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Recession could kill more than coronavirus

Caught between two catastrophes

Philip thomas recession covid-19 coronavirus rick J value

Staying at home is our best weapon against the coronavirus pandemic. But a global economic crash could be a much more significant threat to human life. At some point we will have to endanger lives in the present to save those in the future.

People all over the world are currently confined to their homes.  Lockdown has emerged as our main means of combating the Covid-19 epidemic because there is nothing else.  The development of a vaccine will take at least a year, even under the most optimistic assumptions.  It then needs to be manufactured on an industrial scale and rolled out in mass immunisation programmes. 

It is difficult to see all these things happening in less than 18 months, even allowing for heroic fast-tracking.  But let us imagine that we manage to shorten the whole process to a year.  Can a lockdown strategy work over this prolonged period of time? 

A lockdown brings with it two major problems.  The first affects the individual.  Can people stand being cooped up under this form of benign house arrest for a full 12 months?  No joke if you are living in cramped quarters.  The second is societal.  John Donne wrote in the 17th century, "No man is an island, entire of itself ... I am involved in mankind" and this sentiment rings even more true in today's highly organised and interconnected society.  The division of labour recognised by Adam Smith as central to the Industrial Revolution has brought us huge benefits in wealth, health and happiness, but no-one these days comes near self sufficiency.

A nation's health and its economy are bound together so tightly that at some point they can be regarded as different aspects of the same thing.

Most people would agree that a year's lockdown is not a practical proposition.  It can only be a temporary measure. But if not 12 months, how long? 

My modelling suggests that two months is the shortest interval likely to make a useful difference to the course and effects of the epidemic. The lockdown introduced on 23 March in the UK brought a welcome slackening in the growth of infection after about five days.  A slow decline in the daily new cases has been apparent in Italy since 21 March, while the same leading indicator has started to fall in Spain in the first days of April.  A similar reducing number is apparent in Germany too.

A plateau in the number of daily infections will buy time to prepare for a second wave of the epidemic.  Ideally rates of infection will fall below current values, and this temporary decline will give more time to set up field hospitals and equip them with tens of thousands of ventilators. It is possible that repurposed anti-viral drugs might start coming on stream also.

But there is a cost to a long lockdown, not only in the reduced functioning of our society, but also in terms of human life.  A nation's health and its economy are bound together so tightly that at some point they can be regarded as different aspects of the same thing. 

If there is a sustained fall in GDP per head, then population-average life expectancy will decrease.

In 1975, Samuel Preston plotted life expectancy at birth against gross domestic product (GDP) per head and produced a smooth curve that described how citizens of richer countries live longer than those in poor countries.  Children born in some sub-Saharan states can expect to live only to the age of 55, while those born in Japan will not, on average, die before they reach 85, a difference of three decades.  The Judgement-value (or J-value) has been developed at the University of Bristol as method of finding an objective balance between increases in life expectancy and the spending needed to bring such improvements about.  The observed differences in national life expectancy can be explained using the J-value. 

While the explanation can be couched in mathematics, the J-value's basic message is intuitively clear.  When countries are poor, they cannot devote as many resources to desirable health and safety measures, which range from supplying clean water and sewerage systems, to adopting safer working practices in industry, and on to providing high grade medical services for their citizens.

Humans are humans, of course, wherever they live.  The J-value brings out this commonality clearly, finding that people exhibit the same level of risk-aversion in their decisions on life-extending measures irrespective of their country and its degree of development. The J-value then explains 80% of the variation in life expectancy with GDP per head for 162 out of the 193 nations in the UN.  The change in life expectancy that will be produced by any specified alteration in per capita national income can be calculated.

If there is a sustained fall in GDP per head, then population-average life expectancy will decrease.  Applying the J-value to Covid-19 shows that more life will be lost than will be gained if a disease countermeasure causes GDP per head in a developed country to drop by 6.4% or more for a significant length of time.

In point of fact, UK per capita GDP fell by 6% in the financial crash of 2007 – 2009.  This led on to a stalling two years later in the 30-year long growth in the nation's life expectancy.  It has remained stuck since.

The world is facing a very grave situation in which there are no easy choices. Governments should think long and hard before extending their lockdowns beyond two months.

The Covid-19 crisis is causing the global economy to decline at an unprecedented rate.  The fundamental problem for a strategy of lockdown is that businesses cannot be switched off one month and then turned back on several months later.  If it does not continue trading, a company will go not into hibernation but very likely out of business altogether.  Many governments are trying to cushion the blow with grants and loans, but the longer the lockdown lasts, the greater the fraction of business infrastructure that will be lost.

The IFO Institute has analysed the effect of lockdown on Germany.  A sector by sector analysis revealed that keeping the economy partially shut down for two months would reduce the nation's annual GDP by between 7.2% and 11.2%.  If those figures are representative of other developed economies, two months may already be beyond the point where the remedy is causing more harm than good, implying that this duration is the longest we should be contemplating.

It is clear that the world is facing a very grave situation in which there are no easy choices.  A temporary lockdown is proving its worth.  But on human health grounds, governments should think long and hard before extending their lockdowns beyond two months.

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Elizabeth Schiemer 12 April 2020

A Modest Proposal: Last century our great grandparents sent their young healthy sons to war, to die painful miserable deaths in dirt and mud to ensure freedom for their children. No sacrifice of life was considered too great. This germ warfare is targeting the old, yet the young are being asked to sacrifice their future life on earth to save us. Thanks to the sacrifice of life of those young men and women who went before us those who are old now have lived long lives. . Maybe the time has come for the old to sacrifice themselves for the young that they may too live in freedom we were privileged to enjoy. { idea att to Jonathan Swift. A Modest Proposal}

Wolfgang Kilian 10 April 2020

Brave people, daring to describe the world and everything with a holy single 'J' value. The economic growth in Germany in the last ten years was gained by outsourcing and economization, not necessarily helpful for the health system. Retrospective models also may fail for future developments when decissons are made with mind. However, the may serve for insights for future decissons. The other questions is what is with the other 20% of countries not fitting into this beautifully moddel. Doesn't that show that there are other social communities possible where this solely capital bound live length relation is not true?

Gurdeep Singh Sandhu 8 April 2020

Universal basic income is the solution.