No Minister

Visible Death vs. Invisible Death

One of the most famous economic essays ever written is That Which is Seen, and That Which is Not Seen, by 19th century French economist, Frédéric Bastiat. He introduced what he called the fallacy of the broken window, where the money spent to fix the window – paying the person who made the glass and the glazier who installed it – is seen, but other costs are not:


Frédéric Bastiat

But if, on the other hand, you come to the conclusion, as is too often the case, that it is a good thing to break windows, that it causes money to circulate, and that the encouragement of industry in general will be the result of it, you will oblige me to call out, “Stop there! Your theory is confined to that which is seen; it takes no account of that which is not seen.”

It is not seen that as our shopkeeper has spent six francs upon one thing, he cannot spend them upon another. It is not seen that if he had not had a window to replace, he would, perhaps, have replaced his old shoes, or added another book to his library. In short, he would have employed his six francs in some way which this accident has prevented.

The lockdown of New Zealand society to deal with COVID-1984 is presenting the same problem, except instead of money, the counting is in deaths.

In the post, More Epidemiology Modelling Problems, I looked at a report of the results from testing the epidemiological model used by the NZ governments’s health care advisors.

Buried within the report was a short section that made crude sensitivity estimates of the costs and benefits of the Lockdown across just one part of the NZ economy: building and construction. The report estimated the benefits of avoiding deaths and hospitalisations in that industry at $7.6 million and the cost at $3 billion (one month, 250,000 workers at $3000 per week).

The point of this was not to try and calculate precise numbers but to test the ranges and comparisons across different runs and sensitivities to get a handle on the possible cost/benefit. As the report said:

Of course, the benefit cost ratio of .003 is from just model run. Different, and plausible, assumptions can readily generate benefits that are a order of magnitude, say, ten or twenty times, higher than the $7.6 million. But it is very difficult to see how they could be over 300 times higher.

But what I was interested in was the assumptions had purloined from government sources (p. 25):

  • The value of a statistical life is $4.5 million;
  • The life years conversion factor is 0.10 for over 70s and 0.55 for under 70s;
  • The cost of an illness is $4000;
  • The cost of a hospitalisation is $30,000.

The value of a statistical life!

A précis of that report was linked to in an article of Michael Riddell’s Croaking Cassandra blog, Coronavirus economics. But there was another section of Riddell’s article looking at an unpublished (as yet) economic analysis that took a different bite at the cherry.

This analysis was performed by one of New Zealand’s leading academic economists, Professor John Gibson from Waikato University, and he decided to look at the Lockdown policy from the POV of how it might affect population-wide life expectancies in NZ.

The flu kills about 500 New Zealanders a year but it can kill more in a bad season like that of 2015, when 767 died from it. A season worse than that would be “flu shock” and Gibson picked a figure of 875 for that edge-case scenario. That produces a reduction in life expectancy of 0.14 years across the whole population.

Ten such shocks would therefore drop it by 1.4 years: that’s 8,750 dead people, which is in the range of the middle scenario of the Otago model for COVID-19 deaths.

In other words, in saving all those lives the lockdown could be expected to prevent the population life expectancy from dropping by 1.4 years, and more again if the third scenario of 14,000 deaths eventuated.

But at what cost? We’ve allowed ourselves to be bullied by shroud-wavers talking about preferring to make a buck over saving the lives of old people. But that’s a false choice and an emotional weapon wielded by people who don’t want their solution to be questioned. The fact is the lives will be lost as a result of the lockdown.

It turns out that life expectancy in New Zealand is more sensitive to changes in real income than is so for many countries.

In other words, a ten percent decrease in real per capita GDP reduces life expectancy by 1.7 percent. The most recent period life tables for New Zealand report that male life expectancy was 79.5 years and female life expectancy was 83.2 years, so 1.7 percent of the average of those two values is 1.4 years.

In other words, if real per capita GDP in New Zealand falls by ten percent due to the lockdown and other effects associated with Covid-19, life expectancy would be predicted to fall by 1.4 years.

And we could be looking at an annual GDP drop of more than 10%. By contrast, even going by the real worst-case death rate of New York City, currently 1,085 deaths per million, we’d be looking at a life expectancy drop of 0.93 years.

So even in that highly unlikely example the lockdown solution would still result in reducing life expectancy by an extra 0.5 of a year. The apparent kindness of doing everything possible to limit deaths due to Covid-19 would, instead, be killing more people by making them poorer.


And we may not need to dabble in such statistical comparisons of invisible deaths anyway. As this article by six American doctors points out, the US hospital system has been so emptied out that doctors and nurses are being laid off and furloughed in droves:

Almost every hospital outside of the hotspots is empty. The dramatic reduction in healthcare utilization and capacity is by no means limited to small, country hospitals. Mayo Clinic is empty: 65% of the hospital beds at Mayo Clinic are empty, as are 75% of the operating rooms. This is the world’s premier medical center. If Mayo Clinic is empty, imagine how dire the situation is at smaller, community-based healthcare centers. Given the complexity of the patients referred to Mayo Clinic, its emptiness alone will have a significant negative impact on healthcare outcomes.

Same with this article written by Dr Scott W. Atlas, of Stanford University Medical Center:

Most states and many hospitals abruptly stopped “nonessential” procedures and surgery. That prevented diagnoses of life-threatening diseases, like cancer screening, biopsies of tumors now undiscovered and potentially deadly brain aneurysms. Treatments, including emergency care, for the most serious illnesses were also missed. Cancer patients deferred chemotherapy. An estimated 80 percent of brain surgery cases were skipped. Acute stroke and heart attack patients missed their only chances for treatment, some dying and many now facing permanent disability.

Same in Britain:

It’s chilling to know that many hospital wards, waiting rooms and car parks are now empty. Before this country was hit, only 800 of the NHS’s 4,125 critical care beds were vacant at one time. Now it’s 2,300. Even with some of the worst fatality rates in Europe, some hospitals now report being half empty since they paused almost all non-emergency work.

Richard Sullivan, a professor of cancer and global health at King’s College London, says: The number of deaths due to the disruption of cancer services is likely to outweigh the number of deaths from the coronavirus itself over the next five years. Cancer screening services have stopped, which means we will miss our chance to catch many cancers when they are treatable and curable.

And there are almost certainly deaths happening right now because of the focus on saving people from COVID-19:

Accident and Emergency chiefs in London are concerned that more people are dying of non-coronavirus-related illnesses than normal because they are reluctant to leave their homes and be a burden on their local hospital. They believe there has been a ‘sharp rise in the number of seriously ill people dying at home’. They report that dozens more people than normal are dying at home from cardiac arrests, for example, presumably because they do not want to impose upon our locked-down society and what is continually presented to us as a busy, stressed-out health service.


In Spain, health investigators found a 40 per cent reduction in emergency procedures for heart attacks at the end of March compared with a normal period.


there has been a ‘drastic drop’ in cancer and heart-attack patients presenting to the health services. In Victoria, health officials report a 50 per cent decline in new cancer patients and 30 per cent decline in cardiac emergencies. It is now feared that ‘coronavirus anxiety’ could lead to ‘more deaths from cancer and heart attacks’.

And back to NYC:

The New York Times published a piece on 6 April headlined, ‘Where have all the heart attacks gone?’. It was written by a doctor who likewise described hospitals in the US as being ‘eerily quiet’. He has heard from colleagues who are seeing fewer patients with heart attacks, strokes, acute appendicitis and acute gall-bladder disease than they would normally see.

In Britain at least they appear to have asked the question:

Matt Hancock, the health secretary, refuses to give a figure for the potential non-Covid fatalities from this catastrophe but the cabinet was told it could be up to 150,000 avoidable deaths.

I’ve seen no evidence that we asked that question of our public health experts, either inside government or outside. It cannot be possible that the same deaths are not happening here. We’re just not seeing them widely reported in the MSM or announced in the PM’s press conferences.

%d bloggers like this: