Australia is in the fortunate position of having good news on the coronavirus front. Over the last few weeks, the curve has noticeably bent. The daily rate of increase in confirmed Covid-19 cases has fallen dramatically, from a peak of 460 on 28 March to around 15-20 in recent days.
Several prominent commentators have responded to this by arguing for a rapid end to social distancing. According to this view, Australia has over-reacted to the crisis and is paying insufficient attention to the costs of the downturn, both narrowly economic and in terms of broader wellbeing.
Since the economic costs fall disproportionately on young people, especially those in short-term casual employment, while the health risk falls disproportionately on elderly people, some have argued that it would be better to quarantine the most high-risk members of society and otherwise let economic activity return quickly to normal now that the pandemic is seemingly under control.
This is a dangerous idea. Low fatalities and slowing rates of transmission cannot be taken for granted. They are consequences of the policies we pursue. It is no coincidence that the bending of the curve happened here in Australia and in other countries following the imposition of tough social distancing restrictions.
Absent a vaccine, a quick return to normal risks tragic consequences and should not be taken lightly.
The idea that high-risk individuals can be quarantined as the virus diffuses through the low-risk population is foolish and wishful thinking. First, it is not feasible to achieve this separation. It is not possible to identify everyone who is high-risk individuals may think they are low-risk but have an undiagnosed comorbidity, making them actually high-risk. Even for those who are clearly high-risk, such as the elderly and those with acute conditions, they need carers, they need medical support. There is no way to reduce their contact to zero. So long as the virus is present in the rest of the population, any contact, however minimal, will eventually lead to the virus mixing into the high-risk population.
On the off chance you are not persuaded by appeals to morality, perhaps you will be persuaded by economic argument
Second, even if such a separation were feasible (which it is not), it would still mean exposing the low-risk population to unnecessary harm, making many people seriously ill, with potentially long-lived health complications, and numerous fatalities. Low risk is not no risk.
In our view, the idea of putting hundreds of thousands of vulnerable people at risk simply because it involves a high economic cost is immoral.
But on the off chance you are not persuaded by appeals to morality, perhaps you will be persuaded by a more dispassionate economic argument.
The overwhelming view among economists is that the best prospects for economic recovery involve comprehensively beating the pandemic, eradication or something close to it. Think of it as an investment that pays off in the future.
Absent near-eradication, lifting social-distancing restrictions will not let the economy bounce back to near-normal because people, fearing for their health, will still refrain from many kinds of economic activity. They still wont go back to bars and restaurants at normal rates. Low-margin businesses will still struggle to be viable. In other words, this approach risks the worst of all worlds, compromising our public health goals and at the same time not getting a proper economic recovery.
In this sense, achieving our public health goals and achieving our economic goals are not fundamentally in opposition.
The precautionary principle suggests that we should be very careful when the consequences of getting the calculation wrong on one side are worse than getting the calculation wrong on the other side. The potential medical and economic losses associated with easing social restrictions prematurely are much larger than the economic losses associated with not easing them soon enough.
The kernel of truth in the contrarian rush to end social restrictions is that, absent a vaccine, in the event that confirmed cases are near zero, we will have to carefully think through the tradeoffs involved in slowly allowing some forms of economic activity to restart. The economic pain, and the mental health side effects of a prolonged shutdown, are real. But we need to start from the premise of carefully easing the toughest social restrictions where the potential societal gain is largest, not from the premise of a soon-as-possible snap-back to life as normal.
In our view, the role of economists in this debate is to help create space for public health experts to craft the policy (as they have been doing with great success) and in light of the health policy help craft economic policies to mitigate all the suffering caused by this crisis, not just the narrowly economic but also the broader loss of wellbeing.
We should not be using spurious economic arguments to undermine the views of public health experts.
With thousands of people dying daily in major cities around the world, with temporary morgues set up on ice rinks and temporary graves in public parks, it beggars belief that anyone could take lightly the apparent relative successes Australia has had to date. We are in a very fortunate position through a combination of good policy and good luck. Lets not blow it.
Chris Edmond is professor of economics at the University of Melbourne and Richard Holden is professor of economics at UNSW Business School
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