Pandemic: A Fear That Destroys The Economy

General director en Libertad y Progreso

Economist specialized in Economic Development, Strategic Marketing and International Markets. Professor at the University of Belgrano. Member of the Liberal Network of Latin America (RELIAL) and Member of the Institute of Ethics and Political Economy of the National Academy of Moral and Political Sciences.

LA NACIÓN – By Agustín Etchebarne and Dulcinea Etchebarne, Bachelor of Political Science and MA in Communication

“Anyone who gives up his freedom for a little temporary security deserves to lose them both,” Benjamin Franklin once said.

The ancient Greeks related that, on their way back to Ithaca, Ulysses had to circumvent Scylla and Charybdis; two monsters located on opposite banks of a narrow water channel. To survive, the sailors had to dodge the whirlpool produced by Charybdis, which led to the abyss, risking approaching the cliff where Scylla was hiding, a dangerous six-headed monster that emitted terrifying screeches and had three rows of fangs. Unfailingly fearful sailors were absorbed by Charybdis. The others fought against Scylla and lost more or less crew depending on the ability of these and their commanders.

In the same way, this year the world faced the dilemma of minimizing deaths caused by the pandemic and avoiding congestion in hospitals and, at the same time, avoiding economic disaster.

Fear turned to panic because the deaths caused by the pandemic were talked about to the point of exaggeration. John Ioannidis, a scientist at Stanford and a specialist in evidence-based medicine, confirmed that all deaths that “probably” were caused by Covid-19 are counted. However, the information that is disclosed avoids mentioning the word “probable” and increases the number of deaths. Also that the mortality rate was exaggerated (up to 10 or 20 times) because it is not known what is the actual number of infected, so the figures disclosed lack a minimum scientific rigor.

Biologist Matt Ridley explains that humans have a natural tendency to pessimism that is locked in the amygdala, a brain gland. That is why the most negative headlines tend to be successful, and since the business of some media depends on the rating, pessimism multiplies. This explains why the article by Neil Ferguson, an epidemiologist at Imperial College, quickly gained 40 million readers, despite the fact that his previous predictions on topics such as Mad Cow or SARS had also failed miserably. His mathematical model warned of possible millions of deaths in the world and of 510,000 deaths in the United Kingdom alone if quarantine was not established. Today Ferguson reduced his projection to less than a tenth of the original. You could argue that this was accomplished through quarantine. But his mathematical model predicted hundreds of thousands of Covid-19 deaths for Sweden, and the Swedes were lax, taking mostly voluntary measures. There, too, his projection failed. Sweden serves as a witness case for not having carried out a strict quarantine. It had fewer deaths per million inhabitants than the United Kingdom, Spain, France, Belgium or Italy, although more than other countries such as Norway, Denmark and Finland. How they did it? In the words of the health minister, they trusted that the Swedes “keep their distance and be responsible.” The economically active population is the least affected by the virus and with adequate protocols for sanitation, social distancing and the use of chinstraps, most activities can be carried out without greater risk. Naturally, those who can work from home do so, but businesses are still open and self-employed can continue their work.

Hong Kong, Taiwan or Japan did not do extensive compulsive quarantines either, but took more punctual and better-planned measures. Taiwan, for example, had only 5 fatalities. He applied a protocol against the epidemic early: flight restriction, use of gel alcohol, testing and random temperature measurements, in addition to the habitual use of masks that was contrary to the WHO policy followed by most of the European countries. Added to this was the use of telephone geolocation to control that the 55,000 citizens who could be infected completed a quarantine of 14 days.

It is clear that the strict and generalized mandatory quarantine was not the only or the best alternative. Little by little it is confirming that the keys to success in the face of the pandemic have been the number of tests, the responsibility of the population to maintain hygiene and social distancing protocols, and public-private collaboration. The case of Veneto deserves special consideration, since, being a neighbor to one of the worst sources of death in Italy, it managed to overcome the pandemic with very few casualties. His prescription was to treat the infected at home instead of piling them up in hospitals, thereby avoiding increasing the viral load in the air, which, being very intense, can even kill young doctors and nurses.

The problem is that our fearful rulers chose to let themselves be caught in the whirlwind of Charybdis, and the damage is already immense. The economic activity will fall between 10 and 15% in the year, added to the fall of the two previous years. That average hides an even more tragic reality: tens of thousands of people are merging, closing their shops, restaurants, gyms, beauty salons, etc. In addition, we are going to have an inflationary jump in the second semester, caused by a fiscal deficit that will exceed 5% of GDP. Unemployment and poverty will generate misery and, of course, a jump from the dead due to heart attacks, strokes, cancer, suicides and hunger. Intra-family violence is also growing due to prolonged confinement. There have already been at least 28 femicides and calls to line 137 of the Ministry of Justice have risen by 20%.

There is an urgent need to end quarantine and restore freedom to work and move around, containing the enormous damage being done to the social fabric of Argentina.

General Director of Fundación Libertad y Progreso