The British government attempts a covid endgame

In England 19 July is “Freedom Day” when most covid-related legal restrictions will be lifted in England. This was first trailed a couple of weeks ago, when the government billed it as a major step forward in the battle against he virus, and delighted lockdown sceptics, which include a substantial number of Conservative MPs. Alas it looks like heavy going for the government.

Freedom Day was originally billed for 21 June, but the government lost its nerve. At the time I defended this postponement, based on the government’s narrative that we were experiencing a race between the virus and the vaccine, and that the extra four weeks will allow the ever increasing number of vaccinations to slow the progress of the virus. Alas for my understanding of epidemiology. There is no sign that the level of vaccinations is having much impact on the spread of the new Delta variant, which is following a similar exponential path to the Alpha variant in the Spring. There is no sign of the vaunted herd immunity, so beloved of lockdown sceptics. Delta may be just too contagious.

Instead the government’s strategy, as originally explained by the new Health Secretary Sajid Javed, is to let the disease rip, and rely on the vaccine to keep people out of hospital, and so limit the stress on the health system. Mr Javid made no attempt to deny that infections would continue their exponential path, up to 100,000 a day and beyond. Reckless as this sounds, this is perfectly logical, and even shows a degree of leadership in the face legions of people urging caution of some sort or another. There has to be an endgame, and ours is based on a high level of vaccination, using the more effective vaccines, such as Pfizer, Astra Zeneca and Moderna. We only have to look at Australian, where Delta is breaking out into a population with a low vaccination rate. Australia had managed the disease by keeping people out, but failed to focus on the endgame, and messed up its acquisition and roll out of vaccines as a result.

But the government’s strategy had clearly not been thought through. This was evident from one of the goverment’s core arguments: “If not now, when?”, whose logic I find unfathomable. They seem to be hoping that the disease will burn itself out before the busy winter season, but it looks just as likely to make things worse. Two big problems have emerged. The first is the use of face masks. Some people can’t be vaccinated; others will derive less protection than the norm; many more (I have to include myself) are far from sanguine about catching the virus, even though double vaccinated. Even most vaccine sceptics have understood that some efforts need to made to protect the vulnerable – they just don’t want the tail to wag the dog, as they see it. Where this has come to a head is on mask-wearing. As we have better understood the virus, our appreciation of the effectiveness of masks in stopping the spread has grown. It seems sensible to most people to continue to require people to wear them in those public spaces which vulnerable people will find it hard to avoid. This does not include pubs and night clubs – but surely does include public transport and most shops. And the government yet wants to drop all legal requirement to wear a mask, and at first suggested that such matters could be left entirely to personal discretion. One Tory MP (admittedly not a minister) suggested that freedom from mask wearing was essential to getting people using public transport again – his argument seemly was that if we ignored the disease our worries would cease. Slowly but surely the government is being forced into retreat on this; by this morning they were suggesting that operators should use their powers to enforce mask -wearing on public transport. But the messaging has been fatally mixed.

And them came a problem with the NHS covid app, which pings people who have come into near contact (within 2 metres for 15 minutes) with somebody who has tested positive and tells them to self-isolate for 10 days. The government said that it was going to leave this in place until mid-August, when double-vaccinated people would asked to do a test instead. They weren’t very clear on why this delay was being instituted – I suspect it simply takes that long to change the app and test it. But the consequences look worrying if infections are likely to reach 50,000 a day next week, and 100,000 a day not so long after that. The opening up was supposed to help the economy to get moving again, but the projected volume of people being told to self-isolate will hit it right back down again, remembering that these self-isolation requests will tend to cluster in particular workplaces, the disease being what it is. The government’s response has been to suggest that it would de-sensitise the app, so that fewer people would be pinged – within one metre for 30 minutes, say. As a response to the virus becoming more contagious this is nonsense – it leads to the question of what they are hoping to achieve by keeping the app in being. And it points to an easy answer to the government’s “If not now?” question. Then again, if the government wants to let the disease rip and peak before the winter comes, won’t the app just slow things down? Unlike mask-wearing it looks an inefficient way of trying to protect the vulnerable.

The government have clearly thought a bit harder about ta third issue – the effect increased infections will have on the NHS. The link between infections and hospitalisations – and that to ICU usage and deaths – has been weakened but not broken. Hospitalisations for covid now seem to be doubling every month, and we can expect that to increase after the loosening up. The levels are nothing like those experienced in previous peaks, but the NHS is fragile. Backlogs are massive; there are press reports of staff leaving, exhausted after the pressure placed on them over the last 18 months. Given the quality of the government’s ability to think things through elsewhere, there must be a degree of scepticism that they have got their calculations right.

I am more sympathetic with the government on another widespread criticism: that loosening up increases the chances of a new and deadlier variant turning up. With the virus rampant in the rest of the world, where vaccination is woefully slow in many places, what happens in Britain will make little difference. Besides, scientists are reporting that new variations are repeating. The possibilities of new variants for a simple thing like a virus must be limited, so maybe the chances of a significantly more dangerous new variant are not as high as some people are making out. That’s a bit speculative, of course.

So the government is facing a sticky few months, when it will continue to be on the defensive. Other issues loom. The government plans to withdraw the fiscal support it is giving to the covid-stricken economy. This is bound to lead to hardship and criticism; it is also likely that the economy will start to slow as well.

A government that was well-led and with a core of first-rate ministers would command a lot more confidence. But this government cannot seem to think anything through properly and lurches from one crisis to the next. It will be determined not to reimpose lockdown. Twice before it has thought it could wether the storm without reversing course, only to U-turn in the end. What odds would anyone offer that this does not happen again?

How do we live with Covid-19?

As predicted “Freedon Day”, when covid restrictions were due to be lifted, has been postponed from 21 June. And as usual most of the sceptical comment seems to have missed the point. They are suggesting that the government will keep on postponing through dither and indecision. But in fact I thought the government was being quite clear, and there is good reason to think that they will stick with the new proposed date of 19 July, though doubtless some restrictions will be long-term. Meanwhile there is not nearly enough debate on what is an acceptable balance between risk and danger in future while the virus remains prevalent in the world at large – which may well be forever.

The government’s narrative is that the we are in a race between vaccination and the virus. This suggests that there is some kind of equilibrium to be found between the proportion of the population that is vaccinated and the infectivity of the virus, which might bring the reproduction rate to below one, depending on the level of restrictions in place. There is good reason to think that if 75% of the population is vaccinated, then the R rate will stay below one even with most restrictions lifted. The government’s calculation seems to have been that, with the previously dominant Alpha variant, R would be close enough to one on June 23, when 80% vaccination has been reached for one dose. But with infection rates increasing at an alarming rate, this is clearly not true. The now-dominant Delta variant seems to be to blame. They have now calcualted that 75% or more people need both vaccine doses for this equilibrium to be reached.

It isn’t as simple as that of course. There is plenty of evidence that vaccinated people who do become infected do not suffer severe disease, while the mainly younger people who are not vaccinated are less likely to suffer severely too. So we might be able to weather higher infection rates just like we already do for flu. Against this I think two arguments have been accepted. First is that there are still a lot of unknowns about the Delta variant, including whether the earlier assumptions about the vulnerability of younger age groups still hold. India seemed to be less vulnerable than us to covid, mainly it was thought because its population is younger: until it was hit by Delta. Second the NHS is distinctly fragile at the moment. Waiting lists are massive in many places; the Financial Times has reported that many staff are leaving, exhausted by the stress of the last 18 months, and without substantial improvements to pay and conditions on offer. While it is true that the NHS can cope with high levels of flu, that is because it is seasonal – and even then it can be touch and go. So it seems more sensible to wait. Most people agree.

But the most significant thing I picked up from the announcements was that ministers were saying that we must learn to live with the virus, rather than expect that it will be beaten. What does this mean? Hospitalisation rates need to be stable and reasonably low, and likewise deaths. Current levels are surely close enough to this – but the exponental growth of infections is a clear threat. But that comes with significant restrictions on public events, hospitality, social distancing and so on. The big question is whether we can relax all of these. What measures can be kept in place that would reduce risk of infection (and not just from covid), without annoying too many people? Better ventilation standards for public places is an obvious one. I suspect we need to adopt more Asian approaches to mask-wearing (though this is more a metter of social mores than regulation). Certain settings, hospitals and care homes perhaps, will doubtless need higher levels of infection control.

These are the questions we should be asking ourselves. We need to watch and learn from what is happening in the rest of the world. Alas instead we get the usual nonsense about whether lockdowns are evil in principle, or whether the government lost two weeks by not restricting travel from India earlier.

Rethinking economics – what we should learn from the pandemic but probably won’t

I recently published some thoughts on the economics of the pandemic. This wasn’t one of my more coherent offerings, but somehow I needed to break the ice. I wrote about the short-term question of government stimulus. I made a throwaway remark about the pandemic throwing up deeper issues as well. I want to open the box on these, because I think the pandemic has shown the poverty of conventional economics. So here are some early observations

The narcissism of small differences

Economic commentary used to be about small changes to the economic aggregate statistics, such as GDP or productivity. That didn’t prepare us for the earthquake that came. There are some big things happening in the world, and the risk of a pandemic is only one: there is climate change, nuclear proliferation, bottlenecks in global production processes (microchips, rare earth minerals, etc), but we tend to overlook these in a quest for small gains here and there. It seems like an avoidance strategy for not confronting the bigger questions of our time. Above all we need to break away from our obsession with monthly or quarterly or even annual GDP growth. Alas even during the crisis commentators are trying to compare quarterly GDP figures between countries, at a time when they are surely unreliable, where differences in statistical methods between countries are not well understood, and when timing differences between countries on the evolution of the epidemic matter a lot.

Production is no longer central to economic performance

We depend on food, clothing and many manufactured goods, but these represent a diminishing proportion of the economy. Or, to put it another way, these activities only occupy a minority of workers. Manufacturing, by and large, has had a good crisis. Clearly it has been bad for some things, but it has been good for others (computers and PPE for example). Our roads and ports have stayed busy with goods being moved to and fro. But this has still left economic devastation. And yet economic commentators still tend to talk of manufacturing as being central. They fret about barriers to trade, the effect of bottlenecks on inflation, and stagnant productivity. And yet developed world economies have moved on from these things.

An economy where services matter more than anything for the supply of jobs, and health and care services in particular, needs a different mindset from one based on factories and products moving around on lorries.

Most of the economy is non-essential

As we locked down, we drew a distinction between essential and non-essential supplies and services. The former turned out to take up a surprising small share of economic activity, and it wasn’t hard to keep the show on the road. And much of what we deemed essential has a dubious claim to that status (garden centres? – of course that doesn’t mean that there aren’t very good reasons for keeping them open). That is good news because it shows that there is more resilience in modern society than we thought. But it should make us reflect on whether we have our priorities right for the non-essential parts of our lives. Their action should be about providing wellbeing both to those using and supplying them. How well do they actually do this?

It also turned out that essential workers included a lot of people of rather lowly status in our society. Hospital cleaners; care home workers; supermarket shelf-stackers – all of whom tend to be paid as little as possible. The habit of calling these and other workers “low-skilled” has rightly been challenged. It is a stark reminder that a modern developed economy often rewards the ephemeral while taking the essential for granted.

We have found the magic money tree

The government has been called upon to open the floodgates of public finance, with a “what it takes” approach. The budget deficit has duly expanded into unthinkable territory. The sky hasn’t fallen in. Inflation and interest rates remain low. In fact there are no signs of financial stress at all, unless you count rather bubbly markets in financial assets. Doubtless that is partly because of the extraordinary economics of lockdown, when so much private spending and investment has been suppressed, leaving room to finance government spending. But we have much more flexibility on government finance than many thought we did, especially when we control our own currency.

If this looks too good to be true, it probably is. But we don’t really know what the vulnerabilities are. How do we know when we are overdoing it? For my liking economists are too focused on inflation. The consequence of overdoing things could as easily be some form of financial crisis that makes people poorer.

Hayek was right

We are supposed to be living in an information age, but governments, and everybody else, are blundering around for the lack of information. Governments can’t devise efficient schemes to help businesses in lockdown, even though they can afford them, because they have no good way of knowing which businesses need help, and how much. The result is that many are getting generous help they don’t actually need (including a lot of fraudsters), while many more that need help aren’t getting it. This information gap brings to mind the neoliberal ikon Friedrich Hayek’s argument in “the Road to Serfdom”. The most effective way of transmitting information in a complex society is the use of free markets. Government attempts to close the information gap result in oppression and corruption. The truth of that is evident in China, which has done most to gather and act on information about its citizens.

To them that hath shall be given

But the injustice of leaving matters to free markets is also very apparent. At first I was a bit sceptical by reports that poorer people were being hit hardest by the pandemic. People always say that, regardless of the facts. But it is very clear that people in poorer communities with less stable jobs have suffered more than anybody else. The big problem with free markets is that so many people lack the wherewithal to take part properly. This helps make the case for ideas like Universal Basic Income. The US scheme of giving handouts to everybody has been very helpful to the poorest, though it has also led to excessive gambling on financial markets by retail investors.

Free choice doesn’t work well in a pandemic

Libertarians have been very exercised by what they see as excessive government restrictions to individual choice. They feel the people should be left to make their own choices about the risks they want to run. Such critics have been made to look very foolish more than once. People may be able to make choices about personal risk, but they are ill equipped to assess the effect of their behaviour on others. The idea that the vulnerable should hide while leaving everybody else to take their chances doesn’t fit the complexity of society, where vulnerable people depend on others, or are forced to go out to earn a living. Instead of confronting these realities many libertarians instead tried to deny the facts, suggesting that covid-19 was similar to flu. This is another sign that unfettered free markets don’t provide efficient outcomes in many circumstances.

So where does the leave us?

What strikes me first and foremost from this is that we have become slaves to chasing marginal benefits while the planet is in crisis. As societies we could do a lot more to change the way we do things to address the dangers we face, without damaging health and wellbeing beyond some short-term disruption. “It will damage the economy,” is not an adequate reason for not acting. And the notion that economic growth is a prerequisite to positive change is false, in developed countries at least.

Government action is clearly part of the solution, but most successful action will come through individual initiative, with the action of free markets playing a central role, alongside a strong civic society that is able to challenge and complement government action. And it means that economists must move on from a focus to one focused on broader wellbeing.

Will we do this as life starts to return to normal? I wish I could be optimistic.

In defence of vaccine nationalism

Not all are equal when it comes to vaccination against Covid-19. Israel speeds ahead, followed by Britain and the USA, with other European countries bumbling along in their wake. Developing countries, or most of them, are a long way behind. This has provoked some harrumphing. “None of us are safe until we are all safe”, it is said. According to this idea the vaccine should be distributed in a world programme based on individual vulnerabilities. This gets general murmurs of approval from liberal types, or at any rate those are not in government. No wonder conservatives think liberals are soft in the head.

There are deeper philosophical and ethical questions behind this, but it would be useful to start with two facts which don’t seem to get mentioned in this context. The first is that vaccine manufacture is well behind the ambitious targets set earlier in the year. The headlines may be dominated by the massive scale of orders placed by the British government and others, but delivery is another matter. According to Tim Harford in the Financial Times some 800 million doses were promised in 2020. but only 20-30 million were actually delivered. There are no surplus stocks sitting around in national inventories while the needy are unvaccinated. The second fact is that death rates in the developed world, and Britain and the USA in particular, are very high. Britain’s is the highest in the world, we are told. In the developing world death rates are much lower. Some of this may be down to weaknesses in data gathering and government denial, of course. But mostly it is because their populations are much younger, on average, and so less vulnerable. And Britain and the USA both have an obesity problem. So if you are going to start with a worldwide vaccination programme, why wouldn’t you begin with the USA and Britain anyway? Is there really a worldwide injustice here?

Looking a bit deeper there is then the question of practicality. Collective efforts are often inefficient. In Europe the EU’s joint procurement is well behind that of newly separate Britain’s. A centrally organised world programme doesn’t bear thinking about. It’s bit like the lockdown sceptics’ idea that we should protect the vulnerable and let everybody else live their lives unrestricted (or restricted only by their own fear). At fist sight you might think it looks a good idea, but it doesn’t survive any closer inspection at all.

It’s worth a thought as to why this might be. One problem is accountability. The more complicated a project, and the more people involved, the more the need for accountability slows things down. And at the world level accountability has always been a problem. There is also the question of information. The further away you are from the sharp end, the poorer the quality and the less effective decisions tend to be. Committees and collaboration have their place; they even have heir place in worldwide vaccination programmes. But not in leading the emergency effort to get as many people vaccinated as fast as possible. here allowing national governments to act independently is going to get more shots into arms more quickly.

This leads to an important philosophical and ethical issue that liberals would do well to think about more deeply. How often do we hear pleas that needs of African peasants (we often focus on the rural poor and overlook ballooning urban poverty for some reason) should be just as much concern to us as the problems of our immediate neighbours? The fact that we neglect poor people in faraway places is regarded as a moral failure. And yet when rich people, or people in rich countries, try to help poor people far away, it so often ends badly. Aid ends up helping the wrong people, or distorting market and governance structures to their detriment, or simply comes over an example of patronising post-colonialism, reinforcing ethnic stereotypes. The exercise often seems to be guilt-tripping with little wider practical utility, beyond raising the status of certain NGO types. Of course the first premise of the liberal argument is sound enough: that all people on earth are morally equal. This is not a given, but there are all manner of reasons, moral, spiritual and pragmatic, why we should believe this. But this needs to be complemented by some form of proximity principle. It is quite right to be more concerned about those closer to us than those further away. It isn’t a moral failure. We can imagine a sort of hierarchy of family and close friends, neighbours, fellow countryman and so on. Such a hierarchy invites a whole series of problems, though. Western liberals, me included, agree that race or ethnic identity should play no part in it, of course, but this isn’t universally accepted (look at what is happening in China or India). Should Britons be more concerned about Latvians than Moroccans because of some form of European or Christian identity? And a lot of aid made by rich countries to faraway places is beneficial to humankind; I give to several charities and support the UK’s generous aid budget. It’s a bit of a nightmare, which is doubtless why many liberals try to short-circuit the discussion by denying any kind of proximity principle. But that doesn’t work either.

I am no moral philosopher,so I am not going to attempt an answer to these tricky questions. I rely on intuition. To me there is nothing wrong with countries focusing on vaccinating their own citizens as a top priority, even if richer countries end up getting ahead of the queue (which won’t be entirely the case anyway; India, for example, is the world’s leader in the manufacture of vaccines and is as nationalist in its priorities as anybody). That does not mean it is right to sabotage other countries’ efforts, or to hoard unused vaccine stocks. And once the urgencies of your own country have been dealt with, it is right to devote national resources to aiding other countries where the need is greater. I often disagree with the current British government’s moral priorities, but I think they have this one roughly right.

Three things lockdown critics just don’t get

Here in England, the British Prime Minister, Boris Johnson, is under fierce attack from his backbenchers over both the four-week lockdown that is coming to an end, and the system of tiered restrictions that will replace it, which means that almost everybody will still be subject to heavy restrictions. These critics are, for the most part, very muddled. While I would not suggest that Mr Johnson’s management of the pandemic has been particularly competent, I do think his overall strategy is the right one.

Still, the critics are right about a couple of things. The first is that lockdowns will not eliminate the virus, which has been a realistic objective in Asia and Australasia. This is because, unlike them, we cannot seal off the country from people coming in. That would mean closing almost all airports, ferry ports and the Channel Tunnel. The trickle of people allowed in (including returning Britons) would be quarantined under guard. Goods would have to be picked from ports by drivers based in this country. It would make Brexit look like a walk in the park. No European country, or American one come to that, can enforce such a regime. It is remarkable that so many Asian economies, as well as Australia and New Zealand, are able to do this. Without having to deal with such a volume of incomers, it is possible for a rigorous test and trace system to stay on top of the virus. New Zealanders can now go to rugby matches and concerts without social distancing. The economic cost is substantial, but this regime seems to be popular with those that live there.

The second thing that the critics get right is that the costs of an effective lockdown are huge, in both jobs and wellbeing. and that the longer the lockdown goes on for, the greater the cost. But no supporter of lockdown suggests otherwise. They simply say that the alternative is worse. That is because of three things in particular that the critics mostly fail to grasp.

The first is that infectious diseases grow exponentially, and not arithmetically, unless you can impose restrictions that reduce the reproduction rate down to one or less. And that means being very restrictive: the virtual cessation of social life (England’s Tier 1 is not enough, current evidence suggests). If the reproduction rate is above one, then the disease keeps on getting worse, and will accelerate. The critics seem to suggest that there is some form of equilibrium to be found between the level of restrictions and the prevalence of the disease. So, for example, a high level of lockdown means, say, one hundred deaths a day, but a looser one means a thousand. If R is above one, however, there is no such equilibrium. The equilibrium is not a function of lockdown restrictions, but the achievement of herd immunity – which means that 70% or more must be immune (the widespread assumption being from having already caught and survived the virus), and so breaking the chain of infection. The cost of that is massive. In Europe levels of significant herd immunity have only been observed in Italian towns were the disease has killed 1% or so (see this article in the Economist).

And the second point that few critics grasp is that the damage wrought when the virus shows high levels of prevalence is about much more than a few extra dead bodies. The disease will reach a point where it is be seriously disruptive. That people can’t see this was driven home to me when a senior Conservative MP Mark Harper was interviewed on the radio. He trotted out the familiar trope than people were underestimating the costs of lockdown, which had to be weighed against the benefits. He gave star billing among the costs to reduced access to healthcare services during lockdown. And yet there will be no access to such services once the epidemic starts to overwhelm them, and it is fear of just that which is the main driver of lockdowns; without lockdown health services will be overwhelmed as sure as night follows day. And it won’t be just health services that suffer. Absenteeism will rise dramatically, disrupting all manner of services. And fear will keep at least 40% of the population at home, with the inevitable toll on mental health and the economy. Covid-19 is much deadlier than flu (or at least the strains of flu normally seen each winter), and cannot be weathered in the same way.

And the third point? It is simply not feasible to shield the vulnerable while letting those with a low risk of being seriously ill to get on with life as normal. The disease will strike down even younger and apparently healthy people; and it can inflict lasting damage even if you survive it. But the chances of serious consequences for most people are quite small (and for them comparison with flu has more validity). But the flip side to this is that many others are at serious risk: anybody over 60 or with many quite common health conditions such as diabetes or heart disease. I have seen an authoritative estimate that these are about 20% of the population. But these people don’t live isolated lives: they depend on contact to some degree with healthier people. These people also have to shield, to protect those they are close to. This group is not only very numerous (somebody has plausibly suggested another 20%), but it is much harder for such people to successfully shield themselves form the outside world. In the second wave of the epidemic, where vulnerable people have been much more successfully shielded than the first, there has been a clear pattern. Firstly younger people catch it, largely without serious symptoms. Then it is passed on to working people whom they interact with (shop staff, security guards, and so on). and from these it moves on to the seriously vulnerable. It is not enough to suggest that people should simply take the level of precaution that is appropriate to themselves. That would mean that many working people would have to furloughed and somehow replaced at the front line.

There really are no alternatives if you cannot seal the country’s borders Personally I placed high hopes on rigorous test-and-trace systems, such as those operated in Germany. We have not attempted anything like German rigour in the UK, instead going for massed centralised families with a high theoretical volume but almost no impact on the course of the disease. But even in Germany the system gets overwhelmed once the virus reaches a certain level, and you are back to lockdowns. Sweden’s rather laxer regime is sometimes mentioned as an alternative, but that is breaking down too. Its advocates had suggested that infection levels would fall in the Autumn as herd immunity started to impact. But it hasn’t, because in fact Swedes had been exercising social distancing to such an extent that not enough people were being infested (and with the economic and other damage that followed). If enough people had been infected their health systems wold have collapsed.

All of which is very grim, were it not for one thing: the fact that vaccines are on the way. We don’t know much about the various vaccines, beyond basic safety and efficacy. In particular we don’t know how much they would slow transmission of the virus. But they are enough to make huge difference and allow lockdowns to be eased. Quite why Conservative critics are still banging on with their complaints about lockdowns when relief is at hand is one of the pandemics’ many mysteries.

It’s all about R. Lockdown critics don’t understand exponential mathematics

Quite early in the Covid-19 outbreak, policymakers told us that the critical thing to understand about managing the disease was something they called “R”. This is the reproduction rate: the average number of other people that anybody that catches the virus will infect. If it less than 1.0 the epidemic will fade away. More than one and the disease spreads exponentially. Discussion of R then dropped from view, with people focusing more on the absolute level of infection (usually given as cases per 100k). That’s a shame because R is central to understanding what has just happened here in UK, which also applies to most of the rest of Europe with small variations.

In those the dark days of March, R was a horrific 2-3. That meant the disease was spreading very rapidly through the population. For a moment people thought that might not be such a problem: that herd immunity would develop, and the disease would slow down as the number of potential carriers was diminished. But there are two major problems with this. The first is that if the disease spreads rapidly, then health services (and other infrastructure) become overwhelmed, and there s substantial collateral damage. And that is exactly what happened in the Spring. Hospitals started to fill up, requiring them to clear beds; people with other conditions suffered, and Covid-infected people were pushed into care homes to make room for others, with appalling results. The death rate across the country shot up, and not just because people were dying from Covid, though frightening numbers were. The second problem with the herd immunity strategy was that nobody knew whether, or for how long, catching the disease would confer immunity. It was quite an interesting example, incidentally, of how basing decisions on evidence is not quite as robust as it seems. What do you believe in the absence of evidence? In Britain people believed, absent evidence, that face masks were useless and that you would get long term immunity by catching the disease. There is no rhyme or reason to it being that way round. Too often people who ask where the evidence is are just sticking to their prejudices.

I digress. The only sensible response to an R of over 2 was strict lockdown, which was implemented in Britain on 23 March. This was remarkably successful (it is puzzling why some people suggest that it wasn’t). R came down to about 0.7, and the disease was beaten back to manageable levels in most places. But what next? The government eagerly implemented a general relaxation, while maintaining a certain number of rules on social distancing. By this time few people were talking about R, and it was hard to know what aim of it all was. I think it was felt that the relaxation would take the R back up to 1.0, but no further, thus keeping the virus at manageable levels. It is probable that a lot of faith was being put in the Track and Trace system to contain outbreaks as they occurred. And yet the system they built was not designed to achieve that level of rigour, which needs tough local leadership and timely data, both of which were practically designed out of the system from the start. The result was that R crept up to about 1.5. Much better than before, but also pretty useless in terms of managing the disease. If R is over 1, then the disease will rise up to overwhelming levels much more quickly than people will intuit, because of the exponential way in which the disease spreads.

The government’s next strategy was one of local local lockdowns. The hope was that these would reduce R to below 1 in areas were the prevalence had become high. Over the last few weeks two problems have emerged, though. First is that even with these stricter measures R is above 1, and health services are under imminent threat. Second is that R is rising scarily everywhere else, and to beyond 2 in some places. That meant that most of the rest of the country wasn’t in fact that far behind the hotspots. Just what was going on here will probably not be known for some time. Perhaps people in Tier 3 of the lockdown system felt bolshy because they were being singled out, and did not apply themselves properly to lockdown. Perhaps people in Tier 1 felt they could relax because they weren’t in trouble yet. Anyway, it is very clear that the regional response strategy has failed. And so we are back to national lockdown.

But schools an universities are still open, and weariness is creeping in as businesses fail and savings run out. The death rate is much lower than before (the rate of excess deaths remains negligible) and this is being used to suggest that we should just “live with” the virus. Some conservative newspapers (the Telegraph and Mail in particular) opposing lockdown, even though their recommendations would sentence many of their readers, more vulnerable than the average, to an untimely and horrible death, or perhaps just a long-term deterioration of health. Such critics have failed to understand the logic of R. It is not about choosing an acceptable level of disease and freezing it there: it is about stopping the disease before it overwhelms.

So how on earth do you live with the disease and retain a semblance of normal life? The only proven way is the Asian one (there are many variations, shown by China, South Korea, Taiwan, Japan and Australia and New Zealand). This requires the disease to be stamped out, mainly through strict lockdown, for inward travel to be heavily restricted, and for any outbreaks to be stamped on hard. For some reason Europeans, and not just the British, seem unable to do this (even the Germans are struggling). It’s even worse for the Americans. Asians, and interesting this includes Antipodeans of European heritage, seem much happier to comply with busybody regulations. Not all Asians of course: Indians struggle, as do Indonesians, Philipinos and a number of others.

Absent the Asian approach, thoughts turn to the use technologies that are not yet available. Vaccines may not be the silver bullet they are for diseases like polio, but they could still throw enough sand in the wheels of transmission to stop R getting above one. Mass testing, talked up by the Prime Minister Boris Johnson, offers ways of identifying infected people so that they can be isolated. That raises all sorts of questions.

Locally I have found the most informative source about the progress of the virus comes from the government’s interactive map. I have watched the infection rate steadily go up, with white ares (very low infections) moving to green, and green going moving to blue (over 100 per 100k); in my local patch it is 171. We’re keeping our heads down.

It’s all very depressing. The most important thing to understand about the spread of infectious diseases is that it is exponential. None of the lockdown critics I have heard or read seem to grasp that. And only a few understand that the critical thing isn’t the death rate but the stress on public infrastructure, including, but not limited to, hospitals. In the end it’s all about R.

September: the virus strikes back

I still have not yet recovered blogging groove, as I settle down in my new home, and with family caring issues taking priority. So I am doing a consolidated look-back on the last month’s news again. If last time the central theme was the rise of Great Power politics, this time the theme is the virus.

After the Spring crisis passed, more or less, in the developed world (not so much in the US), people relaxed in the summer (or winter depending on your hemisphere). But the virus is coming back, with the world both better prepared, but less psychologically and economically resilient. The stress is showing.

The virus’s most spectacular victim was the US President. This drama is still playing out. What has emerged is interesting, though. Donald Trump has made a great show of not allowing the virus to affect him, being rarely seen in a mask. But in fact huge efforts are made to screen anybody that comes near him, with extensive use of a quick-turnaround test. But such measures only work so far, and if enough people come into proximity, the test is bound to have miss a few. A reception for his nominee for the Supreme Court appears to have been too hubristic.

Once Mr Trump was infected his behaviour stands in complete contrast to our own Boris Johnson. Mr Johnson soldiered on valiantly, did what the doctors told him, and went to a public hospital only when he had to, with treatment recognisably similar to any member of the public. Such a passive approach was not for Mr Trump. He quickly ordered the most aggressive treatment possible, and checked himself into and then out of an elite hospital. He now claims to have conquered the virus in days. We shall see. This probably reflects cultural differences between our two countries as much as personality. Many Americans, and especially the rich and powerful, struggle with the idea that they can’t take full control of their treatment, as is often the case with the UK’s NHS. Private treatment is available here, but, quite often the best expertise is tied to the public service, and Britons don’t like public and private to mix. It is one reason why nationalising health care is unpopular in the US, even if less well-off Americans have little practical control.

But what effect will this have on the US election campaign? Democrats continue to have reason for quiet confidence. A month ago they seemed a bit rattled, as Mr Trump had forced the narrative onto his own agenda: law and order. But the Democrats’ candidate, Joe Biden, is a seasoned campaigner, backed up by a solid team. He held his nerve. The riots subsided and soon the news was dominated by the death of Supreme Court Justice Ruth Bader Ginsburg, and the unseemly haste to replace her before the election. Mr Biden refused the invitation to stoke up the culture war on abortion, but instead moved the narrative on to court challenges to President Obama’s health care system, which many working class Americans now depend on. This was followed by the first TV debate, dominated by Mr Trump’s hyper=aggressive behaviour. Mr Biden was not given the rope to hang himself with, and the focus became the personality of the President, which the Democrats are quite happy with. And now Mr Trump’s infection has put the virus centre stage. Mr Biden’s poll lead seems to be holding up, and perhaps even increasing. Most Americans have chosen who they will vote for, and not a few have voted already. Everything that is happening seems to reinforcing those choices, on both sides, and making each side more motivated. As in the mid-term Congressional elections in 2018, that is mainly working for the Democrats. Can they seize the Senate?

But the biggest question to me is what will happen after the election, with the country so bitterly divided. Mr Trump doesn’t seem to care. But if Mr Biden wins, he will have a big job on his hands. He does seem to be aware of this.

Here in Britain, the UK government’s reputation is floundering. There is something curious about this. After its initial fumblings, and the appalling early death rate that resulted, the country’s record bears comparison with many of its peers. The record of the US is worse, and so is that of France, since June. Also the records of England (directly under the control of the UK government) and Scotland (mainly under the control of the devolved SNP government) is pretty similar. But Mr Johnson’s Conservatives have suffered much worse damage to their reputation. Mr Johnson’s style is ill-suited to the occasion, and, worse, he has surrounded himself with weak ministers, while more competent people remain on the sidelines criticising his record. There is a lot to criticise, of course, especially with the government’s failure to understand effective process management (with vastly inappropriate and over-centralised structures), and the lack of a clear strategy, as different factions vie to be heard. But others are making the same or worse mistakes and getting away with it. Mr Johnson is failing at the sorts of things politicians are supposed to be good at, as well as the ones for which they have little expertise. Many of theConservatives that voted Mr Johnson into office last year seem surprised; but most others are not.

So far the big winner from the crisis appears to be China. Although they too fumbled the early stages, with dire consequences for the rest of the world, their brand of totalitarian government has stamped out the disease and kept the virus at bay. Meanwhile everybody else is struggling: as they ease restrictions to let life go on as it should, the virus comes back, and the exponential dynamics of infectious diseases stoke. Still, some countries seem better able to handle the challenge than others. But it is hard to generalise. Herd immunity can be bought only at a very high price, in direct and indirect deaths, and debilitating “long-covid”, and may not last long-term anyway. But containment comes at a very high price too. A vaccine seems the best hope.

Why localism is key to test and trace

Sometimes you have to keep banging away about something. For some time I have been complaining that the government’s system for providing tests for Covid-19, and then for its approach to contact tracing, suffers from a fundamental flaw of process design. I see this being occasionally mentioned by others, but the idea hasn’t caught on. So I will say it again.

This is relevant because the testing regime seems to be in a state of complete dysfunction. The government is not being transparent about what is going wrong, a an issue which is not unrelated, so I’m having to join some dots, based on a flood of anecdotal evidence from people at different levels in the system that have popped up on the news. The system has been overwhelmed by a surge in demand. Whether or not this should have been foreseen is one question, but taking a step back and looking at the outcome prompts another. This excess demand seems to have caused the whole system to fail, so that while testing capacity is very high (the government claims it is higher than in most other countries), all, or most, of the tests are taking far too long to return results, which completely undermines their usefulness. I have heard experts suggest that if results take longer than 48 hours to be returned, then they are of little practical use. That sounds about right. Results seem to be taking much longer than this in the official system, or at least that which serves most users (I think hospitals are linked to a different one, which might be working a bit better). The problem seems to be at “Lighthouse” labs where samples are analysed. The government suggests that this is just a numbers game: these labs have a capacity and demand is in excess of it, leading to delays – which is perfectly plausible explanation and doubtless at least part of the problem. There are other stories of staffing issues as these labs are losing temporary workers as the university terms start, and finding them hard to replace.

How to manage this? The first response is to stop people taking tests through the booking system, by telling them that they are unavailable, or only available hundreds of miles away. One story is that the only way that people living in the London suburb of Twickenham can get a test locally, rather than one in Aberdeen (in the north east of Scotland), is to say that they are living in Aberdeen. This is causing an immense amount of distress, which is feeding back in complaints to MPs. The government is now trying to impose some form of prioritisation on tests to give this more rationality. But that will be hard going, with goodwill in short supply. There is a least one new Lighthouse lab in the pipeline, and the government doubtless is placing its hopes on this. Alas any relief is unlikely to last for long. The whole thing gets much worse when the need for contact tracing is brought into the picture, where similar problems are emerging, though not, excess demand. The whole damn system is flawed.

What’s gone wrong? The designers of the government system are bewitched by the idea of scale economies. The unit cost of a large scale system operating at full capacity is generally very low. And because covid tests are basically quite standard, at first sight the building of such high volume facilities looks like a sensible way forward. When the government suggested that the system would be “world-beating”, this is doubtless what lay behind it, as many countries have gone for a much more artisanal approach. But that is only one aspect of process design. The problem comes from how you manage the whole process from end to end (i.e. from the moment somebody decides that they need a test to the moment they get the result). The more steps there are in the process, and the more disconnected their management, the less efficient the whole becomes. This can seem quite paradoxical. Each part of the system can seem to be operating well, but the whole can be dysfunctional, and doesn’t seem to be anybody’s fault. The problem is compounded by the the government’s preference for the use of mass-sampling facilities. People are sent to drive-in centres that are able to process large volumes. But these are often idle and simply make the whole process more disconnected. The symptoms of such a disconnected “silo” based process design are very familiar. Bottlenecks, queues, delays, lost files, and all the while managers working frantically hard at their own little section in the knowledge the the problems are all somebody else’s fault. And managers blaming users for making unreasonable demands. There is so much at stake in the overall design that nobody dares point out that it might be better to scrap the whole thing and start again. Instead they work on fixes that ameliorate the worst problems but make the whole process more cumbersome. In this case designing systems to prioritise demand.

What’s the alternative? It is to create local facilities that do the whole job end to end, or as much as possible. Best of all is if the testing function can be integrated with a similarly localised system of contact tracing, all accountable to a local director of public health, part of local government. Where possible staff should be able to cover multiple jobs, rather than specialising in just small parts of it. This is more or less how it works in Germany, among other places. Such a system cannot solve all problems. It may not be able to overcome shortages in critical supplies (reagents for tests, and so on), though managers are more empowered to find work-arounds. How would it cope with excess demand, as is happening at the moment? It is superior in several ways. Firstly because managers are likely to have a better overview of the whole system, problems are more likely to be foreseen. Secondly bottlenecks are more easily fixed. It is easier to recruit two or three extra staff in a local centre than a couple of hundred in a centralised facility. And where there are problems, they will not bring the entire country to a halt. And finally communication with the end user is likely to be far superior, as they are much closer to a knowledgeable, human interface.

These principles have been well-understood since the 1990s (when I used them to reorganise processing operations that I was managing). Alas the government, and those it appoints as advisers, are far too wedded to the imperial silo-based model and seem incapable of understanding that they are dealing with poor systems design rather than a few teething difficulties. Doubtless the silo approach works well in some contexts. But not here. But quite why the lessons of the 1990s are so widely forgotten in 2020 remains something of a mystery to me – my guess is that managers and politicians have been distracted and beguiled by new technology.

Deadly and contagious, this virus is reshaping our society

When the pandemic started to seriously intrude into our daily lives, in March, my view was the it might accelerate some changes, but it was being overplayed by some commentators as a society-changing event. My view is changing. And it is changing because the virus is proving so hard either to beat or to live with. It just won’t go away. In this week’s statement the Chancellor, Rishi Sunak, made some steps towards acknowledging this. But many people are still in denial.

It is too early to develop a clear view of how this pandemic is evolving. But I can see at least three phases. The first phase is over. This saw the initial emergence of the disease, and immediate hard lockdowns to try and contain its spread, alongside the mobilisation of the health systems. In East Asia and Europe, and in some parts of America (such as New York) this strategy has succeeded in preventing or stemming a rapid advance. Elsewhere weak health systems or perverse political leadership means that the disease is still spreading rapidly. But that aside we are now in an awkward second phase. The lockdowns are being eased, but alongside this the disease is making local breakouts. It is becoming clearer that restrictions on our daily lives cannot be relaxed fully. Even if the disease can be stamped out in some areas, it remains prevalent in neighbouring ones, and the threat of it returning ever-present.

We still don’t know enough about the virus that is causing all the trouble, how it spreads, and its effects on the human body. But some aspects are becoming clearer. The first is that it is deadly. It does not seem to affect many of the people it infects, and some people seem to think that it merely hastens the demise of people already at death’s door. And yet 20-30% of the population appears to be vulnerable in most places, and it has the capacity to double the death-rate, or more. Hospitals become overwhelmed and unable to deal with other health conditions. The second aspect is that it is highly contagious, much more so than other viruses that are deadlier to the infected (such as ebola). Just how contagious is unknown, but we do know that super spreading events occur, where dozens of people are infected by a single individual at once. Being indoors seems dangerous, as does being in proximity to people who are exhaling heavily, such as people singing, shouting or exercising. Wearing masks seems to be a significant help in reducing infection risk. What makes the virus so much of a problem is this combination of lethality and contagiousness. We are conditioned to deal with diseases that are highly contagious but not so deadly (like most flu) or deadlier but much less contagious. To these two known aspects there is an important unknown. Does catching the disease confer immunity to it? There is a widespread assumption that it does, meaning that we can expect herd immunity to arise at some point, when most people can’t catch or spread the virus. But the emerging evidence is troubling. Antibody tests show low rates of prevalence even in places where the disease has been widespread. And there are reports of people being infected multiple times. A second unknown is how quickly we can get an effective vaccine. There has been impressive progress, but plenty of reason to be cautious.

So where does that leave us? Developed societies have no choice but to try and contain the disease. This means changing behaviours to reduce the risk of catching it. This arises partly through public policy and partly through private choice. As I said in my previous post this means that many people are going to avoid social gatherings indoors, including going out to pubs and restaurants. The more prevalent the disease at any time and place, the more such measures have to be taken. The best we can hope for is containing the disease to low prevalence, allowing quite high levels if freedom, but stamping on local outbreaks as they occur. This is being done most successfully in East Asia; in Europe Germany is the main large exemplar. But even this is far from normal. The big problem is that we are going to have to live with this disease for a year at least and probably a lot longer. This has profound consequences.

The main consequence is in the world of work, and in the economy generally. There are two main aspects to this. First is that sectors that rely on close social contact and free movement are going to shrink, perhaps drastically. This includes hospitality and travel. The second is that productivity in most sectors is going to be dented as health precautions take effect. This will inevitably reduce the standard of living. Prices will rise faster than pay; taxes will probably have to rise to curb excess demand and inflation. All this is too much for most people to take on all at once. Many are still trying to negotiate with the virus. I hear owners of indoor gyms complaining about not being allowed to open, like other businesses are. And yet an indoor gym must be one of the best spreading environments conceivable, after a mass indoor choir.

So how did Mr Sunak face up to this huge challenge in his budget statement this week? Pretty well in the circumstances. The most important thing is that he is pivoting from trying to keep old jobs alive (e.g. through the furlough scheme) to creating new ones, in particular focusing efforts on younger people, whose livelihoods are most at risk. His generosity towards the hospitality sector with his VAT scheme and meal discounts may look hopeless against the tide of events – but it does demonstrate some empathy towards one of the sectors most under pressure, which could reduce the short-term trauma somewhat. His £1,000 bonus for firms that retain furloughed staff until January looks harder to justify. It is hard to believe that it will make much difference to job retention, and yet it is estimated to cost huge sums. Surely it would have been better to top up benefits for the out-of-work. His reduction of stamp duty on property purchases looks like an expensive sop to party donors – though I personally stand to benefit.

But, as most people see, this is only a start. In the pipeline are more job losses and business failures, which will bring more problems in their wake. There is also an upcoming crisis in local government finance, as central government support to meet the extra costs of the crisis is woefully inadequate, and the role local government needs to play in combatting the virus is becoming ever larger. This will be the third phase of the pandemic, as the economic crisis deepens, while the struggle to contain the virus continues. Conventional economic management tools are not going to help as much as they should be. A lot of the problem is restriction to the supply side of the economy, while demand is suppressed by fear as much as lack of funds – so boosting demand simply risks creating inflation or a currency crisis. However job creation in public services: health care, social care and education, looks like a sensible way forward. Lower productivity means more people will be needed in these sectors. A rebalancing of the economy from private to public sector will surely mean tax rises in due course, but with no shortage of liquidity in financial markets the government can probably defer some of the hard decisions.

And meanwhile the public will have to confront some hard truths. The virus shows that the free-wheeling individualism at the core of western societies has its limits. It is not sustainable to suggest that individuals can judge the health risks for themselves, since by spreading a lethal disease the consequences of their actions will mainly be felt by others. The failure of so many people in Britain and parts of America to wear masks in public shows how far we have to go. We have something to learn form the East Asians. But not China. That is another story.

The two worlds of post-lockdown Britain

Joss Bay Broadstairs 31 May 2020
Joss Bay Broadstairs 24 June 2020

On Monday the Prime Minister, Boris Johnson, happily announced a tranche of relaxations of England’s lockdown restrictions, to be timed for 4 July. The public weren’t going to wait, flocking to the country’s beaches to take advantage of a few days of sunshine. I took the first picture here in Broadstairs, Kent on 31 May, thinking it was crowded (we had become used to this beach being deserted), but look at yesterday by comparison. The country seems to be making a dash for normality. Disappointment lies ahead.

The relaxations come after some hefty lobbying by businesses, who are experiencing huge strains. They highlight a legitimate concern, as many jobs are under threat as businesses face the danger of folding. Public finances are under strain too, though by how much and why remains a matter for debate. But the problem is a deadly virus for which there is no vaccine or cure, not overzealous lockdown regulations. So if you don’t want to risk catching the disease, and the prospect of a horrible death, just how safe are you being made to feel? The country is dividing on this question.

I have heard quite a few lobbyists for the hospitality industry on the radio. For the most part they do not inspire confidence. They are anxious to abolish the two-metre social distancing rule, but are reluctant to explain how they can still be safe. Some of them even grumble about the idea that they would have to keep records of all those attending their establishments, even though this is an obvious quid quo pro to relaxing distancing requirements in the high-risk settings that most of them obviously run. One expert offered a list of potential mitigations for reduced distancing: not facing people, masks, reducing time of contact, low noise levels so that people can talk softly. Not much of this helps if you are indoors in a pub or restaurant, although if customers are seated at tables only with members of their isolation group, then at least you won’t be facing others. To be fair some hosts on television are doing a better job of explaining themselves: instead of whinging about the rules they are showing viewers all the precautions they are taking to make people feel safe.

But a lot of people don’t really care. They are fed up with confinement, and note the reduced prevalence of the disease, and therefore the reduced risk of catching it. Many are younger and fitter people who feel less at risk of suffering badly. Many also draw confidence from other countries where restrictions have been relaxed. They miss two aspects of these overseas examples. First is that in the more successful countries they applied relaxation after they had beaten back the disease further than England has, and that even then they have had to identify and manage local outbreaks. And England’s track and trace infrastructure inspires little confidence that it is up to this task. The second is that in other countries that have relaxed (notably in some states of the USA), they are moving headlong into a relapse. Two things about the epidemic strain our intuitive way of understanding the world. First is the time lag between picking up the disease and diagnosing it, then between diagnosis and hospitalisation, and finally between hospitalisation and death. The second is the exponential nature of the spread, and the way a small number moves very rapidly to a big one and so the need to intervene when it feels too early. This is what led to some countries failing to take the disease seriously enough until too late. It is clear that the US President Donald Trump, ever the intuitive leader, struggles with both these things.

But while one, very conspicuous, group are making a headlong dash for normality, another, usually older and more vulnerable, group remain very frightened. They are staying indoors, so remain nearly invisible. But this applies to my household and many others that I know. This is both good and bad news. The good news is that if this group stays out of trouble, then the most vulnerable people will be protected, keeping hospitalisations and death rates down. The bad news is that this large number of often quite high-spending people will not be the free-spending agents needed for a full economic recovery. And if infection rates start to rise, they will become even more scared.

All of which gives an impressive of a government that doesn’t think things through. If it wanted to tempt older people back into shops and other facilities it needed to work a bit harder to reassure them. The words are there but the body-language isn’t. For example the government says that the 2-metre rule is replaced by “one-metre plus”. The plus is meant to suggest alternative mitigation, and yet this has been totally drowned out in the messaging. If it had been combined with a clear directive for people to wear face coverings in virtually all indoor settings, then it might have been easier to convey this. Instead they promote the idea that the risks are reduced so you don’t need precautions like masks; of course they don’t say that, but observing people around me that seems to be what is happening. And the problem about masks is that everybody needs to wear them for it to work. It is no use if just the worried people do.

Still, the government has probably bought itself a month or two before any obvious problems emerge. And then it looks likely to face a twin threat. A faltering economy as the worried sit on their savings while government support schemes, like furlough funding, run their course. And rising infection rates working their way slowly but surely through the system, beyond the country’s capacity to contain it on a local level. I really hope I’m wrong.