A consequentialist critique of the economic shutdown …

… and of Adam Silver’s drastic decision to suspend the rest of the NBA season? Check out this consequentialist critique of the “lockdown” or “shelter in place” approach to the current virus. The author of this critique is Romans Pancs, an assistant professor of economics at the Instituto Tecnológico Autónomo de México (ITAM). Here is an excerpt from Professor Pancs’s critique (edited by yours truly for clarity):

“Suppose 1% of the US population die from the virus. Suppose the value of life is 10 million USD, which is the number used by the US Department of Transportation. The US population is 330 million. The value of the induced 3.3 million deaths then is 33 trillion USD. With the US yearly GDP at 22 trillion, the value of these deaths is about a year and a half of lost income. Seemingly, the country should be willing to accept a 1.5 year-long shutdown in return for saving 1% of its citizens. The above argument, however, has three problems that overstate the attraction of the shutdown:

“1. The argument is based on the implicit and the unrealistic assumption that the economy will reinvent itself in the image of the productive capitalist economy that it was before the complete shutdown, and will do so as soon as the shutdown has been lifted.

“2. The argument neglects the fact that the virus disproportionately hits the old, who have fewer and less healthy years left to live.

“3. The argument neglects the fact that shutting down an economy costs lives. The months of the shutdown are lost months of life. Spending a year in a shutdown robs an American of a year out of the 80 years that he can be expected to live. This is a 1/80=%1.25 mortality rate, which the society pays in exchange for averting the 1% mortality rate from coronavirus.

“It is hard to believe that individuals would be willing to stop the world and get off in order to avert a 1% death rate. Individuals naturally engage in risky activities such as driving, working (and suffering on-the-job accidents), and, more importantly, breathing….”

This might be a sound argument if you are a crude moral consequentialist, but what if you are a Kantian?

Source: Philip Pettit

About F. E. Guerra-Pujol

When I’m not blogging, I am a business law professor at the University of Central Florida.
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1 Response to A consequentialist critique of the economic shutdown …

  1. Pingback: My natural rights approach to the current economic shutdown | prior probability

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