Tim Harford The Undercover Economist

Undercover EconomistUndercover Economist

My weekly column in the Financial Times on Saturdays, explaining the economic ideas around us every day. This column was inspired by my book and began in 2005.

Undercover Economist

Young pessimists, old optimists, and the strange ways we think about risk

Have we blown the risk of catching Covid-19 out of all perspective? Or are we not nearly frightened enough? The fashionable view is that people have become reckless. Photographs of crowded bars and beaches provide some evidence for that. So too, more worryingly, does the apparently endless swell of the first wave of infections in the US, where young people are making up a larger proportion of new infections. In hotspots such as Houston, the young make up a growing proportion of the people being admitted to hospital, too.

Peer more closely, though, and the picture is mixed. Across the world, people are fearful of schools fully reopening, despite the fact that children and parents alike badly need them. There is very little risk to children and not much evidence that schools are major vectors for infecting teachers or parents.

Yet we worry. Ola Rosling of Gapminder, an educational foundation, tells me that his international polling finds almost 85 per cent of people think it is unsafe to reopen schools. Nearly half of them think it is unsafe for the children themselves, which thankfully is untrue.

Our sense of peril will continue to evolve as we hear more stories from families who have suffered. Daniel Kahneman, the psychologist and Nobel laureate, has argued that vivid stories tend to swamp probability when we evaluate risk. A two per cent chance of dying from Covid is clearly twice as bad as a one per cent chance.

But if instead of the thin description “dying from Covid”, we tell a story about infection, family concern, fever, apparent recovery, a sharp turn for the worse, being rushed to hospital, sedated and then dying, separated from family — well, by this point nobody cares about the percentages. The risk becomes terribly real, for a while at least.

Another perspective comes from an NBER working paper with the self-explanatory title: “Older People are Less Pessimistic about the Health Risks of Covid-19”.

This study screened out people who could not answer some reasonably demanding questions about statistics, and then asked them to estimate the quantitative risks of coronavirus to themselves and to others. For example: consider 1,000 people “very similar to you” who contract Covid-19. How many will die?

A plausible estimate of the true answer is that 5-10 people will die, but also that the details depend dramatically on the age of the respondent. Objectively, the risk for people in their seventies who contract the virus is about 10 to 20 times that of the risk for infected people in their forties. The risk for people in their twenties or early thirties is so low as to be hard to estimate.

Respondents to the survey saw things rather differently. Those aged 18-34 thought 20 people “like them” would die out of every 1,000 infected. That guess is far too high. In contrast, those over 70 thought that 10 people like them would die out of every 1,000 infected. That guess is too low, although probably closer to the truth than the youthful pessimists.

Andrei Shleifer, one of the authors of the NBER paper, is confident that the finding is real, partly because other surveys have reached similar conclusions. But how to square it with pictures of young people on beaches is not clear.

Prof Shleifer speculates that the explanation is that young people do not usually think about dying at all, while elderly people have spent a little too much time at funerals to ignore the fact that we are all mortal. Covid-19 has forced everyone to think about death, but for the over-seventies that thought is not novel.

Perhaps Prof Shleifer is right. If so it underlines how strangely our minds process risks. Covid has not appreciably increased the already tiny risk of dying for those under the age of twenty five. For those over 45, already facing a variety of ways to drop dead, Covid has been a large additional risk factor. During April and May, the risk of death increased by about 50 per cent for everyone over 45 in the UK, according to calculations by Professor David Spiegelhalter.

None of this explains the insouciance in evidence among young partygoers. But that may not be so difficult to understand either. Dr Claudia Schneider, a risk-perception expert at Cambridge university, puts it simply: maybe the kind of person who likes to go out and party in a pandemic is a very different kind of character from the person answering online surveys about Covid risks.

This simple explanation points to a messy truth: we are now at the stage of the pandemic when there is a vast disparity of different attitudes and actions. Some of us are nervous and cautious; some are unafraid and reckless. I am grateful for the over-cautious: the last thing we need is a resurgence of the virus in Europe.

But our disparate perceptions of risk are creating a social minefield. To answer my original question: some of us are blowing the risk out of all proportion, some of us are not frightened enough. But all of us are going to have find a way to forge ahead together.

Written for and first published in the Financial Times on 10 July 2020.

My NEW book The Next Fifty Things That Made the Modern Economy is NOW OUT. Details, and to order on Hive, Blackwells, Amazon or Watersones. Bill Bryson comments, “Endlessly insightful and full of surprises — exactly what you would expect from Tim Harford.”

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Will the mental scars of Covid fade or endure?

My local cheesemonger, having reinvented itself as a general produce store, has been open throughout lockdown. The proprietor tells me something strange and new has started to happen. Customers he hasn’t seen since March as they diligently shielded themselves from human contact, have finally re-emerged, blinking in the daylight. What’s more, he says, they have no concept of physical distance. While the rest of us have been honing our skills for 15 weeks, these poor souls haven’t got a clue how to behave when in public.

But then, do any of us, really? We’re all still working it out. Some people wonder around maskless, sneezing, snogging, shaking hands. Others are paranoid: “Keep two metres away from me! Get out into the road!”, I saw one masked gentleman scream as a perplexed woman jogged in his direction.

It’s a reminder that there is more to this pandemic than what governments tell us to do. Each of us has our own feelings about what is safe. Those emotions have shaped the arc of the pandemic. They will also define the path of the recovery.

Consider the impact of lockdowns. Common sense suggests they have been decisive in driving the disease into retreat, but they have not been the only factor. Hand-washing, handshake-aversion and working from home began long before legal enforcement.

A working paper from the economists Austan Goolsbee and Chad Syverson tries to separate out the effect of mandatory measures from voluntary ones in the US. For example, Illinois imposed restrictions before Wisconsin did. The researchers looked at activity on either side of such borders, using cell-phone data to track journeys to shops and other businesses. They were able to gain insight into how much of shutdown was effectively voluntary. The answer: a surprisingly large proportion. “Total foot traffic fell by more than 60 percentage points,” they write. “Legal restrictions explain only around 7 percentage points of that.” The shutdown, then, was roughly 10 per cent mandatory; it was 90 per cent voluntary.

A similar message comes from a comparison of Denmark, which had a firm lockdown, with Sweden, with its notoriously light-touch approach. Aggregate spending dropped 29 per cent in Denmark and 25 per cent in Sweden. That means voluntary measures did much of the damage to the economy — and, one hopes, have delivered much of the public-health benefit too.

I wouldn’t put too much weight on the precise numbers, but the basic message is important. People didn’t lock down merely because governments told them to. Now the converse applies: just because shopping is legal again does not mean people will rush out to the shops.

In Germany, they did: Germans spent more in May 2020 than they did in May 2019, suggesting that not only were they willing to visit the shops, they wanted to make up for lost time.

That is encouraging, but only up to a point. Germany had a good crisis by western standards, with fewer than 10,000 excess deaths, compared with 25,000 in France, nearly 50,000 in Italy and Spain, and more than 65,000 in the UK. The US is currently averaging about a hundred times as many daily new cases as Germany. Perhaps Germans feel safe because they are safe. Not everyone can say that.

Once the virus is suppressed, then a sharp recovery is possible. But might this experience leave a lasting mark on our thinking? Perhaps so. The economist Ulrike Malmendier has published several studies suggesting that our early economic experiences can be formative of enduring attitudes. If the stock market is weak when we are young adults, we tend to shy away from investing, permanently. Similarly, the hawkishness or dovishness of Federal Open Market Committee members is shaped by their personal experience of inflation.

A new working paper by Prof Malmendier and Leslie Sheng Shen suggests recessions reshape consumer behaviour long after they have passed. The after-effects are wonderfully described as “experience-induced frugality” — that is, people who’ve seen periods of high unemployment save more and accumulate wealth, just in case.

Such thrift could lead to more investment, of course, but another recent paper by Julian Kozlowski, Laura Veldkamp, and Venky Venkateswaran argues otherwise. They assert that the psychological scarring is destructive, since a vivid appreciation of catastrophic scenarios will leave people fearful of making bold investments. Why risk anything in a capricious universe?

I wonder. We do learn from bitter experience, of course. But we also have a great talent for forgetting. In particular, we forget how bad things feel. The pandemic will long be remembered, but the pain will fade. After Hurricane Katrina, the US National Flood Insurance Program saw a spike in demand. Three years on, demand for flood insurance had fallen back to pre-Katrina levels.

My guess is that clever statisticians will be able to detect the psychological aftershocks of the pandemic for decades to come — but that, to a casual gaze, everyday life in 2022 will look a lot like it did in 2018. Scars do not always heal, but they fade.

Written for and first published in the Financial Times on 03 July 2020. My new book The Next Fifty Things That Made the Modern Economy is NOW OUT. Details, and to order on Hive, Blackwells, Amazon or Watersones. Bill Bryson comments, “Endlessly insightful and full of surprises — exactly what you would expect from Tim Harford.”

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Why experiments matter and why we hate them

While the world celebrated the discovery that the steroid dexamethasone was an effective treatment for Covid-19 patients on ventilators, my physician friend was unimpressed. It was obvious that dexamethasone would work, she opined; intensive care units should have been using it as a matter of course.

Perhaps. But that is what doctors thought about the use of similar steroids to treat patients with head injuries. Logically, steroids would be so effective that a clinical trial seemed unethical. Overcoming these objections, the Corticosteroid Randomization After Significant Head Injury trial (CRASH) put the steroids to the test — only to discover that, far from being lifesavers, they raised the risk of death.

From steroids to social policy, what works and what doesn’t is often surprising. That is why rigorous experiments in real-world settings are invaluable.

This was the true contribution of the much-vaunted “behavioural insight” teams that became fashionable about a decade ago in the UK, US and elsewhere. Behavioural scientists have some useful ideas, but like doctors they are often wrong. More useful than any “insight” was the increased use of randomised trials in policymaking.

It is surprising how far one can push the idea, as Ben Goldacre describes in the International Journal of Epidemiology. Should we have had a randomised trial, in the 1960s, of whether beating boys with canes discouraged them from smoking? The idea of caning children is repugnant today, and rightly so. But then it was commonplace — so it might have been worth checking if it worked as advertised. A non-randomised study was even conducted in 1962. But as Archie Cochrane, a pioneer of evidence-based medicine, wrote, “when one thinks about it, the results do not tell us anything at all”.

There are, of course, examples of randomised trials that clearly risked harm to the participants. One 1958 experiment lured 200 children into simulated refrigerators rigged with internal video cameras; the idea was to watch what the children tried to do to escape. It is an unnerving study that distressed some children and for which no meaningful consent could have been obtained. On the other hand, it informed improvements in fridge safety that have plausibly saved several hundred lives.

A modern parallel would be a trial that deliberately infected healthy volunteers with coronavirus to see whether there was a way to trigger an immune response with a low-risk dose. Exactly this idea was proposed to me in March by a senior adviser to the UK government, who grumbled that doctors refused to approve the scheme. Unlike the toddler-in-a-fridge study, informed consent would have been easy to obtain. But otherwise the ethics are similar: a clear risk of harm to the study group, with the greater good in mind.

The idea is an old one; before we had a true vaccine for smallpox, people were “variolated” with a controlled exposure to the deadly virus. Variolation was truly dangerous, but broadly effective.

Trials of caning, fridge-escapes and variolation worry us not because of the trial but because of what is being tested. But often experiments make us uneasy for no good reason. A recent study by Michelle Meyer and others described hypothetical cases to survey respondents and asked them if the behaviour was appropriate.

Imagine, for example, a clinical director who tried to reduce hospital infections by putting up posters with a safety checklist for medical staff. No problem, right? Or imagine he or she instead puts the checklist on the back of the badges worn by doctors and nurses. Also, surely, no problem. Now imagine instead that they decide to run an experiment by randomly assigning people to be treated in a room with the poster, or by a doctor wearing the badge.

When Ms Meyer and her colleagues described one of these scenarios, few people were concerned about either the poster or the badge, but a substantial minority who were told about the randomised experiment raised objections.

It is unclear why we have this aversion to randomising between two unobjectionable alternatives. The most straightforward explanation is that people either object to the idea of being arbitrarily manipulated, or they are unnerved by the realisation that the clinical director doesn’t know what he or she is doing.

But while understandable, these are not good arguments against experimentation. If decision makers are fallible — which they are — then randomised trials are a solution to, not a symptom of, that problem. So researchers should work hard to demonstrate the trustworthiness of their experiments. Securing real consent is ethically invaluable, but it is also good public relations.

And policymakers should embrace randomisation. Steroids were surprisingly effective in treating ventilated Covid-19 patients, and surprisingly harmful in the head injuries trial. There are plenty of policy interventions with a similar capacity to surprise. The equivalent of dexamethasone for crime, or early-years education, or tax compliance, may be out there. Randomised trials, however queasy they may make some of us feel, are a good way to find out.

Written for and first published in the Financial Times on 26 June 2020.

My NEW book The Next Fifty Things That Made the Modern Economy is NOW OUT. Details, and to order on Hive, Blackwells, Amazon or Waterstones. Bill Bryson comments, “Endlessly insightful and full of surprises — exactly what you would expect from Tim Harford.”

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What will bounce back after the pandemic, and what will never be the same?

In the middle of a crisis, it is not always easy to work out what has changed forever, and what will soon fade into history. Has the coronavirus pandemic ushered in the end of the office, the end of the city, the end of air travel, the end of retail and the end of theatre? Or has it merely ruined a lovely spring?

Stretch a rubber band, and you can expect it to snap back when released. Stretch a sheet of plastic wrapping and it will stay stretched. In economics, we borrow the term “hysteresis” to refer to systems that, like the plastic wrap, do not automatically return to the status quo.

The effects can be grim. A recession can leave scars that last, even once growth resumes. Good businesses disappear; people who lose jobs can then lose skills, contacts and confidence. But it is surprising how often, for better or worse, things snap back to normal, like the rubber band. The murderous destruction of the World Trade Center in 2001, for example, had a lasting impact on airport security screening, but Manhattan is widely regarded to have bounced back quickly. There was a fear, at the time, that people would shun dense cities and tall buildings, but little evidence that they really did.

What, then, will the virus change permanently? Start with the most obvious impact: the people who have died will not be coming back. Most were elderly but not necessarily at death’s door, and some were young. More than one study has estimated that, on average, victims of Covid-19 could have expected to live for more than a decade.

But some of the economic damage will also be irreversible. The safest prediction is that activities which were already marginal will struggle to return. After the devastating Kobe earthquake in Japan in 1995, economic recovery was impressive but partial. For a cluster of businesses making plastic shoes, already under pressure from Chinese competition, the earthquake turned a slow decline into an abrupt one.

Ask, “If we were starting from scratch, would we do it like this again?” If the answer is No, do not expect a post-coronavirus rebound. Drab high streets are in trouble.

But there is not necessarily a correlation between the hardest blow and the most lingering bruise. Consider live music: it is devastated right now — it is hard to conceive of a packed concert hall or dance floor any time soon. Yet live music is much loved and hard to replace. When Covid-19 has been tamed — whether by a vaccine, better treatments or familiarity breeding indifference — the demand will be back. Musicians and music businesses will have suffered hardship, but many of the venues will be untouched. The live experience has survived decades of competition from vinyl to Spotify. It will return.

Air travel is another example. We’ve had phone calls for a very long time, and they have always been much easier than getting on an aeroplane. They can replace face-to-face meetings, but they can also spark demand for further meetings. Alas for the planet, much of the travel that felt indispensable before the pandemic will feel indispensable again. And for all the costs and indignities of a modern aeroplane, tourism depends on travel. It is hard to imagine people submitting to a swab test in order to go to the cinema, but if that becomes part of the rigmarole of flying, many people will comply.

No, the lingering changes may be more subtle. Richard Baldwin, author of The Globotics Upheaval, argues that the world has just run a massive set of experiments in telecommuting. Some have been failures, but the landscape of possibilities has changed. If people can successfully work from home in the suburbs, how long before companies decide they can work from low-wage economies in another timezone?

The crisis will also spur automation. Robots do not catch coronavirus and are unlikely to spread it; the pandemic will not conjure robot barbers from thin air, but it has pushed companies into automating where they can. Once automated, those jobs will not be coming back.

Some changes will be welcome — a shock can jolt us out of a rut. I hope that we will strive to retain the pleasures of quiet streets, clean air and communities looking out for each other.

But there will be scars that last, especially for the young. People who graduate during a recession are at a measurable disadvantage relative to those who are slightly older or younger. The harm is larger for those in disadvantaged groups, such as racial minorities, and it persists for many years. And children can suffer long-term harm when they miss school. Those who lack computers, books, quiet space and parents with the time and confidence to help them study are most vulnerable. Good-quality schooling is supposed to last a lifetime; its absence may be felt for a lifetime, too.

This crisis will not last for decades, but some of its effects will.

Written for and first published in the Financial Times on 5 June 2020.

My NEW book The Next Fifty Things That Made the Modern Economy is NOW OUT. Details, and to order on Hive, Blackwells, Amazon or Waterstones. Bill Bryson comments, “Endlessly insightful and full of surprises — exactly what you would expect from Tim Harford.”

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What countries can – and can’t – learn from each other

Brazil has lost two health ministers; their replacement is a general. The country now probably has the highest prevalence of active coronavirus infections in the world.

South Korea was briefly the worst hit country outside China. It has suppressed the virus, albeit with myriad curtailments of everyday life. Just 280 people have died in total. In the UK in mid April, that death toll would have been reached each morning before breakfast.

Vietnam went in hard, early, rapidly restricting movement and introducing a vigorous contact-tracing programme. There have been a few hundred confirmed cases and no deaths.

Germany rolled out a massive, decentralised testing and contact-tracing programme to help slow the spread of the virus, then introduced a lockdown early on the epidemic curve. Economic damage was contained, while the death rate is much lower than in France, Italy or Spain.

Sweden opted for a policy of “herd immunity”, keeping schools and businesses open and relying on distancing measures. An influential Swedish epidemiologist, Johan Giesecke, declared that the fatality rate was probably about 0.1 per cent — much less deadly than feared elsewhere. Sweden has the highest infection prevalence in Europe right now, by design. The flow of new confirmed cases is still growing.

The UK flirted with herd immunity, too, before locking down late and discharging some elderly people from hospitals into care homes without testing them. One in 16 residents of care homes in the UK has already died, according to Stuart McDonald of the Institute and Faculty of Actuaries, and Britain has arguably suffered one of the most deadly outbreaks yet of any country. Shops are open. For most pupils, most days, schools are not.

As for the US, the response has been so diverse across different states as to defy easy description. “A patchwork of state reopenings,” the Washington Post called it in mid May, adding that it was “a deadly game of trial and error”.

It is certainly true that this messy diversity of approaches, both in the US and worldwide, makes it harder for all simultaneously to suppress the virus like South Korea. But global suppression now seems impossible anyway.

At least the unnerving lack of co-ordination is an opportunity to learn what works by comparing different approaches. In 1932, US Supreme Court justice Louis Brandeis wrote: “A single courageous State may, if its citizens choose, serve as a laboratory; and try novel social and economic experiments without risk to the rest of the country.”

In the case of an infectious disease, one could hardly say experiments are without risk. But perhaps we should be reframing the sprawling variety of responses as a chance to learn from the laboratory of those who do things differently.

The economist Charles Manski argues persuasively that modelling only teaches us so much about an uncertain future, whether the modellers are economists or epidemiologists. Ultimately, one must learn from experience. The more experiences cities, states or nations are having, the faster we can learn from each other.

But it is one thing to be presented with an object lesson. It is quite another to learn from it. It seems clear that western countries learnt too little from the experience of Sars. And even when the new virus hit Italy, other European countries seemed to hesitate before acting in earnest. The delay was fatal.

Why were so many countries so slow? I asked Jill Rutter and Gemma Tetlow of the Institute for Government. One problem they identified — which is both pathetic and all too human — is that it is simply more convenient to learn from countries with a shared language. There is plenty of information in the UK about what is going on in New Zealand, the US, and Anglo-fluent Sweden. Dispatches from South Korea or Vietnam seem to come from a different planet.

It should be possible, of course, for diplomats to gather information from anywhere in the world. But the people in the UK government with contacts in Hanoi and Seoul are not necessarily those with contacts in public health and epidemiology.

Ideology matters, too. For some politicians, the US is the role model to be emulated. For others, Scandinavia is the paragon. The current British cabinet seems disinclined to learn anything from Germany, while nobody seems to care about Vietnam.

There is another reason why countries are often not set up to learn from others: each place has its own institutions, culture and history. In most policy areas, lessons do not easily translate. There is a limit to how much the UK really can learn from Japanese banking regulators, or what Ethiopia can conclude from a study of German pensions. The starting points are so far apart that the lessons are obscure.

Coronavirus is different. It doesn’t care about cultural norms and barely about the level of economic development. There are ample lessons we can learn from each other about how to deal with it. But they must be learnt quickly — and we are not in the habit of studying.

Written for and first published in the Financial Times on 19 June 2020.

My NEW book The Next Fifty Things That Made the Modern Economy is NOW OUT. Details, and to order on Hive, Blackwells, Amazon or Watersones. Bill Bryson comments, “Endlessly insightful and full of surprises — exactly what you would expect from Tim Harford.”

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What the pandemic teaches us about our priorities, our planet, and the degrowth movement

Certain environmentalists have long argued that economic growth must end for the sake of the planet. “Degrowth” is concisely defined by one proponent, Riccardo Mastini, as “the abolition of economic growth as a social objective”.

Degrowth represents the view that sufficiently sharp reductions in carbon dioxide emissions cannot be achieved through new technology, pricing incentives or even major investment in energy and transport systems. The only thing that will work is economic growth itself coming to an end, permanently.

The pandemic is giving us a taste of what an end to growth might look like. So what lessons should we learn?

The lockdowns have indeed suppressed carbon dioxide emissions, but less than we might hope. The climate science website Carbon Brief estimates that emissions in 2020 are likely to fall by about 5 or 6 per cent relative to emissions last year. That would be the largest fall on record.

What might be a surprise is that it is not enough. If the cuts were compounded at that rate for the rest of the decade, we’d still fall short of what the UN Environment Programme estimates would be needed to restrict global temperature rises to 1.5 degrees. (A 2 degree target would be easier: five pandemics in the next decade would suffice.)

Evidently, hitting demanding emissions targets through crude degrowth would be hopeless. The human misery would be immense.

So would the political backlash. Relative to the slow-burning crisis of climate change, coronavirus is vivid and immediate. It is killing people by the thousand, every day, often in the world’s richest and most famous cities. It should be easy to get people to rally round the idea of making sacrifices to defeat the virus. Yet there is still a vocal minority opposed to any economic sacrifice whatsoever. That should unnerve any of us who worry about the far more diffuse threat of climate change.

Refined policies beat crude ones. The reason we opted for the hardship of a lockdown was that we hadn’t developed any better options. We didn’t have a vaccine, we didn’t have much in the way of treatments and, in many countries, we couldn’t even get together the basics such as testing stations, contact tracing and protective equipment for medics.

Refined beats crude for climate change, too. We could, of course, crush livelihoods to prevent ecosystem collapse, just as we have crushed them to prevent mass death from Covid-19. But that, too, would be a last resort, an admission that we had no alternative.

We do, in fact, have plenty of alternatives, although we have hesitated to use them: research subsidies for green technology; support for the smart grids necessary to harness ever-cheaper solar and wind energy; carbon pricing. The last has been a tough sell, politically, but I am willing to bet it polls better than a deep green perma-depression.

Of course, while many environmentalists would nod along with Greta Thunberg’s sentiment about “fairy tales of eternal economic growth”, most would acknowledge that the priority is not actually to reduce gross domestic product growth to zero or below, but instead to reduce emissions, restore natural ecosystems and sustain human flourishing and freedoms.

Fine. Yet if ending growth is not the objective, but the means to an end, might I suggest that it is not a very effective means? “Abolish economic growth” works as a radical political slogan, but when we’re looking for policy levers to pull we find ourselves coming back to specific taxes, subsidies, public investments and regulations. So why don’t we stop talking about degrowth and focus on the particular policies that might address environmental degradation?

We might find that those policies, applied with sufficient vigour to save the planet, would indeed have the side-effect of bringing economic growth to a halt. I doubt it. But the way to find out is to try; we might be pleasantly surprised at how flexible economic activity can be, and how much fun we can all have while respecting planetary limits.

Here, again, the pandemic sharpens the point. Because in the short term we have left ourselves few options, we have fought the virus with lockdowns. The lockdowns have damaged growth. But there are no “degrowth epidemiologists” arguing that throttling economic activity is the aim rather than the unwelcome side-effect, and that vaccines and contact tracing are fairy tales peddled by neoliberal economists.

The virus has taught us that our way of life is more vulnerable than we might hope. It has taught us the importance of making sacrifices now to prepare for predictable risks in the future. It may even have reminded us that driving to work, or flying half way around the world for a meeting, are not always necessary, and of the joys of walking or cycling through quiet streets.

These lessons may help us deal with the threat of climate change that still looms over us. But my friends in the environmental movement should take one more lesson to heart: if degrowth is the only solution we can find to our problems, perhaps we haven’t looked hard enough.

Written for and first published in the Financial Times on 1 May 2020.

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The cost of keeping schools closed will be grave

British parents received mixed messages this week. On one hand, most children would not be going back to school until September at the earliest. On the other, zoos would be reopening. It’s a shame about the decay in maths and reading skills, but look on the bright side: penguins!

The closure of schools in many countries around the world puts the dilemmas of the pandemic in particularly sharp relief. There are no easy answers, but I worry that the question is not being given enough priority. We are at risk of making a mistake now with consequences that will last.

Children are not at much risk from the virus. As a parent I understand the impulse to protect your own children at any cost, but in England and Wales, just two children from the age of five to 14 have been recorded as having died with Covid-19 between March 28 and May 29. To put those two tragedies into context, over the same time period we would typically expect eight children to be killed in road accidents. Our children are very safe, by historical standards. If they return to the classroom, Covid-19 will not be the biggest risk they face.

When a society closes its schools, then, it is doing so not for the sake of the children.

What about the teachers, who must stand in front of 30 little viral vectors while some of us write newspaper columns from our homes? I would certainly not want to demand that my children’s teachers go to work while I stay home — doubly so for those in higher risk groups. But the evidence suggests that most teachers who decide to return to school would not be at grave risk. Data from England and Wales studying deaths registered before April 21 — many of whom would have been infected before lockdown — found that construction workers, cleaners, care workers, nursing assistants, taxi drivers, chefs and retail assistants were among those at higher risk. Teachers were not. Nobody should feel compelled to enter a workplace where they feel unsafe and we must find ways to make schools safer. But there is no sign that teachers should feel at greater risk than many others.

The final argument to keep the schools closed is that closures might be an essential component of a general effort to contain the virus over the medium term. But are they? That is unclear. Children will find it even harder than the rest of us to wash hands, avoid touching their faces and maintain distance from one another. Classrooms put them in close proximity, indoors, for an extended period of time. That must risk spreading the virus.

That said, the evidence suggests schools are just one of many places where the virus can spread — and that workplaces are just as risky, while restaurants and public transport are riskier still. In late May, researchers at the Center for Global Development looked at 20 countries that had reopened schools, usually as coronavirus infections were on the wane. In three of them, there was some evidence — albeit weak — that the epidemic had worsened after the reopening. In most, if I showed you a graph of new cases you’d find it impossible to guess the point at which schools returned.

This doesn’t prove that schools pose no risk. In particular, societies may often open them only when they are sure that other measures are keeping the virus under control. Such measures, for example contact tracing, should not be overlooked. Yet the broad fact that so many reopenings have succeeded does suggest that the risk is manageable when done right.

Meanwhile, what of the risk of keeping classrooms closed? That is higher than many seem to realise. It is damaging for the careers of many parents — mothers especially, I suspect. It is hard to see an economy bounce back when so many people’s jobs depend on their children being safely supervised at school.

As for the pupils themselves, we have evidence from numerous school strikes around the world that children’s education suffers when their schooling is interrupted. There is an active debate in academia over whether long summer breaks set back the learning of all students, or only that of those who were already disadvantaged. Either way, a break in schooling of six months or more seems likely to put a serious dent in the skills of many, permanently damaging their chances of flourishing.

Schools are trying to provide resources to help children maintain their momentum, but it is self-evident that some of these distance-learning offerings are much weaker than others. None of them can entirely deliver what young children need.

Reversing lockdown is a perilous moment. If it is bungled, and the virus springs back, we risk combining the health costs of openness with the social costs of lockdown. But we cannot sacrifice our children’s education indefinitely, purely to benefit their elders.

The problem of reopening schools has become central to the pandemic response. It requires wisdom, diplomacy and close attention. So far, the British government has displayed none of those qualities.

Written for and first published in the Financial Times on 12 June 2020. (The original is free to read and packed with links to original sources.)

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The pros and cons of libertarian lockdowns – or “don’t be a dickhead”

In March, an employee of a Melbourne bank was sacked after the bank concluded they had falsely claimed to be infected with coronavirus, triggering alarm for everyone working in the same building. The hands-off response of the local police chief: “It’s not against the law to be a dickhead”.

For weeks, much of the world has been locked down in an attempt to suppress the spread of the virus. The severity of the rules, and the relentlessness with which they have been enforced, has varied from place to place, but the broad theme has been the same: the rules are wide, restrictive and legally binding. Flout them and you will be punished: so it is “against the law to be a dickhead”.

It is easy to lose sight of an alternative approach: a libertarian lockdown. If you want to open a nightclub, rub shoulders in a choir, or offer to shake hands with everyone you meet in a hospital: “It’s not against the law to be a dickhead”. The sanctions will be social or commercial, not legal.

Before considering the objections to this idea — and there are plenty — take a moment to consider its appeal. First, freedom is valuable. To make something punishable by the power of the state is not a step to be taken lightly.

Second, most people try to do the right thing. We are social animals: we look out for each other, especially in a crisis, and we also fear being ostracised. In the UK, the vast majority of people complied with the lockdown, and not because they expected the police to come knocking.

Still, we do not rely on peer pressure as a substitute for making murder illegal. When life and death are on the line, laws and punishments are reasonable.

So the third argument is, I think, the most persuasive: the next stage in the fight against Covid-19 requires a subtlety that the law cannot provide. With coronavirus spreading rapidly, there was a strong case for a blunt, one-size-fits-all message: “stay at home, save lives”. But now the task is different. We are not trying to suppress a spreading epidemic; we are trying reopen our countries where possible while preventing a second wave. That means seeking out the most effective ways to prevent infections while still allowing both the economic activity that supports our livelihoods and the social activity that makes life worth living.

Last week, I discussed ways in which the government might try to discriminate — between young and old, or between different regions. But there is an alternative, which is to let people decide for themselves.

To use Friedrich Hayek’s phrase, making the right judgments from now on requires “knowledge of the particular circumstances of time and place”. Every workplace, every social setting, every classroom, is different. There is no law that can accommodate all the different ways in which people might try to protect themselves and each other while still maintaining some semblance of normal social and economic activity. And while firm guidelines and ­standards can be useful, no law can reflect my own intimate judgment about how much risk I am willing to take.

The case for a libertarian lockdown, one that relies on voluntary action and social pressure, is strong. But there is also a powerful case against.

First, and most crucially, this is an infectious disease. Each case of infection risks sparking many others. As I weigh the balance of benefits and risks I may downplay the risks to others, and endanger them. If I am not thoughtful and altruistic enough, people may die.

Second, while we should normally give each other the benefit of the doubt in judging our own best interests, this virus is a novel and invisible killer. We are figuring things out in a stew of ­misinformation, quack remedies and questionable advice. Can we expect mere common sense to be sufficient?

Third, people may lack either the power or the information to make a real choice. If a restaurant reopens, I am free to decide whether it’s safe to show up. The restaurant staff may feel they have no such freedom. And if the restaurant looks conscientious at the front of house but is taking risks in the kitchen, would market forces really punish that hidden offence?

A middle way is, of course, possible. Governments can outlaw the riskiest activities, while allowing free choice to prevail elsewhere, bolstered by firm guidance. The more clarity, trust and social solidarity there is, the more likely voluntarism is to work. It is a shame that the UK government has done so much to corrode that clarity, trust and social solidarity this week in the row over the lockdown odyssey of the prime ­minister’s chief adviser Dominic Cummings.

Yet the idea is hardly doomed. We will have to start figuring out how to stay safe, making difficult judgments in ambiguous situations. And it is striking that Denmark, which has lifted many restrictions, has not yet seen a second wave of infections. Perhaps “don’t be a dickhead” is enough after all.

Written for and first published in the Financial Times on 29 May 2020.

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What happens when you smash your own face in, in the middle of a pandemic?

My initial instinct, after hitting the road face first, was to call out to assure my wife that I was fine. My second instinct, as I looked at the rapidly spreading puddle of blood, was that perhaps I wasn’t.

Reader, you can deduce that whatever I did, it was not enough to stop me writing this week’s column. It was spectacular, though. Having your bike chain snap as you stand up in the saddle is not an experience I recommend. Absorbing the impact of the tarmac with your mouth is a strategy that I cannot endorse. Next time I’ll try to land on my backside.

Fortunately, that was not the only lesson I learnt. First, I was reminded that people really do look out for each other in a crisis. The coronavirus lockdown awkwardness of tense people avoiding each other on the street evaporated in an instant when I was sprawled face down in the middle of the road. One woman ran out of her house with tissues and water. An elderly fellow ambled over, proffering hand sanitiser and asking what he could do. Friends with bandages and medical degrees were at my side in minutes — I was cycling through my own neighbourhood — but even once the professionals were on the scene, everyone who passed stopped to offer help. Social distancing matters and the coronavirus is a scary thing. But when a poor soul is covered in his own blood, no one passes by on the other side.

Second, I learnt how impressively a healthcare system can perform when there’s some slack. Given that the UK’s NHS is focused on the twin challenges of treating Covid-19 cases and preventing the spread of the virus, I assumed that dental work would be out of the question. Not a bit of it. At half past eight on a Saturday evening, just a few hours after the accident, I walked into a near-deserted dental surgery, rubbed alcohol gel all over my grazed hands — ouch — filled in a form, paid a few pounds and settled in for a couple of X-rays and a temporary filling. (The damage, it turns out, is permanent but trivial.)

A tetanus jab on Monday at my local doctor’s surgery was even easier to arrange. Astonishingly easy, in fact. No mystery as to why: no one goes to see a doctor right now unless they really need treatment; some people are failing to see a doctor even then. As a result, the parts of the health service with which I interacted had plenty of slack. There was no waiting for an appointment, and ­everything was running to time — more like a restaurant than the NHS I grew up with.

In the short term, it will be impossible to maintain that slack. In the long term, we might decide to regain it. When the NHS reopens, all the postponed procedures must be crammed in; some patients will have acquired more severe and complex conditions for lack of treatment. It will be tough for staff and patients alike. But years from now, I hope we will not lose the memory of a healthcare system with both the flexibility and the spare capacity to see patients promptly. Such extra capacity costs money, of course. But we may find that it is worth the extra expense, even in the good times. It is efficient to stretch a healthcare system to capacity, but the strain imposes countless small costs, from long queues to stressed staff to appointments that are sometimes too brief to do the job. If the coronavirus pandemic has taught us anything, it is that spare capacity can be invaluable when a crisis hits.

The third lesson is one that I have to relearn in every personal crisis: you can change your plans, even those that seem set in stone. It is frustrating to have to delay work, upsetting to cancel long-anticipated pleasures and embarrassing to call others to explain that they will be inconvenienced because I fell off my bike and led with my chin. I am always a little too slow to accept the inevitable, and usually need others — a friend, a colleague, or my wife — to start prying open my iron grip on an obsolete ­schedule.

My own pratfall, bloody though it was, is of course trivial compared with a deadly global pandemic. But the lockdowns are tripping us all up just the same. Our work, our social lives, our holiday plans — all are sprawling on the deck. I see myself and others struggling to let go of our fond aspirations and comfortable habits and, instead, crossing our fingers and hoping things will be back to normal soon. And perhaps they will, but that seems less likely by the day. So we will all have to keep rethinking and adapting. Those people who are quickest to adjust, whether by temperament or sheer happenstance, are the most likely to ­flourish.

The final lesson is the simplest, the most familiar, the most banal — and yet somehow never redundant. I learnt, again, to count my blessings: medically trained friends who sprint to the rescue; NHS staff on duty and happy to help despite the risks; the fact that I didn’t break my jaw. And I am grateful that I work not on television, but in print and radio. Now, more than ever, I have the face for it.


Written for and first published in the Financial Times on 15 May 2020.

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The pleasures and perils of precrastination

Many writers are notorious for leaving things to the last possible moment. Not I. I’m always itching to get started and, for that matter, to get finished. I would gladly have written this column on Monday, but in her wisdom my editor pointed out that in a busy week for news, it might be a good idea to wait. So I did, soothing myself by working on an episode of my podcast that I expect to be broadcast early in 2021.

I can’t help myself. In a world full of procrastinators, I am a precrastinator. I’ve been like this for a long time. At school, we had homework diaries in which the tasks for each subject and each day would be recorded. However slapdash my work, I itched for the moment of completion when I could score a bold line through each item. Even better, when every piece of work on a page was complete, I would tear out the page with relish. Sometimes, infuriatingly, some ugly outlier could not be completed promptly. It would sit there like an unsqueezed spot.

One of my children has the looking-glass variant of this trait: while I am desperate to get to grips with unpleasant tasks, she is happy to postpone pleasant tasks indefinitely. To her, the highest form of gratification is gratification delayed. Christmas sweets are still in storage come Easter; her chocolate eggs last until her birthday in September; her birthday treats last until Christmas. Coronavirus be damned; we’re in no danger of running out of candy.

My daughter and I are both inverting the natural order of things, in which uncomfortable tasks are postponed in favour of easy pleasures. There are advantages in such behaviour, but traps as well. My daughter’s siblings have realised that her chocolate hoard is a tempting target for sweet-toothed marauders. And a new study from the behavioural economists Paola Giuliano and Paola Sapienza finds that very patient people are also less likely to be happy with their lives — possibly because they delay gratification so long that it never arrives at all.

Meanwhile I am suffering the curse of the precrastinator in a world turned upside down by a virus. I regret my early purchases of cheap rail tickets, given that the meetings to which I intended to travel keep being cancelled. Booking Easter and summer holidays seemed far-sighted at the time; now it seems short-sighted. Or perhaps that is just hindsightedness. We precrastinators enjoy the benefits of better choice and cheaper reservations; in exchange, we have to be willing to accept that sometimes we will face painful conflicts between new opportunities and prior engagements. At times, we must abandon our plans.

I’m an economist, so that’s fine by me; I’m trained to believe the sunk-cost fallacy is a fallacy. While regular humans tend to obsess about spending that cannot be recouped, throwing good money after bad, we economists can sound almost Buddhist on the topic. Attachment to such sunk costs is the root of suffering.

The psychological study that coined the word “precrastination” was conducted by a team of psychologists led by David Rosenbaum. The experimenters showed people an alley, along which were distributed two heavy buckets. The experimental subjects were asked to walk down the alley, pick up a bucket and carry it to the far end. The total distance walked is the same either way, so the easiest way to do this task is to pick up the furthest bucket, minimising the distance over which one has to carry the load. However, the majority of people choose the nearest bucket, instinctively believing “soonest started, soonest finished”.

Psychologists who study old-fashioned procrastination argue that it’s a behaviour designed to manage negative emotions: we avoid tasks that make us feel anxious.

Surely we precrastinate for the same reason: to manage our worries. Here, the dread is not about the process of engaging with the task, but the anxiety of leaving a task unfinished.

It’s plausible that the feeling intensifies as the list of incomplete tasks grows. One suggestive study, by Francesca Gino and colleagues, looked at the emergency room of a hospital. As the department became busier, the doctors tended to favour the easier tasks — healthier patients with simpler problems — presumably because as they felt overwhelmed, they started looking for the quick wins. The researchers dubbed this behaviour “completion bias”, and it seems closely related to precrastination. The busier and more stressed we get, the more desperately we look for opportunities to tick something off the to-do list.

Nevertheless I shall keep precrastinating, and gladly. The advantages of getting stuck into a task are clear enough, so it is a question of managing the downsides. My to-do lists are structured to keep the important stuff in plain sight while the trivia is tucked below the fold. I try not to hold too tightly to my plans.

I will admit that sometimes I go too far. A timeworn saying advises us to eat a live toad for breakfast each morning, to put the worst behind us. There’s wisdom in that. But is there any way I can eat tomorrow’s toad today?
Written for and first published in the Financial Times on 13 March 2020.

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