Sunday, January 24, 2021

Libertarian pandemic

 "Libertarians in a pandemic" is a good essay by Jacob Grier expanding on many themes I've written about here, whether markets though imperfect might do a better job, or at least help on top of government. And if freedom might be better in a pandemic, where all the econ 101 market failures are present, just think how well markets might allocate, say toilet paper. 

There are libertarians in a pandemic, and it turns out they have some good ideas and insightful critiques.


Let's start with the testing snafu. Tests, of course, should be run by the government because there is a big externality. I want you to get tested so you don't give me the disease. How did the the government do, relative even to a free market? 

The American pandemic response was beset by government failure from the very beginning. In February of 2020, the most urgent priority in the United States was deploying COVID tests to identify cases, survey the extent of the virus’s spread, and attempt to contain it. Although the World Health Organization had already developed a working test, the Centers for Disease Control designed its own from scratch. The CDC test turned out to be unworkably flawed, reporting false positives even on distilled water.

Around the same time, Health and Human Services Secretary Alex Azar declared a public health emergency. Ironically, one effect of this declaration was to forbid clinical labs from creating their own tests without first obtaining an emergency use authorization from the Food and Drug Administration. Bureaucratic hurdles — which included pointless requirements to send files by mail and to prove that the tests would not return false positives for MERS and the original SARS virus — slowed development. The early outbreak in Washington was uncovered in part by researchers simply defying the CDC to test samples without permission.

The net effect of the CDC’s and FDA’s decisions was to create a government monopoly on testing, leaving labs with a test that didn’t work and forbidden from producing their own alternatives. ...

Even now, the FDA stands in the way of rapid antigen testing that could help contain the spread of the virus. These tests are cheaper and faster than lab PCR tests and people can perform them at home. They’re also less sensitive than PCR tests, but they serve a different function. PCR tests are the gold standard for diagnosis, but antigen tests could catch cases when individuals are at their most infectious, often before symptoms occur. Unfortunately, FDA regulations currently require a medical consultation to use them, raising costs and eliminating the social benefits of widespread testing.

 My emphasis. FDA and CDC still don't get that their job is to stop the spread of a disease. 

. the government is doing worse than nothing about these tests. Not only has the government neglected to subsidize them, it has put up obstacles so citizens can’t pay for them. Regulations are actively denying individuals access to valuable information about their own bodies that would help them avoid unknowingly spreading the disease.

Epidemiologist Michael Mina is one of the leading advocates for getting government out of the way to deploy cheap, rapid at-home testing. “We must take account of what is before us and truly recognize the public health crisis we are in,” he recently urged the FDA and CDC. “We must support the public to legally test themselves, frequently, AT HOME.”

A libertarian would agree!

Would the market perfectly manage an externality? No. But by simply allowing us the basic right to know what's going on in our own bodies, we'd be doing a lot better than with government controls. 

Never needed regulations

Adapting to the pandemic entailed rapidly changing the way firms do business. In many instances, making necessary changes required waiving, repealing, or ignoring government regulations that stood in the way.

In the healthcare field, states responded by easing licensing requirements to allow medical personnel to practice across state lines and increase access to telehealth. 

Yes back in the day Medicare would not pay doctors to talk to you by zoom. 

In some states, ride-share companies expanded non-medical transportation and got into pharmaceutical delivery, thanks to waived regulations. The FDA relaxed enforcement of rules to speed the production of respiratory devices and personal protective equipment. The agency also allowed distillers to pivot from spirits to hand sanitizer, albeit with strict denaturing requirements that needlessly raised costs and reduced supply.

As indoor dining plummeted due to mandated closures and the risk of airborne transmission, the hospitality industry benefited immensely from cities allowing more use of outdoor spaces and expanding the legality of outdoor drinking.... Alcohol has been deregulated in ways that would have been unimaginable a year ago, with states tearing down barriers to home delivery and allowing bars and restaurants to serve cocktails to-go. ..

Which makes you think, 

All of it went to show how unnecessarily prohibitive the rules had been before COVID. 

... the pandemic has revealed how regulations often inhibit flexibility. In many cases — consulting our doctors over the internet, enjoying outdoor spaces, getting cocktails with our takeout — we’re simply better off without them.

Will they come back? Will we learn a general lesson about the nitwit regulations that strangle personal and economic life? Sadly, many regulations are there to prop up existing businesses and protect them from competition. The forces that brought them in the first place are still there, and I don't see a big deregulation ethic growing force in current politics of the right or left. Let's hope I'm wrong. 

Prisons are COVID Clusters. 

Lockdowns and Compensation

More Vaccines, Faster

Markets for Vaccines

Read the essay for good thoughts on all of these. 

A More Libertarian Pandemic

...Combatting the spread of infectious disease is a legitimate function of government under many libertarian conceptions, and the unprecedented scope of COVID justifies a lot of government activity that libertarians would find unreasonable in other circumstances.

Still, it’s worth contemplating what a more libertarian response to the pandemic would have looked like.

  • We would have had more and better testing available during the earliest outbreaks when that would have helped slow the spread of the disease.
  • We would have more and better testing now and the freedom to test ourselves at home, empowering us to discover when we are asymptomatic and contagious.
  • We would have more vaccines, faster, available to more people.
  • We would have smaller prison clusters, more people freed on compassionate release, and fewer of us imprisoned in the first place.

A lighter regulatory touch would allow affected businesses to adapt more effectively. Business owners and workers who suffered under shutdowns would have been compensated more justly, preventing permanent failures, while greater access to testing and vaccination would mitigate disruptions and help life get back to normal more quickly. Most importantly, fewer people would die.

These responses are not perfect, but then neither is relying on governments 

A gratuitous Trump insult follows, but I guess signaling that virtue is now required.  




  1. I like some of the ideas herein, especially about decriminalizing sidewalk-, truck-, push-cart and motorcycle-sidecar vending.

    Unfortunately, 99% of US cities closely regulate who can retail, and then confine that activity to zoned retail space, in collusion with property owners.

    In the US, local governments actively criminalize small businesses. Especially the type of business a guy with limited capital could enter.

    The extensive apparatus of laws regarding alcohol boggles the imagination.

    Libertarians often appear very, very concerned about international "free trade." Maybe that is a worthy issue, though from what I see, in global markets the winner goes to subsidized exports and repressed labor share of incomes.

    Be that as it may, the guy with a push-cart is evidently beneath the view of academics. I am glad to see John Cochrane turning some attention that way.

    1. Libertarians and like minded individuals and groups are concerned with the freedom and economic rights of every individual.

      There are libertarian leaning legal groups like the Institute for Justice that focus much of their mission on local impediments to the property and economic rights of the common citizen...

    2. I like the Institute for Justice. Would like to see them tackle property zoning, front and center.

      That is probably the largest structural impediment in the US economy today. Perhaps 100 times as important as Trump's trade tariffs.

  2. "PCR tests are the gold standard for diagnosis,..."

    Actually that's wrong. PCR is NOT a diagnostic test - another government failure. PCR is designed to find RNA fragments, which tells us one of 4 things:
    1) you had covid in the past and are recovered
    2) you have it now
    3) you may develop it in the future
    4) false positive

    PCR is an industrial test that must be run (cycled) multiple times for a given purpose. Each cycle's sensitivity is 10x as powerful as the last. Most PCR tests for covid are run a minimum of 35 cycles, or 10 to the 35th power in terms of sensitivity. Fauci himself said PCRs run >35 cycles are not reliable for covid testing.

    One immunologist stated that this is like finding the rear view and a hub cap from a Mercedes in a junkyard and declaring you've found an "E" class.

    PCR tests as used are not suited for the purpose and are part of the massive problems in the entire covid-mania narrative...

  3. I agree with much of this, but it seems like window dressing. The two meaningful choices that were available to slow the spread faster were (1) use of "hazard testing" in vaccine trials (i.e., intentionally exposing participants to the virus), and (2) forced quarantine of both those who test positive and those with a "close contact" identified via contact tracing. More tests would achieve very little.

    I do get the logic of more/cheap testing slowing the disease, but it doesn't seem to actually work in practice to the degree libertarians seem to assume. In my state (Massachusetts) free/fast testing IS* available... but nevertheless very few people actually get tested regularly. Many schools are testing kids weekly, but do not seem to be enjoying reduced rates compared to schools that don't. The trouble seems to be that people are viewing testing as an ALTERNATIVE to other measures, but even the best tests don't actually work that way.

    *The only restriction is that if you're getting tested specifically to travel, then you need to EITHER pay or wait in lines that can get long. But for any other reason testing is fast/free at any Walgreens or CVS, and numerous "urgent care" facilities. You make an appointment online for a specific time, no fuss, no waiting.

  4. If we had to do it all over again... there might have been some opportunity to do some things differently. But it would only have been a handful of things and it may not have made a measurable difference in the outcome. Hindsight being 20:20, it is facile to imagine what could have been excepting certain conditions, prior decisions, incomplete information, etc. We call this "utopianism". It's not the real world where the arrow of time points in one direction only (forward). There is no time machine that can take us back and allow us to 'redo' the past based on the information set of the present, just as there is no time machine that can take us forward in time in order to learn what we should do in the present to avoid the conditions we find in the future state.

    As a Libertarian, if you truly believe in the sovereignty of the individual as an individual, then there is no coercion that you or another can apply to the individual to make that individual follow your chosen path for him. You can only try to persuade; you cannot order. Like a mote of dust in a room, the individual will wander where he will without regard to a higher purpose. You cannot, as a Libertarian, order him to undergo a test--he will or he won't according to his own lights. You cannot order him to refrain from an activity or to engage in an activity--he will do as he likes without reference to your likes, wants, or norms and mores. He is sovereign in himself. As a Libertarian, you must respect that, indeed you must encourage it in yourself and in others of the ilk.

    As for society, is it not at is base, founded upon the free association of independent like-minded individuals of which no two are identically alike in person or persuasion, in the Libertarian view? One might hope so, for a Libertarian. Ergo, Grier, J., is probably not at base a Libertarian per se.

  5. There's another entire dimension where the government is _not_ helping us. I refer to how the government is actively discouraging the use of ivermectin and hydroxychloroquine as early stage treatment options.

    Instead, they have orchestrated a propaganda campaign filled with lies about HCQ and are simply ignoring IVM entirely. There is a growing abundance of evidence, including dozens of peer-reviewed articles, showing massive benefits from both drugs.

    How many of the 440,000 dead, so far, in the US alone, might have been saved if allowed access to HCQ/IVM? Actually, there are cogent answers to that in the links above, suggesting up to a 90% survivor rate with proper administration of either (both?) these drugs.

    David Rowell, author, "The Covid Survival Guide"

  6. Has anyone done some calculations as to how many people the FDA killed in 2020, and how much money it cost? It's a hard calculation, but it would be worth getting lower and upper bounds on what would have happened if the FDA had been dissolved January 1.

  7. Is the followign paradox correct?
    I have a million dollars to invest. If I'm shorting Acme because I think it is a fraud, then I put up the million dollars as collateral to borrow 1000 shares of stock, and then I wait till the fraud news comes out in a year or so. So far, so good.
    If I'm shorting Acme because there's a bubble in it, though, after I borrow the 1000 shares the price might well double, and I have to reduce my shorting to 500 shares, given my capital constraint. So the bigger the bubble, the less the short sellers can do to stop it.
    Is that right?

    1. Eric,

      The part you have wrong is that you don't have to borrow the stock that you think is overvalued to sell it short.

    2. Eric,

      "If I'm shorting Acme because I think it is a fraud, then I put up the million dollars as collateral to borrow 1000 shares of stock, and then I wait till the fraud news comes out in a year or so."

      You are presuming that you need to borrow the shares to be able to short them. You don't.

    3. I think short sellers are indirectly borrowing the shares they sell. The broker must have access to someone else’s shares in order to implement the short sale. Be that as it may, short selling like any form of speculation is a short term activity. If you think the fraud will not be revealed for a year, I doubt shorting today is the best way to place the bet.

    4. I think short sellers are indirectly borrowing the shares they sell. The broker must have access to someone else’s shares in order to implement the short sale. Be that as it may, short selling like any form of speculation is a short term activity. If you think the fraud will not be revealed for a year, I doubt shorting today is the best way to place the bet.


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