Covid-19: Protection of lives and livelihoods – analysis
Should we save lives or livelihoods? This question has put legislators, citizens and academics in a dilemma. Other questions include: How long should public health take priority over economic prosperity? By temporarily shutting down the economy, is the cure making the disease worse? How long can we sacrifice the nation’s economic potential and reduce GDP growth?
At first glance, these questions appear to be valid and logical. However, a recent survey, conducted by the Booth School of Business at the University of Chicago, where similar questions were asked to more than 40 economists from the best universities in the United States (USA), found that the overwhelming answer It was that any reduction in the current closure restrictions in the country will cause much deeper economic damage in the long term.
Similarly, a statement issued by the Aspen Institute Economic Strategy Group on March 25 stated: “Saving lives and saving the economy are not in conflict at this time; We will accelerate the return to robust economic activity by taking steps to stop the spread of the virus and save lives. ”
In other words, economic experts seem to be emphasizing that the premature lifting of blockages will result in a more virulent resurgence of the pandemic.
The fact is that the questions referred to at the beginning of this article present a false binary of having to choose between economics and public health. The two are not, and cannot be seen as, mutually exclusive, but must be seen as interdependent. Stopping the virus is a sine qua non for the economy to recover. It is fallacious to suppose that the destruction of growth and employment is a corollary of social distancing, and not the pandemic itself.
Interestingly, according to a 2014 study published in the Preventive medicine magazine, an increase in the unemployment rate during the Great Recession had a beneficial effect on health in all European countries, except for mortality by suicide. Therefore, it is wrong for anyone to argue that a recession will “kill” more people, in the normal course, than the virus.
At times like this, public confidence in the government’s strategy is more critical than the strategy itself. If the virus recovers with equal or greater speed by lifting the lock, will the public still trust the authorities who cheated on them? The importance of public trust cannot be overstated in current construction, as the success of any government strategy requires public acceptance. It is only the public that can guarantee the effectiveness of maintaining strict social distancing, good levels of hygiene and evidence of compliance.
Most economists continue to urge that the only way to minimize long-term damage to the economy is to control the virus first, as it is not only an end in itself, but a prerequisite to saving livelihoods and the economy.
A start-stop approach, which refers to imposing a block, becoming complacent and lifting it, only to see an increase in infections and re-impose restrictions, will produce a fortuitous result, compromising the mental, social and economic benefits to a methodical and sustained method. and phased economic recovery. The most obvious example of this is Singapore, which was forced to reintroduce a more severe 30-day blockade after it prematurely eased initial restrictions and allowed international travel, which would lead to a spike in cases.
On April 3, the World Health Organization and the International Monetary Fund set the task ahead for all governments that are dealing with the coronavirus crisis. They point out that an economic stimulus can only be “in addition to,” and not a substitute for, spending on health care.
Governments around the world have the difficult task of striking a harmonious balance between spending on health care (improving support for existing hospitals and new makeshift treatment stations, increasing testing infrastructure and purchasing kits, paying wages and providing medical teams to front-line healthcare workers) and provide economic stimulus to those most in need, improve unemployment benefits and minimize corporate insolvency. It is only by walking this tightrope that we can achieve the most optimal result of a minimal burden of medical care and maximum economic recovery.
It might be instructive for economists and policymakers to reevaluate the functioning of modern capitalism to a broader form of capitalism that works for the majority of the population, as hedge fund investor Ray Dalio pointed out. He points out that capitalism “is producing a self-reinforcing feedback loop that widens the income / wealth / opportunity gap” and continues to concentrate wealth in the hands of the few, and therefore widens the gap by 1% richest of the population and another 99%.
It is cause for concern when millions of people will have to experience a drop in living standards in the near future, while investors in large corporations, especially those that have capitalized on the current blockade due to the specific nature of their businesses, reap benefits of stock prices of all time. According to the Bloomberg Billionaires Index, while the combined net worth of the world’s 500 richest people has dropped $ 553 billion this year, it has risen 20% from its March 23 low. This is due in large part to the benefits that government bailouts will bring to giants, particularly in the United States.
It is time for society to use this pandemic as an opportunity to increase the value of human life in a more qualitative way to create a society that truly understands what Mahatma Gandhi said: “It is health that is real wealth and not pieces of gold”. and silver. ”
Sameer Rohatgi is a lawyer at the Delhi High Court and the Supreme Court
The opinions expressed are personal.