Remember there are no trade-offs …

The there-is-no-trade-off-between-health-and-the-economy brigade are getting very shrill.

There is an op-ed that appeared online today and will probably appear in print tomorrow that is very interesting.

Economists in Australia and around the world have come to a near-unanimous conclusion about how best to handle the coronavirus pandemic: we must get infections under control and keep the reproduction rate below 1.

Now you don’t need to be an economist to come to that conclusion.

In a pandemic, what is good for public health is also good for the economy.

I’m more agnostic on this point. Many people are somewhat surprised by my view here. This seems to me to be an empirical question. It may well turn out that this is the case, or is may not. What has surprised me is the extent to which anyone who has wanted to debate the point has been vilified (see here and here).

That said, a small – but vocal – contingent of dissenters have argued that legislators should use a seemingly scientific method to calculate the economic value of different lives. Were they correct, this grim calculus would have us evaluate a policy by weighing the costs of, say, a 25-year old’s reduced lifetime job prospects against the benefits of an 80-year old staying alive for the remainder of their life expectancy.

Notice the framing?

Were they correct, this grim calculus would have us evaluate a policy by weighing the costs of, say, a 25-year old’s reduced lifetime job prospects against the benefits of an 80-year old staying alive for the remainder of their life expectancy.

That should be:

Were they correct, this grim calculus would have us evaluate a policy by weighing the benefits of, say, a 25-year old’s reduced lifetime job prospects against the costs of an 80-year old staying alive for the remainder of their life expectancy.

Notice also the change in terminology – dissenters – not economists, but dissenters. Now they aren’t picking on economist Gigi Foster, but rather the Vice Chancellor of Melbourne University. Duncan Maskell actually specialises in bacterial infectious diseases. To be fair – COVID19 is a virus, but you’d imagine that there is a lot of commonality around infectious diseases. He was recently interviewed in The Age:

Professor Maskell says decision-makers must consider the role of quality-adjusted life year (QALY), a unit of measurement used by economists to predict and assess the impact of health policies. In simple terms, it assumes that a life near its end, whether because of disease or advanced age, is empirically different to a healthy life closer to its beginning.

“We have to look at this as an overall picture. My personal view is there should be some form of sensible, public health, QALY-based analysis done and tough calls made. It boils down to a basic but very hard moral philosophy: What is the value of a 90-year-old’s life versus the value of the continuing livelihood and happiness of a 25-year-old?’’ he said.

Notice the switch. He says, “livelihood and happiness of a 25-year-old”. They say, “lifetime job prospects” i.e. livelihood only.

That is a very tough call to make, but our intrepid economists are happy to quibble.

Like many debaters with a dubious argument, this group often relies on appeals to authority.

Remember that; “appeals to authority”.

Medical professionals and health economists “use QALYs all the time”, they say. And yes, QALYs are frequently used in those fields – but for narrowly defined purposes that have nothing to do with making interpersonal comparisons of the value of lives.

I’m going to call “Bullshit” on this point. Maybe not in the academic literature, but I reckon that medical professionals do use QALYs for making interpersonal comparisons of the value of lives. Here is Dominic Lawson explaining how the NHS in the UK does triage.

As directed by the National Institute for Health and Care Excellence (Nice), the NHS will agree to fund non-palliative treatment for the seriously ill only if the drugs provided (for example) do not cost more than £30,000 in providing a further year of good-quality life. This is known as a Qaly (quality-adjusted life year). Since those with potentially terminal illnesses don’t have a good quality of life, that £30,000 limit would typically be cut to £15,000 per annum in their case — two of their years being regarded as of the same monetary value (in health accounting terms) as one year for an otherwise fit person.

As Sir David Spiegelhalter (who for decades ran the Medical Research Council’s Biostatistics Unit) put it to me: “It’s a myth that all lives are considered equally valuable in the NHS. The system already values years of remaining life given by treatment. So triage would be normal.” What Spiegelhalter means is that if the coronavirus crisis leads to a situation in which an older person is essentially left to die, in order to provide a scarce ventilator to someone with a greater life expectancy, that would be a graphic demonstration of the working model of the NHS.

So QALYs are used in practice in precisely the way our economists tell us they are not being used. But moving along … .

The interesting question is whether QALYs should be used like that?

Proponents of applying QALYs to pandemic policy often justify this huge logical leap by invoking the notion that assigning value to lives in this way is justified by economic theory. 

I’m not entirely sure that economic theory says this, but okay …

In fact, that’s very far from the truth. As (excellent) economists Han Bleichrodt and John Quiggin pointed out 20 years ago: “QALYs have no foundation in economic welfare theory.”

So much for appealing to authority and dubious debaters. Anyway, I went and read the actual paper being cited. I decided to examine the precise context in which the statement “QALYs have no foundation in economic welfare theory” appeared. Please note the ” ” marks – that tends to suggest a direct quote. So imagine my surprise when I discovered that the quote did not appear in the paper. The closest expression I could find was:

Notwithstanding the fact that it is currently the most common tool in the economic evaluation of health care, cost-effectiveness analysis, unlike cost–benefit analysis, has no foundation in economic welfare theory.

That is a bit naughty. Now I understand that words are at a premium etc. in an op-ed, but manufacturing quotes, while appealing to authority is not the done thing. But what else do Bleichrodt and Quiggin say?

It is not our intention to resolve the controversy about the role of cost-effectiveness analysis. We only observe that there exists a perception of cost-effectiveness analysis which requires a foundation of cost-effectiveness analysis in welfare economics. This perception provides the rationale for this paper.
The aim of our axiomatic analysis is to reveal the conditions under which cost-effectiveness analysis is equivalent to cost–benefit analysis. Let us emphasize that we do not intend to argue that these conditions have descriptive or normative force.

They are focused on making very precise theoretical points only. It isn’t clear to me that they intended to weaponise their argument.

Back to the present and our current argument. Our economists now argue:

But the most dangerous claim that proponents of QALYs make is that they allow one to make principled comparisons among different groups of people. That is, make a reasoned and reasonable tradeoff between young people and old people, or between sick people and healthy people.

I do have some sympathy for this argument. How principled or unprincipled comparisons are is itself a value judgement. Rule based comparisons, however, are far more likely to be principled.

But it is here that our economist friends go overboard:

QALY-boosters say that by converting life years into dollar values it is easy to make such comparisons. But they have either forgotten – or never learnt – their basic first-year microeconomic theory. We could go into excruciating detail, but the next time some would-be economist tries to bamboozle you with such statements just ask them if they recall that a von Neumann-Morgenstern expected utility function is only defined up to a positive affine transformation.

Wow. There is a lot in that paragraph.

I think here they are having a go at either Gigi Foster or Adam Creighton of The Australian.

Now I admit, it has been 35 years since I did first year micro, 34 years since second year micro, and 33 years since third year micro. So please, folks, please go into excruciating detail explaining your argument.

Let’s play a game:

the next time some would-be economist tries to bamboozle you [insert claim] just ask them if they recall that a von Neumann-Morgenstern expected utility function is only defined up to a positive affine transformation.

For example:

the next time some would-be economist tries to bamboozle you [by claiming progressive taxation is economically efficient] just ask them if they recall that a von Neumann-Morgenstern expected utility function is only defined up to a positive affine transformation.

Talk about “appeals to authority” and trying to bamboozle people?

But wait, there is more.

The idea that QALYs allow interpersonal welfare comparisons is a profoundly dangerous and misguided claim. It is unsafe at any speed. Economics has nothing—absolutely nothing—to say about how to make interpersonal “welfare” or “utility” comparisons.

When you mark exams students engage in some deceptive practices. So you combine a true statement with a dodgy statement and hope the examiner won’t notice. But, of course, after many years of practice this sort of thing jumps out at you.

Economics has nothing—absolutely nothing—to say about how to make interpersonal “welfare” or “utility” comparisons.

Now that I do remember from my student days. Positive economics has nothing to say about interpersonal welfare comparisons. James Buchanan used to invoke a Rawlsian veil of ignorance to try get around that problem. But generally that statement is true.  Making those sorts of comparisons is something that economists qua economists should not do. That is the role for ethics, morals, politics and so on. It is not that these comparisons cannot be made at all, but that economics, strictly defined as an academic disciple, gives no guidance as to how those comparisons should be made.

So this part of their argument is misleading:

The idea that QALYs allow interpersonal welfare comparisons is a profoundly dangerous and misguided claim. It is unsafe at any speed.

Yes. It is unsafe. It is fraught. But nobody is suggesting that economists make those comparisons. Here is the Melbourne VC:

Though his research expertise is in infectious diseases and microbiology, he says that ultimately, it is a question that can only be addressed by our political leaders, taking into account public sentiment.

Now you’d think we’re all in agreement because this is what our economists say:

Do politicians and policymakers make such judgments every day? Sure they do. It is part of what they are elected to do, and they are accountable to voters for such judgments.

But no. They carry on:

But it is intellectual malpractice to pretend that judgments about how to value different impacts of the pandemic on different individuals is an Excel-spreadsheet-level exercise that doesn’t force us to grapple with weighty moral choices that should give us all pause.

Anyone who pretends otherwise should be ashamed of themselves.

Intellectual malpractice! Take that Melbourne University VC – you should be ashamed of yourself.

I don’t think anyone is understating the moral choices that need be made. Accusing your intellectual opponents of intellectual malpractice and the like is not serious debate.

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67 Responses to Remember there are no trade-offs …

  1. PB

    “It’s a myth that all lives are considered equally valuable in the NHS. The system already values years of remaining life given by treatment. So triage would be normal.”

    This has been the case like forever. You do get sick of seeing 80 year-olds with intractable airways disease being stuck on ventilators so the pushy daughter-in-law-elect can postpone the inconvenience of grief.

  2. Hay Stockard

    Roll on Brave New World.

  3. Tim Neilson

    As (excellent) economists Han Bleichrodt and John Quiggin

    Quiggin is a world record breaking Olympic gold medal winning wrongologist. He was one of the clowns who warned that Howard winning in 1996 would plunge Australia into a decade of economic misery.

    He also spectacularly beclowned himself when he inveighed against the Telstra privatisation in the AFR. He claimed that the government’s tax receipts from a privatised Telstra would be so much less than dividends if it remained government owned that it was a bad deal. One problem with his analysis was that his sums very clearly included nothing for company tax, because that company tax would be distributed as franking credits, but the only tax included as being paid by dividend recipients was the top up tax payable in addition to the use of the franking credits – so the actual cash projected to be paid by Telstra to the government as company tax was not included anywhere in his sums. I wrote to the AFR and pointed that out. Quiggin responded with a huff and puff piece proclaiming that of course as an economist of great genius he understood how franking worked, and he set a herd of unicorns stampeding in all directions, but he never got round to explaining how his sums could possibly add up if they did in fact include the tax that underlay the franking credits.

  4. Squirrel

    I can think of at least one high profile proponent of the health at all costs approach to this issue who was a pioneer in talking about QALYs in this country – perhaps the perspective changes when it’s one’s own life years (but not income) that are under potential threat.

  5. Rabbi Putin

    I know several old people I would consider more valuable and worth maintaining than a lot of young people. Ageism really has no logical basis.

  6. Peter Smith

    How we get to this point I don’t know. It is not a question of a trade-off. Protecting old and sick people (who want to be protected) and allowing healthy people to get on with life are not mutually exclusive. Both can be done. But, as it is, we have allowed old people in nursing homes to die at the same time as destroying the businesses and livelhoods of those at little or no risk from the virus. Hopeless!

  7. Leo G

    That said, a small – but vocal – contingent of dissenters have argued that legislators should use a seemingly scientific method to calculate the economic value of different lives. Were they correct, this grim calculus would have us evaluate a policy by weighing the costs of, say, a 25-year old’s reduced lifetime job prospects against the benefits of an 80-year old staying alive for the remainder of their life expectancy.

    A rather narrow use of economics- one that limits insights to those most concerned with comparing people’s notional net present value as producers of goods according to age. I believe that may be setting Maslow’s bar rather too high in the hierarchy.
    Let’s be more inclusive and set the bar closer to the lowest level of need.
    What is a year of a person’s life worth to that person, without regard to how it serves their higher wants? Is the next year worth more to a 25 year old than to a 75 year old?
    Accordingly, the most gneral economic assessment of strategies for managing an epidemic should be considering the expected performance of options in terms of costs and benefits expressed as expected years of life- and stratified by age group.

  8. Nob

    Q: How many deaths are acceptable to you?

    A: People die all the time. How many deaths are unacceptable to you?

  9. Leo G

    But, as it is, we have allowed old people in nursing homes to die at the same time as destroying the businesses and livelhoods of those at little or no risk from the virus.

    There is clearly a needed trade off- a critical question should be how to quantify it.

  10. Steve

    In WW2, there was the infamous Nazi T4 program that actively killed of the intellectually disabled etc.

    The cry was “life unworthy of life”

    Anther word for it is eugenics.

    We never completely killed off nazism, it just went underground after ww2 and is now re-appearing with a green or red wrapper….and appears to be endorsed by the Elite.

    The Nazi belief system is also alive and kicking – the master race, putting nature first , etc. Same belief system we see being pushed at us now…..

  11. Roger W

    All this is a distraction.
    Minus an effective vaccine, humans can no more control a virus than they can control the climate.
    It is just their vanity that fools them into thinking they can. So it is not whether we save lives OR the economy.
    Scary stuff I know, but we are all going to die. About 110 on average a day in Victoria, though today, for example, you might be forgiven for thinking only 2 died.

  12. NoFixedAddress

    Sinc

    Example 14,568 that folk that dribble about ‘Economics’ know nothing about Cost Accounting.

  13. Leo G

    Minus an effective vaccine, humans can no more control a virus than they can control the climate.

    Humans are really very good at controlling viruses. We do it without really trying. It’s a matter of molecular biology. We just don’t manage it very well in other ways.
    The climate has more to do with factors time-varying insolation across the surface of the earth. Changing the dynamics of the earth’s orbit or the luminance of the sun is largely out of our control.

  14. I didn’t go through every para, but retirement (superannuation) and aged care are multi-billion dollar industries on their own and then there’s the government component (this is just Australia). This, more than likely, is what drives the imperative to consider those at the later part and end of their lives to be of greater value than those who are just starting out in life. Connect the dots.

  15. kraka

    We already know that Governments places a $$$ value on life by the fact they dont make cigarettes illegal. The $$$ they collect in revenue they have decided outweighs the money it costs the health system though I assume they dont count the cost of lost productivity of smokers in the workforce

  16. Natural Instinct

    what Sinclair forgets is that this SMH is propoganda and cannot be fought with logic.
    Go nuclear straight away Doomlord!
    .
    But I did reflect on the truism said by LBJ president of USA (as I recall foggily over my weetbix)

    My hard decisions aren’t between good and bad, they are between two goods

  17. mc

    The old people I know are not economists, but they would rather spend their remaining days surrounded by family than being shut up like prisoners.

  18. Rebel with cause

    Sounds like these economists would’ve been the Titanic passengers arguing against ‘women and children first’

  19. Entropy

    A most excellent fisking, doomlord.

    also an excellent analogy rebel.

  20. Entropy

    In fact, to hone it a bit better, the quigster sounds like one of those first class passengers arguing against “women and children first”.

  21. Mother Lode

    I think what we are seeing is the bog-standard cravenness of the political class.

    Ordinary Australians recoil at the thought of putting value on life. Straightforward making a choice based on a relative comparison is hard enough – a young person or a middle aged mother etc. (Mind you, society will respond to the death of a woman with more grief than a man in things like fires etc. A hang over from more chivalrous days of yore I expect, when men were expected to sacrifice themselves for women.)

    Australians realise that it would be unreasonable, for example, to spend the wealth of a nation on a single life. A state? A city? Some random family? They know there are limits but are reluctant to draw the line. They would not even bring themselves to admit to finding any particular one acceptable at any realistic scales.

    They are eager to be told that we can save as many people as possible at nugatory cost and politicians are happy to tell them that, even though politicians just want to avoid ever being seen as responsible for a lost life – which is why they have abdicated their sworn duty to shift the decision making to medico-bureaucrats.

    And if, eventually, it is revealed that the death rate from Covid was lower – that many ‘deaths’ were wrongly ascribed to Covid, or that people whose lives were already teetering on the cliff edge with the weight of co-morbidities pressing hard behind them and Covid being just the last nudge of less health impact than obesity, cancer, or even ordinary flu – if and when this comes out and Australians consider that razing the economy was reckless, it will be all the more important for politicians to shift blame to someone else.

    And Dan Andrews is the holotype for this miserable breed.

  22. HT

    Rebel with cause
    #3596714, posted on September 25, 2020 at 7:12 am
    Sounds like these economists would’ve been the Titanic passengers arguing against ‘women and children first’

    In these modern times, children first, absolutely? But womxm? Nah, they want equality? Well, equality means people with a penis are no longer disposable and get trumped by a people with a cervix.

    But am no economist 🙂

  23. cuckoo

    So we’ll be shutting down the Australian economy again next year during the flu season? Plus curfews and mandatory masks and distancing? Cos if we don’t, it shows we don’t value the lives of old people in nursing homes.

  24. Leo G

    Sounds like these economists would’ve been the Titanic passengers arguing against ‘women and children first’

    A rational economist should agree with economy-wide measures if those measures optimise the cost-benefits.
    Overwhelmingly, the direct human costs of an uncontrolled CV-19 epidemic are incurred by the old and the week.
    The costs of the present responses to CV-19 are overwhelmingly incurred by younger people whose direct risk of death or injury is insignificant.
    It’s not clear if there will be any significant overall benefit to the old and weak (as a group) in terms of life expectancy from those responses.

  25. Tony Taylor

    No doubt at some stage one, two or all of Richard Holden, Emilia Tjernström and Bruce Preston will be alerted to and will maybe even read this post. When they do, I wonder if he, she or them will gulp when they get to “So imagine my surprise when I discovered that the quote did not appear in the paper.”

  26. Leo G

    Embarrassment- misapplied quote tagging.

  27. Spurgeon Monkfish III

    Were they correct, this grim calculus would have us evaluate a policy by weighing the benefits of, say, a 25-year old’s lifetime job prospects against the costs of an 80-year old staying alive for the remainder of their life expectancy.

    I’m not sure the framing particularly matters in this instance. There would be huge costs, to both society and the individual, if the 25-yo (and any of their dependents) ends up spending their life on welfare, while the benefits of the 80-yo staying alive for the remainder of their life expectancy would be largely illusory (anyone aged 80 now has already exceeded their life expectancy), especially if they were in very poor health.

    However as someone has noted above, none of this is in any way relevant to the disastrous outcomes resulting from the hysterical insanity inflicted on people in this stupid, stupid country over the last six months.

    Instead, due to the fact that we are cursed with the most block headed evil expedient useless corrupt and incompetent quisling politico-bureaucratic class on the planet, we’ve ended up with the worst of all possible worlds.

    That is, most of the alleged Bat Flu fatalities have been among old people (virtually no benefit whatsoever accrued to them from any of the alleged public health measures), while those who will most disproportionally bear the economic and social costs of shutting down the economy will be young people.

    Meanwhile, one final observation:

    if the kung flu crisis leads to a situation in which an older person is essentially left to die, in order to provide a scarce ventilator to someone with a greater life expectancy, that would be a graphic demonstration of the working model of the NHS

    If we’re talking the NHS, both individuals would likely end up dead.

  28. Lizzi55

    This new seasonal flu will never overload our health system, it is not virulent.
    The solution should be decentralised, medical health is an individual responsibility, let people decide individually what risks they want to take and what protections they want to seek. The idea that you can be responsible for someone else’s health, while you yourself are healthy, is a false idea, but it has been accepted by the masses and has enabled politicians to create draconian laws.

  29. BM

    Maybe we should just ask people how much they – personally – would be prepared to pay right now to save a sick 80 year old that they’ve never met from immediate death.

    Because when the rubber hits the road, and it’s their money we’re talking about, just about anyone will find a way to put a price on a human life!

  30. flyingduk

    Minus an effective vaccine, humans can no more control a virus than they can control the climate.

    Vaccines are no cureall. The ‘paradox of vaccines’ is that the groups which are the most vulnerable (the elderly, the chronically ill, those on immunosuppressant meds) are so precisely because they have weak immune systems. This means they dont respond well to vaccination either. Why do you think 1000+ old people die of influenza in Australia every year, despite vaccination?

  31. Roger

    Accusing your intellectual opponents of intellectual malpractice and the like is not serious debate.

    When was the last time we had a serious public debate in Australia?

    I think it was probably in the lead up to the republic referendum.

    And the public space has become quite toxic in the years since.

    That seems to be a feature of all anglophone democracies, although NZ was quite civil until the advent of Ardern.

  32. notafan

    I agree with Peter Smith

    It’s not either or

    We can have both.

    Part of the problem seems to be a vocal minority of the vulnerable cohort who seem to think everyone should get the same lockdown deal because fair.

    No, you stay home and stop whining.

  33. flyingduk

    So we’ll be shutting down the Australian economy again next year during the flu season? Plus curfews and mandatory masks and distancing? Cos if we don’t, it shows we don’t value the lives of old people in nursing homes.

    Sadly, yes we will. Unlike most of the northern hemisphere, it hasn’t ripped through Australia yet (excluding Vic). Until it does, we will have a large pool of the ‘dry tinder of the nearly dead’ waiting in nursing homes for COVID or influenza to visit them. There are several reasons why a bad COVID outbreak next Australian winter is likely:

    1) Respiratory viruses are seasonal – they come in winter and go in summer. COVID will go quiet in Australia now as we enter summer, and return next winter.

    2) Countries which had ‘soft’ influenza seasons the winter before COVID had correspondingly bad COVID outbreaks last winter. Australia has just had a soft influenza season.

    3) Whilst respiratory viruses are much less prevalent in summer, they don’t go into hibernation. Instead, the combination of environmental factors (UV,D), social factors (more time outdoors) etc means they circulate in a much less virulent form. This means summer is the safest time to develop herd immunity to protect your population against next winters hit. In the unlikely event that our control measures are effective at limiting the spread of respiratory viruses, and are continued over summer, we will have a larger population of vulnerable people who will be hit next winter.

    So, in summary: it will go away now (irrespective of any control measures taken) because summer is coming, and it will return next autumn (irrespective of any control measures taken).

  34. flyingduk

    I agree with Peter Smith
    It’s not either or
    We can have both

    No you cant, health care costs money, if you kill the economy, you cant afford health care. We are currently burning the furniture (printing money) to give us the illusion of warmth.

  35. Roger

    French physiologist says covid has revealed that we have reached “the ceiling” of human life.

    And we just have to live with it as lockdowns have been demonstrated to have no effect on mortality rates.

    Here.

  36. Aynsley Kellow

    ‘My hard decisions aren’t between good and bad, they are between two goods.’
    Or, as Voltaire put it, ‘The best is the enemy of the good.’
    It is remarkable that three professors of economics should discover that ethics applies to cost-effectiveness studies, but seem to be ignorant that it also applies to almost all economics. It is, after all, a moral science.
    I refer them to The Myth of Scientific Public Policy by Robert Formaini. To say a project or measure has a positive or better cost-benefit ratio is not rot say it should proceed. There are always ethical and political questions to be answer, so the Melbourne vice-chancellor is entirely correct. A CBA of Auschwitz vs Sobibor might reveal the fomer a more efficient resources than the latter, but that say nothing about whether either should be built and operated.
    Their statement ‘ the benefits of an 80-year old staying alive for the remainder of their life expectancy’ is risible. The remainder of their life expectancy at 80 is close to zero, and one of the notable facts with Covid is that this is about the mean age of those dying.
    They also ignore opportunity costs. Perhaps their first year education did not include Frédéric Bastiat and the problem of the scene and the unseen. The NZ finding that their policies are costing $8m, whereas the value implicit in past government policies is $45K simply reminds us that diverting resources in this way means that many more die because the resources are not there to make other life-saving interventions.
    The same line of thinking was evident with the operation of quantitative risk assessment under Reagan, but in fact no regulation that valued a life at less than $100m was ever disallowed. Viscusi’s work on illicit self-valuation of a life at that time was $5m, and other estimates were that $12m could save a life. A $100m policy could have saved 8-20 other lives. Tenges et al found the worst regulation (relating to arsenic) cost $700m per life-year extension.
    Those are choices governments have to make. Cost-efferctiveness studies should not be determinative, but Holden et al seem to be saying that they should do so without so much asa thought for their opportunity costs. Talk to some medicos (as I have) and they will tell you of the procedures currently not being performed because of Covid.

  37. notafan

    Yes flying.

    Try telling that to #IStandWithDanAndrews

  38. MACK

    The Therapeutic Goods Administration uses QALYs all the time to help decide which pharmaceuticals to approve. Get someone with experience in that area to write an article about it. https://www.tga.gov.au/book-page/executive-summary-1
    QALYs are like epidemiology and climate models – they’re a helpful tool but other factors have to be taken into account as well.

  39. notafan

    The madness too in keeping a 95 year old in hospital for 10 weeks and then self congratulating his being saved from covid19 as he zimmer frames out.

    Meanwhile so called elective surgery is cancelled.

  40. notafan

    Tony Abbott was castigated for saying much the same from his time as health minister

  41. cuckoo

    Countries which had ‘soft’ influenza seasons the winter before COVID had correspondingly bad COVID outbreaks last winter. Australia has just had a soft influenza season.

    Yes, but those countries didn’t also have a parallel covid outbreak during that 2019 ‘soft’ season. This is probably a naive question, but hasn’t 2020 covid cleaned up most or all of the ‘dry tinder’ that would otherwise have succumbed to the flu?

  42. Rex Mango

    My uncle in his favourite attack on economists & economics in general always uses the example of WW2. ‘We went into the biggest war in the world, had thousands killed & came out in a boom’. He then finishes his arguement as to why economics is the dismal science with ‘funny money’.

  43. yarpos

    The other aspect of this discussion is that it is almost universally carried out by people with no skin in the game. Usually the pundits are pollies, academics, corporates who have secure employment, live in nice suburbs and can afford high quality health care and never experience much of the non airconditioned sector.

    Very comfortable to have abstract arguments about the value of this life and that life when you know it will never impact on you. As always its great to be the King.

    Almost universally amongst older I know, they ae horrified at the economic destruction the Covid over reaction has wrought and the impact on young lives. There are a few hand wringers that just love the control freakery but they are a small minority.

  44. Diogenes

    Sounds like these economists would’ve been the Titanic passengers arguing against ‘women and children first’

    Many of those saved according to the Birkenhead Drill (women & children first) on the Titanic, and indeed HMS Birkenhead, after which it named, lived a miserable life of penury as a result of the death of the breadwinner who went down with the ship – which is why the current policy is to try to keep families together. Even on the Titanic some women, eg Ida Strauss, who had the choice, decided to stay on board and perish with their loved one.

  45. Natural Instinct

    Diogenes
    Is that true about penury of female survivors and their children
    Have you double checked?

  46. flyingduk

    Yes, but those countries didn’t also have a parallel covid outbreak during that 2019 ‘soft’ season. This is probably a naive question, but hasn’t 2020 covid cleaned up most or all of the ‘dry tinder’ that would otherwise have succumbed to the flu?

    In the northern hemisphere and Victoria, yes, it did. In the rest of Australia (and NZ) it didn’t. The clear trend for a ‘bad’ flu season to inevitably follow within a year or 2 of a ‘soft’ flu season shows that most old people who die of flu (or COVID) were going to die of something or other within a year or 2 anyway. We are due at least an influenza catchup next winter, and no doubt a COVID hit as well.

  47. flyingduk

    Almost universally amongst older I know, they ae horrified at the economic destruction the Covid over reaction has wrought and the impact on young lives.

    100% agree, I am horrified at what we are doing to our children’s future in a vain attempt to wring another year in the nursing home for their grandparents. Has anyone asked the oldies if they want this?

  48. Leo G

    The clear trend for a ‘bad’ flu season to inevitably follow within a year or 2 of a ‘soft’ flu season shows that most old people who die of flu (or COVID) were going to die of something or other within a year or 2 anyway.

    I disagree. I expect that a statistician who examined the frequency of deaths versus life expectancy (by age and common comorbidities) would identify the typical pattern of discrete random variables, whether the data was restricted to coronavirus deaths, seasonal influenza deaths, or all deaths.

  49. vivi

    Why do we even treat anyone above 80 years old?
    80 and sick – go home and die!
    Leave the money to the unemployed or employed 25 years old to increase their happiness.
    How about disabled – how much a life of a disabled person worth, lets say 75% of abled. Which means if they get sick at 60, they should go home and die or whatever, but do not bother the health system, we need the money for our 25 (able) years old.

    Now, what is the “happiness” of a 25 years old? What will they do with that money? Maybe buy another coffee, maybe a bigger house, maybe a bigger car. No doubt, these will increase their happiness. Or, maybe, there is more to life than coffee and bigger houses, and living in a community that cares for each other also delivers utility.

    I just find the “destroyed livelihoods” arguments pathetic and superficial. People who make them believe in some kind of island theory, where networks, community and society structure do not play any role. The only objective is to increase consumption. This is a very simplistic representation of the real world and those who hold such simplistic views should stay clear from public debates and learn some humility.

  50. So hiring ‘King Street bouncers and door bitches‘ and checking they were paid up trade union measures wasn’t ultimately a QALY assessment?

    Turned out to be a ‘negative asinine transformation’.

  51. Entropy

    flyingduk
    #3596880, posted on September 25, 2020 at 10:52 am
    Almost universally amongst older I know, they ae horrified at the economic destruction the Covid over reaction has wrought and the impact on young lives.

    100% agree, I am horrified at what we are doing to our children’s future in a vain attempt to wring another year in the nursing home for their grandparents. Has anyone asked the oldies if they want this

    The political class will ensure it isn’t their children.

  52. flyingduk

    (re influenza etc regularly harvesting the ‘dry tinder’ of the nearly dead)

    I disagree. I expect that a statistician who examined the frequency of deaths versus life expectancy (by age and common comorbidities) would identify the typical pattern of discrete random variables, whether the data was restricted to coronavirus deaths, seasonal influenza deaths, or all deaths.

    The dry tinder issue is discussed here:

    Its well established.

  53. Pyrmonter

    @ Doomlord

    The ‘debate’ here has been unedifying, and should prompt some hitherto well-regarded people to ponder the state of policy discussion: it reflects poorly on many.

    On one side, we’ve had a series of rather odd (at very least, badly expressed, though Henry Ergas and Jonathan Pincus were probably right to call the first ’embarrassing’) letters from economists who in other circumstances would often be thought to bring differing perspectives to policy analysis (Do Warwick McKibben and John Fairbairn often agree with Sue Richardson, Justin Wolfers and John Quiggan?) arguing for continued measures for suppression. These have been accompanied by some atrocious tweeting (Holden, a lead signatory, in particular has been pretty awful).

    On the other hand we’ve had suggestions from Gigi Foster (and a few others) that ‘there are trade-offs’, as if that was a self-evidently useful observation, and one that had escaped hundreds of her colleagues. In reality it’s no more useful than identifying that without Covid, we’d be better off: an argument implicit in the idea of elimination.

    To identify ‘trade-offs’ is really just to say that there are economic phenomena at play: that behavioural adjustment has costs – something any good first student year who has understood her coursework should be able to explain. It says nothing about what those trade-offs are, or how they might interact, or how they might be used.

    Let’s take an example that should be relatively uncontroversial: there appears to be trade-offs in how to reduce infection. Mask wearing is, it seems, something of a substitute for physical separation. Both have costs, but for most of us, the cost of wearing a mask is trivial; it’s one I’ve happily borne voluntarily in Sydney as the price of being able to move around fairly freely in a community where Covid infection has been effectively suppressed over time using much less intrusive measures than have been adopted in Victoria.

    I can’t say what that trade-off is: I have no idea how many people could be put into Sydney’s normally crowded commuter trains without allowing rampant spread; nor do I know (or can I know) the effect of those who refuse, whether from ignorance, bloody-mindedness, forgetfulness, laziness or some other reason, defensible or not, to wear masks on spread. And if I can’t specify the trade-off, how do I have any hope of determining an incremental cost or price that might be applied to that trade-off? Even if I could determine an ‘average’ price, we know that all information is local: the price applicable in dense, urban Redfern is unlikely to be the same as the one in Broken Hill or Cobar.

    There’s another trade-off: if most people wear masks, I expect the free-riding cost is small. Though, if the effect of a few refusing is to wear masks is to discourage others from doing so out of embarrassment or frustration though, we really need to think of that cost – the indirect cost – as higher than its ostensible and immediate effect. Those are but two speculations – the field is full of them.

    Turning to an issue with ‘trade-offs’, part of the history of thought on macroeconomics is a trade-off between wage inflation and unemployment: the Phillips Curve. This is not the place to debate its existence: it is often said to appear in the data marshalled by AW Phillips in the late 1950s (gated https://www.jstor.org/stable/2550759).

    Phillips’ supposed trade-off quickly became one of the foundations of a Keynesian consensus that economic output could usefully be manipulated to moderate the business cycle and, evening out the booms and, more particularly, busts and thereby, presumably, improving economic wellbeing.

    Yet, barely had that consensus taken form in the 1960s than the supposed trade-off began to break-down. By the mid 1970s the world was beset (as predicted by a range of critical voices – Friedman, the Austrians etc) with both high inflation and high unemployment – something hard to reconcile with at least the simplistic forms of trade-off assumed by those who contended the relationship could be exploited. We might explain that breakdown by reference to Goodhart’s Law; to various micro-foundations bases for macro; or by reference to Austrian thoughts which, at least as I understand them, suggest that manipulation of money, credit and fiscal policy is bound to fail, and to lead to worse outcomes than doing nothing.

    Yet it is surely illustrative of the position regarding Covid policy: we lack information and there is no easy way of collecting it. We can identify possible trade-offs, but absent extensive comparative empirical work, it is hard to determine how stable those trade-offs are, or how they will endure. Governments are faced with all the problems of central planning, but without even the technical information available to a Soviet central planner in the 1930s: there is no equivalent to the plans for steelworks that could be bought or stolen, still less the benefit of a price system that enables the rational allocation of resources.

  54. Kneel

    Peter Smith
    #3596558, posted on September 24, 2020 at 10:20 pm

    +1000

    Also: who is responsible for your health? YOU are. NOT GovCo.
    If GovCo is responsible for my health, can I sue them for bad advise that may shorten my life – like ALLOWING smokers to buy tobacco, or printing and distributing dietary information that says “more carbs, less protein, lose weight, improve serum cholesterol”, when the former two are incompatible with the latter two?

    “Diversity is strength” they say – just not diversity of thought and opinion, which is the one diversity we sorely need a lot more of, but which is the only sort that is ruthlessly suppressed.

  55. Spurgeon Monkfish III

    pyrmonter – Your pathetic emotional non arguments are no basis on which to attack others here who have argued in good faith using logical reasoning and clear obvious evidence.

    I have no idea how many people could be put into Sydney’s normally crowded commuter trains without allowing rampant spread; nor do I know (or can I know) the effect of those who refuse, whether from ignorance, bloody-mindedness, forgetfulness, laziness or some other reason, defensible or not, to wear masks on spread

    You should have stopped at “I have no idea”. I use Sydney trains to commute to and from work on a regular basis. The proportion of commuters who wear masks are clearly in the minority – I’d be surprised if it was above a third (and no I’m not going to conduct a head count). Even if the trains were packed to their usual capacity (and thank goodness they aren’t for reasons of comfort alone) I doubt very much that the ratio would increase significantly. I certainly wouldn’t bother wearing a mask even if the numbers of commuters did significantly increase (which it won’t because so many people have now either lost their jobs or prefer “working” from home).

    You are way out of line using evidence free emotion based arguments (not to mention sanctimonious claims about “unedifying debate” because your own arguments are so specious and unfounded) to denounce people who have correctly seen the bat flu as the insignificant threat to their health that it so clearly is. If you’re so worried about your own precious pointless existence then don’t leave your home.

    Better still, don’t get out of bed in the morning. No one on this planet has any “right” to a risk free existence and nor do they have any right to demand governments forcibly attempt to provide one. Especially given this will adversely affect the fundamental rights of literally millions of others who accept that a risk free existence is unachievable (and wouldn’t be worth tolerating even if it was).

    Just leave the rest of us who want to get on with our lives (without them being destroyed by a bunch of arrogant stupid power crazed corrupt and utterly dishonest totalitarian knobheads, egged on by pathetic bed wetters such as yourself) bloody well alone.

    On a final note – some friendly advice for the commenter at 11:52am. If you’ve made some sort of gutless attempt to rebut the observations I’ve made in the first paragraph of my previous comment, then your comprehension skills are clearly way too insufficient for you to be commenting on this blog.

  56. Sinclair Davidson

    Pyrmonter – here is the trade-off: with voluntary self-isolation that we saw in the March this year the recession would have been V-shaped, short and sharp. With government mandated self-isolation that we saw from late March we will have a Woosh-shaped recession and economic damage lasting years, if not decades.

    One of he ironies of the oped above that I have critiqued is that they say economists have nothing to say on this topic: yet they and 100s of their colleagues had plenty to say in their first letter. Somewhat amusing that a second letter released in the last couple of weeks had far fewer signatures on it.

  57. vivi

    I should have been more clear. My comments referred to the use of QALYs in macroeconomic analysis, not to comments left by anonymous commenters. Gutless or not, the attempt was to raise a point about unaccounted utility factors.

  58. vivi

    Sinclair Davidson (3:07):
    Your assumptions about human behavior do not have any ground. It could have also been the opposite; people could be even more hesitant to continue with their consumption activities if the policies were not imposed. I am genuinely curious about your claims,

    “with voluntary self-isolation that we saw in the March this year the recession would have been V-shaped, short and sharp. With government mandated self-isolation that we saw from late March we will have a Woosh-shaped recession and economic damage lasting years, if not decades.”

  59. Leo G

    Let’s take an example that should be relatively uncontroversial: there appears to be trade-offs in how to reduce infection. Mask wearing is, it seems, something of a substitute for physical separation.

    Mask wearing is an extremely poor substitute for physical separation.
    The most significant mode of transmission involves very high virion concentration in air via respiratory or oral droplets or aerosols. Attenuation of those concentrations by surgical masks is insufficient to protect wearers. The only significant protection arises from the reduction in virion concentration close to the source- that is, to protect others from infection by the wearer of the mask.

  60. Catcalling Inebriate

    How many angels can you fit on the end of a pin? Just thought I’d ask, as this “debate” has about the same level of value. Really, who is going to come out with a literal plan to accept tradeoffs based on death?

  61. David Brewer

    The real problem is not so much cost-benefit analysis, or whether QALYs are a useful tool. The real problem is that we have no clear idea of what benefit values to put in the equation.

    No one really knows whether lockdowns, border closures, school closures, business closures, travel bans, movement restrictions, curfews, masks, antiseptic gel and all the rest of it have actually cut the final incidence of the disease and its health impacts. Moreover, since they were all imposed chaotically and inconsistently on various differently organised societies where they may have had different effects, we may never know. For all we know at the moment, nothing seems to have made much difference, since Covid deaths were almost all among frail, elderly people who were not long for this world anyway, and since the best predictor of a large death toll was below-average mortality over the last year or two, leaving a large crop of vulnerable individuals.

    On the other side, the damage the counter-measures have done is also hard to calculate accruately, but is clearly colossal, and far higher than any benefits. The immediate economic impact has been to produce the steepest fall in output and fastest rise in unemployment since records began. In time we will also get a handle on the impact on business failures, suicides, drug and alcohol problems, schooling deficits, postponed surgeries, untreated or undiagnosed cancers etc. etc. But we will never know or be able calculate the societal and pyschological damage from isolation, curtailment of freedom, abuse of the law, police brutality, and all the rest of it.

    The bottom line is that QALYs or no QALYs, Blind Freddy can already see that this has been a policy disaster.

  62. Pyrmonter

    @ Doomlord

    I’m a bit less pessimistic. Even NSW is returning to something close to normal, so far as I am able to judge it, with the exceptions of: sectors exposed to services exports (higher ed, inbound tourism) and bricks and mortar retail, especially in the CBD. No doubt worse will come with time, as businesses fail, but I see the larger problems (and perhaps some explanation in the buoyancy of the property market) in the effect on public finance.

    Governments now have a strong incentive to inflate to erode the value of their liabilities, and a popular clamour for ‘more relief’. Every lobby from the tourism trade to the infrastructure cartel to the social welfare lobby is now paroting nonsense about ‘stimulating aggregate expenditure’; no-one is talking labour market reform, savings policy, land use control (zoning, retail tenancy law) or any other form of deregulation. Indeed, the feds are now proposing to make the already weak position of small business creditors still weaker. That concerned me in March and April, and I can only say my concerns about the rigour of thinking about economic policy have only grown.

    As an extension of what I said above, and with the benefit of some hindsight … the most frustrating thing, the thing for which Andrews’ government in Victoria deserves to be hammered … is not that they seek to suppress, but that their means for doing so are so fantastically expensive. It must now be weeks since the curfews and travel restrictions within Melbourne arrested more than a handful of cases, while for all the political determination to ‘do something’, we have no regime of rapid testing, or any of the other alternatives chronicled in places like Marginal Revolution: https://marginalrevolution.com/marginalrevolution/2020/08/testing-targets-social-distancing.html

  63. Leo G

    Covid deaths were almost all among frail, elderly people who were not long for this world

    A poor assumption- not all frail, elderly people are not long for this world.
    How do you know that those who died with a CoViD infection would not have survived for long if not for that infection?
    Moreover, even among elderly folk with significant comorbidities a significant number survive the infection- it really depends on the course of the disease in the individual. If on average an 80 year may be a thousand times more likely to die with CoViD than a 20 year old, that doesn’t imply that every infected 80 year old will die with the infection.

  64. David Brewer

    DB: Covid deaths were almost all among frail, elderly people who were not long for this world

    LG: A poor assumption- not all frail, elderly people are not long for this world.
    How do you know that those who died with a CoViD infection would not have survived for long if not for that infection?

    See the graph of ages at death here which shows that about 70 per cent of males who have died from Covid in Australia were over 80, and about 80 per cent of females. Now, the median age of death in Australia is 78 for males and 84 for females, so it would appear that the average age of death from Covid is higher than the average age of death from all causes.

    One can also look at life expectancy figures at different ages. Here we see that an 85-year old man has a life expectancy of a bit over 6 years and an 85-year old woman a life expectancy of a bit over 7 years. That is of the general population. But we know that persons who die from Covid are less healthy than average for their age group. It would seem reasonable therefore to estimate that Covid may, on average, have shortened its victims’ life span by say, 2 to 4 years. How this study could come up with a figure of 14 years for women and 17 years for men is beyond me. Those figures would imply that, in the absence of Covid, the average Australian who has died from it – who BTW is likely to have had at least one other serious illness – would have lived to roughly 100.

    Another intresting perspective would be to examine the most significant comorbities present in people who have died of Covid. From the lists here it would seem that the highest risk factors are recent transplant surgery, blood cancers, and chemotherapies. If it eventually turns out that a large proportion of Covid deaths were among the very small percentage of the population in these and similar categories, that will further weaken the justification for the drastic society-wide bans and restrictions that have been imposed.

    All this is not to say that strenous measures should not have been taken to stop old frail people getting Covid. Having your lungs pack up must be a nasty way to go. But I think it is very much an open question whether many of the repressive measures taken against the broader community had any positive effects in reducing Covid incidence in nursing homes. Even if they “flattened the curve”, that may only have dragged out the period during which strenous measures in those homes and in hospitals may have been required.

  65. Leonie Segal

    I guess to simplify the argument every policy decision involves choices, that is inevitable – the use of QALYs as a measure is a simple way of making some of those choices more explicit. In relation to covid it would seem by the stringent lockdown, the Victorian govt has decided a short extension of life in the elderly – who are most at risk, is of more value than increased risk of early death and loss of livelihood of young and middle-aged adults; the massive increased risk to children in households that were already struggling but will have become more dangerous – and these latter consequences will have lasting and potentially intergergenerational effects – and yet these types of trade-offs are never made explicit and mire than that decisions are being made without any one actually estimating the real cost – in pain and suffering that is not directly covid. Surely with all this modelling happening – a group could have been funded to have conducted a comprehensive assessment of ALL the impacts under a range of scenarios.

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