Over at The Money Illusion, fellow EconLog blogger Scott Sumner lays out 21 characteristics of a banana republic. He points out that it’s not a complete list. I agree.
In particular, there’s one characteristic missing, a characteristic that has been quite relevant in the United States and in major parts of the world since early April.
It is this:
Does the government prevent people from practicing their occupation and shut down huge parts of the economy based on the idea, not that people are sick and might spread their sickness to others, but that people might be sick, even though most of them aren’t, and might spread their sickness to others? And relatedly, does it threaten people who could easily prove themselves not to be sick with fines and/or jail sentences for not complying?
Also, related, does the government keep changing its rationale for the shutdowns.
READER COMMENTS
Mark W
Sep 27 2020 at 3:05pm
“Does the government prevent people from practicing their occupation and shut down huge parts of the economy based on the idea, not that people are sick and might spread their sickness to others, but that people might be sick, even though most of them aren’t, and might spread their sickness to others?”
You say “not that people are sick”, but of course some people are sick. Then you say “even though most of them aren’t” which suggests that the government should only impose a lock down if > 50% of the people are indeed sick. If we were to really reach a point where more than half of the population was sick, that would be over 150 million sick people, and with an IFR of somewhere between .5% and 1%, that would translate to between 750,000 and 1.5 million deaths. Are you actually suggesting that anything short of a million deaths is insufficient to justify government action?
pc
Sep 27 2020 at 5:01pm
You miss a key point. People are sick, people are spreading the sickness to others, people are dying. A banana republic would fail to take decisive action, and pass blame to others.
Jon Murphy
Sep 27 2020 at 5:36pm
That’s the thing, though: the actions taken are not targeted at sick people. They’re targeted at non-sick and political opponents.
Besides, lockdowns are not decisive. In fact, they appear to be worthless, especially given the sometimes-hourly change in reasoning for them
Alan Goldhammer
Sep 28 2020 at 7:45am
This is not true. There are a number of pre-prints posted over the last couple of months that demonstrate the utility of lockdowns. It is non-compliance with simple public health measures that forces government hands. Look at what is happening in Israel right now. A lot of the problems in the US were avoidable with selective closings after the initial lockdown in March/April. Yes, there would be some businesses put in peril (bars, restaurants, movie theaters) but it would have been far easier to provide selective financial assistance than throwing tons of money at everything.
dede
Sep 29 2020 at 3:50am
It also worked in China. Remember that the virus appeared in Wuhan, that XiJinPing decided to invent the lockdown during the Chinese New Year holiday when it is not too much of a nuisance for the economy and then declared that the epidemic was over thanks to the success of his policy.
China is not a Banana Republic, it is a People’s Republic! <sarcasm>
Alan Goldhammer
Sep 27 2020 at 5:07pm
What should the solution be if their occupation is running bars or restaurants where there will be a lot of people congregating in enclosed spaces? This is public health 101. Don’t get me wrong, I thought that things were locked down a little too long in the spring and that places could open if there was going to be controlled access so that crowding would not occur. Of course this cannot happen unless everyone feels a part of the solution which did not happen in this country.
We are now starting to see the fall out from this with all the bankruptcies of retailers and large shopping malls seeing tenant desertion. In our county restaurants are open but when I go to various ones for pick up, there are no in person diners. The wait staff of the restaurants look very glum. Most office buildings are at very low capacity. Airlines are going to lay off a huge amount of people yet there is no prohibition against flying. My lawyer neighbor is planning on driving 800 miles for a deposition next week as he won’t fly right now.
Right now it’s people and not the government that are shutting things down. It would be nice if David provided his personal view on this in terms of a willingness to dine out, travel, etc.
David R. Henderson
Sep 28 2020 at 1:23pm
Alan,
You made some good points, but you went too far.
You wrote:
There are a number of prohibitions that directly affect flying. If I were to fly to Winnipeg and drive to my cottage, I would be quarantined for 14 days. That made my annual trip to my cottage infeasible. Had there been no quarantine, I would have gone for, say, 9 days, because my wife could have handled that amount of separation. And you, assuming you don’t have a Canadian passport, would not even be allowed into Canada. Thanks, Donald J. Trudeau.
I had 2 colleagues who flew directly from Monterey to Denver last year to see an NFL game. With people not allowed at NFL games, there’s no point to flying.
I agree that there are people like your lawyer neighbor who will drive 800 miles (one-way or round-trip?) to avoid flying. If it’s one way, I’m almost positive I can show that that makes no sense if his goal is to avoid death. I’ll do the math if you’re interested.
You wrote:
No, it’s both. But here’s a test. If you really believe that, you should support ending all lockdowns immediately. Do you?
You wrote:
Fair enough. I’m quite willing to dine out. We do it outdoors because that’s all we’re allowed: I dine out about twice per week. If they allowed indoors, and if I could persuade my wife, I would dine indoors.
Also I’m flying to Omaha on October 8 to give a talk on October 9, and I’m probably flying to Dulles in the last half of October to visit people for about 6 days.
IVV
Sep 28 2020 at 2:18pm
No, it’s both. But here’s a test. If you really believe that, you should support ending all lockdowns immediately. Do you?
Most people who want the lockdowns to end say it is because they want to return to an economic reality like before the pandemic. However, it’s clear that unless you enforce people coming out of their homes and congregating and eating out like before, it’s not going to happen.
Part of the reason of that is because there is no credible feeling that the risk profile before the pandemic has returned, independently of whatever the government mandates.
What is the goal you are looking for in ending the lockdowns?
(My position is that the lockdowns have not affected my decision to sequester myself, and lifting them will also not change my decision; instead, we must establish much stronger test and trace protocols, alongside targeted lockdowns and economic assistance as necessary to allow for these targeted lockdowns to be adhered to by affected residents in financial security. Until that’s done, no economic progress in sectors requiring congregation will be possible. We need to know where the disease is, and credibly show commitment to finding, tracking, and fighting the disease wherever it lies.)
Dylan
Sep 28 2020 at 6:38pm
David,
It appears that it has been mostly government support and/or the promise of government support that is keeping businesses open. Sure, there are many people that would be willing to go to restaurants, bars, fly, attend football games, etc. But, are there enough of them to keep the business at the 80 – 90% occupancy they need to be able to stay in business? Ending lockdowns (and the government support that is implicitly tied to them) seems like a good way for you to no longer have any restaurants to go to, even if you wanted.
That’s pretty likely anyway. I know in my neighborhood I’m hearing of a lot more businesses that are throwing in the towel as cold weather is around the corner that will make outdoor activities less feasible and they just can’t afford to keep going any longer.
Rob Rawlings
Sep 27 2020 at 7:16pm
If my reading of Scott’s blog is correct it would be inconsistent for him to view lock-downs as an attribute of banana republics. Some of the countries he contrasts to the US and appears not to view as banana republics – NZ, Australia , Switzerland etc – did in fact have lock-downs.
David Henderson
Sep 27 2020 at 7:28pm
I don’t know what Scott would say. I think it would be hard to argue that such extreme measures, with so little hard evidence and no vote by legislatures over 6 months, are not evidence of a banana republic.
Rob Rawlings
Sep 27 2020 at 7:45pm
I agree that lock-downs are hard to justify on public health grounds but also feel that the term ‘banana republic’ would become meaningless if almost all the world’s richest democracies were to be so categorized on the grounds that they implemented lock-downs. I assume that when Scott uses the term he is contrasting 2020 USA to those other rich countries where politics is conducted in a more ‘normal’ way.
Phil H
Sep 27 2020 at 9:15pm
I think the problem is that banana republics are all about the corruption. The banana part is important – there was trade, and the corrupt political class was skimming off all the benefits of that trade.
Lockdowns tend to kill economic activity, and it’s not clear that anyone is benefiting financially from them.
I get that you think they’re irrational, and that’s kinda connected, but I don’t really think they fit on that list.
Jon Murphy
Sep 27 2020 at 11:17pm
There are ways to benefit from something that are not financial. The question to ask is not “who benefits financially,” but rather “who benefits?”. Limiting yourself to finance alone will blind you to many other realities.
David Seltzer
Sep 28 2020 at 5:49pm
Jon, good point. What are the non-monetary benefits?
robc
Sep 28 2020 at 6:22pm
Power.
David Seltzer
Sep 28 2020 at 6:36pm
Power or abuse of power?
robc
Sep 29 2020 at 7:23am
The goal is power. The means of achieving it is abusing the power they already have.
Jon Murphy
Sep 29 2020 at 1:45pm
Power is one. In the case of Trump, I’d say ego and a lust for glory.
Scott Sumner
Sep 28 2020 at 2:43pm
I’m mostly opposed to lockdowns, but I’m not sure that I would describe them as banana republic policies, just bad policies. But it depends on the justification I suppose.
David Seltzer
Sep 28 2020 at 5:52pm
Scott, good stuff. “But it depends on the justification I suppose.” Classic econ concepts of trade-offs and cost-benefit questions.
robc
Sep 29 2020 at 9:51am
I would think means would matter more than justification for it being a banana republic. Executive order instead of legislative process would be the big indicator to me.
David Seltzer
Sep 29 2020 at 10:22am
Means? Of course. Constitutionally elected officials are fair means. What those duly elected officials do with that power is the real test. It seems Madison’s quote “If men were angels” applies to them as well as they are a subset of flawed mortals elected to govern the rest of we the flawed.
mbka
Sep 29 2020 at 2:40am
As many others have said, lockdowns may or may not be good policy, but they have little to do with political tendencies in “banana republics” (= dysfunctional republics with a domineering crony class that skims public finances and uses public power for private benefits).
The only one aspect re: US lockdowns that comes near banana republic patterns are ineffectual or spotty lockdowns, because they would show the characteristically banana-esque uneven, corrupt, or ineffectual use of state power. State power that is used impartially on everyone may be called authoritarian or democratic, or even legal, depending in its source. But impartial use of state power in and by itself is not a sign of corruption and certainly not a sign of ineffectiveness.
Craig
Sep 29 2020 at 3:01pm
Did the Board of Directors of United Fruit launch a coup. A rose is a rose by any other name. Personally I don’t think that ‘other name’ should be ‘banana republic’ but that’s just me. I would suggest a banana republic describes fundamentally different circumstances.
Does this mean things haven’t gotten to the level of utter ridiculousness? Of course not.
Mr. Econotarian
Sep 30 2020 at 12:29am
A family member of mine died of Covid-19 and another was hospitalized for a month. Friends of mine were also hospitalized. So maybe this is personal for me…
It would have been fine if the US had a solid nationwide lockdown in April for 4 weeks – enough for the incubation of the infected and then the incubation of their family members.
Then all cellphones should have been loaded with tracing software, and 100,000 tracers should have been hired. Mass immediate testing should have been set up across the country. And we could have re-opened the economy.
That is what happened in South Korea and Taiwan. I just noticed a large electronics expo happening in Korea next week. Meanwhile, CES 2021 to happen in Vegas in January has been cancelled as being “too risky.”
I don’t know if it is too late for the US or not. We’ve eaten 200,000 deaths, are we just going to roll over for 200,000 more?
nobody.really
Oct 1 2020 at 9:49am
How can people easily prove themselves not to be sick?
I sense the National Football League has a huge financial interest in excluding players who have COVID-19. Yet they seem unable to to do so. So why should we believe that people who lack the resources and incentives of the NFL will achieve greater success?
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