Features Australia

The tide’s gone out

Plenty of illiberal economists

11 December 2021

9:00 AM

11 December 2021

9:00 AM

‘Only when the tide goes out do you discover who’s been swimming naked’. It’s one of my favourite sayings from the Oracle of Omaha, investor Warren Buffett.

I was thinking of this the other day while reaching the conclusion that my profession – the economics profession – is filled to the gills with illiberal busy-bodies who never seem to hesitate from doling out liberty-sapping recommendations based on their ‘expert’ opinions.

The tide is of course the pandemic and the naked ones are all those know-it-alls who forget their basic economics about trade-offs and push for all kinds of restrictions, mandates, bans and the like.

I should initially point out that the term ‘economics profession’ is a loose one. Happily, the term ‘economist’ is not a legally reserved title. There are no restrictions on anyone joining the club and there are no mechanisms for expelling anyone.

There is the Economics Society of Australia, but anyone can join up as long as they pay the money. From time to time, some of the insiders in this loose profession have considered restrictions on who can call themselves economists and even introducing a system of compulsory professional development.

But all sensible economists oppose confected occupational licensing – as this would surely be – and so these ideas have gone nowhere. That’s the good news.

The bad news is that far too many economists in this country (and elsewhere) have forgotten their basic economics and have entered the public arena to argue the case for a wide array of government-imposed restrictions in the context of the pandemic.

An early shot across the bows was the group letter put together by 265 ‘eminent’ economists, mainly academics. (Don’t you just love a group letter?  It’s really about the tussle to be part of a group that should be deemed important and worthy by the public. The actual content of the letter matters a great deal less. The forlorn hope is that a group letter has impact, that politicians will pay attention to a group letter because it’s from a group.)

These economists signed the letter addressed to the Prime Minister and Members of the National Cabinet – it’s always best to aim high – and dated 19 April 2020. The ostensible aim was to fend off calls to ease the social distancing rules and other restrictions that were in place.

And here’s the real kicker: ‘some commentators have expressed the view there is a trade-off between the public health and economic aspects of the crisis. We, as economists, believe this is a false distinction’.

That’s right: 265 economists didn’t think all those public health measures were really damaging the economy. But the letter then goes on to implore the PM to keep spending up big. ‘We believe strong fiscal measures are a much better way to offset these economic costs than prematurely loosening restrictions’.

Are you following? We are supposed to believe that there was no trade-off between public health measures and economic outcomes and yet fiscal measures were required to offset the economic costs. Oh and these economists thought they were public health experts when it came to assessing the effectiveness of the public health measures notwithstanding the lack of any good evidence.

Take this set of recommendations from the cohort of know-it-alls: ‘our borders will need to remain under tight control for an extended period. It is vital to keep social-distancing measures in place until the number of infections is very low, our testing capacity is expanded well beyond its already comparatively high level, and widespread contact tracing is available’.

Why would economists think they have any comparative advantage – probably another concept alien to this group – in making these judgements? Talk about mission creep. Let’s face it, (some) economists were clearly giving climate scientists a run for their money at this point.

As the pandemic has worn on, economists have continued to play a shameful role in pushing every illiberal, intrusive intervention that could be dreamt up.  When it comes to vaccine mandates, a number of economists have burst into print to argue the case for compulsory vaccination in virtually all settings.

At first, the externality rationale was used to justify mandates on the basis that vaccination would eliminate, or at least reduce, the rate of transmission of the virus. In order to reduce this external cost not borne by the unvaccinated (so the argument of these self-important economists went), it was necessary for governments to mandate vaccination.

When it became clear that Covid vaccines don’t noticeably affect rates of transmission, these same economists switched to the argument that the pressure on public hospitals had to be controlled because vaccines reduce the severity of the disease. The fact that there was no evidence that this pressure on the health system was unmanageable, particularly in 2021, was simply overlooked.

It’s hard to pinpoint the low-point of the involvement of economists in pandemic policy issues, but my judgement is the suggestion that the unvaccinated should be forced to pay a surcharge on the Medicare levy to reflect the burden they may place on the health system.

Saul Eslake, Tasmania’s most famous economist, publicly declared that this was a marvellous idea. ‘Non-vaccinated people could pay a higher Medicare levy. If they choose not to be vaccinated, that’s their choice, but it imposes a higher burden on the medical system’.

Just, wow! Does this apply to anyone who imposes – or who might impose – a higher burden on the medical system? What about women who give birth? That’s costly. What about people who ride motorcycles? What about drug addicts? Gosh, I thought we had a universal health care system open to everyone.

What the tide going out has meant for me that is that there are plenty of economists who simply do not adhere to the freedom-encompassing principles that I always thought were core to the discipline of economics. These include that there are always trade-offs (you can have more of something only by having less of something else), that individuals are best placed to judge what is in their interests and that the role of government should be as minimal as possible.

In fact, these last two years have clearly demonstrated the truth in F.A. Hayek’s statement that ‘the greatest danger to liberty comes from the efficient expert administrators exclusively concerned with what they regard as the public good’.

Include virtue-signalling economists among this lot.

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