As professional economists, we have watched the response of much of the economics profession to COVID-era lockdowns with considerable surprise. Given the evident and predictable harms of lockdowns to health and economic well-being, we expected economists to raise the alarm when lockdowns were first imposed. If there is any special knowledge that economists possess, it is that for every good thing, there is a cost. This fact is burned into economists’ minds in the form of the unofficial motto of the economics profession that “there ain’t no such thing as a free lunch.”
From the depths of our souls, economists believe that the law of unintended consequences applies to every social policy, especially a social policy as all-encompassing and intrusive as lockdown. We economists believe that there are trade-offs in everything, and it is our particular job to point them out even when the whole world is yelling at the top of its voice to be quiet about them. It may still be a good idea to adopt some policy because the benefits are worth the cost, but we should go in with our eyes open about both.
That lockdown would, in principle, impose overwhelming costs on the population at large is not surprising. The scope of human activity touched by lockdown is overwhelming. Lockdowns closed schools and playgrounds, shuttered businesses, and barred international travel. Lockdowns told children they could not visit their friends, put masks on toddlers, and dismissed university students from campus. They forced elderly people to die alone and prevented families from gathering to honour their elders’ passing. Lockdowns cancelled screening and even treatment for cancer patients and made sure that diabetics skipped their check-ups and regular exercise. For the world’s poor, lockdown ended the ability of many to feed their families.
Economists, who study and write about these phenomena for a living, had a special responsibility to raise the alarm. And though some did speak, most either stayed silent or actively promoted lockdown. Economists had one job—notice costs. On COVID, the profession failed.
There are personal reasons for this docility that are easy to understand. First, when public health officials first imposed lockdowns, the intellectual zeitgeist was actively hostile to any suggestion that there might be costs to pay. The lazy formulation that lockdowns pitted lives versus dollars took hold of the public mind. This provided lockdown proponents with an easy way to dismiss economists whose inclination was to point out costs. Given the catastrophic toll in human life that epidemiological modellers projected, any mention whatsoever about pecuniary harm from lockdown was morally crass. The moral zeal with which lockdown proponents pushed this idea undoubtedly played an important role in side-lining economists. No one wants to be cast as a heartless Scrooge, and economists have a particular aversion to the part. The charge was unfair given the costs in lives that the lockdowns have imposed, but no matter.
Second, economists belong to the laptop class. We work for universities, banks, governments, consulting agencies, corporations, think tanks, and other elite institutions. Relative to much of the rest of society, the lockdowns posed much less harm on us and maybe even kept some of us safe from COVID. Narrowly speaking, lockdowns personally benefited many economists, which may have coloured our views about them.
In this essay, we will leave these personal interests aside, though they are important, and focus only on the intellectual defence that some economists have put forward for their defence of lockdown. That economists have human weaknesses and interests that might render them less willing to speak taboo thoughts or against self-interest is not surprising. More interesting are the reasons (inadequate, we believe) that economists have given for their support of lockdowns since, if correct, they would provide a rational defence against the charge we make in this essay that the economics profession, as a whole, has failed to do its job.
In April 2020, the United Nations’ World Food Program warned that 130 million people will starve as a result of the stumbling global economy. The U.N.’s forecasts of the health impacts of this economic collapse were especially dire for children; they predicted hundreds of thousands of children in the world’s poorest countries would die. They would be collateral damage from the Great Lockdown, as the International Monetary Fund termed it last Spring.
It was natural to expect scores of economists to refine these estimates and quantify how our response to the virus in rich countries would hurt the world’s poor by disrupting global supply chains. Such work would increase awareness of the costs of our response to the virus.
Our supposition of economists’ sense of duty to the world’s poorest was well justified. For decades economists have fiercely defended the global economic system on the grounds that it has helped lift more than a billion people out of extreme poverty and increase life expectancy everywhere. The global economy has some significant flaws—vast inequality and climate change are often noted. But the worldwide network of trade has an essential role in facilitating economic development that brings sustained improvements to the lives of the world’s poorest, economists have argued.
The expected rush to quantify the global collateral damage from rich countries’ lockdowns never materialized. With few exceptions, economists most decidedly did not lean into quantifying lockdown harms either in developing countries or rich countries.
Precautionary Principle and Lockdown Love
Already in March 2020, economists considered lockdowns to be worthwhile. Their reasoning was a glorified version of the precautionary principle. Several research teamsquantified how large the economic damage would have to be for lockdowns to be beneficial on net. Using epidemiologists’ guesses of how many lives lockdowns might save, these analyses calculated the dollar value of the life years saved by lockdowns.
In the early days of the epidemic, there was fundamental scientific uncertainty about the nature of the virus and the risk it posed. Faced with this uncertainty, many economists (joining other scientists less well trained in thinking about decision-making under uncertainty) adopted a peculiar form of the precautionary principle. The implicit counterfactual exercise in these analyses took at face value the output from compartment models with dubious assumptions about critical parameters, such as the infection fatality rate from the model and compliance with lockdown policy. Unsurprisingly, these early analyses concluded that lockdowns would be worthwhile, even if they were to cause extensive economic disruptions.
Applied to the COVID crisis, the precautionary principle says that when you have scientific uncertainty, it may make sense to assume the worst-case about the biological or physical phenomenon you want to prevent. This is what the early economic analyses of lockdowns did by taking at face value the early estimates produced by epidemiological models (such as the Imperial College Model) of alarming COVID deaths in the absence of lockdowns.
The idea was that since we do not know with certainty, for instance, about the infection fatality rate, immunity after infection, and the correlates of disease severity, it is prudent to assume the worst. Therefore, we must act as if two or three out of a hundred infected people will die; there is no immunity after infection; and everyone, no matter what age, is equally at risk of hospitalization and death after infection.
Every one of these extreme suppositions turned out wrong, but of course, we could not have known that with certainty at the time, although there was already some evidence to the contrary. Scientific uncertainties are notoriously hard to resolve in advance of the time-consuming scientific work to resolve them, so maybe it was prudent to assume the worst. Unfortunately, fixating on the worst-case scenario then spurred long-lasting unfounded fears among the public and economists.
This all sounds very reasonable, but there was a curious asymmetry in the application of the precautionary principle in these analyses. With the benefit of hindsight, it should be clear that this application of the precautionary principle to the uncertainties of March 2020 was shockingly incomplete. In particular, it was not reasonable to assume the best case about the harms from the interventions you want to impose while at the same time accepting the worst case about the disease.
There are harms from the lockdown policies that any responsible economist should have considered before deciding that lockdowns were a good idea even then. A consistent application of the precautionary principle would have considered the possibility of such collateral lockdown harms, assuming the worst as the principle dictates.
In the panic of March 2020, economists assumed the best about these collateral harms. They adopted the implicit position that the lockdowns would be costless and that there was no other choice but to enforce lockdowns, at first for two weeks and then for as long as it might take to eliminate community disease spread. Under these assumptions motivated perhaps by a curiously asymmetric application of the precautionary principle, economists stayed silent while governments adopted lockdown policies wholesale.
In addition to the asymmetric treatment of scientific uncertainty about COVID epidemiology and lockdown harms, economists erred in two additional ways in applying the precautionary principle. First, when evidence arose contrary to the worst case, economists insisted on continuing to believe the worst case. One example of this rigidity is the negative reaction by many (including many economists) to studies thatshowed the infection fatality rate from COVID to be much lower than initially feared. Motivating much of this reaction was the thought that this new evidence might lead the public and policymakers to not believe the worst about the disease’s deadliness and thereby not comply with lockdown orders. A second example is economists’ support (with some exceptions) in 2020 for continued school closures in the U.S. in the face of ample evidence from Europe that showed that schools could be opened safely.
Second, while the precautionary principle is useful for aiding decision-making (particularly, it can help avoid decision paralysis in the face of uncertainty), we must still consider alternate policies. Unfortunately, in the Spring of 2020, economists—in their rush to defend lockdowns—largely closed their eyes to any alternatives to lockdowns, such as age-targeted focused protection policies. These mistakes further solidified the economics profession’s ill-advised support for lockdowns.
A second strand of analysis by economists in Spring 2020 was perhaps even more influential in turning economists in favour of lockdowns. Economists observed that most of the decline in movement and economic activity occurred before governments imposed any formal lockdown orders. The conclusion? The decline in economic activity in Spring 2020 was driven not by lockdowns but by voluntary changes in behaviour. Fear of the virus induced people to engage in social distancing and other precautionary measures to protect themselves, economists reasoned.
Having concluded that lockdowns do not significantly impede economic activity, economists have seen little need to quantify any domestic or global collateral damage from lockdowns.
To governments, this consensus among economists provided considerable relief and arrived just in time. At around the same time in the Spring of 2020, it became evident that the depth of the economic contraction was much larger than first anticipated. It was essential to politicians to blame this economic damage on the virus itself rather than the lockdowns since they were responsible for the latter but not the former. And economists obliged.
ut was this conclusion about the lack of marginal lockdown harms justified? Economists were no doubt correct that movement and business activity would have changed even without any lockdowns. Vulnerable older people were wise to take some precautionary measures, the elderly in particular. The staggeringly steep age gradient in mortality risk from infection with novel coronavirus was already known by March 2020.
Nevertheless, the argument that people would have voluntarily locked down anyway even in the absence of a formal lockdown is spurious. First, suppose we take the argument that people rationally and voluntarily restricted their behaviour in response to the threat of COVID as correct. One implication would be that formal lockdowns are unnecessary since people will voluntarily curtail activities without lockdown. If true, then why have a formal lockdown at all? A formal lockdown imposes the same restrictions on everyone, whether or not they are able to bear the harm. By contrast, public health advice to restrict activities voluntarily for a time would permit those—especially the poor and working-class—to avoid the worst lockdown-related harms. That some (though not all) people did curtail their behaviour in response to the disease threat is thus not a sufficient argument to support a formal lockdown.
Second, and perhaps more importantly, not all of the fear of COVID has been rational. Surveys conducted in Spring 2020 show that people perceived the population mortality and hospitalization risks to be much greater than they actually are. These surveys also indicate that people vastly underestimate the degree to which the risk rises with age. The actual mortality risk from COVID is a thousand times higher for the elderly than it is for the young. Survey evidence indicates that people mistakenly perceive age to have a far smaller influence on the mortality risk.
This excess fear has received little media coverage until recently. For example, studies on fear published in July and December 2020 gained little traction at the time but were discussed by the New York Times in March 2021 and by other high-profile media outletsshortly after that. These delays indicate a persistent (but now finally easing) unwillingness by the media to accept these facts which are strong evidence that the public fear of COVID has not corresponded to objective facts about the disease.
So, our indictment that economists have paid insufficient attention to the harms from lockdowns thus cannot be evaded by recourse to a rational fear of COVID in the population.
Panic as a Policy
There is an even deeper problem with the rational panic argument. In part motivated by the precautionary principle, many governments adopted a policy of inducing panic in the population to induce compliance with lockdown measures. In a sense, lockdowns themselves drove the panic and distorted the risk perceptions of economists, just as they distorted the risk perception of the public at large. Lockdowns were, after all, an unprecedented policy tool in modern times, a tool that the World Health Organization and the Western media still in January 2020 ruled out as a reasonable policy option. It was not clear even to influential scientists like Neil Ferguson whether the West would be willing to copy Chinese-style lockdowns or comply with them if implemented.
Then in March 2020, lockdowns were widely adopted and became an integral part of the decision to panic the population to induce compliance. The earliest lockdowns fomented fear elsewhere, and each successive lockdown then further magnified it. Because lockdowns do not distinguish who is at greatest risk from the virus, they are likely also a key culprit to the public’s lack of understanding about the steep link between age and COVID mortality risk.
Because economists’ estimates of lockdown impacts have ignored these fear spillovers from lockdowns to other jurisdictions, the conclusion that lockdowns inflict no significant economic harm is decidedly not justified. The large voluntary decline in movement and business activity was not a purely rational response to COVID risks. Excessive COVID fears fomented by lockdowns drove the decline in mobility and economic activity. Excess COVID fears thus induced a behavioural response that was partly irrational.
The lockdowns of Spring of 2020 were thus likely responsible for much more of the decline in economic activity than the consensus among economists admits. Economists have been unwilling to examine the implications of this fact, just as economists have been unwilling to examine the implications of the broader issue that governments stoked fear among the public as a part of the anti-COVID policy.
A Conservative Evaluation
Let us leave aside the controversy over whether the reduction in human movement in Spring 2020 was a rational response to the risk posed by the virus or a panic-induced overreaction. In truth, it was likely a mix of both. Let us then take at face value a lockdown study by economists that showed that “only” 15% of the decline in economic activity can be attributed to lockdowns. (We will leave aside the fact that some economic studies on lockdowns have found the share of the decline in economic activity attributable to formal lockdown orders to be considerably higher, even 60%.) If the conservative 15% estimate is correct, would that imply that lockdowns were worth the cost? No.
Recall the early U.N. estimates that forecasted the starvation of 130 million people in poor countries due to the global economic decline. Suppose that only 15% of that figure is attributable to lockdowns. Taking 15% of 130 million yields a number that represents immense human suffering attributable to lockdowns, even by this overly conservative reckoning. And we have not begun to count the other harms of lockdown, which include hundreds of thousands of additional children in South Asia dead from starvation or inadequate medical care, the collapse of treatment networks for tuberculosis and HIV patients, delayed cancer treatment and screening, and much else.
In other words, if lockdowns are indeed responsible for only a tiny share of the decline in economic activity—as many economists’ have claimed—the total size of the local and global collateral costs from lockdowns is still enormous. The collateral harms to human health and life caused by lockdown are far too large to be dismissed, even under the rosy assumption that panic would have happened in the absence of lockdown.
It bears noting also that the long-run impact of lockdowns on business activity is yet uncertain. The arbitrariness of lockdown rules may chill future business confidence and entrepreneurial activity much more than voluntary movement and economic activity reductions. Economists’ silence on lockdown harms also indicates a belief that everylockdown comes without harm. In reality, each lockdown causes its own set of unpredictable collateral consequences since they interdict normal human and economic interactions in different ways.
The Role Economists Have Played
Economists’ conclusion that lockdowns can do no marginal harm is thus unwarranted. The evidence put forth by economists does not justify abandoning attempts to quantify the global and local collateral health costs of lockdowns. Lockdowns are not a free lunch.
For economics, the failure to document the collateral damage from lockdowns is fundamental. The very purpose of economics is to provide an understanding of the pains and successes in society. Economists’ role is to synthesize the facts and trade-offs and point out how policy assessments depend on our values as well. When economists turn a blind eye to the pains in our society, as they have in the past year, governments lose crucial indicators needed to design balanced policies.
In the short term, such blindness reaffirms the elites’ unwavering belief that the course is correct. As long as only the potential benefits of lockdowns are examined and discussed in the media, it is hard for the public to object to lockdowns. But slowly yet inevitably, the truth about the pains, both big and small, is revealed in the long run. Neither the reputation of economics nor the legitimacy of our political system will fare well if the divide between the elite and those who felt the collateral damage all along is too wide when this divide is finally revealed. By not documenting the pains caused by lockdowns, economists have served as apologists for draconian government responses.
To be sure, some economists have questioned the lockdown consensus throughout the pandemic, and more recently, others have started to express their doubts as well. Also, to the profession’s credit, scores of economists did respond to the pandemic with considerable vigour in an attempt to help policymakers make informed decisions. Whether these sincere efforts were directed in the best way is another matter. Nevertheless, the economics profession will be haunted for a long time for our failure to speak up for the poor, the working-class, the small businessmen, and the children who have borne the brunt of the lockdown-related collateral harms.
Economists also erred in closing ranks so quickly and so vociferously to build the ill-advised consensus on lockdowns. One economist even labelled—publicly—those who questioned the consensus as “liars, grifters, and sadists.” Another economist organized a boycott on Facebook of a health economics textbook (written by one of the authors of this piece long before the epidemic started) in response to the publication of the Great Barrington Declaration, which opposed lockdowns and favoured a focused protection approach to the pandemic. Amidst such chilling edicts from the profession’s leaders, it is not surprising that the consensus on lockdowns has been challenged so rarely. Economists and others were intimidated against pointing out lockdown costs.
The attempts to stifle scientific debate on lockdowns have been costly but have come with one silver lining. The use of such underhanded tactics to support a consensus view is always an implicit admission that the arguments supporting the consensus are themselves understood to be too feeble to withstand closer scrutiny.
Economists’ rush to consensus on lockdowns has also had broader ramifications for science. Once the scientific discipline tasked with quantifying the trade-offs in life decided that the linchpin of our COVID response—lockdowns—involved no trade-offs, it became natural to expect science to give us unambiguous answers in all COVID matters. Economists’ silence on lockdown costs, in essence, gave others a carte-blanche to ignore not just lockdown costs but also the costs of other COVID policies such as school closures.
Once the aversion to pointing out the costs of COVID policies took hold among scientists, science came to be widely seen and misused as an authority. Politicians, civil servants, and even scientists now constantly hide behind the “follow the science” mantra rather than admit that science merely helps us make more informed decisions. We no longer dare acknowledge that—because our choices always involve trade-offs—the virtue of pursuing one course of action over another always rests not just on the knowledge we get from science but also on our values. We have seemingly forgotten that scientists merely produce knowledge about the physical world, not moral imperatives about actions that involve trade-offs. The latter requires understanding our values.
The prevalent misuse of science as a political shield in this manner may in part reflect the fact that, as a society, we are ashamed of the value system that our COVID restrictions have implicitly revealed. This criticism applies to economics as well. Much of what economists have done in the past year has been in the service of the rich and the ruling class at the expense of both the poor and the middle class. The profession has sought to hide its values by pretending that lockdowns have no costs and by actively stifling any criticism of the misguided lockdown consensus.
Economists Should Be Gardeners, Not Engineers
Economists’ embrace of lockdowns is questionable also from a theoretical perspective. The complexity of the economy and differing tastes of individuals have generally tilted economists in favour of individual freedom and free markets over government planning. Governments lack the information needed to steer the economy efficiently through centralized planning. Yet, in the context of lockdowns, many economists suddenly appeared to expect governments to understand very well which functions of society are “essential” and most valued by citizens and who should perform them.
In a matter of mere weeks in the Spring of 2020, a great many economists were seemingly transformed into what Adam Smith had 260 years earlier derided as a “man of system.” By this, he meant a person under the illusion that society is something akin to a game of chess, that it follows laws of motion that we understand well and that we can use this knowledge to wisely direct people at will. Economists suddenly forgot that our understanding of society is always very incomplete, that the citizenry will always have values and needs beyond our ken, and will act in ways that we can neither fully predict nor control.
From another perspective, economists’ support for lockdowns is not surprising. The lockdown consensus can be seen as the natural end result of modern economists’ strong technocratic bent. While economics textbooks still emphasize the profession’s liberal roots and lessons, among professional economists, there is now a widespread belief that almost any societal problem has a technocratic, top-down solution.
This shift in economics is remarkable. The attitude among economists today is very different from the days when historian Thomas Carlyle attacked the profession as “the dismal science.” His complaint was that economists of his day supported individual freedom too much, rather than systems that he favoured in which the wise and powerful would govern every aspect of the lives of the purportedly unsophisticated masses.
This technocratic orientation of the economics profession is evident in the ongoingdebate among economists over which professional analogy best captures the work of modern economists. Engineer, scientist, dentist, surgeon, car mechanic, plumber, and general contractor are among the many analogies that economists have proposed to describe what economists today ought to do. Every one of these analogies is justified based on modern economists’ supposed ability to offer technocratic solutions to nearly every societal problem.
We view economists’ proper role in directing the lives of our fellow citizens as much more limited. The role of a gardener is more apt for economists than, say, the role of either an engineer or a plumber. The tools and knowledge our profession has developed are not sophisticated enough to justify thinking that we economists ought to try to fix all the ills of our society, employing technocratic solutions in the same way that engineers and plumbers do. Just as gardeners help gardens thrive, we economists too should stick to thinking of ways to assist individuals and economies prosper rather than offer all-encompassing solutions that dictate what individuals and companies ought to do.
Economists surprised the public also with their cavalier attitude toward the plight of small businesses, devastated by lockdowns. The profession’s central tenets rest on the virtues of competition. Yet economists’ foremost wonder about the intense duress experienced by small businesses during lockdowns seems to have been whether the closures will have a “cleansing” effect by eliminating the worst-performing firms first. To the dismay of many, the dismal science has had very little to say about how lockdowns have favoured big business and what this will mean for market competition and consumer well-being in the years to come.
Economists’ reluctance to challenge policies that favour big business is regrettable yet understandable. Increasingly, we economists work for big business—the digital giants in particular. We send our students to work for Amazon, Microsoft, Facebook, Twitter, and Google, and we count it a great success when they land jobs with those prestigious companies. Being on good terms with these companies is important also because of these companies’ data and computational resources. Both are now crucial for successful publishing and associated career advancement in economics. Rare is the economist who is immune to the power wielded by the digital giants within the economics profession.
The Path Forward
To regain its bearings, the economics profession must rethink its values. In recent years so much has been written about the increasing emphasis on methods and big data in economics at the expense of theoretical and qualitative work. As empirical techniques and applications have taken over the profession, economics has become a stagnant or perhaps even a receding discipline in its understanding of basic economic trade-offs that once comprised the core of economic training. How many professional economists still agree with Lionel Robbins’ famous definition, “Economics is the science that studies human behaviour as a relationship between ends and scarce resources which have alternative uses”? How much of the work of today’s economists serves this goal well?
This dynamic is no doubt partly to blame for the profession’s misguided espousal of lockdowns. Overt emphasis on quantitative methods in empirical work has made economists less familiar with the economy itself, a trend that the increasing disconnectbetween the perceived and actual precision of economists’ theoretical modelling has amplified. Economists have obsessed with the finer technical details of empirical analyses and the internal logic of theoretical models to a degree that has effectively blinded much of the profession from the bigger picture. Unfortunately, without understanding the bigger picture, getting the small details correct is of little use.
That economists famously are not blessed with much intellectual humility likely also played a part in the profession’s rushed ascent to agreement on lockdowns. Economists demonstrated little desire to explore the many limitations and caveats inherent in the profession’s lockdown analyses even though those analyses were often by people with little or no prior training or interest in epidemiology or public health, and even though those analyses served to support the most intrusive government policies in a generation. Economists did not heed epidemiologists’ prior warnings about the need to be very humble when connecting insights from models to our complex reality.
The fact that economists’ concern for the poor vanished so quickly in the Spring of 2020 also speaks of a distinct lack of empathy. Because most economists are blessed with incomes that place us in the upper-middle class or higher, we (with some exceptions, of course) live lives that are often disconnected from the poor in our own country, much less in developing countries. Because of this disconnection, it is hard for economists to understand how the poor near them in rich countries and globally would experience and respond to lockdowns.
Economics should reinvigorate itself with a renewed emphasis on connecting with the lives of the poor both in rich countries and globally. Training in the profession should emphasize the value of empathy and intellectual humility over technique and even theory. The economics profession should celebrate empathy and intellectual humility as the hallmarks of a model economist.
Reforming economics will bear considerable fruit in the form of trust by the public in the recommendations that economists make about policy, but it will not be easy. Changing the profession’s values requires sustained effort and the kind of patience that the profession sorely lacked when it rushed to defend lockdowns.
In terms of reassessing lockdown harms, there is reason for optimism. Economics served the world well when it defended the global economic system during the past several decades on the basis that economic progress serves a crucial role in advancing the well-being of the world’s most vulnerable people. That this happened so recently gives hope that economists will soon yet regain their interest in the lives of the world’s poorest.
Rather than hide behind the false belief that lockdowns are a free lunch, it is crucial that economists soon evaluate the global impacts of rich countries’ lockdowns. A better understanding of our lockdowns’ global effects will facilitate a more compassionate COVID response in rich countries, and also a better response to future pandemics—the kind of response that values how our response in rich countries influences the economic and health outcomes in the less prosperous parts of the world.
It is equally important that economists soon examine and assess with vigour the domestic pains caused by lockdowns, school closures, and other COVID restrictions. Documenting the highs and lows of society is, after all, the profession’s foremost task. Economics can ill-afford to overlook this core mission much longer.