And now we see the ultimate futility of lockdowns. A pandemic will spread until the virus finds no more hosts susceptible to it. It was the hope of people who have too much faith in top-down control that social distancing, contact tracing, and mask wearing would allow us to eradicate the virus. But that hope itself is a symptom of too much faith in technology and too much confidence (or arrogance) by central planners.
What a miserable way to end 2020. A year that began with anxiety about a new, strange flu out of China ends with free societies embracing an authoritarian response to a public health problem. The response — lockdowns and the elimination of hard-won liberties that clearly limited government control over your life — is now getting even worse. And yet financial markets, driven by central bank liquidity, are at or near all-time highs.
We’ll come back to markets in a moment. Just a brief note on London’s Tier 4 lockdown and the ‘Greater Sydney’ cluster. Both prove the ultimate futility and hubris of trying to control a pandemic through what essentially amounts to house arrest of all the healthy people (not at risk of dying) in society. But as the year closes, governments are doubling down on the control measures.
Victoria and Queensland have shut the border to anyone from Greater Sydney (which apparently includes the Central Coast and down to Wollongong as well). Dan Andrews has ordered 700 police and military personnel to harden the border between the two states. Victorians will need a permit to return home.
Judging by the media response, you’d have thought a rampaging death virus was on the loose in Australia. But the case numbers — in Australia and most places — don’t indicate imminent crisis for everyone effected. According to the data from the US Centers for Disease Control, 99% of people who contract COVID-19 survive it.
But case numbers make good headlines. And by now, the public has been whipped into a frenzy of fear by the media and the breathless, threatening, and relentless press conferences by politicians and public health officials. It’s going to be the worst Christmas ever.
Don’t tell that to US financial markets, though. The Dow Jones Industrials and the S&P 500 are motoring right along to a strong close to 2020. Even the news of a new more infectious strain of COVID-19 in the southeast of England — prompting border closures by Belgium, Austria, and the Netherlands — has not taken the steam out of stocks’ end-of-year rally. Not yet anyway.
What will Monday bring? There’s not much in the way of data to drive markets. And for what it’s worth, we know three things about lockdowns. First, they do not slow the inevitable spread of the virus. Two, they crush small businesses and lead to millions unemployed. Three, the surge in small business failures and unemployment leads to emergency government stimulus (which itself leads to bigger deficits and, most likely, recuring stimulus cheques that look a lot like universal basic income).
We know other non-economic things as well. That educational and social outcomes for children are awful under lockdown, even though the medical evidence is that COVID-19 is not particularly dangerous for kids. We might also know that lockdowns lead to a mental health crisis — with depression, drug and alcohol abuse, domestic abuse, and suicide all following from the public health response. We might know even more about this if the media bothered to report on it, or if governments were honest about the total cost of a public health policy that is so obviously failing.
But life goes on. The Black Plague endured for centuries, even after it wiped out nearly 30% of Europe’s population in the 13th century. The civilisations that were able to survive its flare ups learned to live with it and manage risk in a way that didn’t destroy civil society and the productive economy. Weirdly, the most ‘open’ societies today — the US, the UK, and Australia — seem to be doing the worst job of keeping at risk people safe while doing long-lasting damage to human welfare and the economy through their policies.
The vaccine was supposed to fix all this, right? But as far we know, smallpox is the only disease to be completely eradicated through a vaccine in the last 200 years. Measles, malaria, tuberculosis, leprosy…even the plague itself — they are still with us. The illusion of eradication was fuelled by our faith in technology. But it’s an illusion, nonetheless. And what now?
On current trends, governments will try and prevent COVID-19 from travelling new vectors to new hosts. Border closures, lockdowns, and even a soft version of martial law look likely. Why martial law? Because at a certain point, people who have nothing left to lose — they’ve lost their job, their business, and their freedoms — won’t stand for being pushed around anymore.
Are we close to that point? Obedience and compliance with lawful orders are drilled into Australians and Americans from an early age. It takes a lot for your mind to rebel against the idea that what the government says is best for you (whether that government is the premier, a mayor, or even a central banker). But once the switch is flipped, watch out.
Until next week,
Editor, The Rum Rebellion
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