NOTICIAS

567

El profesor Huerta de Soto publica, junto

con otros colegas y discípulos de la
Escuela Austriaca de Madrid, dos
importantes artículos sobre los efectos
económicos de la crisis del COVID-19,
en dos revistas internacionales de gran
prestigio, Sustainability y Healthcare

El primero se titula «Principles of Monetary Financial Sustaina-

bility and Wellbeing in a Post-Covid-19 World: The Crisis and Its
Management» y fue publidado el 21 de abril de 2021 en Sustainabi-
lity. Sus autores son, aparte del propio profesor Huerta de Soto, los
profesores Antonio Sánchez-Bayón y Philipp Bagus.
El segundo, escrito por los mismos autores, se ha publicado en
la revista Healthcare, con el título de «COVID-19 Crisis Manage-
ment and Cost Stimation Models: Burocratic Government Coac-
tion vs. Spontaneus Social Coordination».
Se adjuntan sendas fotos de la primera página de ambos.
568 NOTICIAS

Preprints (www.preprints.org) | NOT PEER-REVIEWED | Posted: 4 May 2021 doi:10.20944/preprints202105.0024.v1

Review

COVID-19 crisis management and cost estimation models: bu-

reaucratic government coaction vs. spontaneous social coordi-
nation
Jesús Huerta de Soto1, Philipp Bagus2* and Antonio Sánchez-Bayón3*

1 Department of Applied Economics I, History and Economic Institutions and Moral Philosophy, Social and
Legal Sciences Faculty, Rey Juan Carlos University, Madrid, 28033, Spain; huertadesoto@dimasoft.es (J.H.S)
2 Department of Applied Economics I, History and Economic Institutions and Moral Philosophy, Social and
Legal Sciences Faculty, Rey Juan Carlos University, Madrid, 28033, Spain; philipp.bagus@urjc.es (P.B.)
3 Department of Business Economics (ADO), Applied Economics II, and Fundamentals of Economic Analysis,

Legal and Social Sciences School, Rey Juan Carlos University, Madrid, 28033, Spain; antonio.sbayon@urjc.es
(A.S.B.)
* Correspondence: antonio.sbayon@urjc.es (A.S.B.); philipp.bagus@urjc.es (P.B.).

Abstract: This paper reviews the management of the COVID-19 crisis and the difficulty of cost esti-
mation model, comparing centralized management or bureaucratic government coaction and the
agile market alternative or spontaneous social coordination. This is a study of Political Economy and
Health Economics from the perspective of Austrian Economics. We describe and compare the alter-
native models, which are adapted to the current crisis. The analysis is based on the theorem of the
impossibility of the economic calculation under coactive systems, and other principles of economy.
In this context we pay also attention to collateral problems of the centralized and coactive manage-
ment. Finally we propose a solution based on dynamic efficiency and the constitutions of wellbeing
economics.

Keywords: Decision making; cost estimation; COVID-19 crisis; Health Economics; Wellbeing Eco-
nomics; Political Economy.

1. Introduction
In 2020 the World economy suffered a severe external shock [1], by a black swan [2].
The so-called COVID-19 crisis has posed severe problems for health care systems, which
can be analyzed by the fundamentals of Political Economy [3-5]. In order to analyze the
crisis and its management, to review the efficiency of the cost estimation models applied
in 2020 and 2021, this paper uses the principles of economy and the economic theory of
the Austrian Economics [6,7].
This study of Political Economy and Health Economics offers an analysis of two op-
posite approaches to the management of the current crisis: the bureaucratic government
coaction approach that implies centralized planning and management vs. spontaneous
social cooperation approach based on market principles such as profit and loss. In this
context, we apply the theorem of the impossibility of economic calculation in socialism or
coactive and centralized systems [8-10]. Moreover, we review the relation between deci-
sion making and cost efficiency under uncertainty [11], and the contrast between the two
approaches. Another point of the analysis concerns the collateral problems of centralized
and coactive management [10], like bottlenecks, informal markets, etc. Finally, we propose
a solution, for the current COVID-19 crisis management, based in dynamic efficiency [12]
and wellbeing economics alignment [3,5,13-14].

© 2021 by the author(s). Distributed under a Creative Commons CC BY license.

NOTICIAS 569
sustainability
Review
Principles of Monetary & Financial Sustainability and Wellbeing
in a Post-COVID-19 World: The Crisis and Its Management
Jesús Huerta de Soto 1 , Antonio Sánchez-Bayón 2, *


Citation: Huerta de Soto, J.;
Sánchez-Bayón, A.; Bagus, P.
Principles of Monetary & Financial
Sustainability and Wellbeing in a
Post-COVID-19 World: The Crisis
and its Management. Sustainability
2021, 13, 4655. https://doi.org/
10.3390/su13094655
Academic Editor: Ioannis Nikolaou
Received: 27 March 2021
Accepted: 14 April 2021
Published: 22 April 2021
Publisher’s Note: MDPI stays neutral
with regard to jurisdictional claims in
published maps and institutional affil-
iations.
Copyright: © 2021 by the authors.
Licensee MDPI, Basel, Switzerland.
This article is an open access article
distributed under the terms and
conditions of the Creative Commons
Attribution (CC BY) license (https://
creativecommons.org/licenses/by/
4.0/).
Sustainability 2021, 13, 4655. https://doi.org/10.3390/su13094655
and Philipp Bagus 1, *
1 Department of Applied Economics I, History and Economic Institutions and Moral Philosophy, Social and
Legal Sciences Faculty, Rey Juan Carlos University, 28033 Madrid, Spain; huertadesoto@dimasoft.es
2 Department of Business Economics (ADO), Applied Economics II, and Fundamentals of Economic Analysis,
Legal and Social Sciences School, Rey Juan Carlos University, 28033 Madrid, Spain
* Correspondence: antonio.sbayon@urjc.es (A.S.-B.); philipp.bagus@urjc.es (P.B.)
Abstract: This paper analyses the COVID-19 crisis and its management from the perspective of
Austrian Economics. The attention focuses on the State’s coercive intervention according to the
principles of political economy, capital theory and Austrian business economic cycles. The paper
examines the specific case of massive intervention by governments and, especially, central banks
in monetary and financial markets to deal with the pandemic trying to mitigate its negative effects.
The paper offers a critical analysis of government tax policies and the increase in public spending,
considered as the panacea and universal remedy for the social troubles. This review concludes
with a proposal to change the mainstream paradigm, thereby proposing a more sustainable and
wellbeing economics.
Keywords: pandemic; monetary theory; financial sustainability; wellbeing economics; political economy
1. Introduction
The World economy suffered a severe shock in 2020, which continues in 2021. In order
to analyze these shocks and mitigate its consequences we must review how economies
affected by an external shock, like a pandemic crisis, can recover and which conditions
have to be met for this end according to the principles of political economy [1,2]. These
economic principles suggest allowing for an adaptation process to the new circumstances
with the lowest costs possible [3]. Once the pandemic has been overcome, it is necessary
to promote a healthy and sustainable recovery, also in terms of wellbeing economics [4,5].
The result of this review, using Austrian capital theory [6–8] and Austrian business cycle
theory [9–13], helps to understand the pandemic crisis and its management. The crisis
has been a pretext for an increasing fiscal and monetary control and interventionism by
governments and central banks. We will portray and explain the key-points of the crisis
management to understand the agenda and its process.
2. Theoretical Framework and Methodology
This review uses the Austrian theory of capital [12,14] and business cycles [15–18],
and some other main principles of political economy. In this way, we employ a powerful
economic theory to understand and to interpret social reality and its development. As a
result, the most appropriate approach for economic policy approach and the road map
for dealing with a pandemic and, especially, recovering from it is quite clear. Some of its
essential principles are widely known, and others are an “open secret,” especially to all of
those who fall into the trap of fueling populist demagogy by creating false and unattainable
expectations among a population as frightened and disoriented as one would expect during
a pandemic. For more considerations, about the fundamentals and methodology applied
here, we refer to the work of Ludwig von Mises [19,20], Friedrich A. von Hayek [21,22],
Murray N. Rothbard [23,24] and as well as the works of more recent authors [25–28].
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