Lockdowns – Part 2

In the previous post on lockdowns (July 25th), I made the ethical/moral argument against lockdowns. In this part, I make the economic argument against lockdowns.

The economy is a complex set of interlocking activities undertaken by an arbitrarily large collection of individuals and collectives attempting to achieve their self-selected ends as best as they can given the limited means at their disposal and their imperfect understanding of how to realize those ends.

There are limits to what can be done by any entity. The laws of nature (no perpetual motion machines, for example) impose strict limits on what’s possible. Then there are further limits that arise from the lack of knowledge.

Firstly, we act in the present but the results of our actions are realized only in the future. The future being uncertain and unpredictable, we can never know for certain what the results of our present actions will turn out to be in the future.

Omniscience is not granted to any of us. It’s not just that the future is unknowable, but even the present is only imperfectly understood at best. Each of us knows only those bits that are closest to us in time and space, and none of us can know what the innumerable others know.

We know what we (perhaps mistakenly) desire and how best to meet our goals. But it’s absolutely certain that others cannot know better than we do what we should aim at and how to reach our objectives. It takes infinite hubris for someone to presume to know about others what is intrinsically unknowable.

Since the beginning of civilization, people have glimpsed this fact about our social world: that society cannot be planned centrally. The information and knowledge (the two are distinct entities) requirements are impossible to meet. You have to know the present comprehensively and with infinite precision, and you have to know the future with certainty too. Gods, perhaps, could do that but that is impossible for us mortals.

Unfortunately, that fact has not deterred the long list of social planners throughout history in every part of the world to attempt the impossible. They tried and failed spectacularly. They tried because they were ignorant but they were also power hungry. The lust for wielding power over others is ineradicable in certain types of sociopaths — which are most prevalent in the political and bureaucratic classes. These sociopaths are the worst kind of mass murderers.

Think about the countries — past and present — that are poor and unlivable; those countries from which the population most desperately tries to escape. Notice that all of them have one thing shared: they were ruled by power-hungry sociopaths who wanted nothing more than control over others. The lust for treasure was only a secondary goal, and in most cases a welcome byproduct of their lust for power. The lust for treasure is easily satiated but the lust for power is never satiated. The more you have, the more you want.

Social planning fails because of two reasons. First, the knowledge problem. Planners cannot know what every individual and collective is capable of doing, and is willing to do. The second is that people are not automatons which can be programmed. People have volition and their own preferences. These preferences are not fixed and evolve with time as circumstances change — which they unpredictably do in a dynamic world.

I have a dream. I imagine an enlightened person has somehow reached the pinnacle of political power in a country. Faced with a difficult situation, he[1] declares,

Greetings my fellow citizens. We are facing tough times. Like always, this too shall pass. In the meanwhile, we — individually and collectively — must do the best we can to get through this.

I don’t know what is best for you. Nobody knows that. Only you know what is best for you and for those near and dear to you. Therefore, do what you think is best but be mindful that you don’t hurt others by what you do.

Here’s something that you should know. The scientists and other domain experts — I am definitely not one of them — tell us that you should do a, b and c, and you should avoid doing x, y and z. Those are simple enough to understand and follow.

If we all follow what the experts are telling us, we will get through this with the least amount of suffering. Of course, the experts could be wrong but they are likely to be less wrong than us non-experts.

Remember that only you know what’s best for you — not some official who doesn’t really give a damn about your welfare any more than you give a damn about some unknown official’s welfare.

I am not going to tell you what you should do because I don’t know what you can do. But I’m not going to make a bad situation worse by taking away your freedom to do what you want.

As and when I get new information, I will share it with you promptly. That’s my job: to tell you what I know to be true to the best of my knowledge. Be well, do good work and don’t let the officials bully you.

That’s just a daydream that has never happened in any poor country; nor will it happen in a poor country today. And that’s the primary reason why that poor country is poor, and remain poor.

Poor countries have always had dictatorial leaders. They come in different shades of grey but they all have the same grey that comes from a mix of ignorance, hubris, idiocy and stupidity.

Here are concrete examples of dictators: Mao, Zhou Enlai, Lenin, Stalin, Kim Jong-Il, Castro, Che Guevara, Tito. All masterfully immiserized their people.

But two countries matter to me the most. They are extreme examples of degrees of freedom: India and the United States. Indians have nearly never had freedom, and Americans have had copious amounts of freedom.

India has its own home-grown dictators, a long line of them starting with Gandhi, then Nehru, and the rest. The misfortune continues to this day. They have been able to keep Indians miserably poor by denying people to do what they (the people) think is best for them. They made sure that India never prospers.

The Founding Fathers of the United States had a different conception of the role of the government. They didn’t want the government to have dictatorial powers, and so they created a country based on the ideals of freedom.[2] That freedom transformed a very poor country of a few million people into the richest nation in human history in about 150 years.

Freedom creates wealth. And wealthy nations — which are always the result of free people —  have the capacity to ride out storms that capsize poor nations. The irony is that the dictators of poor nations restrict freedom even more when the people most need it to survive a national calamity.

In the next bit, I will conclude this post. I will explain why what the Indian government did — locking down the economy — was the worst thing it could have done to the hundreds of millions of poor Indians.

Thank you, good night and may your god go with you.

NOTES:

[1] Instead of using the politically correct “he or she” formulation, or even the virtue signalling “she” pronoun that is so much in fashion these days, I follow the rule that writers should use the pronoun consistent with their gender. So a male writer should use “he” for the generic case, and female writers use “she.”

[2] The matter of slavery in the US is a topic for another day.

{Read part 3 of this series.}

4 thoughts on “Lockdowns – Part 2

  1. Shivaji Thursday August 5, 2021 / 5:17 pm

    There are several variables at play when you decide to lock down or not.

    It’s not a theoretical yes or no “binary” decision. That is why a CEO’s job is not so easy. There’s not always a black and white response to a crisis situation. It is usually an evolving one with new information coming along every second.

    Also when you ‘lock down’ it’s not really a full lock down, because thats not possible. It is more a restriction for large scale gathering. Say for example large gathering on Moharram in India or large gathering of Spring-break on beach in Florida. That is what lock down means.. The essential services are still running.

    I am glad you are an economist and not a political leader. Because that is the hardest job in the world and there you don’t have the luxury to blog and explain all day in that job..

    Liked by 1 person

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