How History Shows Pandemic Lockdowns Are Not Necessary
Published May 26, Written by Ryan McMaken: Media pundits and politicians are now in the habit of claiming it was the pandemic itself that has caused unemployment to skyrocket and economic growth to plummet. The claim is that sick and dying workers, fearful consumers and disrupted supply chains would cause economic chaos.
Some have even claimed that economic shutdowns actually help the economy, because it is claimed allowing the spread of the disease will itself destroy employment and economic growth.
Leaving aside the fact there’s no evidence lockdowns actually work, we can nonetheless look to past pandemics – where coercive government interventions were at most sporadic – and we should see immense economic damage.
Specifically, we can look to the the pandemic of 1957-58, which was more deadly than the COVID-19 pandemic has been so far. We can also look to the 1918-19 pandemic. Yet, we will see that neither produced economic damage on a scale we now see as a result of the government mandated lockdowns.
This thoroughly undermines the claims that the lockdowns are only a minor factor in economic destruction and that the virus itself is the real culprit.
Economic Reactions in 1957-58 and in 1918-19
The CDC estimates that as of May 18 this year approximately ninety thousand Americans have died of COVID-19. Adjusted for population size, that comes out to a mortality rate of 272 per million.
This is (so far) less than half the mortality rate for the 1957-58 flu pandemic. In that pandemic, it is estimated that as many as 116,000 Americans died. Yet, the US population was much smaller then, totaling only 175 million.
Adjusted for population size, mortality as a result of the ‘Asian flu’ pandemic of 1957-58 was more than 660 per million. That’s the equivalent of 220,000 deaths in the United States today.
Yet, Americans in 1957 did not respond by shutting down commerce, forcing people into “lockdown”, or driving unemployment up to Depression-era levels. In fact, reports show that Americans took little action beyond the usual measures involved in trying to slow the spread of disease: hand washing, staying home when ill, etc.
Although the virus does appear to have been a factor in the 1958 recession, the economic effects were miniscule compared to what the US now faces from the reaction to the COVID-19 virus. This suggests that most of the economic damage now being experienced by workers and households in the US is more a product of the policy reaction to the virus, than to the virus itself.
The pandemic of 1957-58 was a serious and deadly problem for many. As cases of the Asian flu began to spread, it became clear to many scientists and other observers that there was something different and deadly about this flu.
Indeed, according to D.A. Henderson, et al in ‘Public Health and Medical Responses to the 1957-58 Influenza Pandemic’, “Humans under 65 possessed no immunity to this H2N2 strain.” This meant that the “highest attack rates were in school-age children through young adults up to 35 or 40 years of age.”
Total deaths due to the flu over this period range from 70,000 to 116,000.
This is cause for concern, to say the least. With younger Americans, many of them in prime working age, susceptible to the disease, one could anticipate significant costs in terms of economic growth and health.
What was the policy reaction to this? Henderson et al. continue:
The 1957–58 pandemic was such a rapidly spreading disease that it became quickly apparent to U.S. health ofﬁcials that efforts to stop or slow its spread were futile.
Thus, no efforts were made to quarantine individuals or groups, and a deliberate decision was made not to cancel or postpone large meetings such as conferences, church gatherings, or athletic events for the purpose of reducing transmission. No attempt was made to limit travel or to otherwise screen travelers.
Emphasis was placed on providing medical care to those who were afﬂicted and on sustaining the continued functioning of community and health services. There were no reports that major events were canceled or postponed except for high school and college football games, which were often delayed because of the number of players afﬂicted.
In 1957-58, there was concern over the availability of medical services. But the emphasis then was on increasing medical services rather than state-enforced quarantines and “social distancing” measures.
Nor did a vaccine offer an easy way out: Health officers had hopes that significant supplies of vaccine might become available in due time, and special efforts were made to speed the production of vaccine, but the quantities that became available were too late to affect the impact of the epidemic.
Schools and workplaces were affected by absent students and workers, but absenteeism at schools was a larger factor, with some schools even closed for short periods as a result of so many missing students.
Absenteeism did not rise to the level of causing shortages: Available data on industrial absenteeism indicate that the rates were low and that there was no interruption of essential services or production. The overall impact on GDP was negligible and likely within the range of normal economic variation.
Overall, the economy declined by approximately 2 percent during both the first and second quarter of 1958, but this could not all be attributed to the effects of the virus. Unemployment at the time also surged, peaking at 7.5 percent during July 1958. Economic growth was positive again, however, by the fourth quarter of 1958 and had soared to over 9 percent growth in 1959. Unemployment had fallen to 5 percent by June of 1959.
But the overall economic impact of the virus itself was hardly disastrous. Henderson, et al conclude:
Despite the large numbers of cases, the 1957 outbreak did not appear to have a significant impact on the U.S. economy. For example, a Congressional Budget Office estimate found that a pandemic the scale of which occurred in 1957 would reduce real GDP by approximately 1%, “but probably would not cause a recession and might not be distinguishable from the normal variation in economic activity.”
The 1918-19 pandemic, which caused an astounding ten times as many deaths per million as the 1957-58 pandemic, also failed to produce economic disaster. Although the US entered the 1918-19 pandemic in poor economic shape thanks to the Great War, according to economists Efraim Benmelech and Carola Frydman, the Spanish flu left almost no discernible mark on the aggregate US economy.
According to some estimates, real gross national product actually grew in 1919, albeit by a modest 1% (Romer 1988). In new work, Velde (2020) shows that most indicators of aggregate economic activity suffered modestly, and those that did decline more significantly right after the influenza outbreak, like industrial output, recovered within months.
Nor can the pandemic be blamed for the 1921 recession, because by then the decline in output had all to do with a collapse in commodity prices when post-war European production finally recovered.
How Do Pandemics Affect Economic Growth?
Not surprisingly, then, we find relatively mild estimates in a 2009 World Bank report estimating the economic consequences of new pandemics. The authors concluded that moderate and severe pandemics would lead to GDP declines of 2–5 percent.
Or, as a 2009 Reuters report summarized it:
If we get hit with something like the 1957 Asian flu, say goodbye to 2 percent of GDP. Something as bad as the 1918–19 Spanish flu would cut the world’s economic output by 4.8 percent and cost more than $3 trillion.
Not even a 1918-sized pandemic was expected to produce the sort of economic carnage we now see from COVID-19.
The Reaction In 2020
Needless to say, the economy today appears to be in far worse shape in the wake of the 2020 pandemic than in the days following the 1957–58 outbreak, or even in 1919.
As of April 2020, the unemployment rate has ballooned to 14.4 percent, the highest rate recorded since the Great Depression. The Atlanta Federal Reserve, meanwhile, forecasts a drop in GDP of more than 40 percent. More mild estimates suggest drops of 8 to 15 percent. If the milder predictions prove true, then the current downtown is “only” the worst since the Great Depression. If the Atlanta Fed is right, then we’re in an unprecedented economic disaster.
The World Bank’s estimates of even a “severe” pandemic, which predicted a GDP drop of around 5 percent, don’t even come close to the estimates for the 2020 collapse. And why should they? The World Bank report didn’t anticipate the global economic shutdown imposed on billions of human beings by the world’s regimes. Thus, the bank’s estimates assumed that economic losses would be limited to absenteeism, disrupted trade and travel, and declining demand due directly to disease or fear of disease.
So why the enormous difference in economic effects? The answer almost certainly lies in the fact that governments in 2020, unlike in any other period in American history, engaged in widespread business closures, “stay-at-home” orders and other state-mandated and state-enforced actions, that led to widespread layoffs and plummeting economic output.
Defenders of government-coerced “lockdowns” have insisted that fear of the virus would have destroyed the economy even without lockdowns, but there is no historical precedent for this claim, and no current evidence to support it. Although some survey data has been proffered to suggest that more than 60 percent of Americans say they plan to comply with stay-at-home orders, this merely tells us how people make plans when threatened with fines, police harassment, and other coercive measures.
In reality, the experience of the 1957-58 pandemic – or even the 1918-19 pandemic – gives us no reason to believe that joblessness should be increasing at unprecedented rates and that GDP would collapse by catastrophic levels. In a modern industrialized economy, that sort of economic damage is only achievable through government intervention, such as socialist coups, wars, and forced economic shutdowns in the name of combating disease.
The cost in terms of human life will be significant. One study contends that the current economic downturn could lead to seventy-five thousand “deaths of despair”. This is not shocking, however, since the fatal effects of unemployment and economic decline have been known for decades.
Defenders of lockdowns will likely continue to claim that “we have no choice” but to continue lockdowns for long periods of time. At the very least, many claim that the lockdowns until now have been “worth it”.
Yet the efficacy of lockdowns remains an open question, and has hardly been proven. Meanwhile, the world faces the worst economic disaster experienced in centuries.
It didn’t have to be this way.