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The Lockdown-Quagmire

The Lockdown-Quagmire

Economics tells us that every decision comes at a cost, an opportunity cost. In the same period of time that I am writing this article, I could have done other things. Deciding to spend time writing automatically entails missing out, for example, on watching TV, reading a book, or writing other pieces. The missed opportunities are the costs of writing this article.

This insight of economic theory has a brutally practical consequence: people are faced with tradeoffs. People seek to balance the alternative they are pursuing against the opportunity costs they incur while doing so. People weigh up what they are doing against what they are missing. The outcome of this tradeoff is a certain level of activity economists call an optimum. At the optimum, doing something and missing out on other things are of equal subjective value.

Optimality-conditions, i.e., trading off between alternatives, exist not only in economic theory, but, for example, in politics and some types of ethics, too. The choices made in order to mitigate the Covid-19 pandemic showcase them. Many governments were faced with the option of locking down social and economic activity. Of course, lockdowns come at cost: loss of social ties, decrease in GDP, increasing the number of people at risk of poverty, public discontent, and many more.

Since lockdowns come at a cost, the decision to implement them is a tradeoff seeking optimality-conditions. There are several ways in constructing this tradeoff. The easiest is to compare its advantages and disadvantages. This approach is, however, static since it presupposes that all lockdowns are the same. In reality, there are several differences between them, for example, regarding their length, their scope and scale or how strictly they are implemented. Also, measuring their impact on society and the economy calls for a metric.

One way of trading off these components is to analyze how the increase in the intensity of the lockdown impacts an economy’s value added. In this case, the intensity of the lockdown – metricized, for example, with the University of Oxford’s lockdown-stringency index – and the country’s Gross Domestic Product (GDP) – as a proxy for social and economic activity – can be compared against each other. The result is the “optimal intensity of the lockdown”, i.e., a level of lockdown at which the intensity and the economic loss are in balance. If the lockdown becomes more intensive, the economic and social loss grow too much in proportion to it.

This way of trading off is, indeed, nuanced. But it still disregards many factors, for example the benefits of lockdowns in terms of them being a protective measure. Utilitarian ethics provides an extended framework for this. It would assess all the benefits – technically called utility – of the lockdown and contrast them with all of the discomfort or harm – technically called disutility – they may cause. The result of this tradeoff, too, is an “optimal” level of lockdown, only that this time it is the broader measure of utility and disutility that determine the optimality-conditions. 

However: Not all decisions can be based on tradeoffs. At least that is the claim of a different view of ethics. Deontology believes in fundamental values that cannot be subjected to tradeoff. Liberty, autonomy or dignity are among them. Deontologists do not oppose the methodology of trading off in economics; they oppose it as a way of deciding on ethical matters, and they surely opposed it as a method for legitimizing lockdowns. In the deontological view, no measure that curbs fundamental values can be legitimate.

Now what? This overview shows why the discussions and decisions about lockdowns are difficult; one might call them a quagmire. First, there is no imperative to lock down societies and economies, even, or especially, as a measure against the pandemic. Second, from some points of view, a lockdown can be justified up to a point, to its optimum. Third, finding this optimum is an exercise in trading off. But finally, not everything can be traded off; at least for the deontologist, fundamental values such as liberty and dignity cannot be curtailed; notably by a lockdown.

Note: For an extensive exposition of the stated argument, see Henrique Schneider, “Covid-19: A Trade-off between Political Economy and Ethics”, Statistics, Politics and Policy, June 2021.

 
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OEconomica No. 1, 2016