Focusing exclusively on public health rather than trying to strike a balance between human and economic health, China seems to have succeeded by March 15, in preventing, to a large extent, Covid-19 spreading exponentially in the mainland since it first struck in Wuhan, the capital city of Hubei province around December 27, last year.
However, during the three months that it took China to get the hang of the deadly virus its economy had slowed down considerably with the world at large worrying about what looked like an imminent recession in world's second largest economy and its anticipated adverse impact on the overall global economy.
Total retail sales of social consumer goods in China were down 20.5% in nominal terms on a year-on-year basis in the first two months of 2020. Industrial production dropped (-13.5%), and so did investment in fixed assets (-24.5%). Investment in infrastructure, manufacturing, and real estate development declined by 30.3%, 31.5%, and 16.3%, respectively. The value of exports was down by nearly 16% while imports dropped by 2.4%. Still, most estimates, however, suggested the intactness of China's long-term growth.
Economic health rebounded gradually once China had managed to restore the human health aspect on the road to normalcy. Not only that. By mid-March Beijing's economic health had regained enough for China to be able to extend help in the shape of tools and advice to some countries, including Italy and Pakistan, which in the meanwhile had been caught by the contagion totally unprepared.
The new victims of the deadly virus in Europe, America, Africa and other Asian countries were caught by surprise because, in the first place, governments in these countries thought Covid-19 was an exclusively Chinese virus which, in their opinion, would die within the Chinese borders and, therefore, they did not take the much needed essential measures to arrest its devastation from spreading in their countries once the invasion had begun.
Secondly, being practitioners of free market economy, some of the rich and not-so-rich countries led by the US, first tried to sidestep the virus menace by using the tried and tested conventional measures, such as generous bailout packages which were highly successful in the past when their economies had come under serious threat from legendary recessions or depressions.
They perhaps believed that the Contagion was a passing phenomenon and would taper off in due course of time and therefore what was needed on priority basis was to be prepared to minimize the adverse impact being caused to the economic health by the Covid-19 before passing off into the oblivion on its own or may be some effective anti-virus, would be developed, meanwhile, to kill the contagion in good time.
But the economic health of these countries was not being threatened by any legendary recession or depression this time but by what was clearly a public health hazard which in turn was adversely affecting the economic health. Priority, therefore, was needed to be on first slowing down the exponential spread of the menace and then reducing it drastically to the minimum; then alone it was time to see how the damage caused to the economic health by the virus could be repaired. Attempts to meet the menace of Covid-19 by ever generous bailout packages before first taking care of the former was like putting the cart before the horse.
According to Rosamond Hutt, Senior Writer, Formative Content ('Act fast and do whatever it takes' to fight the COVID-19 crisis, say leading economists-published on 3 Mar 2020 in Agenda Weekly of WEF), while you cannot flatten two curves simultaneously all at the same time, it is equally impossible to hope that you can flatten the human health curve by prioritizing the economic health curve.
He, therefore, seems to disagree with economists urging governments to bring out the 'big artillery' to fight the economic fallout caused by the COVID-19 pandemic.
Unconventional policy options such as 'helicopter money' should be on the table, these economists argue and ask governments to reduce personal and corporate bankruptcies, ensure people have money to keep spending even if they're not working, and increase public investment and healthcare spending, the economists say. As the list of countries shutting down in the face of the coronavirus pandemic continues to grow, leading economists from around the world are calling for radical action to fight the economic fallout.
The author was even more horrified to find that more than 40 high-profile economists, including IMF Chief Economist Gita Gopinath and former President Barack Obama's top economic adviser, Jason Furman, contributing to an eBook from the Centre for Economic Policy Research (CEPR) in which they urge governments to act quickly and do whatever it takes to keep the lights on. They advocate using heavy fiscal firepower for a "whatever-it-takes" economic response to the COVID-19 crisis.
Among the drastic measures proposed are: 'helicopter money,' where everyone gets a no-strings-attached handout; Eurozone countries using euro bonds to issue debt together rather than individually; and state investment banks providing unlimited emergency lending to firms.
Meanwhile, Michael Davies-Venn writing for International politics and society (Economic health and public health aren't equal-published on 26 March, 2020) says that governments around the world and their presumably independent central bankers are collectively making crucial mistake in response to the Covid-19 global health pandemic.
Politicians, indeed, quite obviously have a duty towards private enterprise and public health. But while the crisis provided a unique opportunity to question societal priorities, this chance seems to be getting lost because of a focus on two concurrent objectives in the midst of the crisis: protecting public health and economic growth.
The author points out that the main objective is to keep economies 'healthy' by strengthening consumer demand, keeping businesses afloat, avoiding large-scale bankruptcies and unemployment, keeping money flowing so producers produce and consumers consume. All these aims, according to him, are to be realized in the midst of a global public health pandemic. Meanwhile, he said, Covid-19 corpses are piling up and people are not dying for a lack of credit.
He further points out that at the core lies the orthodox economic response that seeks to protect human health while also ensuring economic growth, "but to make matters worse, the success of this approach rests on hope: that a vaccine is found soon, or that the 'whatever it takes' lullaby soon lulls economies back to 'life.'"
"The first general lesson is politicians must learn to unlearn fears of nationalization. Reportedly, the Spanish government nationalized all private hospitals. This decision reflects the recognitions that the self-regulating market should be made subservient to human health. The Spaniards' exemplary move in times of a public health crisis, from liberalization and privatization to nationalization is an example of corrective measures necessary to put human health over economic growth. The fear of infection in Spain will be reduced by assurances of unfettered access to healthcare. Making the economy subservient to societal needs also led the Italian government to 'close down all productive' activity that Italy's prime minister Giuseppe Conte said are 'not strictly necessary.'
"Second, jobs may be a sufficient condition for economic growth, but human health is a necessary condition. So politicians must consider that human health must always take priority over economic activity. This means that a singular focus on doing 'whatever it takes' to protect human health, including curbing the spread of the virus, delinking public health from private enterprise, nationalizing healthcare delivery systems, continues even after the crisis.
"Third, protecting human health, preventing more deaths does not immediately require protecting businesses from going bankrupt. It is a crucial lesson to learn that the private sector controlled by a growing handful is inadequate to respond to the growing demands of public health. Only governments, with statutory duties on public health can maintain exclusive focus on protecting it.
"Fourth, the belief that strengthening consumer demand during a global public health pandemic is largely based on myths. Covid-19 makes clear that economic stability is not a panacea for public health. Even if there's success in creating conditions for consumer demand - public health measures require people to stay home, which will undermine that outcome.
"Fifth, Covid-19 gives chance to put to bed the fiction that central bankers and politicians perform functionally different roles. The reality is that the economic aims of central bankers cannot be divorced from political objectives. Politicians mostly understand their roles in society in economic terms, which is why reducing unemployment is their priority. However, a wider definition of their role allows them to learn to put public health over private economic activities."
There's also a greater opportunity, in the opinion of the author, for all societies to learn the degree of vulnerability of the economic system now at the core of human existence as a new virus has quite quickly reduced economic activity in so many ways.
In the midst of this failure, the right thing to do is ask whether the economic paradigm with its ever tightening grip on our lives can provide adequate societal protection in times of a crisis of this scale. The obsession with economic growth ought to be constrained by concerns that give priority to public health.
Author's advice: The minimum honor to be accorded to the dead and dying is to use this global public health crisis and learn these crucial lessons to undo the complex intertwining of public health and economic growth.