Thanks, Milton Friedman . . .

On Sunday, our war time president:

“We’re a country not based on nationalizing our business. Call a person over in Venezuela,” Trump told reporters. “How did nationalization of their businesses work out? Not too well.”

Trump administration officials pointed to voluntary actions from companies, such as 3M announcing more masks are being shipped to New York and Seattle.

“We’re getting what we need without putting the heavy hand of government down,” White House adviser Peter Navarro said at Sunday’s briefing with the president.

Russ Roberts did an Econtalk episode with Tyler Cowen on the epidemic a couple of days ago.  From the transcript:

[This is Roberts] And my thought–it’s hard to have a libertarian moment or a classical liberal moment in these times–but, it seemed to me that when the Administration and Trump underestimated the seriousness of the problem and downplayed it, which I thought was a terrible mistake, but when they did, people like you and me and others said, ‘Hey, this is a real problem.’ And, the private, voluntary reaction to the crisis was quite strong. The NBA [National Basketball Association] shut down very quickly. The NCAA [National Collegiate Athletic Association] shut down very quickly. Baseball shut down very quickly. Nobody had to order folks around.

And, I think what’s been underestimated in this, in the demand for this sort of top -down, ‘Fix it. Solve it. Make everybody whole. Don’t let anything bad ever happen,’ we’ve missed the role that we can play individually. It’s going to be very imperfect, of course. People cheat on self-quarantining. I know that. But, the idea that if we could test perfectly, as if that could solve it, is unrealistic in a country of 330 million people, and our number of square miles. It just seems that the advantage of this bottom-up, voluntary response to the crisis is that it allows for nuance. The top-down says, ‘Everything’s closed.’ And that means that there’s going to be enormous economic and human results from that, that we’re just ignoring.

The advantage of the private response is it allows for people to be more flexible, to take into account when they can and should, when things are more dangerous for some than others. And, I just think that’s been lost in this maelstrom.

Yes, that’s just what we need . . . nuance and flexibility . . . if it weren’t for those darned misguided price-gouging laws the private sector would have taken care of this perfectly, no doubt.  It seems clear from the interview that Roberts knows this is ridiculous, but he just can’t help himself.  Later on in the interview (in a discussion of saving businesses from bankruptcy):

Russ Roberts: Well, I’m not sure–I’m like you. I want to minimize what we do, particularly if it’s likely to be permanent. Makes me really uneasy. We’re at risk that this becomes a watershed moment. I think it’s–actually, it’s probably too late. Everyone just expects the government to “solve this.” Again, they neglect the things that we’ve done on our own. I understand the things that we can’t do on our own to fix macroeconomic cascades. I’m not suggesting that we’re going to avoid all the problems if we just leave things alone, that’s not true.

But, there are a lot of things happening. People are buying gift certificates from their favorite restaurants, and other things to keep them going. They’re doing takeout. Obviously that’s not going to be enough. If people aren’t flying there’s going to be airlines going bankrupt. But, the idea that somehow we can make everyone whole–I really don’t like the idea of making businesses whole. I’d much rather make individuals whole, and I think that’s just really hard to do. This idea of giving everybody $1,000–I don’t need $1,000. Presumably you don’t need $1,000. Do we want to allow every American–to make it easy? Should we do that?

But, it’s clear there’s going to be terrible hardship on individuals who can’t get to work, or shouldn’t go to work. There’s no “free market” solution to that, that’s obvious. So, there may be some of those things that are necessarily to reduce the spread of the virus, but they’re so blunt. It discourages me tremendously to think about the consequences of how that will be going forward, both in how it affects behavior, that everyone thinks, ‘Oh I don’t have to worry about fill-in-the-blank, because eventually I’ll get check from the government.’

Yes, I too worry that if government solves this problem it will lead people to take fewer precautions to prevent the next pandemic.  This is just beyond belief.  Libertarianism can’t die quickly enough.

 

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