ISET Economist Blog

Should the World Sacrifice the Economy to Save Lives Today?
Monday, 06 April, 2020

No two countries that both have a McDonald's have ever been at war wrote American political commentator and author Thomas L. Friedman in 1996. Since then, of course, there have been plenty of instances of countries with McDonald’s warring, including Russia and Georgia. Though, one should not take Friedman’s phrase too literally. Rather he implies that the spread of McDonald's is a part of a worldwide phenomenon of countries integrating with the global economy, which, in turn, makes wars less likely. Well, Kudos to globalization.

But also, thanks to globalization, the world is facing a new threat. Global viral outbreaks like coronavirus have become increasingly more common and scientists are anticipating that there are still more to come.1 Viruses are not a new thing, but in the past, they were more constrained by geographical location. For example, China has become far more mobile than during the SARS outbreak in 2003, giving a virus a simple route to the world at large.

Worse still is that this new global enemy is much more subtle, thus depriving governments of their ability to react immediately. There’s an old brain teaser that runs: A lily pad doubles in size every day. If on the 60th day the pond is filled by the lily pad, on what day will the pond be only a quarter covered? The answer is the 58th day. Where on the 40th day, one would barely see the pad in the pond. The same logic applies for COVID-19 as its epidemiologic metric R0, describing the contagiousness of the infectious agent, is estimated to range from two to four, implying that one person can infect more than two people on average.

Moreover, it takes time to learn the genetics, mutations, and modes of transmission of the virus, before one can fully model its spread. Thus, while a problem is still uncertain, individual countries are hesitant to report, as notifying others comes with certain economic costs, such as reduced travel and trade. For instance, in 2003 the US did report mad-cow disease at its initial stages, and even though it managed to contain the disease in a short time, imports worth more than a billion were cut off by Japan for a full year.

Now, when the problem finally became certain, countries have started reporting, but some (e.g., the United States, Sweden, Belarus) are still hesitant to take drastic, or any, measures to combat the virus as they fear it batters economies.

“This is first and foremost a medical emergency and there has to be joint action to deal with that. But the more you intervene to deal with the medical emergency, the more you put economies at risk”warns Gordon Brown, Ex-PM of the United Kingdom.

Economic damage is mounting across the globe. While the mortality rate of the COVID-19 is more or less certain, unfortunately, it is harder to estimate the forthcoming impact of such economic damage on people’s lives. As a result of the Great Recession of 2008-2009, a study on 54 countries2 estimated an additional 5000 deaths from suicide alone in 2009.3 The IMF predicts that the coronavirus pandemic will cause a global recession in 2020 that could be even worse than that of 2008-2009.

Should then the world sacrifice the economy to save lives today? Or does a tradeoff exist? For British and South Korean authorities, any form of tradeoff appears to be imperceivably. Though similar in this respect, these two countries have chosen two fundamentally different approaches.


During a press conference on 12 March, British authorities, backed by supposed scientific advice,4 warned the public that the huge burden of illness and death was inevitable as they were skeptical about restrictions. This is how the Prime Minister, Boris Johnson, addressed Britons during the press conference: “I must level with you, with the British public, that many more families are going to lose their loved ones before their time”.

The reason behind skepticism was that “fatigue” could set in – meaning people would grow tired of bans and would find ways around them. The only way out British authorities could envisage was to create ‘herd immunity, allowing enough people to get the illness.5 Social distancing measures would only be needed for managing the number of infected over time, in order to minimize the strain on the health system and, therefore, reduce the death toll. Thus, it was believed it would be better to reserve social distancing measures for when the UK would be closer to the peak of the epidemic. Simply put, when the number of infected reaches 10,000, doubling it adds only 10,000, whereas 100,000 doubled adds an additional 100,000, significantly increasing the burden on the health system.

Returning to the issue of fatigue, behavioral research indeed shows that pervasive media coverage on social problems may lead to desensitization, implying emotional responsiveness to negative stimulus diminishes after repeated exposure. It was also found that the same phenomenon can occur with health events – individuals may be more likely to take precautions against becoming ill on the first reports of a health threat, but sensitivity to these reports may diminish over time, and social distancing practices may be relaxed.

The narrative UK authorities proposed on 12 March turned out to be harder to sell as it required society to accept that they would get sick, and that may cause mortalities. Such fatalism was especially difficult to sell alongside examples of other nations taking aggressive countermeasures. The pressure to shift strategy also came from outside, as French President Emmanuel Macron warned Boris Johnson that France would shut their border if Britain did not toughen its coronavirus measures. Subsequently, on 24 March, the PM finally ordered a UK lockdown.


South Korea is an example of a country that has been largely successful in maintaining its economic life, while equally stopping the virus from spreading until a global scientific and medical effort is fully underway.

In the discussion of the Korean experience, the focus has largely been on its significant virus testing capabilities. What has been less widely reported is the country’s heavy use of surveillance technology, notably CCTV cameras,6 monitoring bank cards,7 and mobile phone usage,8 to track infected patients and their contacts, and therefore identify who to test in the first place. The effectiveness of technology lies in the following: firstly, it helps identify those patients who have mild or no symptoms (if these patients cannot be found, the testing capacity becomes less effective). Secondly, when the infection increases rapidly throughout the country, it overwhelms health officials’ ability to carry out contact tracing. And this is when and where technology comes in.

As Business Insider recently reported, a number of countries, including Europe and the US, have also followed South Korea and started to use digital tracking to stop the spread of the virus. However, there are fears that such surveillance technology will continue to be used by governments when the outbreak is over and it will become the norm, which, in turn, will hurt democracies or strengthen authoritarian regimes further.

While those fears are well-grounded, surveillance technology is hardly a novelty, as the location tracking industry has been around for years; it was developed through an interplay of technological advancements and profit-seeking. Authorities might have already started to misuse location data, or are intending to do so, independent of the current emergency. In any case, the ability to deter governments from abusing their power depends on the strength of civil society and the openness and competitiveness of the economic and political environment.


Unlike in Korea, the tradeoff turned out to be real for Georgian authorities. On 30 March, a nationwide lockdown and partial curfew were announced.

While the virus might be the top concern for the middle- and higher-income classes in Georgia, hunger, and loss of shelter are a greater threat to those people who live hand to mouth. To stay at home may be well-intentioned guidance, but it may also fail to take into account the most vulnerable groups of society.

We should hope then that the lockdown does not last long and the country is able to find other methods to circumvent the spread of the virus. But if the lockdown is extended, hopefully, the British authorities will not prove right about people growing tired of bans and thus seeking ways around them, happening at a time when more people are infected in the country.

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To end on a more general note, if many more pandemics are to come amid increasing globalization, the world will have to be in a state of constant readiness. For that purpose, nation-states will need to form “standing armies” as once they did it to defend themselves from physical or cyber enemies.

1 Apart from globalization, urbanization and increased human consumption of animal proteins are considered to play the role.
2 Chang, S.S., Stuckler, D., Yip, P. and Gunnell, D. (2013). Impact of 2008 global economic crisis on suicide: time trend study in 54 countries. Bmj, 347, p.f5239.u7y
3 Most of the countries covered by the study were middle- and high-income, whereas, in general, 79% of global suicides come from low- and middle-income countries.
4 Behavioral insights team (aka the “nudge unit”) is playing a notable role in advising the government’s response.
5 Herd immunity can only be reached when a precise proportion of a community becomes resistant to an infectious disease.
6 CCTV cameras enable authorities to identify people who have been in contact with COVID-19 patients. In 2014, South Korean cities had over 8 million CCTV cameras, one camera per 6.3 people. In 2010, everyone was captured an average of 83.1 times per day and every nine seconds while traveling.
7 Mobile phones can be used for the same purpose. In 2019, South Korea had one of the world’s highest phone ownership rates (there are more phones than people).
8 By tracking transactions, it is possible to map a card user’s movements. South Korea has the highest proportion of cashless transactions in the world.

The views and analysis in this article belong solely to the author(s) and do not necessarily reflect the views of the international School of Economics at TSU (ISET) or ISET Policty Institute.