How will mandated shutdowns affect the people they are meant to protect?

Anyone that has read or even studied Adam Smith understands he was a huge proponent of personal freedom. For those that have never heard of him, he is considered the father of modern capitalism, an ideology that most people identify with America (even though Smith himself was Scottish.) Part of what I hope to explain in this blog is how America has actually strayed far from natural free-marketism and how citizens of this country are now dealing with the consequences of these actions. Smith, in following the teachings of John Locke, argued for personal freedom from tyranny for everyone, no matter what traits can be used to describe said individual. Adam Smith said that citizens of a country can only truly be free if they are all entitled to the rights of life, liberty, and property. In Smith’s writing he makes it clear that any government that infringes or violates these rights should be considered tyrannical. This is a very different argument than ones that are commonly given by people who are on either side of the political spectrum. Those on the left believe everyone has the right to equality while those on the right believe in the right to live traditionally. Locke-ism is about the right to opportunity. “It asks a meaningful question to the citizens who are governed by this ideology: “given that you have the opportunity to pursue any type of life you desire (as long as you do not infringe upon the personal liberties of someone else), what will you make of your life?”

Now that the most important teachings of Locke (later expanded upon by Smith) have been glossed over, it will be easier to understand how Smith’s views on personal liberties are related to the argument surrounding reopening the economy. As of today (6-30-2020) there are 16 states pausing their reopening plans with many more, such as Texas (which closed bars and gyms, among other things), taking more stringent measures. Most if not all states are seeing rises in their weekly moving averages of new cases (partially offset by increased testing capability) but this is no surprise considering most of America was starting to reopen less than two weeks ago. The question was never whether cases would increase after reopening or not (most knew it would), but whether America could stay stuck at home for much longer, waiting on a vaccine that could be years (especially if the rate of vaccine development in the past is any major clue.) For those on the left-wing, the answer seemed clear: America should stay in lockdown as long as it would save lives, which the lockdown clearly was doing.(?) The cost to the economy is small compared to the potential lives saved. For those on the right the answer was equally clear: the job loss and economic destruction will be felt for years already, any further increases in lock down duration would lead to large amounts of small businesses shutting down and people losing their livelihoods. There is some things that both sides fail to consider; namely, the other sides’ viewpoint but also the agency of individuals as well. Left wingers fail (and often make this same mistake repeatedly) to consider the free will and and rationality of citizens, to put it bluntly: people are not sheep waiting to be led by the shaman. Most people are actively doing the most they can to keep themselves (if they are vulnerable) or others (if people around them are vulnerable) up-to-date with important information on the pandemic and also safe as they recognize the threat that Covid poses to survival. Survival is hard-wired in pretty much every adapting organism’s brain, so it doesn’t make sense that we would need to do things like shut down an entire economy to keep vulnerable people from taking a risk with with their own lives. On the other hand, I don’t see a clear reason why we should value people getting haircuts over human lives. Adam Smith would have agreed with reopening the economy, and in fact would have argued against shutting down at all. However he would be arguing for the right reasons. When learning econ it is common for a student to pick up the notion that government should be active in policy making that works on stabilizing the economy, which means increasing spending during bad times and decreasing during good. Part of the reason for the rush To reopening is that government is attempting to stabilize the economy and bring us out of the current downturn.) Adam Smith argues that government intervention to stabilize the economy is an utter waste of resources and leads to less than optimum wellbeing in the long run. Fluctuations are natural and government is everything but inefficient when it comes to spending resources in the hopes of stabilization. In the case of the pandemic shutdown, without government intervention, the truly innovative companies would have found ways to adapt and increase market share at the cost of companies with a lack of innovation. This, in the long run, is what we would all like to see, even if we don’t realize it. However I believe this only holds true in the case of natural down turns, not government induced shutdowns where some businesses are considered essential while others are not allowed to operate at all. As radical as it may seem, I think it was in all of our best interest not to shut down at all. I recall seeing several pieces of information that cited research that suggests that most citizens followed shutdown mandates before shutdowns were enacted. This is shown in the data through things such as consumer spending at restaurants and other places people generally stayed away from because of the virus. In another piece of research it was shown that were was little to no correlation between the speed at which states enacted shutdowns and death rates. In other words, states that waited a week or two to announce a shutdown didn’t see a significant difference. Perhaps you may derive your own meaning from these facts, but the way I look at it is that most people did not need to be told how scary the virus was, they figured it out on their own. Most of the time at least a week before government officials were able to figure it out. Partially boosted (if not enabled by) social media. Consumers optimized and decided the price of catching covid was higher than the price of not going to the gym or hair salon.

So what DID the shutdown do exactly?

In an ironic twist, it hurt the worst-off, most vulnerable of all of us citizens. When they shut down the economy, government officials were able to pick exactly which businesses had to be shut down and which businesses were able to reap the benefits of pent up consumer demand. For some people, almost always the most worst off of us all, the price of losing a job is higher than catching covid, but the shutdown made sure that people did not have this option between potentially catching covid or losing a job. For some it meant that the cost of food has risen or become less accessible in some way, as the most poverty stricken of us all are now unable to order cheap, hot, and ready food without a phone or a vehicle. For others they would almost always rather be at school or work than locked in a house with potentially abusive family members, but the government limited the options consumers could pick from to just one. Instead of consumers having the option to pick between more expensive products that come with a reduced risk of catching covid (for example buying a membership at a gym which recently raised their prices to reflect the extra cost incurred to keep the business sanitized at all times) and a cheaper alternative with a higher potential chance of being exposed to covid (which would appeal to those who either can not afford an increased set of prices on goods or those who do not feel the drawbacks of catching this virus would be greater than the pros of cheaper goods.) Because of the shutdown all consumers are forced to pick the expensive alternative or nothing, which hurts consumers and suppliers who would otherwise fill the need for cheaper products.

Yes a shut down will save lives for the duration it is in place, but it also makes a lot of peoples’ lives unbearable.