The potential effect of our current stasis on jobs is particularly worrying

I know someone who is an administrator in a large international company with offices round the world. That person has just been furloughed. So, until June, the firm will pay only 20% of their salary, and British taxpayers will pick up the other 80%. The only condition is that the employee does no work at all.

It wasn’t the government’s aim to pay people not to work. Nor that poorly paid local taxpayers should support well-paid international professionals.

Nor that the scheme should be so cynically exploited. In this case, it is only the firm’s UK workers that are being furloughed. That’s because our government’s scheme is so much more generous than those of other countries. This allows multinationals to shift their costs between countries — and get the locals to pay 80% of the bills.

The potential effect on jobs is particularly worrying. Multinationals who furlough British employees will probably shift their work to employees in other countries. When the furlough period is over, will they really want the cost and hassle of moving it back again? Perhaps not.

Of course, the government was pressured to act quickly. But I fear that, in its haste, it may have allowed British taxpayers to be exploited; and may have precipitated the movement of jobs out of Britain.

The quicker we restore economic normality, the better.

Gosh, planning is really difficult, isn't it?

When even The Guardian points out that a centralised and centrally planned system doesn’t work perhaps it really is true that a centralised and centrally planned system doesn’t work? As they are about testing for the coronavirus:

With 400 public health offices forging ahead with testing, the country is a model for others to emulate

As the coronavirus crisis tests the resilience of democracies around the globe, Germany has gone from cursing its lead-footed, decentralised political system to wondering if federalism’s tortoise versus hare logic puts it in a better position to brave the pandemic than most.

Our own system has been to spend £4 billion a year and change on Public Health England - a centralised and centrally planned organisation - to lecture us on the dangers of Cocoa Pops. That might not have been the right decision.

At least one forecast is suggesting that Britain’s outcome from this pandemic will be the worst in Europe. Leading to the thought that if the outcome is worse given exactly the same cause then it must be the system itself which is less than efficient.

However, the real point here is that we can see how difficult planning is in the face of uncertainty. We don’t - no one does - know what really should be done because we just don’t have the necessary information to be able to do so.

Which is all rather Hayek really, isn’t it? That centre cannot gain the information necessary to be able to make decisions. Therefore we cannot rely upon the centre and its plans.

But here’s the thing. Decision making in a pandemic is easy. Easy as compared to decision making about an economy in the absence of a pandemic that is. Currently we’re trying to decide whether to be poorer while retaining more of us or leave some more to die and not be so poor. If not a binary decision then at least close to it.

Now try managing a normal peacetime economy. 65 million people with unique and individual utility functions. At least one billion discrete items are on offer for sale in this economy. That number both growing and morphing as technology marches on and tastes change. That centre is going to be able to plan this?

No one is saying that the current planning - however well intentioned - for the coronavirus is being done all that well. It is though an obvious example of the impossibility of that same centralised and planned process performing a difficult task such as running our economy.

The zero sum fallacy

Ah yes, the Zero Sum Game fallacy returns to haunt us yet again. We can bury it with a stake of logic through its heart at the crossroads, but still it rises from the dead. It’s the one that says wealth is fixed, so that if someone gains more of it, it must be at the expense of someone else having less. It’s often nicknamed the pizza pie fallacy because, with a fixed size of pie, a bigger slice for one person means less pie left for others.

It’s popular on the Left because they don’t like rich and successful people, and think the only way to help the poor is to take that wealth and distribute it. They say the reason the industrialized West became rich was that they stole wealth from poorer countries. It never occurs to them that wealth is created by trade and exchange. You can grow that pizza pie, instead of redistributing it, so that everyone can have a larger share. Wealth was not redistributed by the Industrial Revolution; it was created by it.

The poor don’t improve their lot by having wealth confiscated from the rich. They do it by being part of an economy that grows. The billion-odd people lifted out of starvation in the past 30 years didn’t gain money confiscated from rich people. They did it by creating wealth through trade and exchange, by providing goods and services that people were prepared to buy. They didn’t redistribute existing wealth; they created new wealth.

Some people now call for the wealth of billionaires to be confiscated and distributed. If they did their sums, they would see that people would receive only tiny amounts if this were done, and it would be a one-off that couldn’t be repeated. Society is far better off if we allow people to become billionaires by providing millions of us with goods and services that add value to our lives. It makes us all richer.

We support free markets and free trade because they make the poor richer, and have proved in practice that they can do this. Redistribution doesn’t do that. After the epidemic we want policies that will grow the economy and create wealth, not ones that will shuffle it around without increasing it. We want policies that will enable the poor to become richer, not ones whose only effect is to make the rich poorer.

The economy is more like a fragile ecosystem than a robust machine you can put into stasis

Sadly, our Treasury officials—and all those politicians, with their Oxford PPE degrees—have read too much economics.

Standard economics textbooks explain the economy as a vast machine. They imply that you can switch it off, then switch it back on again, and it will spring back into life.

In reality, the economy is more like an ecosystem. Remember when Chairman Mao mobilized China’s citizens to kill all the sparrows because they were eating the grain?

A plague of insects that ate the crops instead, with no birdlife around to keep down their numbers. And people starved.

Here, we shut down cafes, bars and restaurants. That hit wholesale suppliers, who had to scramble round to find new, domestic, customers. The closures led to lower footfall in towns, and within days the other shops threw in the towel. Their suppliers too are now facing disaster, as are the companies who rent offices and shops to businesses that may never open again.

Once you disrupt the hugely integrated ecosystem of markets like that, things go out of kilter very fast. Health bosses might say we need to lock down for six or nine months, but by then there will be no businesses standing to generate wealth for healthcare anyway. We need to re-open Britain: safely, but as rapidly as we possibly can.

It's an old mistake, perhaps people should stop making it?

Zoe Williams makes a very old mistake:

And there’s an overarching fallacy, that a job many people could do must be inherently low in value.

That lots of people are capable of doing the work, willing to do so, means that the supply is large. The larger it is compared to the demand for that work to be done the lower the price will be. This is why 90% of the actors in the world work buckshee. The number of those who enjoy treading the stage is rather larger than the number we wish to see doing so.

But that is, in the phrase, to know the price and not the value. Which is where that old error is. Aquinas brought it back into Western philosophic thought, Aristotle laid it out, the idea that there is some objective value that can be divined. Something that simply isn’t true.

The only people out here doing the valuations are us humans. Therefore the value is what we place upon it. It is something subjective therefore - what are we willing to pay for this thing, that service or their time and effort?

It’s still possible to go on and insist that there’s some societal value which is different from the individual. We might not think, or I or they etc, that social care is worth more than is currently paid for it but society as a whole does. Well, OK, we have a method of testing that insistence. For the market price is the summation of what we all are prepared to pay for it, whatever it is.

That is, the market price is the average of what we all think something is worth. If you desire that something be paid its true and real value then, given that it is just us humans doing the valuing, the market price is that value. Which is where that ancient mistake becomes visible. For absolutely everyone arguing that there is some true and knowable value is always, but always, arguing that it’s different from the one assigned to it in that market process, aren’t they?

We must be careful with how we value life

Today is my eldest brother’s birthday. He died a few years ago, after a long illness, having told the hospital staff not to revive him when his heart, inevitably, gave out again.

I was devastated to know we would soon lose him. Though I also knew that he had made the right decision.

They say you can’t put a value on human life. But long life is not all we value. When I see virus sufferers taken off to die in hospital isolation without their relatives being able to see them or even attend their funeral, I wonder if we have our moral calculations right. Like when I see elderly patients with other health issues submerged by machines and wires and tubes and people in protective suits. Or planes made into flying intensive care wards to take Italian patients to Germany while their families remain locked down at home.

In ordinary circumstances, doctors consider the effects on families, and on the quality of future life that their interventions might achieve. But now that saving ALL lives has become the political imperative, those values, and the other values of normal daily life, have been legislated away.

That cannot be right, neither for the patients and their families, nor for the lives and welfare of the rest of the population.

There’s hope: The emerging COVID-19 treatments

Imagine a farmer with a field of wheat. The farmer is our immune system and the field of wheat represents the cells and organs of our body. 

The farmer continuously inspects the field.If he spots any weeds or abnormal sheaves of wheat, he removes these; the field remains healthy. If the farmer ceases his inspections, pests can invade and weeds will grow. Eventually destroying the crop. 

The weeds and pests are like infections in our bodies, such as bacteria and viruses.The abnormal wheat sheaves are cancerous cells. At the other extreme, if the farmer becomes over-zealous and starts removing the healthy wheat sheaves, the field will also be destroyed.

The virus that causes COVID-19 is the pest infecting the field. In the majority of cases, the pest infects some of the wheat sheaves, but the farmer goes about his job effectively and removes the damaged crops. The pest is cleared in the process and the field returns to full health (often after a nasty fever, cough and fatigue).

However, if the farmer doesn’t manage to clear the damaged wheat sheaves in time, the pest can infect more and more healthy sheaves. The farmer becomes overwhelmed trying to clear all of the damaged plants. He recruits more farmhands to help him protect the field, but in the process they also cut down the healthy stalks and the field of wheat is destroyed.

This represents the situation that occurs in the roughly 5-14% of people who develop severe disease after being infected by the new coronavirus.  Immunologically, it seems that these individuals are developing an excessive immune response, something known medically as ‘cytokine release syndrome’, or ‘CRS’ for short.

Cytokines are the ‘messengers’ of the immune system ― the commands that the farmer sends to his farmhands to cut down stalks. If he sends too many orders like this, the farmhands start to remove healthy plants as well as defective crops. Some cytokines can be viewed as messages to the farmhands to ‘burn the crops’ ― these cytokines are particularly dangerous. CRS is the farmer sending too many orders to the farmhands to burn the field — the fire can quickly get out of control and kill the whole field.

However, doctors already have drugs that can block the dangerous cytokines associated with CRS. One such drug (called Tocilizumab, or Actemra) blocks the receptor for a cytokine called interleukin-6 (IL-6) and is currently in trials for use in severe COVID-19. It is used to treat CRS in other clinical settings, such as in cancer patients who develop CRS after receiving immunotherapies. The farmhands have switched off their mobiles and no longer receive the farmer’s messages to burn the field.

Another tactic the farmer can use is to treat the field with a pesticide. Many scientists are working on anti-viral therapies for COVID-19. One potential strategy, that has received a lot of media attention, is combined treatment with hydroxychloroquine and the antibiotic azithromycin. This approach is like blocking the messages to the farmhands and simultaneously treating the field with a pesticide. 

However, despite a few initially hopeful small-scale studies, several subsequent studies have failed to find good evidence that this strategy is effective in COVID-19. And a worrying consequence of the initial media hype could be that patients who need hydroxychloroquine for other diseases (including lupus, rheumatoid arthritis and malaria) will not be able to access this vital drug if the existing stocks are stockpile.

There’s another interesting strategy that scientists are looking at just now. Believe it or not, the BCG vaccine that is used to protect against the bacteria that causes tuberculosis might offer some protection against the new coronavirus. It’s like the farmer having recruited some trained farmhands who have helped clear different weeds or pests in the past. These farmhands are more vigilant and will chop down any sheaths of wheat that look slightly unhealthy. The new pest never gets the chance to spread and the farmer does not have to resort to burning the field.

Continuing with the farmhand analogy, if the farmer can recruit specialist farmhands who have previous experience with the pest, they will be more effective in spotting the infected crops and clearing them quickly. This could be likened to another strategy that is being trialled in patients with COVID-19, known as ‘passive antibody therapy’. Here, blood plasma is taken from those who have tested positive for the COVID-19 virus and whose immune system has now eliminated the infection. These individuals have antibodies that help clear the virus and transferring these antibodies to patients who currently have COVID-19 could help them to recover.

Finally, the best solution for the farmer would be if he can spray his field with a safe, long-lasting protective pesticide before the pest even shows up. This is akin to the vaccines that are being developed. However, there are many challenges involved in vaccine development and it is unlikely that we will have an effective vaccine for SARS-CoV-2 any time soon.

It’s still too early to know which of the treatment strategies (if any of them) will prove to be most useful in helping to manage the disease until we have an effective vaccine. The NHS is currently trialling many new approaches to treat COVID-19 patients.

What has been particularly encouraging has been the way in which scientists throughout the world have come together to tackle the pandemic. This will undoubtedly speed up our efforts to develop successful therapies for the disease.

Dr Eddie McAteer is a retired paediatric anaesthetist, with a strong interest in immunology. Dr Yvonne Bordon is a Senior Editor with Nature Reviews Immunology, world’s top immunology journal and one of Nature’s scientific journals.

These are their views of the authors. All treatments for this novel virus are under constant review and test.

For anyone interested in following the latest emerging science on this virus and disease, visit Nature’s rolling stream.

The value of fast fashion and those sweatshops

It is - sorry - fashionable these days to insist that we should not buy those products of the world’s sweatshops. That we must abjure fast fashion because of some reason or another. Which is exactly what we are doing right now to ill effect:

More than a million Bangaldeshi garment workers have been sent home without pay or have lost their jobs after western clothing brands cancelled or suspended £2.4bn of existing orders in the wake of the Covid-19 epidemic, according to data from the Bangladeshi and Garment Exporters Association (BGMEA).

Apply even the most basic logic here. Those sweatshops, that fast fashion, the absence is making people poorer. The presence in the first place must therefore have made them richer. As Paul Krugman noted decades back:

The benefits of export-led economic growth to the mass of people in the newly industrializing economies are not a matter of conjecture. A country like Indonesia is still so poor that progress can be measured in terms of how much the average person gets to eat; since 1970, per capita intake has risen from less than 2,100 to more than 2,800 calories a day. A shocking one-third of young children are still malnourished--but in 1975, the fraction was more than half. Similar improvements can be seen throughout the Pacific Rim, and even in places like Bangladesh. These improvements have not taken place because well-meaning people in the West have done anything to help--foreign aid, never large, has lately shrunk to virtually nothing. Nor is it the result of the benign policies of national governments, which are as callous and corrupt as ever. It is the indirect and unintended result of the actions of soulless multinationals and rapacious local entrepreneurs, whose only concern was to take advantage of the profit opportunities offered by cheap labor. It is not an edifying spectacle; but no matter how base the motives of those involved, the result has been to move hundreds of millions of people from abject poverty to something still awful but nonetheless significantly better.

But things made by poor people in poor countries. It’s exactly and specifically the thing that makes them richer.

And when the shops are open again do your bit, as we shall be. Check the labels on the clothes you buy and if they’re made by those poor people in a poor place then buy them. Heck, buy two, three. Because buying the products of their labour is exactly what increases the value of their work, it is what enriches them.

When to ease up on the Precautionary Principle

The precautionary principle is not a real-life situation. It tells us not to do something until we’re sure it’s safe. It urges us to err on the side of caution, and not to risk new things that might be damaging. The “weak” precautionary principle rules out things that might just have unquantified risks, but the “strong” one, favoured by the EU, forbids things until they have been proven safe.

Of course, in the real world we can never be sure that anything is completely safe. Everything has associated risks, from climbing downstairs to taking a bath. We might, over time, be able to assess the risk level of innovations, be they drugs, foods, additives or modes of transport. We don’t usually then ban them once they have an established risk level. Instead we assess the benefits of the innovation and calculate if they’re worth the risks involved. This is “cost benefit analysis,” and we do it every day as we cross the road, take a drink, or eat a chocolate. 

On an individual basis we assess whether the gains justify the risk of the possible consequences. When governments take over these decisions, they tend to err on the side of caution, giving more weight to the potential risks than to the benefits delivered. They do this for political reasons, wanting to avoid the wrath of those who might be adversely affected. They tend to do “cost” analysis instead of “cost-benefit,” leaving out the likely benefits.

Many governments, in response to the coronavirus epidemic, have decided that a lockdown will have a better outcome than continued contacts. They’ve weighed up the scientific advice about possible illness and death, and decided that the economic shutdown is the preferred course. They may be right, but the shutdown will have consequences in terms of mental illness, suicide, possible domestic abuse, as well as making people poorer, which seems to increase sickness and lower the quality of life. It’s been a balancing act.

Vaccines against covid-19 have been and are being developed by several teams, and some are in preparatory testing. The process of thorough testing and regulatory approval would usually take years. But there is a strong case for softening the normally stringent regulatory requirements in order to speed up the availability of vaccines. The sooner a vaccine is deployed in large quantities, the more lives can be saved, and the quicker can be the economic recovery. 

Yes, there may be risks involved in rushing an effective vaccine through the hurdles, but the risks of not doing so are almost certainly greater and more predictable. In this case sensible cost benefit analysis should push the precautionary principle to the back seat.

Entirely true, it's the implication that matters

This is news to some:

But while we know work is drying up, there is much we don’t know about who is being affected. The data we usually rely on doesn’t become available at the pace of the crisis, but there is some evidence. A timely survey conducted by academics in Britain and Switzerland showed that the young and low earners are hit hardest. Lower earners have been twice as likely to lose their jobs as high earners, while 12% of under-30s report being unemployed because of this crisis, against 6% of those aged 40-55.

Policymakers wishing to see us through this crisis need to recognise that we face a jobs catastrophe, but one that has arrived sooner for some than others.

It’s not news to us. For of course it’s the point we have been making about the minimum wage all these years. Those afflicted by any squeeze on the labour market are going to be those most tenuously attached to it, the young, the untrained, the unproductive.

They are, as here, going to be the first laid off in times of trouble. They are also the first who won’t be hired as the price of labour is forced up above the market clearing rate. Precisely why the correct minimum wage is £0 an hour, anything higher discriminates against the very people who need to get a job in order to progress in life.