TheMarketForIdeas

As the lockdown has been relaxed (in Romania, the homeland of TMFI), yet social distancing is still a sacrosanct recommendation, we release the second episode from our collection of editorial products, this time from our in-house harvest. We hope that the variety and the quality of these “corona-readings” to function as a cure equally for unjustified anxieties and for mind hibernation. 

(20) Some Thoughts on COVID-19 Pandemic Shock 

“We think the COVID-19 pandemic shock ‘verifies’ the following features: the shock is atypical, external, and non-economic.” (Emil Dinga) 

(19) Three Paradoxes of the Territorial Distributions of Contaminations with COVID-19 

“The pandemic plays the part of a parallel world, which seems to push the countries of the world into a “strange” competition, as if they were competing to get as much contaminations as possible.” (Cezar Mereuță) 

(18) The Romanian Government’s Underwhelming Response to the COVID-19 Crisis 

“There is no active – in some cases even experimental – strategy, no special health care crisis unit, no real-time research and goal-oriented policy.” (Bogdan C. Enache) 

(17) Pandemic: How to Avoid What Is Worse 

“Besides the tragedy of human casualties … the worst-case scenario would be the one where, after a major economic crash, we will find that … an extreme event was used to erode freedoms.” (Lucian Croitoru) 

(16) Exploring the Transformation of Human Work in Relation to the Shock of the Novel Coronavirus Pandemic 

“This partly natural, partly social transformation, and of course under the influence of politics, will reshape the global conditions of the labour market.” (Monica-Florica Dutcaș) 

(15) Mutating Mindsets and Contagious Behaviours 

“When we look at human economic behaviour through the lenses of the two paradigms [neoclassical vs. and behavioural economics], we see quite differing pictures.” (Adrian-Ioan Damoc) 

(14) Smith, Hayek and the Virus: Entrepreneurial Responses in Times of Crisis 

“The fact that some of the indispensable ideas of entrepreneurial initiative stem from times of humanitarian crises should not mystify us.” (Vlad I. Roșca) 

(13) Pandemic: Of Words, Beasts, and the Gates of Peace 

“In a time of crisis, words are given more gravity and power than ever. One must be careful how one uses them and mindful of their boomerang effect.” (Georgiana Constantin-Parke) 

(12) Corona-Economy: From Crisis to Rebuilding Trust 

“The Corona-Economy is already the grand economic challenge of the year 2020, but also of the political establishment.” (Cosmin Marinescu) 

(11) The COVID-19 Pandemic – Changing the Paradigm 

“COVID-19 is a zoonotic virus, bats appear to be the reservoir of COVID-19 virus, but the intermediate host(s) has not yet been identified.” (Florin Paul)

The following set of short pieces is an updatable selection, amid the myriad of collections that can be assembled, of “corona-readings” that, hopefully, have the property of keeping us sealed off from hasty worries and making reasonable arguments “viral”. It is the first episode in a series of monthly refreshable editorial signals of TMFI & third-party scholarly & mass media productions. 

(10) The cure may be worse than the disease 

A recent Imperial College London report was a sobering assessment of the challenge facing our societies. The report concludes that “epidemic suppression is the only viable strategy at the current time. The social and economic effects of the measures which are needed to achieve this policy goal will be profound”. The various states should be reacting not only to what we know of the virus, but also to what we do not know for sure, such as transmission rates and the like. But the various social distancing measures to be adopted, such as closing down schools, limiting mobility and contact, will have a disruptive effect on the entirety of society. The economic press has switched from using the word recession to using the word depression. The report also notes that “long-term suppression may not be a feasible policy option in many countries. Our results show that the alternative relatively short-term (3-month) mitigation policy option might reduce deaths seen in the epidemic by up to half, and peak healthcare demand by two-thirds”. The issue is not just with economics in terms of numbers and mortgages, but with the actual running of society and the provision of critical goods and services, such as food, water, medical supplies etc. There is also an issue with how much a population cooped up in its homes can stand before we get political consequences, and the management of this pressure is very important, as too early reduction in measures may see a resurgence of the virus.

Just a few days after the publication of the report, its chief author, Dr. Neil Ferguson, was also diagnosed with the disease. In his words: “Sigh. Developed a slight dry but persistent cough yesterday and self-isolated even though I felt fine. Then developed high fever at 4am today. There is a lot of COVID-19 in Westminster”.

(Alexandru Georgescu)  

(9) Book readers’ “Love in the Time of… Corona” 

We are living in interesting times (if we are to recall the supposed Chinese curse). In such “interesting times”, panicked people are depleting the shelves of supermarkets of the most precious kind of paper (even more than paper-money, which they give-up gladly in exchange for the rolled sheets). But even if toilet paper has a premium over the noble pre-printed sister that is packed up between sober or fancy covers, if there ever were to be a shortage of books, surely the best candidate for such penury will be the gloomy readings speaking of disease and despair. Here the “supply side” accommodates epochal pieces which had survived periods of both affluence and austerity, the latter sometimes associated with contagions of the bodily kind (with all the assorted social/economic/political disarray, inviting mental health issues as well). From Gabriel García Márquez’s Love in the Time of Cholera, Albert Camus’ The Plague or Thomas Mann’s Death in Venice to Charlotte Brontë’s Jane Eyre, Mary Shelley’s The Last Man or even more back in time to Boccaccio’s The Decameron, belles-lettres could not stay away from capturing the social metabolization of maladies. And contemporary literature seems even more generous, if we follow the recommendations of respectable life-style section bookworms penning for, e.g., The New York Times, Time, The Evening Standard or The Guardian. We’re waiting now for the reaction of the “demand-side”.

(Octavian-Dragomir Jora)  

(8) The best data we are ever going to get 

With every day seeming like an eternity and our eyes glued to each other, it has become difficult to keep up with all of the SARS-CoV-2 (that is “severe acute respiratory syndrome coronavirus 2”, the official name of the virus) development. Does anyone remember the cruise ships stuck in port in quarantine in Hong Kong and in Yokohama, Japan (also, there is one in San Francisco, but did not really make the news)? Well, there are a few new papers collating the results from the Diamond Princess ship in Japan. This is important because, in the messy real world, there are no opportunities for such a study – thousands of people in close proximity to each other, sharing air ventilation systems and facilities, with permanent monitoring by doctors. This represents a wealth of details in a natural experiment we could not replicate otherwise (ethically). The 3,711 passengers and crew members on-board were a pretty mixed bunch, though not necessarily representative – the crew are generally young and fit, and half the passengers were elderly (average age onboard was 58). By February 20^th, 17% had been infected, half of them being asymptomatic. Seven deaths were recorded (the naïve case fatality rate), though more may come with a lag because of complications. This is a 1.1% fatality rate, heavily biased towards the elderly, and a 0.18% fatality rate for the whole population. Of course, the numbers are reported in confidence intervals. The report says that “adjusting for delay from confirmation-to-death, we estimated case and infection fatality ratios (CFR, IFR) for COVID-19 on the Diamond Princess ship as 2.3% (0.75%–5.3%) and 1.2% (0.38–2.7%)”. Not being an expert on cruise ships, I ask myself whether you are more likely to get infected on a cruise ship or off it. Because the various other reports have been bandying about figures of up to 60% or more of the population getting infected. Since it is far easier to track the number of dead people than the number of infected, we have very little idea of what the true fatality rate is for the disease. Another article says that “infections and deaths onboard suggest that the disease’s true fatality ratio in China is about 0.5 percent, though that number may vary from place to place, researchers report March 9^th in a paper posted at MedRxiv.org. That 0.5 percent is far less than the 3.4 percent of confirmed cases that end in death cited by the World Health Organization, but troubling nonetheless. The WHO’s number has come under fire because the true number of people infected with the virus worldwide is not known”.

(Alexandru Georgescu)  

(7) “The Walking Dead” alludes to living people 

Watching movies (and/or marathons of episodes from movie-series that normally are issued with a sometimes-exasperating weekly frequency) in the comfort of our (self-)imposed home-offices is one of the delights of these days. Especially when books don’t look so appealing and sports fields have shifted to online gaming platforms. Of course, ranking high nowadays – at least as high as are, for some, the Home Alone pentalogy in the Christmas season and biblical motion-picturization during the Easter holidays – are the “zombie” productions due to their resemblance (hopefully not to the end) to the current distress: a virus escapes from medical labs (as opposed to bat-hosted spontaneous mutations in the case of Corona) and transforms people into “walking dead” creatures. Probably the best sample is AMC’s The Walking Dead, revealing a “zombie apocalypse” where the very few and dispersed survivors are fighting the deadly “somnambulist” creatures as well as their equally deadly fellows engaged in some ruthless carnage for the “survival of the fittest”. Notably, the series is not dramatic only for “zombies – humans” clash, but make for a fastidious capturing of the reset of civilization from scratch, yet in the tight confines of a “life-boat” world where state apparatuses lost control over everything and markets languish. Novel human relations relive slave-master rapports, feudal landlord-vasal oaths of obedience or islands-of-socialism, far from the modern human freedoms, equal rights and rule of law. An economically realistic dystopia.

(Octavian-Dragomir Jora)  

(6) Australia and good governance 

A lot of people have criticized the Australians for an inadequate response to climate change and to the huge fires that raged throughout the country until recently. Some of it is warranted, but most of it is people not knowing how difficult true governance and decision making are. I was surprised to see what a well thought out plan for economic support throughout the SARS-CoV-2 crisis the Australian Government has laid out. Readers can find the overview here, along with a fact sheet for businesses, for investors, for households and for regions. Of course, as the poet Robert Burns said, “the best-laid plans of mice and men often go awry”. With so many unknowns regarding the Corona-crisis and the global and local reaction to it, one does not know if the stimulus is sufficient, if it is well targeted or if it does not overlook a key detail that will come back to haunt the government. The “economic response totalling $17.6 billion across the forward estimates, representing 0.9 per cent of annual GDP” is meant to provide adequate healthcare, stimulus payments to households to maintain income, cash flow assistance, asset write-offs and investment support for businesses. Of course, if we see a consumption crunch, we might not see new investment materializing, regardless of government backing. The usual critics will say that it is either too little or too late, but it is the case with every slow-burning disaster that measures which are first seen as too outrageous are ultimately seen as insufficient. It is especially interesting for a very right-wing government to be forced to adopt such intervention measures in the economy and I do not think that they will end by June 2020, as the document implies. They will have to be extended. Still, one cannot fault them for their quality of strategic communication.

(Alexandru Georgescu)  

(5) It is a gurus’ world (especially during crises) 

Well-known for his best-selling, yet criticized books (but isn’t it true that criticism is the best advertisement?), historian Yuval Noah Harari said in an op-ed signed for Financial Times that humanity has to make two types of choices in these tense moments: the first is between “totalitarian surveillance” and “citizen empowerment”, while the second is between “nationalist isolation” and “global solidarity”. His fears are converging to the idea that current state involvement might become chronic, persisting in the societal landscape on “preemptive” rationales, but to the detriment of human freedoms. At his turn, Klaus Schwab, “founding-father” of the World Economic Forum and “god-father” of the Fourth Industrial Revolution, continues to act as “Amphitryon” for global trend-setters, inviting business (and political?) leaders to join the COVID Action Platform that aims to “1. Galvanize the global business community for collective action. 2. Protect people’s livelihoods and facilitate business continuity. 3. Mobilize cooperation and business support for the COVID-19 response”. Fully against the tide swims Elon Musk, the creator of SpaceX and Tesla, who made no secret in downplaying the pandemic labelling panic as dumb, postponed the temporary closure of one of his factories in California, while promising to provide ventilators “if a shortage”. No viral wording yet from Thomas Piketty, the anti-“propertarian” and pro-“democratic” (by means of taxation and nationalization of unequal wealth) economic prophet.

(Octavian-Dragomir Jora)  

(4) Dissenting from the expert consensus 

A very interesting essay was recently published by StatNews, authored by Prof. John P. Ioannidis, an epidemiologist/statistician from Stanford University. In it, he laments the lack of data on which governments can base draconic social distancing measures. Ioannidis is famous for having been the first to sound the alarm, in 2005, regarding the replication crisis in academia, especially in research, in an article titled “Why Most Published Research Findings Are False”.

As for the current crisis, he argues that the data is unreliable, as regards infection rates and death rates, not to mention the actual characteristics of the virus and its transmission. With a wide scale vaccination program 18 months or more away, the measures that are currently being adopted promise sever disruptions over the long-term. This disruption can cause even greater suffering and loss of life. Ioannidis says that “we don’t know if we are failing to capture infections by a factor of three or 300. Three months after the outbreak emerged, most countries, including the U.S., lack the ability to test a large number of people and no countries have reliable data on the prevalence of the virus in a representative random sample of the general population. This evidence fiasco creates tremendous uncertainty about the risk of dying from COVID-19. Reported case fatality rates, like the official 3.4% rate from the World Health Organization, cause horror – and are meaningless. Patients who have been tested for SARS-CoV-2 are disproportionately those with severe symptoms and bad outcomes. As most health systems have limited testing capacity, selection bias may even worsen in the near future”. He claims that “projecting the Diamond Princess mortality rate onto the age structure of the U.S. population, the death rate among people infected with COVID-19 would be 0.125%”, though based on a very limited sample size and with other issues thrown into the mix; “adding these extra sources of uncertainty, reasonable estimates for the case fatality ratio in the general U.S. population vary from 0.05% to 1%”. We have similar problems actually estimating the number of people dying from common colds (including coronavirus related) and influenza, since many feature multiple viruses at the same time, and suffer from other issues (such as the elderly). He also criticizes the strategy of “flattening the curve” by delaying infection to prevent the medical system becoming overwhelmed, since that leads to a protracted allocation of medical resources at the expense of the other diseases and problems which we face, and would cause other fatalities. Ultimately, “one of the bottom lines is that we don’t know how long social distancing measures and lockdowns can be maintained without major consequences to the economy, society, and mental health. Unpredictable evolutions may ensue, including financial crisis, unrest, civil strife, war, and a meltdown of the social fabric. At a minimum, we need unbiased prevalence and incidence data for the evolving infectious load to guide decision-making”. A reply addressing these issues and reiterating the risks and ethics of inaction was later also posted by StatNews.

(Alexandru Georgescu)  

(3) In the state of emergency, philosophy resists 

When descending from the plane, at Malpensa airport near Milan, coming from Shanghai, carrying with them 400,000 masks and 17 tons of equipment, the delegation of Chinese medics greeted their Italian counterparts with a message not (as some stereotype thinkers might have expected) from their ruler Xi Jinping (however, a friend of Italy and proponent of a Health Silk Road). They displayed a banner inspired from the hosts’ ancestor, Seneca: “We’re waves from the same sea, leaves from the same tree, flowers from the same garden”. Seneca was a “late stoic”, where stoicism was a philosophical school imported by the ancient Romans from their conquered Greece. Stoicism states that we cannot really control what is happening to us, but rather the way we react to what is happening to us. Thus, virtue might be sufficient to be happy while things that are beyond out power – health, wealth, fame – should leave us untouched. Life is uneasy and unstable, so the goal is to stay chill in the face of harshness. The Chinese, with their 5000 years of continuous mindfulness, had their own variety of “stoics”. For instance, Lao Tzu preached the idea that a wise concern is to own only essential belongings and to travel light throughout life. Such teachings may have a particular meaning now, when humans are confronted with something that encroaches to the majority of “our” heavily hedonistic habits. Even if for some it might seem counterintuitive to learn about well-settled thoughts amidst hasty chains of events, a wink of reflection will not hurt.

(Octavian-Dragomir Jora)  

(2) There is life after this crisis 

The recent publication of the Global Trends 2020 report (a survey of people from 33 countries conducted prior to the outbreak), to be followed by this year’s crop of global reports from the World Economic Forum and many other institutions and companies, is very important for us. The newer reports will acknowledge the importance of the current coronavirus crisis and imprint some urgency on the elite classes, especially in the US, but they will also give us an important reminder. This too shall pass – the crisis is one of many that are headed the way of the globalized society, and, while our attention has a laser-like focus on this one, we must remember to look towards the future and consider the long-term problems and trends, in demographics, in technology, in politics and resources, and even in epidemiology, as the World Health Organization has previously warned that hundreds of localized epidemics could go cross-border and become a full-fledge pandemic. A figure from page 31 shows the most important trends, according to this recent publication.

(Alexandru Georgescu) 

(1) A visual guide to the spread of an invisible foe 

A “state of the art” infographic, as every piece of this genre produced by the BBC News, has been created to help us understand in the shortest number of clicks and scrolls, via expressive maps and charts, what is going on. Furthermore, the website discusses topics that range from “How to behave in an epidemic”, “How the government hopes to stop you touching your face”, “Buy responsibly and think of others, shoppers told”; or “When will the coronavirus outbreak end?”. With regard to the “new manners of our times”, it is being brought to the fore that “the virus is exploiting our very humanity. We are social creatures, but this disease risks turning our natural instincts into a fatal weakness”. In this context, the behavioural scientists are telling the government to “promote a sense of collectivism”; it is a word that contrasts to “freedom-loving instincts of the British people”, as Prime Minister Boris Johnson said in a statement addressed to his fellow nationals. But what is hard for a Brit may be soft for individuals with a deep-seated and looked-after collectivist spirit – from China, Japan, South Korea, those areas appearing, at least for now, to hold the line more effectively than the Western nations that are rooted in an individualist worldview. But with respect to the last of the above topics – regarding the moment when all this folly will come to a close – not even the most penetrating journalist, either from BBC or from any other media outlet, can find the “sage” who can foretell the outcome. For such a scientist (and science) does not exist.

(Octavian-Dragomir Jora)  

(#) A saying from a 19^th century “special guest” 

“I think, then, that the species of oppression by which democratic nations are menaced is unlike anything that ever before existed in the world; our contemporaries will find no prototype of it in their memories. […] The first thing that strikes the observation is an innumerable multitude of men, all equal and alike, incessantly endeavoring to procure the petty and paltry pleasures with which they glut their lives. Each of them, living apart, is as a stranger to the fate of all the rest; his children and his private friends constitute to him the whole of mankind. As for the rest of his fellow citizens, he is close to them, but he does not see them; he touches them, but he does not feel them; he exists only in himself and for himself alone; and if his kindred still remain to him, he may be said at any rate to have lost his country.

Above this race of men stands an immense and tutelary power, which takes upon itself alone to secure their gratifications and to watch over their fate. That power is absolute, minute, regular, provident, and mild. It would be like the authority of a parent if, like that authority, its object was to prepare men for manhood; but it seeks, on the contrary, to keep them in perpetual childhood: it is well content that the people should rejoice, provided they think of nothing but rejoicing. For their happiness such a government willingly labors, but it chooses to be the sole agent and the only arbiter of that happiness; it provides for their security, foresees and supplies their necessities, facilitates their pleasures, manages their principal concerns, directs their industry, regulates the descent of property, and subdivides their inheritances: what remains, but to spare them all the care of thinking and all the trouble of living?

Thus it every day renders the exercise of the free agency of man less useful and less frequent; it circumscribes the will within a narrower range and gradually robs a man of all the uses of himself. The principle of equality has prepared men for these things; it has predisposed men to endure them and often to look on them as benefits.

After having thus successively taken each member of the community in its powerful grasp and fashioned him at will, the supreme power then extends its arm over the whole community. It covers the surface of society with a network of small complicated rules, minute and uniform, through which the most original minds and the most energetic characters cannot penetrate, to rise above the crowd. The will of man is not shattered, but softened, bent, and guided; men are seldom forced by it to act, but they are constantly restrained from acting. Such a power does not destroy, but it prevents existence; it does not tyrannize, but it compresses, enervates, extinguishes, and stupefies a people, till each nation is reduced to nothing better than a flock of timid and industrious animals, of which the government is the shepherd.

I have always thought that servitude of the regular, quiet, and gentle kind which I have just described might be combined more easily than is commonly believed with some of the outward forms of freedom, and that it might even establish itself under the wing of the sovereignty of the people”.

(Alexis de Tocqueville)