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Don’t fall for the false balance between economy and coronavirus

Opening up society too early could have more disastrous consequences for the economy in the long-run. Photo by Dan Kitwood/Getty Images - Credit: Getty Images

JAMES BALL on the dangers of falling for the false balance between economy and coronavirus

Unless you’re an undertaker, death is bad for business. This blunt truth isn’t some secret handed down from top economist to top economist, upon their initiation to the profession’s inner circle: it’s a statement of the obvious.

Our economy – and thus our jobs, our wages, our livelihoods – relies on us having money and being willing to go out and spend it. It is hardly surprising, then, that a deadly pandemic is bad for business.

Dead people don’t spend money. Sick people spend far less than usual. Their relatives stay home to look after them. If an illness is spreading fast and people are afraid of it, healthy people stay home too.

None of the above are consequences of lockdown or government policy decisions: they’re consequences of an illness like coronavirus itself.

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The problem is that these truths, which you’d hope would be self-evident, appear to have escaped a large swathe of Conservative politicians and their accompanying commentariat.

If you believe what you hear and read from that crowd, you’d think that the economic devastation that the UK is only just starting to feel – a huge drop in GDP, a quarter of the working population furloughed, mass unemployment on the way – is all the result of lockdown.

This is true, but only on the shallowest of levels: if we had a perfectly healthy economy without the menace of coronavirus, it would indeed be hugely damaging to inflict lockdown measures upon it. That’s why no sane government would ever propose such a thing, and no government did so now.

If we used the analogy of a sickness affecting a person, rather than a society, coronavirus would be something like a cancer, for which chemotherapy was a useful part of the treatment mix. If you allowed yourself to forget the underlying cancer, the chemotherapy would seem like it was the source of all the damage.

A sizeable minority of the elite, mostly though not entirely on the right of politics, appear to have forgotten the underlying facts of coronavirus. It is a highly infectious disease which affects a substantial minority of those who catch it very severely.

Even so-called ‘mild’ cases can take weeks to recover from, and more serious cases often need hospital beds or even intensive care for weeks if not months. Without the lockdown, the NHS would have been quickly overwhelmed, deaths could have been orders of magnitude higher than they were, and fear alone would soon have kept people home.

That underlying reality has not changed. The UK’s track and trace system is patchy at best, our testing is riddled with delayed, there is no reliable treatment for coronavirus anywhere in the world, despite some advances, and we are still months if not years away from having a mass-produced vaccine.

Anyone calling for the government to fully reopen, or for it to ‘rule out’ a second lockdown – as former Conservative leader and foreign secretary William (now Lord) Hague did this week – to ‘protect the economy’ is fundamentally misunderstanding reality.

If we get a severe second wave of coronavirus, it will do even more damage to the economy than the lockdown did. Our first wave was more severe, and the lockdown longer, because we dithered rather than shut down quickly – which would have let us reopen more quickly.

Conservatives such as Hague are imagining a world where politicians and policymakers have an unbelievably hard – even callous – decision to make. They imagine Boris Johnson’s hand over a dial where the economy lies at one end, and coronavirus at another, and he has to pick the right number of fatalities to keep Britain’s businesses alive.

That’s not, thankfully, the world we actually live in. Keeping coronavirus in check and minimising damage to our economy are perfectly aligned as goals – it will cause economic damage to manage coronavirus, but far less than it would to ignore it and reopen without a plan.

We should not be comparing our performance to a world in which coronavirus didn’t mutate or one in which it was successfully contained. That’s not the world we live in. Our options now are whether the damage is ‘bad’, ‘awful’ or ‘catastrophic’.

This is not a good time for unfounded optimism. During a pandemic, optimism gets you killed, and puts those around you at risk. During a recession, optimism leaves you broke – and possibly your business too. Now is a time for realists.

Phase one of coronavirus was botched, from beginning to end. It will be years until official inquiries decide why or who was to blame, but the UK reacted slowly and indecisively, leaving us with one of the highest death tolls in the world, a commensurately long lockdown, and with larger economic damage to come.

Two errors do not a right answer make, though. Losing a tyre on lap one of a race does not mean we should accelerate all the faster on lap two to make up for lost time. We need to accept a pit stop. It is precisely because the lockdown was long and painful that we need to reopen slowly and carefully, and actually get the systems in place that we should have had long ago. That, rather than a chaotic and rushed reopening, is what will keep the death toll down in future, and what will minimise the economic damage.

In a perverse way, Johnson is in a lucky position: the choices that will keep the most people alive are the ones that will protect the economy, too. He should not listen to the demons at his shoulder who claim otherwise.

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