As anticipated, the Coronavirus outbreak has definitively entered new phases in both the UK and the US, in the wake of ‘lockdown’ restrictions limiting non-essential production and consumption and encouraging populations to stay at home. These policies are centralised in the UK and State-wide in most of the US. As we can see from Chart 1 below, the log curve of cases and deaths is steadily flattening to the extent that we no longer have exponential growth of cases and deaths. It seems fairly clear that significant bending of the case curves took place after widespread social restrictions were imposed, and that the death curves followed with around a 10-day lag.
It’s too early to lift restrictions
It is utterly irresponsible to suggest, as many are doing (Trump supporters in the US and the usual Brexit suspects in the UK) that this means that we are in the clear and can now start to contemplate lifting restrictions on gathering socially, for work and on public transport. We do not have exponential growth, but despite all our efforts we still have steady linear growth in cases and deaths as indicated in Chart 2 below, and more clearly for deaths in Chart 3. Linear growth means that roughly constant numbers of people are acquiring the disease and are dying from it daily.
It is notable the extent to which the UK and US patterns of Covid-19 growth are now following each other, with similar rates of case growth and of the rise in deaths from the Coronavirus epidemic. (Chart 1)
Whilst both the UK and the US can be said to have been
slow in initiating forceful measures to deal with the Coronavirus epidemics in
their countries, the UK government under Prime Minister Boris Johnson has now,
albeit not always with the necessary clarity, announced shutdowns of most
social-mixing in Britain. Only ‘essential workers’ – a term yet to be
satisfactorily defined – should be leaving their homes except for shopping for
necessary goods, healthcare access or for suitably distancing exercise. There
are problems in obtaining adequate protective equipment for front-line health-workers,
but central government do seem to be making some effort to address this.
Unfortunately, in the US, the leadership vacuum in the
shape of Donald Trump is more interested in spreading misinformation and
bigging-up his own desultory (frankly negative) role in efforts to combat the virus
and its consequences. Any effective efforts to counsel isolation of those with
symptoms and general social-distancing, and to provide additional equipment and
space in anticipation of the inevitable rise in the number of cases needing
hospitalisation, have been taken by State governors, and mainly Democratic
ones. Worse still, Trump is now touting the idea that ‘the cure is worse than
the disease’ and that such restrictions as there are should be relaxed after another
two weeks to allow business (and from his point of view the stock market) to recover.
Apart from the fact that cases and deaths will almost certainly still be rising
at that time, the degree of complacency this signals is likely to be extremely
damaging to ongoing suppression efforts in the United States.
In addition, even if all patients were able to be treated, we predict [under a mitigation strategy] there would still be in the order of 250,000 deaths in GB, and 1.1-1.2 million in the US. In the UK, this conclusion has only been reached in the last few days, with the refinement of estimates of likely ICU demand due to COVID-19 based on experience in Italy and the UK (previous planning estimates assumed half the demand now estimated) and with the NHS providing increasing certainty around the limits of hospital surge capacity.
Yet, as I described in my previous post, a figure in the
region of 250,000 deaths could have been reached by somewhat simpler calculation.
Some of the most important information about the Coronavirus (Covid-19) epidemic is to be found not from medical knowledge or in the lab but from basic mathematics. The key to understanding this behaviour is in the mathematics of exponential growth. What does this mean? There are two ways in which regular increases of anything can occur – either by constant addition – arithmetic growth – or by constant multiplication – exponential growth. We can illustrate the difference by starting from 1. If there is daily arithmetic growth of 2, then on the second day the total will be 1 + 2, so 3, on the third day the total will be 1 + 2 + 2, so 5, on the fourth day 1 + 2 + 2 + 2, so 7, and so on. If there is daily exponential growth of 2, then on the second day the total will be 1 × 2, so 2, on the third day 1 × 2 × 2, so 4, on the fourth day 1 × 2 × 2 × 2, so 8, and so on. The difference is in the sign – a plus sign in the case of arithmetic growth, a multiplication sign in the case of exponential growth. As is made clear by Chart 1 below, although the arithmetic growth gives higher totals initially, exponential growth very quickly afterwards leads to higher and rapidly increasing values.
Epidemics cause exponentially increasing numbers of
cases because for every person who is infected, that person can in turn infect
another. The number of people each infected person in turn infects every day multiplies
the number of cases. If we start off with one person who then infects one
other over 24 hours, and these two each infect another over the following 24
hours, and all four infected each in turn infect one other the next day, and so
on, then we have the daily exponential growth of 2 we described above. This
might be quite an extreme epidemic, but in any case where the number of new
infections is increasing each day, the growth will be exponential, rather than
The media, social and otherwise is now rife with analyses
own included) of why Labour lost the 2019 election so badly, and what the
Party should do about it. A common theme revolves around the loss of
‘traditional working class’ seats in the English North and Midlands, and how
Labour has moved away from their ‘socially conservative’ and ‘communitarian’
values. These values evidently led many of these constituencies to vote in
favour of Brexit in the 2016 referendum, which further alienated some of their
voters from Labour’s soft Brexit and second referendum stance. If this analysis
is correct it leads to some serious soul-searching within the Labour Party.
So there we have it. The polls were right, and produced the electoral results that could have been anticipated from them. To the extent that is a surprise it is only because of the unexpected result of the 2017 election and the rarely-fulfilled dream of some substantial tactical voting. Of course Scotland is a rather different story, and one that looks likely to run and run.
As far as England is concerned, Labour seem to have been
caught in a Brexit trap – divided both within and without by the either/or
nature of the question. It could neither fully embrace what was always primarily
a right-wing nihilist project, nor fully reject a referendum result that was
backed by many in ‘working class Labour heartlands’ – irrespective of which
side actual Labour voters had supported in that referendum. At least the
Conservative majority gives that issue some clarity; whatever Brexit brings
over the next five years – and it is unlikely to be anything particularly good
– it will be entirely at the doors of Boris Johnson (if he survives without
terminal scandal) and the Tories.
Reaction to modern liberal society has apparently been treated as akin to ‘the Inquisition and Islamic State, Francisco Franco and Ayatollah Khomeini, Vichyism and Leninism’. If you make that claim and end by stating ‘[W]e do well to remind our fellow citizens [that] Man [sic] is made for more than this world, and his [sic] final destiny is in the hands of the Almighty’ you might be thought to have given up your own cause. But let us be charitable and (overlooking the implicit sexism) acknowledge that we must accept our ignorance of the universe’s final ends and live only according to the little that we can know.
Sohrab Ahmari’s essay on ‘The New American Right’ in First Things attempts to lay a philosophical base for what he calls ‘Post-Fusionist Conservatism’, but which elsewhere has been referred to as ‘Post-Liberalism’ and in the UK flies under the banners of ‘Blue Labour’ and ‘Red Toryism’, associated with Maurice Glasman and Phillip Blond respectively. The basic premise is that ‘liberalism’, in both its social guise and economic guise has precipitated a society that is ‘fragmented, atomized and morally disoriented’, and in consequence ‘we need a politics of limits, not of individual autonomy and deregulation’.
Ahmari’s call for ‘a public square reoriented to the
common good and ultimately the Highest Good’, is commendable, but leaves open
the question of what and whose ‘Highest Good’ is to be sought. Without revealed
truth (and a single revealed truth at that) this can only be speculative. The
unique selling point of liberalism is that it recognises this and so seeks to
maximise the options for everyone, individually or collectively, to seek and to
find their own Highest Good. Ahmari characterises ‘progressive liberalism’ as
wishing to ‘raze all structures that stand in the way of an empire of
autonomy-maximising norms’, while ‘conservative liberalism’ recognises ‘the
need for some limits’. He rejects both, arguing that ‘freedom requires a moral
and religious horizon…in the state and the political community’. But this is to
bring the subjective and the metaphysical into the objective and empirical; ‘[m]illennia
of religious tradition and philosophical contemplation’ are no better than ‘old
prejudices’ when they lack any empirical foundation or basis in common
experience of the world.
IS-LM and MMT The core issue at the heart of debates between the heterodox Modern Monetary Theory (MMT) approach and more mainstream macroeconomics is how the financial economy and the real economy interact. As a consequence we see Keynesians of various hues attempting to illustrate their response to MMT with the standard orthodox Keynesian IS-LM model of the economy, which attempts to illustrate this interaction graphically.
The IS-LM model, as elaborated by various economists after Keynes, consists of upward and downward sloping curves in income (Y) and interest (r) space. (See Figure 1) The downward-sloping IS curve illustrates the inverse relationship between the cost of physical capital (summarised by r) and GDP (Y) where investment is assumed to be the major variable in the latter. The upward-sloping LM curve is a somewhat more complex concept but essentially proposes that given a fixed supply of money, a higher Y leads to a higher interest rate on bank deposits. This interest rate is assumed to feed through to the price demanded for financial capital in such a way that it can be considered as variable r for the purposes of the model. The model is thus somewhat vague in what r is really standing for. Further criticism is that a fixed supply of money is an unrealistic concept; the quantity of money supplied in a modern monetary economy being endogenous to its demand. It is also pointed out that the model mixes up stocks (of money) and flows (of income). Despite these criticisms, the IS-LM structure has been used to characterise MMT ideas in terms of the slopes of the two curves – in its extreme a vertical IS curve (implying investment as independent from any rate of interest) and a horizontal LM curve (implying a technically unlimited supply of money).
A Matching Flows Approach A better way of approaching the real/money interaction might be to work from the viewpoint of two linked flows – that of money and that of its exchange counterparts. We start off with the economy in a steady state, with constant flows of money on one side and of real goods and services and speculative assets on the other. (See Figure 2) There is no distinction between consumer goods and services and productive capital goods in this model, since this is regarded as an arbitrary distinction between goods that have a spectrum of durability and of the timing of flows of utility and/or monetary return. What we will distinguish are goods purchased for use, and those (speculative assets) purchased for resale at (expected) higher prices.
Last year a strange bit of ‘neoliberal’ propaganda
surfaced in the New Scientist of
all places. In what purported to be a report of recent research, Washington
University psychologist Pascal Boyer has written of how the ‘human mind is
designed to misunderstand the mass-market economies we have created’.
He says ‘evidence from psychology and anthropology…reveals
that people have an intuitive mental template for how exchange…should occur’,
and that these are evolutionary in origin. This template has arisen because,
humans evolved to be highly co-operative…[a]nd our ancestors shared resources, especially when it came to goods with highly variable availability… Trade mostly took place between people who knew each other, or between groups that shared repeated exchanges. Technology was simple enough that they could track how much effort was involved in making most things, and verbal communication…was used to select the most co-operative partners with whom to do business. As a consequence, ‘we have a strong sense of fairness, and intuitively expect and prefer that the proceeds of a joint effort be shared in proportion to each participant’s contribution’. Moreover ‘we intuitively consider it beneficial to extend small favours to trading partners rather than exploiting their weak positions, because of expectations of long-term interactions.