Two Distinctly Different Approaches to Crisis Resolution

There are two very distinct approaches to crisis resolution. One is the socialist approach, adopted by most governments of the world in the latest coronavirus crisis. The other is the individualistic approach, used by few if any of the world’s major nations.

 

The Socialist Approach

 

Here are some of the main elements of the socialist approach:

 

  • Centralized decision making to which all must comply
  • Temporary loss of civil liberties
  • Suspension of property rights
  • Large, perhaps even totalitarian, government
  • Reliance on data and statistical models
  • Reliance on expert opinions and recommendations

 

The Decentralized/Individualistic Approach

 

Here are some of the main elements of the individualistic approach:

 

  • Radical decentralized decision making even to the individual level
  • Defense of all civil liberties
  • Defense of property rights
  • Limited government
  • Skepticism of data and statistical models, especially early in the crisis
  • Skepticism of experts, especially early in the crisis

 

The Look of the Two Different Approaches

 

We know what the socialist approach looks like, since it has been adopted by all the world’s major nations during what is called the coronavirus crisis. The president closed our borders to international travelers (but not goods). Many state governors have restricted the people’s right to assemble, the right to work, the right to open their businesses as normal, and even the right to leave their own homes except for “permitted purposes”. The financial and personal cost of these measures is beyond calculation. Government justifies these measures by reliance on expert advice that to allow citizens to go about their lives as they see fit will cause a medical catastrophe. These experts rely upon data and statistical models to justify their recommendations. One of the problems with reliance upon experts who, in turn, rely upon data and models, is that the data and the models constantly change and may even become suspect. For example, the Foundation for Economic Education (FEE) reported on March 25, 2020 that the Oxford-based Our World in Data had stopped using World Health Organization data for the coronavirus reporting, citing errors. Another problem is assessing when the data and expert advice should trigger the suspension of civil and property rights, if ever. Is it not interesting that the Center for Disease Control and Prevention (CDC) predicts that 12,000 will die of the “normal” flu this year in the US and that 61,000 died in the 2017/2018 flu season? Yet the US has taken draconian action only this year in reaction to the 804 who have died with the coronavirus as of March 25, 2020. (Note the qualifying preposition “with”.) What changed to warrant such action and are we to expect similar draconian responses in the future?

 

The individualistic approach is well known. It is the approach taken heretofore following other major flu-type outbreaks in the fairly recent past. But let us pursue a thought experiment somewhat. What action might individuals and businesses take on their own in response to this media hyperbole? We know that some people with medical conditions or those who simply don’t want to take a chance are self-quarantining themselves or venturing out in public much less than normal. Furthermore, some stores are open and people seem to be taking precautions. They are maintaining a safe distance from one another in public. Hand sanitizers are being used in some stores to clean public shopping baskets and for customer use. Some stores are asking customers not to use cash. My local Ace Hardware Store has blocked off a six foot distance between the customer and checkout clerks. These are just some common sense actions taken by a self reliant people. But what might be the response if  businesses who were forcibly shutdown were allowed to open? I’ll use my local dental office for a thought experiment.

 

My dental office has been forced to close, but what if it were not? It could close voluntarily anyway, of course. That would be my dentist’s decision. But if she closed and others remained open, she might lose many customers permanently. Or she could remain open. Then customers could decide whether to see her for their regular checkups, etc. or not. If some did go, they might assess what steps the dentist was taking to protect herself and her patients. If they were not comfortable with her measures, they might try another dentist, in which case my dentist would risk losing a customer permanently if the other dentist adopted better protective measures. We could go on and on about the choices that both my dentist and her customers might take, but the point is that there are lots of options available to both my dentist and her customers. Individuals and businesses may rely on data somewhat, but the data is just one input to guide their action.

 

Conclusion

 

The Austrian school of economics explains that humans are guided by preferences, and preferences are NOT quantifiable. They are subjective. They differ from one person to another and change often within the same person. It is impossible for government to draft rules and restrictions that can satisfy the subjective preferences of ALL people all the time on how to respond to a crisis. Pretending that it knows what’s good for over three hundred million people is ludicrous. Better to adopt the individualistic approach and let each of us decide for himself.

Patrick Barron

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