Save lives first - deal with the economic consequences later (by social change if necessary)

A time of crisis appears to be one in which academics will publish articles before they have been peer-reviewed and accepted for publication. Philip Thomas, Professor of Risk Management in the Faculty of Engineering at the University of Bristol has released an interesting article which relies upon the “J value” (which is a new approach to cost benefit analysis intended “objectively” to give a value to years of human life saved by safety measures in industry).

The point which the media have picked up on in this article isn’t really about the merits (or otherwise) of the “J value” but about the following observation;

“This implies that a recession resulting in a general fall in economic output of 6.4% per person over a prolonged period would cost more life than would be restored by Option 4 [early 12 month lockdown with widespread vaccination at the end of the lockdown period using a newly developed vaccine]. The theory behind the calculation assumes quasi-steady conditions and it is not expected that a temporary fall of 6.4% followed by an immediate recovery would lead to this drop. However a prolonged recession of this magnitude would be expected to have such an effect.

For comparison, in the economic recession of 2007 – 2009, the real-terms GDP per head fell by 6% between 2007 and 2009 (see Figure 7), and did not recover to its 2007 figure until 2015. The effect of the recession on life expectancy is seen in Figure 8, where the life expectancy at age 42 is displayed as an approximate proxy for population-average life expectancy. The effect of the reduction in GDP per head appears about 3 years after the severe dip of 2008 – 2009 occurs, when the clear upward trends for both men and women are markedly reduced. Flat-lining is apparent after 2014.”

The flaw in this line of argument seems to me that “a prolonged recession of this magnitude would be expected to have such an effect” because it has done in the past. In other words, this would happen if the way we responded to a recession was no different in the future than it was in the past.

Yet, if the experience of coronavirus has shown anything, it is that it is quite possible to do things which seemed impossible yesterday. The Government have effectively nationalised the railways (for the time being) whilst offering unprecedented wage subsidies (now extended to the self-employed).

If – instead of just allowing a recession to diminish our economy as if it were as much a force of nature as the coronavirus – the Government were to respond to any recession with a fiscal stimulus and redistributive taxation to improve the living standards of the poorest (not to mention a Green New Deal) then there would be nothing whatsoever inevitable about a reduction in life expectancy (because there would be nothing inevitable about a reduction in per capita GDP).

We must demand that the Government takes whatever course of action will save the most lives from this coronavirus – and if that then means we need further social change to deal with the economic consequences of those public health measures then let’s bring that on.