Coronavirus puts elected governments in a sticky situation. If they appear to fail to solve the public health crisis, they will lose the next election. If, in the process of solving the public health crisis, they create an economic crisis, they will also lose the next election. They’re stuck between a rock and a hard place. It all reminds me of Bernard Mandeville’s “Fable of the Bees”. Mandeville’s bees live luxurious, decadent lives, and their drive for ever greater pleasures pushes them to build an extraordinarily elaborate economy to keep up with their excesses. One day, a divine intervention rids the bees of their vices, leaving them full of modesty and virtue. But this collapses demand and destroys the bees’ economy, annihilating their living standards. The fable serves to highlight one of the paradoxes of capitalism–the welfare of the poor becomes dependent on the vices of the rich. If the rich stop spending money on frivolous nonsense, the poor lose their jobs and go hungry.
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