«If economists managed to be considered humble people, with specific competence, on a level with dentists, it would be wonderful!», wrote the prince of economists, John Maynard Keynes in 1930. On the contrary, an adorable and highly intelligent teacher, owner of the course of History of Economic Thought at Bocconi University, half-jokingly exhorted us to give ourselves the airs of economists…
Instead of dentists today, in the year of grace 2020, some economists would like to be as useful as epidemiologists. Scientists, the latter, until a few months ago ignored by public opinion and now risen to demigods, constantly in the limelight. One suspects that these exponents of economic science suffer from some sort of inferiority complex, or perhaps it is simple frustration.
The fact remains that our heroes, on a site once full of much more interesting interventions, write first how we should deal with the pandemic. For example, by placing young people in hotels. Then, in a subsequent article, they state that only economists, thanks to their familiarity with models, are able to understand how to take into account changes in people's behavior when deciding measures to restrict social activities. In short, they claim a sort of supremacy over epidemiologistsinviting them to cooperate. Some of them even coined a new term, obviously English, yearning the fusion of economics and epidemiology: epinomics.
Keynes, who was well aware of his intellectual superiority, aspired to humility for the category. Humbly economists need to look at reality. And reality says some very clear things.
First: the trade-off between saving lives and the performance of the economy is false. If you let go of the virus and kill 1% (2% if hospitals go to overload) of the population you still have a big contraction of the economy. In addition to unspeakable mourning. The New Zealand-style solution (politically correct compared to the Chinese one, but there are more sheep than humans there) is to close everything immediately, at the slightest hint of the presence of the virus. Too bad that in this hemisphere many economists would say that it would not be worth it for so few infected. Miscalculating.
According to: people need strong cues to adjust behaviors. It is true that the economic analysis based on the models shows that the fear of getting sick is 90, i.e. equivalent to a total lockdown. In the sense that where there hasn't been complete closure, people have behaved as if had been there. See for all a study by the IMF incorporated in the latest world economic scenario. However, without lockdown measures in neighboring areas and country(ies), where geographical proximity becomes good neighborly relations, the alarm siren that sounds everyone at home even if there is no legal ban on wandering is missing . With all due respect to behavioral economics (magnificent ramification of the economists' reflection, with roots in the primitive thought of Adam Smith, but which is ill-suited to epiedemic events).
Third: who tried to find third ways (Sweden, primarily and more consistently, but also the United Kingdom and the United States), he then acknowledged that he had paid a very high cost in terms of human lives, without a particular economic benefit.
It is absolutely legitimate to criticize this or that government measure. But let us look at the facts which clearly indicate that sWithout severe restrictions on social behavior, the spread of the virus does not stop. The graphs below demonstrate this.
Not being humble, in these situations, risks costing many human lives.
PS: who, how those responsible for the government of Lombardy, thinks the time has already come to loosen the restrictions, plays dangerously with the existence of citizens. Let them rest their hearts and improve healthcare management.
PPS: those wishing to know the names and surnames of the economists referred to here can find them in the edition of lavoce.info on Tuesday 17 November 2020.
PPPS: Graphs are built using the new positive buffers. However, these underestimate, sometimes sensationally, the actual number of infected people. Which can be deduced from the dynamics of the deaths, considering that the fatality rate of the infection is 1% (i.e. one dead corresponds to one hundred infected).
The case of Lombardy is, in this, exemplary. Especially when compared to New York State.
Let's take into account that half of the tests are carried out here that are carried out there, net of the difference in population. Despite having a positivity rate that is almost seven times higher (20% versus 3%), which should prompt many more tests. Here's a nice task for humble economists: understand what does not work in the Lombard health organization compared to the New York one, which certainly cannot be considered as universal as the Italian one is (or would like to be).
