Have you wondered whether a particular public health intervention during the COVID-19 pandemic has actually been worth it? Perhaps you then felt a bit ghoulish for asking the question, given that lives are at stake.
Well, you’re in luck because this episode of Building Tomorrow asks about that price tag. After all, resources are finite and we all routinely trade risk for convenience; there are some interventions that would not be worth the opportunity cost. Answering the question of how much a human life is worth is the first step to figuring out whether the shutdown and other measures during the pandemic have been worthwhile. Cato economist Peter Van Doren joins the pod to help us think through the topic.
00:04 Paul Matzko: Welcome to Building Tomorrow, a podcast about tech, innovation, and the future. Something I’ve been spending a good bit of time thinking about recently, is just how little we truly know about COVID-19, and that means how little we know about how we ought to respond. The scientific method, it takes time, time that a pandemic doesn’t allow. We have to respond first based on our best guesses and verify it later. Now that we’re a few months into the pandemic, we have more data, more studies, more science, that’s allowing people, like economists, like our guest today, to start making guesses about which government interventions are worth the cost to the global economy. Is social distancing, general shutdowns, mask‐wearing, and so on, is that worth the cost? But asking those questions requires, first, putting a price tag on what a human life is worth. That may sound like an unpleasant topic, but that really is necessary. We live in a world of limited resources, meaning that we can’t do everything. We can’t make our lives perfectly safe, no matter how much we might wish otherwise.
01:13 Paul Matzko: And so, the question is, how can we get the most life‐saving bang for the literal buck? To answer that question, I’ve asked friend of the Pod, and fan favorite, Peter Van Doren, or The Notorious PVD, as we call him in the office, to join me. Peter is the editor of Regulation Magazine at Cato, and knows more about the economics of government regulation than anyone else I know. But to start, and this will give you a fly‐on the wall sense of what Peter and I’s impromptu chats in the office are like. We discuss the arbitrariness of our cultural memory, including how little we remember about prior pandemics.
01:56 Peter Van Doren: You’re a historian, and so, that’s… That we can talk about… I’m hearing a lot of, “We’ll never forget,” right? And as I dig through history, since I never took it, I’m always amazed at how much we do forget. [chuckle] Maybe professional historians do not, but the older I get, the more I realize, there aren’t really any new problems, there’s just old problems that resurfaced, somehow we forgot about. And so, on the pandemic side, I was 13 years old in 1968, and the Hong Kong Flu killed a 100,000 people in the United States. Well, that’s not… It’s more than the normal flu, and at the time, US population was much lower, and yet, not only… So I asked Catherine, she’s three years older than me, so she was 16 in 1968, and did she remember? And the answer is no, neither of us remember anything about it. What we remember about in ‘68 were, Dan Rather on getting beaten up by the Chicago cops, and the Democratic Convention, and the city is burning, and… But Hong Kong flu, just somehow… No, I mean… So, if you’re a younger person asking me, “What is the wisdom from my youth in pandemics?” I ought to remember something about that and yet, I don’t remember it even being discussed. So, it could be because I grew up in the boonies, but…
03:36 Paul Matzko: Well, in like so many of these topics, it’s… When it does get remembered, it’s in order to score political points in the present, right? So, the Hong Kong flu…
03:51 Peter Van Doren: The remembering isn’t for… I try to be neutral. And I think science ought to be neutral, and we’ve discussed that in the past, and yet most of the time, it really isn’t, is it? It’s like, knowledge is a weapon, and history… I guess, historians vary, I assume you are taught how… You get educated in schools of thought, and then your training probably varies in how neutral or how aggressive it was, and maybe there’s some departments that try to be really, really neutral, but my guess is, they don’t do well in history, history may not be about that. And you can tell me what…
04:38 Paul Matzko: Yeah. Well, one of the things…
04:40 Peter Van Doren: The history of pandemics, or something.
04:42 Paul Matzko: One of the things we do learn, and we can just get into it here, one of the things that you learn in graduate school in history is that there is no such thing as full, complete, platonic, idealized objectivity. The objectivity is a myth. It might be also an ideal that’s worth striving for, but you’re never going to arrive at perfect objectivity, because you are this bundle of biases and prejudices, that even if you attempt to restrain them, to examine… To introspectively examine yourself and rid yourself of your biases and what not, you can’t. There’s some that are out buried in your subconscious that are reactionary tics that you can’t actually eradicate.
05:31 Peter Van Doren: Right.
05:33 Paul Matzko: And that’s fine, you might do your best, you try to be fair, you don’t have… But, get rid of the pretense of complete objectivity is something you learn in graduate school. And be aware that all history, and all historical work, makes choices. You choose what information to make salient and what information to leave silent.
05:53 Peter Van Doren: And notice how different that is, than, I would think, graduate training in biology or chemistry or physics. I mean, that’s not… In other words, the… Where there’s an intersection of medicine and history. So medical historian… And certainly my training was… Economics tries to make believe it’s more like experimental science, right? There are parts of it, but what you described is a fundamental aspect of your training, certainly wasn’t. I don’t think it’s not what your average science PhD student would, they wouldn’t talk about that much if at all, right?
06:37 Paul Matzko: I guess, it’s… There’s a truth out there, and we’ll use the scientific method to arrive at the truth with a capital T, I guess.
06:47 Peter Van Doren: Yes. And that science is a conversation among people using either experimental method or statistical inference to try to get at something called the real world out there. And John Samples and I talk about that a lot. He was always saying that, “I was… ” And I forget. I don’t know the names of the… But he said, “I represent a certain way of looking at the world where I think it’s actually out there and can be discerned, and in other disciplines, one does not… That’s not the goal, and people are taught early on, that is not even possible,” I think is what you’re saying. So that… There’s a divide right there.
07:32 Paul Matzko: Just because… And the historians even today, we debate about to what extent the… This thing out there, that’s the real history with a capital H, to what extent we can access it or should be trying to access it. So we do debate over that, but it’s not to say that there isn’t something there there. There is a there there. [chuckle] There is history that happened…
07:58 Peter Van Doren: Okay.
08:00 Paul Matzko: But what historians do is not necessarily… We’re not chroniclers, we’re not just trying to… You know, like the medieval chronicles where you wrote down in the doomsday book, “today the harvest was this, today the weather was this.” Just fact after fact after fact. We’re telling narratives. And so, it’s about why things happened, and the why of a thing happening is kinda fundamentally harder to access than the what? So, if it was just a matter of what happened, then… Well, then you can get… The there that’s there is easier to get to, ‘cause like, what… And the more specific, the easier it is. So what buttons? What material? What metal went in the buttons of the 34th Regiment of the first Infantry Division? Well, I can tell… You can find out that fact and you can ascertain it with a high degree of certainty, like, scientific level certainty, right? You find all these documents, they wore brass buttons. But what does that mean? I mean, who cares? What’s the purpose of that? What is the value of that factual observation?
09:09 Peter Van Doren: Right.
09:12 Paul Matzko: Very little. It’s not to say there’s none, but very little. It’s the why question that’s more interesting and valuable and more subjective, ‘cause you can make a thing about the inter‐transatlantic transfers of metallic substances of global trade and of brasses. I don’t know. I’m just making the up stuff up right here.
09:33 Peter Van Doren: Right, right, right, right.
09:35 Paul Matzko: But it’s… That’s the harder… So, historians are taught to kinda… We’re not taught that there’s no there‐there. There is something, there is an object of reality, there’s stuff that happened in the past. But we can’t know it perfectly, and you shouldn’t. It’s dangerous to pretend that you can always know it perfectly. And that pretense… And sometimes, yeah, I do get frustrated in the more scientific… In the scientific fields where it’s not that they’re wrong. There is scientific data that’s out there that can be accessed that’s real, with a capital R, but there’s also a lot about science that is in this subjective realm. What does it mean that when you eat eggs, it has this effect on your cholesterol level or doesn’t? What does that mean? Is that information that should be made silent or salient? Like how… Relative importance of that thing that’s factually true, who should that be communicated to? Who benefits from that information being communicated to? None of that is… That is all… Like, that’s the humanity’s realm right there. And scientists often ignore the fact that… Ignore that stuff that’s going on around their pursuit for some sort of true fact. And I guess, economics it exists in that middling space between history and science?
10:58 Peter Van Doren: Yes. Yup.
11:08 Paul Matzko: Since we’re talking about economics, and you’ve been thinking through COVID-19 I think in a different way, and its ramifications for American society and the economy, the future in a different way than I think the average bear, given your background and training. So, one of those things, and you sent this to me before we recorded, which was a paper that you and a blog post, I should say, with Jeff Miron and Ryan Bourne about the value of living, which that title might make our listeners think that we’re into the dismal science at its dismal‐est. Like, what is the value [chuckle] of human life? How much… Let’s put a price tag on that.
11:50 Peter Van Doren: Correct. We are.
11:51 Paul Matzko: Which actually isn’t dismal. It’s actually a hopeful thing. We can talk about that. So what is a life worth and why does that matter in the time of a global pandemic?
12:04 Peter Van Doren: Well, economists, what economists try to remind everyone of is that there are limits, that there’s a budget constraint, there are limited resources. And so, the heart of economics is trying to figure out how much of anything to do. And you need to know what people’s preferences are about things, how much they value things, and then what is their budget constraint. So in health, the question is, how much should society expend to save people from, in the current context, of an infectious disease and the consequences of that infectious disease, where once one has it, the ability of medicine to do something about it is more limited than with other medical issues that we face. So there’s no miracle cure right now. There’s only palliative efforts within hospitals to try to keep people alive, involving ventilators and things like that. But basically, you’re on your own with some medical technology. And the results, the death rate for… Have… Particularly in New York… In the northeast corridor has been, a lot of people have died from this disease.
13:33 Peter Van Doren: So then, the… How should we value… How much should we be willing to spend to try to avoid these consequences? Or said differently, is a shutdown, are lockdowns and shutdowns in effect, mandatory recession? Something that countries don’t… Countries don’t usually induce recessions through policy. They happen, and we have discussions about why they happen. But leaders of democratic countries don’t usually shut countries down, because that reduced income is very large. And so, the question is, why are we doing that? And the answer is, to save life. And so, the… What economists try to think about is, “Hmm, alright, what do we know about in market settings, how much do… How risk‐averse are people when they face risk? How much do they seem to be willing to reduce their own income to avoid risk? Or in turn, how much do they demand in compensation in market settings to face risk?”
14:44 Paul Matzko: Yeah.
14:44 Peter Van Doren: And from that of market calculation, we then come up with a number about how it appears in those small little trade‐offs that people face in daily life, how much people in market settings seem to value a reduction in risk and that when scaled up becomes what we call the value of a statistical life.
15:10 Paul Matzko: Well, I was struck in your post about… And we had two nice illustrations of what you’re talking about. You gave one example, which was the cost of making lighters like for lighting a cigarette or something else, of making them child‐proof. What does that cost per… That means fewer children will set themselves and their houses on fire and kill themselves. So, how many lives are saved by mandating some sort of mechanism on these BIC lighters versus how much… I forget, some sort of carcinogenic compound or something that is restricted by OSHA in a workplace. And for one…
15:52 Peter Van Doren: Correct.
15:52 Paul Matzko: It was like, $100,000, a few $100,000 per life saved with the BIC lighters, and the other was billions was it? Billions of dollars per life saved, tens of billions?
16:02 Peter Van Doren: Yes, lots of money.
16:04 Paul Matzko: Yeah. And…
16:05 Peter Van Doren: So, the traditional context in which VSL, which is the econ acronym for Value of a Statistical Life, the context of which VSL has been used before, before the pandemic was evaluating various health and safety regulatory initiatives, mostly in workplaces, but sometimes in the environment as well for the public as a whole. How much is it worth to reduce exposure to said thing through regulation? And again, the examples are guardrails. Guardrails, you now live in New Jersey, the most famous one is the Jersey barrier, right? In New Jersey, basically on arterial roads, you can’t turn left. There’s a barrier in the middle and you have to go to a light or a traffic circle and get to cross a major road. You just can’t turn left, and New Jersey implemented this.
17:09 Paul Matzko: That probably saves lives, right?
17:11 Peter Van Doren: Oh yes, it saves… I mean, a lot of people die in traffic and New Jersey is dense. New Jersey has lots of traffic. And so, the New Jersey invention that’s really saved a lot of lives is in effect banning a lot of left‐hand turns, and the so‐called Jersey barrier that separates traffic and on arterial highways that’s going at 60 or 65 miles an hour. So those implements, those regulatory measures are very cost‐effective per life saved. Some of this…
17:45 Paul Matzko: And that’s why this is such a… It’s not a dismal observation. It’s actually very hopeful, because it’s… The goal is to… There are finite resources, and so the question is, how can we most effectively spend those resources in order to save the maximum number of lives? So it’s about…
18:03 Peter Van Doren: Correct, correct.
18:04 Paul Matzko: Life preservation, life extension, saving lives. And that… So it’s not… Yeah, it’s a hopeful thing, even though I think folks kind of… There’s something vaguely ghoulish feeling, I think for the non‐economists to hear about qualities and the number of life extension and VSL. It all feels kind of cold in the calculating, but that…
18:28 Peter Van Doren: Correct.
18:28 Paul Matzko: When you dig then into it…
18:31 Peter Van Doren: Some non‐economic intellectuals find this whole exercise offensive. And those of us that practice it, respond, “Well, what should guide decisions? You can’t save all lives. You don’t… ” This applies to how many fire stations should a jurisdiction have? What’s the response time for a EMT? How much more should you spend to get the response time down from five minutes to four minutes? Should you build a station in each neighborhood or… But you’d run out of money. So again, all of this actually goes on, but it makes people very uncomfortable to talk about it. But I think you’re right to point out, it’s not dismal. It’s actually hopeful. It says, try to avoid spending money on very stupid things that don’t do much to improve life expectancy even though there are various constituencies that believe that we should do so and those particularly are on the environmental side. So super fun sites.
19:40 Peter Van Doren: The most famous one, Love Canal, near Niagara Falls, New York, which started the so called… What’s now called the Superfund EPA program, which is… So chemicals were buried during the height of industrial America. They were not disposed off in very, what we now would call modern ways. They were just buried and dumped. They leach into the ground water, and then so what… How much does that matter? Do people really catch… Are exposed to things and do they get cancer and other life‐reducing diseases because of that exposure? And the answer is a lot less than people think. So some Superfund expenditures and some workplace exposure prevention programs have actually been found to be… Save very few lives and cost thus a very large amount of money per life saved. Whereas things like guardrails and Jersey barriers and children lighter, not making beds and children’s blankets to be fireproof, those things seem to be very cost effective.
20:53 Paul Matzko: Well, and there is the… This is true whether we’re talking about economics or… I know it’s frustrating for wildlife conservationist types, is that folks make these decisions intuitively based on what feels right rather than based on data. So in wildlife conservation it’s easier to raise money to save a cute and cuddly panda than it is a fly. Or in terms of economics, people think, “Oh, you know a life‐saving measure that makes sense to me intuitively because I have one in my car is a seat belt. My kids are on school buses, the school buses should have seat belts, and that must be a cost‐effective way of saving lives.” And we know that actually isn’t very cost‐effective because of the nature of school buses and the high seats. You don’t really need… Seat belts are very expensive to add, and it wouldn’t say very many lives or some such. But people make those decisions not based on data, but based on feel. And that’s not necessarily… Our intuition is not…
21:54 Peter Van Doren: Correct.
21:55 Paul Matzko: As reliable as we like to think.
22:03 Peter Van Doren: Well, let me switch then to the pandemic, which is… So we’ve described the VSL policy context historically has been OSHA and EPA. It’s been workplace, environmental, regulatory interventions and the evaluation of them, as well as environmental and transportation, the traffic safety measures that we have been describing. All right. So there’s a VSL literature, and the number is right now in the United States and again, VSL varies by the wealth of society, etcetera. So the number varies by context and country, but the best estimate we have now for the United States is about $10 million per statistical life. That’s in other words, expenditure is below that or thought to be consistent with market choices that economists observe, that’s how much people seem to be willing to spend to save a life in market settings and much above that, people don’t seem to in market settings. So the $10 million is a guideline. So you should certainly spend below that, that’s cost effective, and then once you get an order of magnitude above that, that’s probably not.
23:21 Peter Van Doren: So in the pandemic context, people have taken the $10 million number and there have been papers written that again, this London College epidemiological model said that moderate social distancing would save an estimate of about 1.8 million lives. All right? Wow, okay. So how much economic slow‐down should we be willing to accept in return for saving 1.8 million lives because what social distancing requires is that all sorts of service occupations stop. Restaurants, opera, ball games, any place where there’s large crowds and they’re in close proximity. Those things need to be in fact shut down through lockdown orders and also through just voluntary behavior, people will avoid those things. So if you multiply 1.8 million lives saved times $10 million per statistical life, you get something on the order of $17 to $18 trillion which is…
24:36 Paul Matzko: That’s real money.
24:38 Peter Van Doren: US GDP is only 21.4. So these early papers in April and March were suggesting that in effect a severe policy‐induced recession would be cost‐effective because of the calculation I just described. And so lots of economists have been, including Jeff and Ryan and I have been scratching our heads about, is this really right? Is this… And so let me go through some of the concerns we have which is the $10 million VSL number comes from job context in which there’s much smaller statistical risk than in a pandemic. So I’ll give you… We basically have observed the wages in different occupations depending on the mortality rate that occurs in that occupation with white‐collar jobs being on the low‐end and then coal mining being on the high‐end. But that variation is only… Even for coal mining, the upper end of the US occupational data, the annual fatality risk is only 0.02%. All right, 0.02. Whereas we think COVID is on the order of 0.2 to maybe as high as 2. And we’re still in great dispute about what that number is, since we don’t have random sample of testing to actually know what the denominator is in a COVID calculation.
26:19 Paul Matzko: So at the lower end though, even at the lowest most conservative estimate, it’s about as dangerous as coal mining is that the riskiest occupations?
26:28 Peter Van Doren: Well, no. The COVID is a probably an order of magnitude greater than coal mining.
26:33 Paul Matzko: Right. But 0.2 to 2, even the lower end of that range is it has…
26:37 Peter Van Doren: It’s 10 times higher than the annual fatality risk in coal mining.
26:44 Paul Matzko: Okay.
26:45 Peter Van Doren: And that’s underground coal mining not on the surface where people don’t die ‘cause they’re not underground. [laughter] So there’s a paper by an MIT economist Bob Pindyck says, “Well, wait a minute, if you… Are we really gonna spend two‐thirds of GD… Is that really “economically sanctioned? Is that… Should we give our blessing to that cost‐benefit calculation?” And Pindyck said, “Well, the total US wealth is $98 trillion. And if you divide that per capita, you get about 300,000 per person.” And that’s a lot less than $11 million per statistical life. So in other words, if we spent $11 million to save the entire US population, we’d run out of money. And so that gave him pause as to, should economists really be saying… Well, what should they be saying? So Jeff and I and Ryan have been scratching our heads and trying to read and think about what does it mean to scale up the VSL estimate to pandemic levels of fatality risk, which are basically in order of magnitude higher than the settings in which VSL are calculated. And we’re still not sure.
28:12 Peter Van Doren: There are papers that suggest… Again, to get in the weeds a little bit that the probability, the annual probability of survival in an occupational setting in the US is 0.99. And so we’re studying underlying fatality rates, they’re no greater than 1%. Whereas if survival probability goes to like only 0.5 instead of 0.99, people seem to be willing to spend much more than VSL. In other words, ironically, even though Pindyck wrote a paper that said, the VSL as calculated maybe too high, it actually may be too low. I’ve got a paper that says, instead of… If the survival probability to next year is only 0.5, in other words, if we were facing a real survival crisis, our willingness to pay wouldn’t be $10 million per statistical life, but it would be 16–17. But again, that just makes the problem worse from a Pindyck point of view, ‘cause yes, we’d be willing to spend that at the margin, but we would quickly run out of money because of the budget constraint, because there’s only $98 trillion worth of wealth.
29:33 Paul Matzko: So with the old calculation off the top of my head, at 10 million a pop, 98 trillion, you’d run out… You can only save what, one in 30, 33 people before you run out of money, if that was… I can’t remember the exact number off the top of my head. And if you double that, then that’s obviously one in 50, one in 60 people before you’re out. And tough luck.
29:58 Peter Van Doren: If we had to save everybody, we couldn’t.
30:01 Paul Matzko: Yeah. So it’s okay at the margin, when we’re talking about relatively small numbers, you can spend more than you would otherwise.
30:10 Peter Van Doren: Yes.
30:10 Paul Matzko: But you can’t scale that up in the sense.
30:13 Peter Van Doren: That’s certainly our preliminary thinking is that… And we’re trying to write a paper that muses on these things and tries to come up with an answer but we haven’t got it yet.
30:28 Paul Matzko: I don’t envy you that task Peter, because all the data is still so unsettled. I saw on Twitter this week that the mortality rate appears for the last couple of weeks, appears to have fallen to half a percent in some… The expected mortality rate from an infection has gone to 0.5 where it was up closer to two in New York City in March and April, and they’re not sure why… It doesn’t matter whether… Because it’s New York City versus Iowa. It doesn’t matter because it’s summer versus spring, the seasonality effect, the severity and the transmission of virus. There’s so much we don’t know.
31:15 Peter Van Doren: One of the biggest things we don’t know is what should the number be in the denominator of that calculation. All right. So death, but even, I was gonna say the numerator is more certain, but notice, if you dig into the weeds, and Jeff Miron has done this more than any other scholar at Cato, death certificates, death causality, what are causes of death? It turns out, they’re not, there to use the jargon endogenous to the time. So there’s lots of… So once physicians are aware that a pandemic exists, what used to be called pneumonia is now called, “Oh, well, there’s not just pneumonia, there’s… We’ll call it a COVID‐related pneumonia.” “Well, have we done testing to know whether the person was COVID positive?” “Well, no. But we’re gonna… ” So the lumping in of respiratory infections, the classification system across time is actually much less consistent than you would think because we’re all human and there’s… At time of death the doctor is then charged with writing three things down on a form, and then those three things are related to what’s going on.
32:40 Peter Van Doren: And so even the numerator I’m not sure. But then there’s the denominator, which is, what’s the infection rate? Well, a third of… It’s estimated somewhere between a third, and that’s a low estimate, and then a half of COVID infected people are asymptomatic. So they don’t even know they have it, and thus they don’t get tested. So the testing of the population needs to be random in order to actually create a denominator, so that we can calculate the true infection fatality rate. And we may never know that. So anyway, I’m just… You’re right.
33:21 Paul Matzko: On that numerator bit or denominator bit, that was the controversy over an early Stanford study where they showed a very high prevalence. And there were people who criticized, I think correctly, the design. They put out the call for, “Do you wanna be tested for whether or not you had COVID?” But they got a very high.
33:43 Peter Van Doren: Yeah, yeah, I mean…
33:45 Paul Matzko: A quarter of the population had been infected at that point versus, I think a later study out of Indiana showed a 6%. Theirs was more truly random, a random sample. They got much lower number, but that’s a big variance right there.
34:01 Peter Van Doren: And some of the evidence comes from the cruise ship, the early cruise ship data, where people were confined and thus the total population was observable. The Diamond Princess is where maybe some of our best data come from. But I’ve read there a scientist who criticize inferences from that data set as well. So there’s science and then there’s digging in and then it gets more mysterious.
34:38 Paul Matzko: So it does sound… This gets into the debate over what should we do, of course, what was the appropriate cost‐efficient response to COVID, then also who should be getting to decide that. And I did detected note of concern in your paper with Jeff and Ryan, which was, right now, we’re leaving this solely to public health officials when they might be good at figuring out… They might be the ones to look to figure out the numerator, I take it, or the denominator if [35:14] ____ now. But they’re probably not the ones who are the best equipped to determine something that an economist needs to be called for, or a…
35:23 Peter Van Doren: Or just ordinary citizens. The question is off the air before we started, you alluded to the, there are facts, but then we need a weighting function or historians consciously engage in discussions about a weighting function in which some facts are more valued than others in a discussion of a narrative about history. Well, you can think of the same thing in a decision about life and death and resource allocation, which is… It’s probably the case that people who go into public health basically care greatly about public health to the exclusion of other things. And they may be… In fact their objective function may be to get COVID related deaths, let’s say, to zero.
36:17 Peter Van Doren: And wow, okay. So again, if you’re a zealous auto‐traffic safety person, the National Highway Traffic and Safety Administration, they may care more about traffic deaths than anything else, and to the exclusion of, “I can drive at 10 miles an hour, but it would take me so long to get there that I’m willing to risk more death in return for getting there sooner.” The same thing on COVID, which is Jeff and I and Ryan wrote, “If you don’t let anybody interact with anybody, that has cost above and beyond the strict reduction in income, the loss of measured economic welfare. There’s just the welfare from not being able to see anybody, from not being able to see your grandkids or your partner or whatever, and the current way we measure cost doesn’t help that. It’s not part of GDP. It’s not part of the measures that economists use for income.”
37:23 Peter Van Doren: So we were suggesting that even if these papers were correct, let’s say you ought to spend $15 trillion to save lives, part of our $15 trillion calculation was all sorts of things that aren’t counted in the 15 trillion. So the actual economic reduction you might be willing to tolerate would be lower, then you add in all this loss of freedom, and that would get you to 15 trillion. And so, if you follow what we’re trying to do.
37:52 Paul Matzko: Yeah, well, it’s like there’s the price of preventing a, I don’t know, a 40‐year‐old worker from going into his job as a massage therapist because of social distancing. He lost this job, that’s lost revenue. There’s also, though, what’s not being measured by that is the amount that he’d be willing to spend to visit his grandfather in a nursing home, but he’s not now allowed to do so. But that’s a real loss that he’d be willing to pay for, but that’s not captured by his employment versus unemployment.
38:32 Peter Van Doren: Correct, yup, exactly. Yeah, so we were just adding, in effect, that there’s all sorts of unmeasured things that ought to be in the waiting function, and we think that for some people, they care a lot about those. And so again, the conflict in the United States over whether to protest or not the various lockdown measures that political officials have implemented, people will not agree on how they value those unmeasured things that we’re describing. And that varies by political affiliation, and then also maybe how urban or rural your own setting is and things like that.
39:18 Paul Matzko: So off the top of your head, obviously, we don’t have… Again, all the numbers are in flux and so, I’m not asking you for a specific answer here, but off the top of your head, in terms of public health interventions that are closer to the sub 10 million, the BIC lighter, child burn down house preventer to the… Versus the OSHA requirement. I’m just gonna list a few interventions and whether or not they just make sense based on what you’ve been researching in terms of cost efficiency in fighting COVID. It sounds like you’re a skeptic when it comes to the kind of total, near total economic shutdown that we had back in March and April being worth it, at least any more. How about things like shutting down concerts, athletic venues, big gatherings of people, musical concerts, that kind of thing? Do you think that is a worthwhile expenditure?
40:21 Peter Van Doren: Yeah, people jumping up and down in a closed setting, yelling. [chuckle] Given a respiratory disease, that’s probably not a good idea. The question we don’t… There are some estimates, but what research is gonna try to figure out is: How much would people do that or not do that on their own? In other words, once, as more and more people become…
40:50 Paul Matzko: Oh, right, right.
40:51 Peter Van Doren: So trying to figure out how much of distancing results from policy per se, versus how much results from just voluntary not doing that because you’re scared. Again, papers vary as to how much the lockdown mattered or not. There’s some estimates that it didn’t matter much at all ‘cause people were just scared and gonna stay home as long as they could and earn an income. So then they’re… We’re back to if you have to earn income, what do you do in these settings? And some people may face very difficult choices.
41:34 Paul Matzko: You’re gonna be more tolerant of the risk if you need to make income. Well, there’s some evidence from that, perhaps from the Tulsa rally this last weekend, Donald Trump’s campaign, and there was this immense willingness to just make the cost less signalled that I’m interested in buying a ticket, or not buying a ticket and getting a free ticket to a rally. But then when it came to confronting the actual risk of…
42:01 Peter Van Doren: They didn’t show up.
42:02 Paul Matzko: Exposure of… People didn’t show up. And I know there’s some debate on about whether or not it was TikTok team sabotaging it, whatnot, but I tend to think more significantly, it’s lots of people who said, “You know what? I don’t think it’s worth it right now to go to a giant mosh pit of people without masks and yell our love for a politician.” [chuckle]
42:24 Peter Van Doren: Yeah, correct.
42:25 Paul Matzko: Except for the real hardcore.
42:26 Peter Van Doren: Correct. And the fact, in the reddest of reds… Oklahoma’s support of Trump in 2016 was what? 80%?
42:37 Paul Matzko: Oh, crazy! Yeah, okay, highest in the nation, perhaps? [chuckle]
42:40 Peter Van Doren: That’s what I mean. So if I’m Trump, that’s where I’m gonna hold my rally. The likelihood of this venue being filled seems higher there than it would be in New York, let’s say, even if it were allowed. So the fact that only nine… I think the estimates are what? Only 9,000?
43:02 Paul Matzko: Instead of 19 or whatever it was able to hold, yeah.
43:03 Peter Van Doren: It’s… Yeah, yeah, that’s… No, it’s… That’s interesting.
43:08 Paul Matzko: Well, and to your point, I remember seeing data early on, which someone went and I think they used, I think it was OpenTable, that I might be wrong about that, but they used a restaurant reservation booking.
43:23 Peter Van Doren: They were collapsing before the mandatory.
43:25 Paul Matzko: Yeah. And so that would imply that the same thing would probably be true when you lift the… And in fact, there’s some evidence from that from states that lifted their lockdowns, that people didn’t immediately go back to resuming their normal lives. Some people did, but lots of folks said, “You know what? I’m gonna keep getting takeout. I’m not gonna go sit down whether I’m in Texas or Florida or Arizona.” And so I think that’s a good point to make. Okay, well, so that’s… Yeah, so the interesting thing is that you could apply this to basically any government intervention.
44:06 Peter Van Doren: In fact, that was the purpose of the… The intellectual development of VSL was exactly with that in mind. In other words, in a non‐market setting, what guide should government officials use in making their regulatory decisions? How much? And that’s exactly where VSL has been used, but never in a mass scale pandemic setting before.
44:35 Paul Matzko: Right. Well, we’re really testing the system in this moment. What would you say are the low… If you had to guess, what are the lowest cost interventions that you would… The first things that should be part of our public health response to COVID-19? This is somewhat retroactively stuff we know now, we didn’t know then, but what are the things that come with a relatively low economic price tag, but seem to come with a relatively high effect on fighting COVID-19 that you would say the Peter Van Doren’s seal of government intervention approval? [chuckle]
45:16 Peter Van Doren: Well, yeah, I don’t… We could talk about how the whole view on masks has changed over time. And again, we’re back to: What do we really know? Apparently, there’s scientists who are testing. I’ve seen these simulations with UV light or something and so, you can… You put on various things on people and then you see how far their respiratory cloud, through exhalation, how much it goes in space. And then if you put a face shield on versus a mask and then… And they colourized these videos. And so you see a plume of stuff that comes… So I saw one the other day on masks, and it was, “Alright, well, it doesn’t go out the front so it leaks out on the side, and so then… ” So I don’t know what I… I still think we’re in the early stages of figuring out lots of things about how much respiratory stuff goes in space, and whether it’s the small stuff, the small particles or the large droplets, and all of that’s being… We haven’t done enough research on that because we haven’t had a pandemic. And so now, everyone’s into that and we’re figuring things out. And I think the general view I have is, for a respiratory pandemic, reducing interaction with other people is useful. Again, that’s just common sense. Where do I draw the line? I don’t… I’ve gone out of the house to buy groceries and I’ve done nothing else. My wife hasn’t left the house since March and… But again, we’re 60 something and so…
47:16 Paul Matzko: Right, higher risk, yeah.
47:17 Peter Van Doren: We’re more worried. And when am I gonna know, when am I gonna feel more at ease to do stuff? And the answer is: I don’t know.
47:28 Paul Matzko: My guess is it won’t hinge on what the governor of Maryland… Purely on what governor of Maryland decides, is… Right?
47:35 Peter Van Doren: Yes. I do have one thought of one thing I’ve read. Gina Kolata is one of my favorite science writers. She used to write for Science Magazine and now, she writes for the New York Times. One of the more interesting pieces I’ve read in the last three or four months is by her, and it was on how do pandemics end. And it was your point of it was not science, it was just people eventually decide to go on, whatever. And in fact, there’s a sociological or cultural end to pandemics, rather than a real medical end, and we get used to or comfortable with a certain level of risk and we get… And that the death rate is raised and it’s not what it used to be, but people put their heads out of the foxhole and they look up and they look around and they eventually, in effect, sociologically declare an end to things, even though medically, it’s still actually going on, but at a reduced level. And so I found that info, that what we’re discussing today, the scientific beginning and end of a pandemic may miss something. I found her analysis to be interesting.
48:56 Paul Matzko: We’ll have to put that in the show notes. That sound interesting and right up our alley. We saw this with the great flu pandemic of 1918, which killed my great‐grandfather, which was a… He was in Philly, which was one of the cities that got hit particularly hard because they took very few interventions early on. They had a big bond rally right at the height of the pandemic for war bonds, and so a mass spreading event. And so it was very hard hit city, versus cities that put in place social distancing and mandatory mask usage and the like.
49:35 Paul Matzko: But one of the things they saw was across the board, at some point, even the cities that did government measures early on that beat the first wave, etcetera, or bent down the curve on the first wave, eventually, the public’s willingness to put up with any kind of restriction just fades. No matter what you do, no matter how effective the restrictions are, at some point, people just say, “We’re done with this.” And so you always get a second spike. Now, how severe the second spike is, but basically, every city in the US had some kind of second wave or second spike once people, just their willingness to endure, ended. But in some ways, that’s, from a public health perspective, that might be seen as a failure. It’s more complicated, though, when you look at people were willing to assume that risk. They were tired of that. And so it’s complicated, but that’s certainly true from the last time we had a pandemic this severe. And it is.
50:37 Peter Van Doren: And again, what we’ve talked right about about 1968, it was real and fairly severe, I think less severe than this one. And yet, wow! It doesn’t seem to have left any lasting understanding among anybody.
50:54 Paul Matzko: Yeah, yeah.
50:57 Peter Van Doren: So again, the claim that, “Wow, we’re gonna remember 2020 forever, and blah, blah, blah.” And it’s like, “No, no, we’re not. I don’t think so.”
51:11 Paul Matzko: So maybe we would have remembered the Hong Kong flu for a lot longer if they had taken severe measures and tanked the economy in ‘68 and…
51:19 Peter Van Doren: Good point. There weren’t… Right. We were…
51:21 Paul Matzko: Yeah.
51:21 Peter Van Doren: As I said, ‘68 was troublesome for other reasons, and that’s what everyone focuses on. All these books on 1968, I don’t think they mentioned the flu much. They mentioned the Democratic Convention and the riots and etcetera.
51:42 Paul Matzko: It’s very true. I’m a historian of the ’60s and it almost never comes up in the standard histories of the ’60s. The same thing, though, is true of 19… Of the great flu epidemic in 1918, which in 1919, which is that… It’s part of many people’s family stories. I heard that story about my great‐grandfather as a kid from his daughter, my grandmother. But it was not something… People have actually commented on this, historians have commented on this, which is that it did not appear to cast some sort of long shadow over people’s memories.
52:15 Peter Van Doren: Correct, yes, right. Yup.
52:19 Paul Matzko: There’s not a ton of novels and early films.
52:21 Peter Van Doren: And it was a big deal, the death rate.
52:24 Paul Matzko: Bigger, yeah.
52:25 Peter Van Doren: That was… And there really wasn’t any medicine. What we know, not antibiotic, nothing existed. People… It was a big deal.
52:35 Paul Matzko: They’re also taking place in a very different information environment, too, though, which is today, we’re all connected. Social media, Twitter. Well, maybe not… I know you’re not on Twitter, Peter, but there’s… [chuckle] The conversation… You can’t hop… In a sense, something can’t fall as easily down the memory hole as it once did.
52:54 Peter Van Doren: Well, I would push back only a little bit in that…
52:57 Paul Matzko: Okay.
52:58 Peter Van Doren: The telegraph. The civil war was the first horrific event covered by photography and the telegraph. And newspapers relied on the telegraph to give pretty instantaneous information. The telegraph was just an enormous shock to information conveyance. So 1918 is just radio is about to come on. KDKA in Pittsburgh, I think it’s 1920. So radio did not exist, but the telegraph did. And the experience with the telegraph had been multi‐generational and it was rapid. It was electronic, it conveyed information. And newspapers were local, but they were all tied in by telegraph. So I would… If we could transport ourselves back, the information available to people who read newspapers, I think, would have been much more instantaneous than we’re giving credit for.
54:00 Paul Matzko: Well, it’s not the speed of transmission that I’m thinking of here. You’re right and never underestimate the power of the rise of the telegraph and the transformative effect it had. And before that, the rise of newspaper distribution, the way in which newspapers tied people together across the country and across the globe. So I don’t wanna devalue that, but it’s not the speed of transmission I’m thinking of; it’s the extent to which they’re… So what we’re describing is the rise of a particular form of gatekeeper and information gatekeepers. So in the ’60s, unless the network news, unless network, especially network television, unless the network radio…
54:40 Peter Van Doren: Unless Walter Cronkite covered it, it didn’t happen.
54:44 Paul Matzko: It didn’t happen. And then I think Walter Cronkite probably didn’t spend a lot of time on the Hong Kong flu. In 1918, are the… So it’s a little bit different there. You have a network of big national newspapers like the Chicago Tribune and smaller local newspapers. Did the newspapers relying on the telegraph wire services, did they spend as much attention on 1918 on the flu epidemic? Obviously, at the time, they would have, but afterwards. In other words, there’s information gatekeepers that get to decide what… Help us decide what to remember as a society and what not to remember. And I suspect that maybe there’s less of that.
55:24 Peter Van Doren: Yeah, yeah, no. And it appears that World War I and the failure of Robesonian international institutions, that’s what we all hear about, that era, and you and I in high school and then college, and… Right? Was that, not… So blame historians. No, I don’t know why.
55:53 Paul Matzko: That’s right, yeah. When in doubt, blame historians. That’s always a good rule of thumb.
56:01 Paul Matzko: We’ll end on that note, which I think is a reminder that the response to COVID-19 really ought to be a multidisciplinary discussion. We need epidemiologists to model the spread of the disease, public health professionals to suggest government interventions. But we also need economists like Peter to help us figure out which interventions are worth the cost. And well, historians like myself to address the holes in our cultural memory and dredge up stories from the past that can help guide us in the present. There are folks from many different disciplines that should have a seat at the decision‐making table now. But even more importantly, they should, as we attempt to improve our response for when the next inevitable pandemic arrives, whether it be 10, 50 or 100 years from now. In any case, I hope you enjoyed my conversation with Peter. He’ll be back next time to talk about whether COVID-19 will induce mass de‐urbanization of American cities. Until then, be well.
57:01 Paul Matzko: This episode of Building Tomorrow was produced by Landry Ayres for libertarianism.org. If you’d like to learn more about libertarianism, check out our online encyclopedia, or subscribe to one of our half dozen podcasts.