Crisis Resolution Through Methodological Individualism

From 2009 to 2012 I taught an introductory course in Austrian Economics at the University of Iowa. On the first day of class I would tell my students that Austrian economics would change the way they looked at the world, not just from an economic perspective but from an overall life perspective. Nothing would ever appear to be the same again. They would learn to think for themselves and would not fall prey to all the propaganda from government, the mainstream news media, and poorly thought out opinions of friends and acquaintances. Of course, that does not make one the most popular person at a cocktail party!

Methodological Individualism vs. Collectivism

I would explain that economic science falls within the overall science of human action. All action is individual, subjective, and purposeful. Ludwig von Mises used the phrase Methodological Individualism to explain the basis of what can be known about economics in particular and human action in general. It is the individual, and not the group, that attempts to achieve a higher level of satisfaction as he perceives it at this point in time. Of course, these "preferences" are subjective for the individual, meaning that they undoubtedly are different for different people and are subject to constant change within the individual himself. (Consider the subjective desire for a glass of water after mowing the lawn on a hot day. At that point in time a cool glass of water ranks very high on a person's individual preference scale, but once satisfied drops down the scale. Others may not be satisfied with a glass of water; perhaps only a cold beer or a lemonade will do.)

There is no such thing as "group" human action, such as Americans chose to sell stock last week, Frenchmen like to go to the Riviera in August, or Germany declared war on America on December 11, 1941. Some individual Americans may have sold stock last week, and some individual Frenchmen go to the Riviera each August, and certain people controlling the German  government passed a resolution declaring war on America on December 11, 1941.  Aggregates do not act; only individuals act. Ludwig von Mises explained the fallacy of collective action. At first this seems strange, but upon further reflection it becomes self evident and many bogus statements are dethroned. For example, the mainstream media is noted for headlines such as "Americans are fearful of the coronavirus". This is a meaningless statement, since there is no such entity as Americans, only individual people who live in America. The fear of catching the coronavirus that is attributable to Americans in general ranges individually from so afraid that one will not leave one's home to hardly any fear at all.

Government Restrictions are Collective and Illogical

Since all action is individual, purposeful, and subjective, in the case of a crisis it is impossible for government to take collective action that would not be coercive to almost everyone. The coronavirus is a case in point. At the present time (April 16, 2020) forty-one of the fifty US states have declared some form of what is called a "lockdown". Non-life saving businesses must remain closed and there are various restrictions on the movement and interaction of the populace. The stated purpose in all cases is to "stop the spread" of the virus.

But Austrian economists and students of human action in general dispute the very basis of these government coercions. If all action is individual, the individual himself must decide what action he will take or not take in order to both prevent catching the disease AND satisfy his other preferences, such as keeping a roof over his head and feeding his family. If it were the preference of all people to isolate themselves, close their businesses, not patronize businesses, refuse to show up for work, or refuse to socialize with their friends and neighbors, then the government would not need to implement any of these measures. The only conclusion to be drawn is that the state-imposed restrictions are violations of the preferences of many individuals. Since it is only the individual who acts purposefully and not groups, then government restrictions upon these individuals are illogical and cannot be justified.

Man is an End and Never a Means to an End

Suppressing the spread or lethality of the virus is a result of individual human action and is not an end in itself that justifies using man as a means. Immanuel Kant expressed it best in his Humanity Principle; i.e., that man is an end and must never be treated as a means to an end. Individuals have different preferences and only the individual may determine what is and is not in his own best interest. An individual who desires to keep his business open will deal only with others who individually desire to patronize his business. The business owner and his customers may take whatever protective actions that they deem mutually appropriate. No one is forced to patronize a business that he believes is not taking appropriate safety measures, and business owners may require customers to take some sort of protective action in order to obtain the business owner's goods or services. All individuals have expressed their preferences as only each may determine for himself. This is fully consistent with Kant's Humanity Principle and the recognition of Austrian economic science that society advances through social cooperation via the division of labor. In other words, there can be no such thing as a collective goal as set by government. Government is composed only of individuals expressing their own preferences. But each individual expresses his own preference through cooperative interaction with other individuals. No one, not even government, may ethically force people to act against their preferences. This is a violation of Kant's Categorical Imperative that each person should act only as if his action should be a universal law. In other words, everyone should always and everywhere obey the Golden Rule.

Conclusion

Stopping the spread of the coronavirus is NOT a proper role of government. Government should restrict its actions to protecting those three inalienable rights as expressed in America's Declaration of Independence: Life, Liberty, and the Pursuit of Happiness. Lockdowns explicitly violate the latter two inalienable rights and probably the first through psychological harm from police enforced house arrest and even the prohibition that the seriously ill and injured in hospitals be kept in isolation from loved ones. This is monstrously cruel and undoubtedly has resulted in depressing the spirit-to-live in many. All of us are children of God and may not be used as means to the ends of others. No one may deign to choose what is best for us; only we can do this individually, because we all have different subjective preferences which we have the moral right to pursue as long as they are in line with the Golden Rule. Even in this age of the coronavirus, social cooperation through the division of labor will result in the best outcome as defined by each of us individually.

Government Shutdowns are Unconstitutional, Ineffective, and Immensely Destructive

The Shutdowns Are Unconstitutional

Our Constitution guarantees us certain rights that may not be abridged. The many government shutdown orders violate these rights. For this reason alone, the shutdown orders should be rescinded immediately. Furthermore, federal prosecutors should indict state governors for abuse of power for, in effect, creating a police state within their boundaries.

The first amendment to the Constitution[1] prohibits government from abridging the right of the people peaceably to assemble. Therefore, all actions to limit people from gathering together in whatever number and wherever they may choose are specifically prohibited by the Constitution, the Supreme Law of the Land.

The fifth amendment[2] prohibits government from depriving a person of his property without due process of law. All pronouncements by state governors forcing certain types of businesses to close were not conducted in anything resembling due process; therefore, these actions are specifically prohibited by the Constitution, the Supreme Law of the Land.

The fourteenth amendment[3] assures citizens that the protections of the Constitution, including amendments, are applicable to state and municipal governments; therefore, state governors may not claim that the above two amendments prohibiting them from abridging their citizens right to peaceable assembly and depriving them of life, liberty, or property without due process of law apply only to the federal government and not apply to them. Yet today state governors are violating both the first and fifth amendments. For example, Pennsylvania Governor Tom Wolf issued an executive order[4] on March 6, 2020 restricting Pennsylvania citizens' rights to assemble and depriving them of their property through blanket closure orders. His proclamation cited several sections of the Pennsylvania statute law, authorizing him to prevent citizens from entering disaster areas. He cited no section of the Pennsylvania Constitution giving him power to close down businesses, yet that is exactly what he did. His proclamation initially applied to six counties in southeast Pennsylvania, subsequently expanded to the entire state. It is obvious that the statutes were meant to be applied to restricting the public's access to areas suffering from floods, tornadoes, hurricanes, fires, etc. Governor Wolf's interpretation of expanded powers would mean that he can become a dictator whenever he himself deems it necessary. This is at odds with the US Constitution and, if unchallenged, would mean the end of that founding document as the Supreme Law of the Land.

The Shutdowns Are Ineffective

There is no objective evidence that government shutdowns and restrictions of civil liberties are working to restrict the spread of the coronavirus. In fact no government has even attempted to do so. Governments simply assume that lockdowns will work. It is clear that governments understand little about the virus and its ability to spread. If the shutdowns cannot prevent the Prince of Wales and British Prime Minister Boris Johnson from catching the virus, then citizens everywhere have been deprived of basic freedoms for nothing. There's a good reason why no government claims to have a criteria for success or failure. There is no criteria and there can be no criteria. There simply is too little understanding of how the virus originates, the manner and how fast it spreads, or the proper mitigation remedies. Even fear-monger-in chief, director of the National Institute for Allergy and Infectious Diseases Dr. Anthony Fauci, admitted that “I’ve looked at all the models. I’ve spent a lot of time on the models. They don’t tell you anything. You can’t really rely upon models.” In fact a government shutdown order is an admission of this fact. If government knew more it would do less, if it decided to do anything.  Americans especially seem to be seeking solace or reaffirmation of governments' wisdom in statistical data, models, and accurate projections that simply do not exist. The models have too many unknown variables.

Universal shutdowns defy logic. Since so much is unknown, the government should not pretend to know the best course of action. Radical decentralization of decision making is best, a policy recommended by Nobel Laureate Richard Feynman. Let every person decide for himself the best course of action based upon his personal circumstances, experiences, and knowledge. Of course, one's personal experience includes considering what is reported as happening to others and the recommended courses of action by health care experts. Radical decentralization will result in many diverse protective and preventative actions taken by many different individuals. Shutting down ALL business and social activities not only prevents the wide gathering of knowledge from many diverse people, but it exposes an entire population to what may later be determined to be completely ineffective or even counter-effective actions. Businesses such as grocery stores that have been allowed to remain open have adopted impressive virus thwarting protections for their customers and employees. Customers are accepting these impressive preventive measures with great calm, courtesy, and patience. Government coercion definitely is not required. One can expect that these private actions will continue to evolve and improve. In short, government blanket shutdown orders are not necessary.

A further logical fallacy is that government knows exactly how much risk each person should be allowed to take in reacting to the coronavirus crisis. Some people are more risk averse to catching the virus than others. If we all were one hundred percent risk averse, no one would get out of bed in the morning. But risk is part and parcel of life. We take risks just driving our cars (38,000 traffic deaths per year), swimming in pools (3,500 drownings per year), not to mention accepting the risks of smoking, drinking, consuming fatty foods, flying private airplanes, bungee jumping, etc. There is risk in taking a shower or bath (over 100,000 injuries per year), walking up and down stairs (one million injuries and 12,000 deaths)...the examples truly are endless. Why not allow all businesses to adopt whatever measures they deem appropriate and that their customers will accept and allow individuals to accept whatever risk they find appropriate individually?

The Shutdowns Are Immensely Destructive

On March 30, 2020 the Federal Reserve Bank of St. Louis, well known in banking and financial circles as the Fed system's premier statistical arm, projected that government mandated shutdowns would result in over 47 million unemployed in America, for an unemployment rate of over 32 percent. During the Great Depression of the 1930's, unemployment in America peaked at around 25 percent. Government has not even attempted to identify much less quantify the mental and physical health and cultural risks of forcing citizens to remain alienated from one another. How about the cost of bankrupting millions of people? Incalculable! We assume that life will return to normal as soon as the shutdown is lifted. It will not do so and may never do so. Any new business venture must calculate the possibility that it may be shut down for almost any reason. Remember, so far the coronavirus has not surpassed the lethality of many previous flu's, and no one ever suspected that governments would react this way. Now businessmen must calculate the probably unknowable risk of seeing one's life savings destroyed for some now unknown so-called crisis in the future. Finally (or maybe not finally) we just cannot calculate the damage done to the international division of labor. Our standard of living, which includes our ability to protect ourselves from unknown risks, depends upon our wealth. Destroying world trade will make us all much less secure from many of life's challenges.

Conclusion

The long term adverse effects of the coronavirus crisis will be two fold. One, our leaders claim that our very freedoms and liberties were barriers to dealing effectively with the crisis and, therefore, it was right and proper that government at all levels take actions to rescind our Constitutionally protected liberties. Two, that free trade, globalization, and capitalism caused and exacerbated the crisis. Free trade made the US too dependent upon foreigners for critical medical supplies and, therefore, trade restrictions need to be expanded. Both of these claims are false; nevertheless, our freedoms and our standard of living will suffer greatly. Unfortunately it appears that the public generally agrees with these false narratives and are willing to sacrifice their freedoms and the freedoms of others for the questionable promise of greater security. If so, then it is likely that government has only whetted its insatiable appetite for further restrictions of our liberties in the future for so-called crises that it itself claims exit.

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[1] AMENDMENT I

Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.

[2] AMENDMENT V

No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offence to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.

[3] AMENDMENT XIV

Section 1.
All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside. No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.

[4] Pennsylvania Governor Tom Wolf's Shutdown Order

COMMONWEALTH OF PENNSYLVANIA OFFICE OF THE GOVERNOR ORDER OF THE GOVERNOR OF THE COMMONWEALTH OF PENNSYLVANIA REGARDING THE CLOSURE OF ALL BUSINESSES THAT ARE NOT LIFE SUSTAINING WHEREAS, the World Health Organization and the Centers for Disease Control and Prevention (“CDC”) have declared a novel coronavirus (“COVID-19”) a “public health emergency of international concern,” and the U.S. Department of Health and Human Services (“HHS”) Secretary has declared that COVID-19 creates a public health emergency; and WHEREAS, as of March 6, 2020, I proclaimed the existence of a disaster emergency throughout the Commonwealth pursuant to 35 Pa. C.S. § 7301(c); and WHEREAS, I am charged with the responsibility to address dangers facing the Commonwealth of Pennsylvania that result from disasters. 35 Pa. C.S. § 7301(a); and WHEREAS, in addition to general powers, during a disaster emergency I am authorized specifically to control ingress and egress to and from a disaster area and the movement of persons within it and the occupancy of premises therein; and suspend or limit the sale, dispensing, or transportation of alcoholic beverages, firearms, and combustibles. 35 Pa. C.S. § 7301(f); and WHEREAS, in executing the extraordinary powers outlined above, I am further authorized during a disaster emergency to issue, amend and rescind executive orders, proclamations and regulations and those directives shall have the force and effect of law. 35 Pa. C.S. § 7301(b); and WHEREAS, in addition to my authority, my Secretary of Health has the authority to determine and employ the most efficient and practical means for the prevention and suppression of disease. 71 P.S. § 532(a), 71 P.S. 1403(a); and WHEREAS, these means include isolation, quarantine, and any other control measure needed. 35 P.S. § 521.5. NOW THEREFORE, pursuant to the authority vested in me and my Administration by the laws of the Commonwealth of Pennsylvania, I do hereby ORDER and PROCLAIM as follows: Section 1: Prohibition on Operation of Businesses that are not Life Sustaining All prior orders and guidance regarding business closures are hereby superseded. No person or entity shall operate a place of business in the Commonwealth that is not a life sustaining business regardless of whether the business is open to members of the public. This prohibition does not apply to virtual or telework operations (e.g., work from home), so long as social distancing and other mitigation measures are followed in such operations. Life sustaining businesses may remain open, but they must follow, at a minimum, the social distancing practices and other mitigation measures defined by the Centers for Disease Control to protect workers and patrons. A list of life sustaining businesses that may remain open is attached to and incorporated into this Order. Enforcement actions will be taken against non-life sustaining businesses that are out of compliance effective March 21, 2020, at 12:01 a.m. Section 2: Prohibition on Dine-In Facilities including Restaurants and Bars All restaurants and bars previously have been ordered to close their dine-in facilities to help stop the spread of COVID-19. Businesses that offer carry-out, delivery, and drive-through food and beverage service may continue, so long as social distancing and other mitigation measures are employed to protect workers and patrons. Enforcement actions will be taken against businesses that are out of compliance effective March 19, 2020, at 8 p.m. Section 3: Effective Date and Duration This order is effective immediately and will remain in effect until further notice. GIVEN under my hand and the Seal of the Governor, at the city of Harrisburg, on this nineteenth day of March two thousand twenty, the year of the commonwealth the two hundred and forty-fourth. TOM WOLF Governor

A Parable for Our Time

One of my fondest books as a child was Doctor at Timberline, by Charles Fox Gardiner. Gardiner was a doctor early in the settlement of western Colorado in the nineteenth century. Each chapter of the book is a self-contained story of his experiences of tending to the ailments of mostly men in mining towns, ranches, and lonely cabins high in the Rockies. The book was a gift from my father, who spent his teenage years before the war in Mintern, Colorado, where his father owned and ran a saloon. I passed it along to my son, who enjoyed it, too.

The book has been lost for some time. A pity, since I would love to read it out loud to my grandchildren. There is only one story that I remember distinctly. It involved taming a temperamental horse. A good horse was a very valuable property in the that era, as long as it was, shall we say, docile. This horse was not. The doctor needed the horse and, instead of trying to sell it, he decided to break its spirti.

 The doctor was not a horse trainer or bronco buster, so he decided upon a plan to teach the horse who was boss. The first thing he did was separate the horse from his other horses into a small coral where the horse could not see others of his kind. He did not allow the horse out of this small coral. Then he cut the horse's water and feed ration so drastically that the horse almost starved. Eventually the doctor slowly increased the horse's ration, eventually leading it out of its solitary confinement to graze and to regain the remuda.

Needless to say, the doctor broke the horse's rebellious spirit, and it became completely willing to do whatever the doctor demanded.