other public places, as if their work could not be undone by one cough, sneeze, or infected bare finger. Our public K-12 education system inculcates in Americans the notion that some benevolent government official can wave a magic wand and protect us all. University study used to disabuse Americans of such notions but, alas, not so much anymore as the academy has fallen into the hands of Left-leaning scholars and administrators.

The so-far easy acceptance of the government’s medieval reaction to the spread of a not very lethal virus to a vanishingly small percentage of the population suggests that universities are not helping Americans to overcome the many behavioral biases they inherited from their cavemen ancestors. 

To be fair, though, buying unusually large amounts of toilet paper may have more to do with Americans’ fear of government’s response to the virus rather than fear of the virus itself. FDR may have been right that we had nothing to fear but fear itself but his New Deal helped to feed several of the parasites currently weakening Americans’ ability to combat COVID-19.

Robert E. Wright

Robert E. Wright

Robert E. Wright is a Senior Research Fellow at the American Institute for Economic Research. He is the (co)author or (co)editor of over two dozen major books, book series, and edited collections, including AIER’s The Best of Thomas Paine (2021) and Financial Exclusion (2019). He has also (co)authored numerous articles for important journals, including the American Economic ReviewBusiness History ReviewIndependent ReviewJournal of Private EnterpriseReview of Finance, and Southern Economic Review. Robert has taught business, economics, and policy courses at Augustana University, NYU’s Stern School of Business, Temple University, the University of Virginia, and elsewhere since taking his Ph.D. in History from SUNY Buffalo in 1997.

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