COVID-19 and containment

April 20, 2020

It is a risky thing to start analysing the COVID stats and coming up with some
conclusions at this still early stage of the pandemic. It is even riskier for an
economist to delve into areas beyond his or her supposed expertise. But after
looking at myriads of articles, heaps of data and lots of presentations by people
who ought to know what they are talking about, I cannot resist putting my dollar on
the table.

The first point that I want to make is on the severity of the COVID-19 virus. On
any reasonable estimate of the mortality rate, assuming no containment measures,
then we could expect up to 60% of the population on average to be infected before
the virus wanes with so-called ‘herd immunity’. The mortality rate is very
difficult to be clear about, varying from the 3-4% that the World Health
Organisation (WHO) reckons based on existing cases, down to some local studies that
put the rate at more like 0.3-0.4% on extrapolating the number of infections from
mass testing. Even that rate would be three to four time the average annual
influenza mortality rate.

Anyway, if I make an arbitrary rate of 1% of the population- an estimate that many

epidiemologists seem to latch onto, then in a global population of 7.8bn, and given
a 60% ‘herd immunity’ level, that would mean about 45m deaths globally. Given that
there are on average about 57m deaths a year, an uncontained virus would have
raised 2020’s death rate by 80%. For individual countries, that increase would
vary between 65% to double. Even if the (uncontained) mortality rate turns out be
half that, then over 20m people would die, or some 40% more than usual.

But the Malthusian argument could then be presented. As something like 70-80% of
these deaths would be for those 70 years and over and there are negligible deaths
among those under 40 years, the impact of the virus does not matter.

Indeed, some in financial circles argue that the virus is ‘getting rid’ of the old
and the sick who are mostly unproductive in generating value and profit. After the
pandemic is over, the world will be ‘leaner and fitter’ and able to expand more
‘productively’.

Marx and Engels were vehement in their condemnation of Malthus’ ‘survival of the
fittest’ theory; Engels calling it “this vile, infamous theory, this hideous
blasphemy against nature and mankind”. But they did not condemn it on anti-humane
grounds only, but also that Malthus was wrong economically too. Productivity
growth does not depend on keeping the population down but on increasing the
productive forces and on the march of science and technology. It is not an issue
of overpopulation but one of inequality and poverty bred by capitalist accumulation
and appropriation of value created by the power of labour.

That is the key reason for attempting to contain COVID-19; to save lives that can
be saved. The other reason is that if the pandemic was allowed to spread
unchecked, health systems would be overwhelmed, disrupting their ability to deal
with existing patients and people with other illnesses; and probably causing an
increase in such secondary mortality rates (and this time in younger fitter people
too). Most governments on the globe are not in a position of opting for Malthus
and ignoring public pressure if the bodies of loved, old or sick, pile up. If they
did, they would not survive.

So containment of the virus was necessary. But containment can mean many things.
It can mean from total lockdown of all economic and social movement and activity to
more relaxed measures, down to simply testing everybody for the virus, isolating
and quarantining those infected and shielding the old, while hospitalising those
with severe conditions. If a country had full testing facilities and staff to do
‘contact and trace’ and isolation; along with sufficient protective equipment,
hospital beds including ICUs), then containment along these lines would work –
without significant lockdown of the economy.

But nearly all countries were not prepared or able to provide the facilities and
resources to do that. Germany has come close and I shall show how successful that
has been in a moment. South Korea also maybe. But in both countries, there has
also been some important social and economic ‘lockdowns’. Every other country with
major infections has been forced to into a major lockdown of movement and isolation
for weeks in order to contain the pandemic. China is the most exceptional example
of a high level lockdown in one large province. New Zealand applied a high level
lockdown from day one and reduced deaths to the bare minimum.

Here is an estimate of the varying degrees of lockdown adopted by countries.

If you look at the average lines, you can see that on the Google mobility trend,
Spain has delievered a 66% reduction in economic and social activity, while in
Sweden it has been only 6%.

Has containment worked? It certainly has. And here I am entering the risky
territory of trying to measure the success of containment. As above, I estimate
that without any containment, there would have been about 45m deaths from COVID-19
in 2020. But with containment, and partly using the forecast estimates of the
Institute for Health Metric and Evaluation (IHME), I reckon that death toll will
have been reduced to “just” 250-300,000.

Here are my estimates for various countries comparing the ‘no containment’ deaths
with forecast accumulated deaths after containment.

Deaths (‘000s)

US UK Spa Ita Bel Fra Ger Swe Kor Jap Chi Ind Russ Bra
World
No contain 1974 402 282 360 69 402 498 61 312 756 8400 7872
882 1260 43200
Contain 60 37 24 26 8 23 5 6 0.4 0.4 7 0.8
0.6 4 248
As you can see, containment will enable countries to reduce the potential
uncontained mortality rate by 90-99%! As a result, if sustained, containment will
curb extra mortality above the normal annual average to less than 1%.

So containment works. But as it has been achieved mostly by drastic lockdowns, it

is only at the cost of pushing the world economy off a cliff into a deep slump in
production, jobs, investment – to be followed by a very slow recovery over years if
containment has to be maintained at extreme levels to curb a re-occurrence of the
pandemic, and/or until an effective vaccine can be produced along with mass testing
and isolation methods.

Could the lockdowns have been avoided? Well, as I said, I think if there had been
facilities and staff for mass testing, contact and trace; enough hospital resources
and a vaccine, lockdowns would not have been necessary. Even poor countries have
had success with these methods – see ‘Communist’ Kerala.

Are the extreme lockdowns imposed by China and some other countries unnecessary?
The Swedish authorities have opted to what might be called ‘lockdown-lite’, with
restrictions only on mass gatherings and relying voluntary social isolation. Is
this working as well as draconian lockdowns in other countries?

Well, the evidence of potential accumulated deaths as projected by IHME for various
countries suggests not.

Sweden is heading for one of the highest death rates in the world, only likely to
be beaten by Belgium among the larger countries. And compared to its Scandinavian
neighbours (where restrictions are nearly double that of Sweden’s – see the
mobility graph above), the Swedish mortality rate will be some two or three times
greater. It seems that the Swedish authorities have failed to protect the old, as
the privatised residential homes have been engulfed with infections, just as they
have been elsewhere.

But Belgium has a lockdown and will have a heavier mortality rate than Sweden,
while Germany will do way better than countries like Spain and Italy where there
are much more strict lockdowns. What that suggests is that containment does not
just depend on the level of restrictions and lockdown, but also on the level of
hospital facilities and testing.

Germany’s surplus of hospital beds is much higher than in the rest of Europe.

And it is testing much more, if at still a low rate.

Sweden and Belgium have fewer beds and are doing less testing.

The Swedish ‘lockdown lite’ means more deaths per capita. But the argument for it
is that eventually the Swedish population will achieve ‘herd immunity’ and the
economy can continue in the meantime without being shut down. The first
proposition is full of uncertainty: how will the authorities know that they have
achieved such immunity? The second proposition is clearly false. No economy is an
island. Even if the Swedish economy continues to be open for business, where are
its exports going to when much of the rest of the world is locked down?

So my tentative conclusions are that:

COVID-19 has a much higher mortality rate than flu

Without containment it would have increased the annual mortality rates of most
countries by over 80%
Containment has worked in driving down potential deaths from millions to thousands
Because most governments were unprepared and lacked sufficient healthcare
facilities, they were forced into varying degrees of lockdowns, bringing the world
economy to a standstill
The more severe the lockdown and the more health facilities available means
generally that there will be fewer deaths
The ‘lockdown lite’ approach risks more deaths without offering a stronger economy
as a trade-off.