More People Won’t Die Because of a Recession Than Because of Coronavirus

by Aaron Bastani

31 March 2020

(War time rationing | Alfred T Palmer)

Last week saw the spread of a strange argument. It goes something like this: while the Covid-19 pandemic will lead to many thousands of deaths, shutting down the economy in order to minimise or slow its spread could lead to even more.

Such an argument typifies a contrarian, rightwing impulse often used to bolster seemingly absurd talking points. These include the claim that lower tax rates actually lead to more money being collected (the so-called Laffer Curve); that generous welfare provision in fact disadvantages the poor; and that burdening young people with decades of debt for a university education somehow benefits the least well off.

To the average person all of these arguments appear comically absurd. That is because they are, according to any objective measure, wrong. The Conservatives never really believed in the Laffer Curve, which is why planned cuts to corporation tax were spiked in the March budget when more revenue was needed. The legacy of historic cuts to public services over the last decade, particularly in the case of welfare benefits, is clear: Britain now has record levels of in-work poverty, with hundreds of thousands of people using food banks. The idea that the previous status quo, when food banks barely existed, kept people trapped in a ‘cycle of poverty’ is as offensive as it is wrong. Outside of the UK, the evidence is even clearer – those countries with the most extensive social safety net, such as Scandinavia, enjoy far lower levels of economic deprivation. 

The argument that a prolonged recession would lead to a greater loss of life than failing to adequately respond to a pandemic is equally wrong. To be absolutely clear, any economic contraction would not mean that – as a simple result of causation – people die; this isn’t how GDP works as even Simon Kuznets, the man who devised the measure, was the first to admit, declaring in 1934 that “the welfare of a nation can scarcely be inferred from a measurement of national income”.

What we do know is that certain measures – from social distancing and economic demobilisation, to the rapid build-out of extra healthcare capacity and wide-scale testing – saves lives. We know this with a high degree of certainty because you can compare outcomes in countries like South Korea and Germany, to Britain and the United States. The implicit argument, then, is that the human cost of such measures, in implementation and lost economic output, is higher than the cost of failing to act.

But is that really true? As of Sunday, the United States is anticipating between 100,000 and 200,000 deaths as a result of Covid-19, although leading infectious disease expert Dr Anthony Fauci said a much higher figure was not impossible. Of course the extent of the tragedy will depend on decisions taken over the coming weeks and months – not only by federal government but by states as well. The counter-argument is that a recession of the kind America now confronts, which is set to be even worse than the Great Depression, would kill even more. 

The most prominent study to make this argument, albeit relating to Britain, was conducted by academics at the University of Bristol. It concluded that if the coronavirus lockdown leads to a fall in Britain’s GDP of more than 6.4%, then more years of life will be lost due to recession than would be gained through containment. According to the model used in that study just under a million Britons would die if we let the virus run unchecked. But because most casualties would be older people, in terms of years lost that would equate to the deaths of around 400,000 average age adults – roughly the same number of casualties Britain suffered during the Second World War.

How could a recession, however dramatic, lead to greater suffering than that?

Despite such an alarming, almost incredible conclusion, there is some data to back up such a claim. A 2016 study by Imperial College attributed 500,000 cancer deaths worldwide, between 2008 and 2010, to the global economic downturn, finding a correlation between higher unemployment, and increases in cancer deaths. A separate study in 2014, this time conducted by researchers at Oxford University, found over 10,000 suicides directly related to the Great Recession in Europe and North America.

Further back, the disintegration of the USSR catalysed unprecedented suffering in the absence of war, famine or natural disaster, with the rapid demise of its economy meaning as many as five million Russian men prematurely died in the 1990s. During this period male life expectancy fell as low as 57 – a full 14 years less than the average female (which also fell over the same period). It should be added, however, that the economy of the Russian Federation contracted by 40% during the first half of the 1990s – an experience never seen before, or since, in peacetime. This wasn’t just a cyclical economic downturn but the imposition of privatisation and free market economics on one of the world’s largest countries as if it were a petri dish in a laboratory.

But while the Russian experience is terrifying, and should function as a hypothetical worst case scenario for economic collapse, the projected numbers for the UK don’t add up. Britain’s economy contracted by more than 4% in 2009 and while lives were lost as a result, this was primarily the result of political choices, namely austerity, which saw the socialised costs of that downturn lead to 130,000 ‘excess’ deaths. Yet even a repeat of that, while projecting a recession of 6.4%, means the Bristol University study is wrong.

Furthermore higher GDP doesn’t necessarily mean greater longevity. Cuba’s median life expectancy is better than the United States – despite the latter enjoying a GDP per head twelve times that of the former. Naturally some of this is due to climate (although Icelanders are some of the longest living people on the planet), but it is primarily a consequence of how resources are administered. Despite spending nearly 18% of its national GDP on healthcare, a woman in the United States is more likely to die in childbirth than in Bosnia, while infant mortality is lower in places like Croatia, Belarus, and yes, Cuba, than the world’s most powerful and advanced economy.

The most striking example in making this point is the Indian state of Kerala, where men enjoy a life expectancy of 75 (compared to the national average of 69). This has been achieved, despite the state being relatively poor, because of its long established healthcare system and history of socialist governance. A state with a GDP per capita of less than $3,500, and few natural resources, enjoys average male life expectancy on a par with the world’s largest producer of petroleum, Saudi Arabia. As Amartya Sen notes in his seminal Development as Freedom, an African-American male born in the United States is likely to have a shorter life than a male born in Kerala. Sen first noted this decades ago, but it still applies today. What matters from the perspective of mortality rates and life expectancy, is not only that wealth is produced but, as importantly, how it is shared. 

An example closer to home can be found in Britain’s experience of wartime rationing – “the best diet we have ever had in Britain” according to one former public health professor. The years following the war saw dramatic reductions in diabetes and dental decay – both of which can be linked to better diet – and children who grew up during rationing were healthier and taller than children before. To the idiocy of anyone who says they ‘survived despite rationing’ the answer is they survived because of rationing. What is more they enjoyed a healthier diet than children before them – and all in a period of shortages and scarcity. Again, that was because of political choices.

The idea that an economic recession would necessarily lead to more deaths than Covid-19, even if no measures are taken to slow the spread, isn’t just wrong – it’s ideological. Already a working class man in Glasgow or Blackpool can expect to die at a much younger age than elsewhere, and all in the fifth wealthiest country on Earth. Not only could life expectancy stay the same with a recession, even a historically painful one, but – if there was the political will to redistribute resources – it could in fact go up across income groups, while food banks and rough sleeping could disappear. All of this, as with so much else, is the result of political choices. To simply point to GDP as a reason for inaction, or why social regression is inevitable, isn’t just an excuse – it’s fanaticism. 

Aaron Bastani is a Novara Media contributing editor and co-founder.


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