THE GREAT COVID PANIC

How to make sense of the astonishing upheaval of February 2020 and following? Normal life – in which expected rights and freedoms were taken for granted – came to be replaced by a new society as managed by a medical/ruling elite that promised but failed to deliver virus mitigation, all in the name of public health. Professor Gigi Foster works in the School of Economics, UNSW, and is a co-author of The Great Covid Panic – What Happened, Why and What to do Next. On Monday, 11 October 2021, The Sydney Institute held a Zoom meeting with Gigi Foster in discussion with Gerard Henderson, Executive Director of The Sydney Institute, to explore what happened in the Covid pandemic of 2020-21 and why the panic.

THE GREAT COVID PANIC

GIGI FOSTER

Gerard Henderson: Welcome to our Zoom tonight to discuss The Great Covid Panic, a book just released and co-authored by Gigi Foster who is here to lead this discussion.

Thanks for joining us Gigi. Firstly, why did you write this book? It seems to me like a libertarian tract. Is that what it is?

Gigi Foster: Interesting question. I don’t think of it that way myself, and it certainly was not our intent. When we started writing this book, about a year ago, we did not want to produce anything with a particular ideological slant, other than to try to seek truth and to try to advise on what would be the most welfare maximising ways to handle the emergence of Covid into the world. So, I wouldn’t describe any of the three authors as strict, ideological adherents to any particular camp or any particular political party or any particular stripe at all.

We are economists and, as you know, economics holds as the maximand that we should always aim for in our policy, total welfare. Certainly, as a social scientist, I like to think that my role involves seeking truth in my research. I’m trying to find out what is actually going on in the world, just like any scientist would. So, it was the frustration of that attempt last year and the desire to write down what we saw happening, tragically, around the world, in terms of the destruction of human welfare, that motivated us to write this book.

Gerard Henderson: You’re not simply writing about what the book calls “the great Covid panic”, and occasionally you use a shorter term, “the great panic”, which is a catchy title. It’s not simply about that, is it? In your conclusion you use the word “should” a lot; you talk about what society “should” do, what governments “should” do, what individuals “should” do. About 340 pages in, you and your co-authors have a message for the world. So, you take this task quite seriously.

Gigi Foster: We do, very much. Certainly, Paul and I, who are employed by the public purse, by universities that are financed by the taxpayer, feel responsible and duty-bound to offer suggestions about how to avoid this catastrophic policy failure that we’ve seen during the Covid period by changing our institutions. We made suggestions around how to change institutions in a way that we feel would better safeguard human welfare. The “should” in there, the normativity, comes from our analysis and our judgement on what would be a good thing to do from the perspective of safeguarding human wellbeing, going forward. That’s where our normativity comes from, for sure.

Gerard Henderson: You have a gig on Radio National, but we couldn’t get any economists to come and talk against you, and I’m not sure your own program has covered this book. So, what’s your problem at Radio National, or the ABC in general?

Gigi Foster: First, about the program itself. We started it in 2018. Peter Martin, who is my co-host on that program, came to me and basically did a blind interview – I didn’t know I was being interviewed – to see whether I would be a good co-presenter. Then we did a pilot and we started doing it. My motivation for being involved in that program is to try to reach a broad audience with a message about economic reasoning and economics as a profession. What we’re trying to achieve is the applicability of big ideas in economics to policy choices and individual choices and understanding human society. It’s basically an educative goal, and I’m quite grateful to the ABC that that they have renewed us now for five seasons. We finished our fifth season a week ago.

During the Covid period, it was on that show, in the fourth season, that was the first time I came out publicly saying that blanket lockdowns, including of healthy people around Australia, was the wrong policy response to Covid. What we received, in the audience reactions, the emails and the messages that we got, and the producers got, was a very wide range of reactions. They included some that said, “Take that woman off the air, she is advocating against health. She’s advocating for people to violate public health orders, and this is criminal.” Since then, it’s been a bit like toeing a line between what I would like to say and what is going to be acceptable to the ABC audience. Now, I want to speak to them, I want to engage them, I don’t want to be put off the show. At the same time, I don’t want to simply play into their pre-existing beliefs. I want to try to engage them with different ideas, and that’s what I have tried to do during this whole fifth season.

Gerard Henderson: In your new book, you referred to people having been called “Covid deniers”, “granny killers”. Have you copped them?

Gigi Foster: Oh, my goodness. I can send you quite a lot of emails with very interesting invectives. A “granny killer” is not the worst that I’ve been called. I’ve received toilet rolls with Donald Trump’s face printed on them; I’ve received death threats. But I’ve also received the most wonderful, grateful, desperately hopeful and admiring emails that I’ve ever received in my life. If I ever feel bad about myself in the future, I just have to open that folder, it’s the feel good, it’s got so much love in it. It’s because so many people were having similar kinds of questioning thoughts about the policies, but felt they could not speak out, either at work or in public or even around their own dinner tables. This has been a topic, just like Trump’s election was, that divided people right down the dinner table in many cases. One of the challenges, moving out of this era for us as a society, is to work out how to reconcile. How do we start speaking to each other again? How do we start engaging and accepting each other again, despite the fact that we may have had radically different views on the appropriateness of how we’ve handled the covid problem?

Gerard Henderson: For those who haven’t seen the book, at times, you and your co-authors write about Jane, who’s the conformer, Jasmine, who’s the doubter and James, who’s the decider, the operative, the public servant, perhaps a politician. I guess you’re Jasmine.

Gigi Foster: Indeed.

Gerard Henderson: But your co-authors are also Jasmine, right?

Gigi Foster: We’re all Jasmines.

Gerard Henderson: We’re all Jasmines now.

Gigi Foster: Would that that were so, Gerard.

Gerard Henderson: So, Jane is the conformer. How do you describe Jane briefly for us?

Gigi Foster: This is basically one of our expositional artifices that we use to try to draw people in with personal stories about how different types of people reacted very differently when Covid came on the scene and then as it continued.

Jane is the typical fearful, reactionary conformist who was very scared – one who got scared over the course of late February into mid-March 2020, and by the end of March was really pants-off scared and pressing her politicians to do something to protect her from this threat that she perceived through interaction with the media, interaction with her friends and family, and the messages she was reading in the newspapers. She not only was the major character in pressing for the political reactions that we saw early in the period, but she also became, later in the period, a vigilante, a remote enforcer on behalf of the governments and on behalf of even big businesses that were benefiting during this period. Telling other people they should wear masks and stay a distance of two metres or not have a party, and dobbing people in, all that sort of stuff. It is very similar to what we saw in 1930s Germany, really. The way that Hitler’s establishment was so successful at co-opting individual members of the population into being enforcers, and that really reduces the monitoring costs, greatly, for the people in power during periods of control. So, that’s Jane.

Gerard Henderson: It’s not quite like the 1930s in Germany, because, as you know, in the 1930s in Germany, there were crowds, and there’s that chapter on crowds in your book. You talk about the Russian Revolution, the French Revolution, the Iranian Revolution, the Nazi German Revolution. But what’s different in all of them is, as you know, they were all followed by a period of political violence on the streets. There wasn’t simply a group of people holding up banners that everyone should be locked up, so it’s not quite the 1930s, is it?

Gigi Foster: Well, we certainly haven’t seen a world war and we certainly haven’t seen direct killings, but we have seen political violence on the streets of Melbourne. This dynamic is what I’m most worried about. It’s important to draw to people’s attention the extremes to which we can move in a society when we let this crowd dynamic co-opt and hijack our political systems.

Gerard Henderson: Now, let’s go to Jasmine, which is you and your co-authors. Briefly, what’s Jasmine on about?

Gigi Foster: In March (I can speak from direct experience being one) Jasmine was scratching her head and thinking, “What is all the fuss about here?” The data, even in March 2020, clearly showed that this virus, yes, it was new, it seemed dangerous, but it was dangerous to people who were in groups that were already vulnerable to many other things, including influenza and other infections. Basically, it preyed on the weak; the old particularly, and the weak. So, the idea that somehow locking down whole populations of the whole age range and all demographics was the right thing to do seemed immediately, on the face of it, to be absurd. Also, we knew that we had pandemic response plans in place before the emergence of Covid which did not call for wholesale lockdowns. It also seemed that, even for the people who were really vulnerable, this was not going to be a death sentence.

We saw that in what happened with the Ruby Princess cruise liner, which was roundly considered a complete abject failure of management. Which it was. But, because it was such a failure, and people were kept there, locked into the cruise ship, pretty much most of them would have been exposed to the virus. So we got a taste of what would happen if, in fact, we had the worst policy in the world and very vulnerable people were exposed, because a lot of the people on the cruise ship were older. It just seemed clear that this was not a virus that merited that kind of draconian response. Jasmine, certainly earlier on, did not think that this was going to last as long as it lasted.

I did not, at any moment in March or April 2020, really think we would still be dealing with this more than a year later, and not just having Covid on the scene, but having all these amazingly different policy settings that we’ve had in Australia, that we’d still be trying to get back to normalcy. I didn’t think it would happen. What I was missing was an understanding of how crowds form and how powerful they become. They can essentially replace the need that individual people have to come up with ideas about what is true and what is right and what is moral. The crowd takes the place of the individual’s conscience e and then just runs with it. And it has lots of mechanism that develop, as the crowd gains strength, for keeping itself alive. That is what has propelled us along this path.

Gerard Henderson: The only hero of your book is James, who’s a man.

Gigi Foster: I wouldn’t call him the hero.

Gerard Henderson: What’s James going on about? What’s James’ role here?

Gigi Foster: If you’ve been educated in economics, you’ll remember the model of homo economicus: the amoral, cool, calculating, atomistic individual, who just looks for opportunity wherever it may lie for him. That’s basically what James does. James, the archetypal character, has representatives during this period, within governments and within industry and even in particular ministries who are aligned with governments and are appearing at the pressers together, with the politicians. James is, by contrast to Jane, not scared by everything, but sees the fear that is developing as a possible opportunity for him. He, then, can be seen to be the protector; he can be seen to be the one who delivers the protection. He can be seen to be the one who fuels and feeds this obsession, and thereby makes a lot of time and friends in high places, and maybe even becomes a sex symbol.

We see what’s happened to Brent Sutton, what’s happened to Dan Andrews. They’ve become drunk on their own power. This is unfortunately a consequence of a James gone out of control, and James is currently still in operation around the world in various positions, including at the top of big pharmaceutical companies that are pushing for vaccines, PPE manufacturers, the companies that took huge government contracts with very little oversight to produce massive quantities of things that they had no expertise in producing. So, James was everywhere and caused a lot of the economic effects. Amazon would be another that just rocketed up in terms of value because those companies saw opportunity, and they pounced upon it, as we would expect in economics that they would.

Gerard Henderson: You’ve been critical of business, you’re critical of public servants, critical of politicians, but I think what academics like you and journalists share, it’s fair to say, is that you don’t have to make decisions. You make commentary. I understand your points about Daniel Andrews and Brett Sutton and Victoria, but if you are a prime minister, a premier and you have to make decisions in an environment where people are scared, not only because they’ve been encouraged to be scared but primarily because there’s an increasing fear of death as with the 1919 influenza, it is something else. You’d be aware of the book The Great Influenza by John Barry. There was quite a different attitude to the way people handled it in 1919 because, a hundred years on, families are smaller, people are more worried about dying, they’re worried about their relatives dying. It’s a pretty tough job when you’re the prime minister or the state premier, or even the state health officer.

You’ve got to make a decision, which you will be accused of being responsible for, where someone may have or will have died who otherwise wouldn’t have died if you’d locked more people up, if you’d stopped more ships from coming to the country. How do you recognise that? It’s one thing to be commentating, and it happens on both sides of this debate, including the people who want more lockdowns, like the people who wouldn’t come on and discuss this with you tonight. They want more lockdowns, but they’re also not making the decisions. You want fewer lockdowns or no lockdowns, but you’re not making the decisions. James is the bureaucrat, but what’s missing from this group is the politician who has to make the tough decision.

Gigi Foster: Well, it’s interesting, Gerard. I would say the first thing to recognise is that what was happening in March 2020 was indeed a wave of fear, and a couple of countries in the world – notably Sweden, but soon after that, Denmark as well – were able to recognise that the fear was more dangerous than the virus. And that it was the responsibility of the politicians and the government to control the fear, as a primary objective in their policy making. What happened here in Australia is the politicians were cowardly, in the sense that they did not face that fear head on; they actually fanned it in many cases, and they pivoted very much from their pre-Covid pandemic response plan strategies, which were already in place. Science had delivered the supposedly best-practice way to manage a pandemic, and they deviated fully from those plans, in response to population fear.

If populations are afraid of an asteroid hitting, does it mean that it’s the right thing for politicians to do to cave into that and start funnelling billions of dollars into some asteroid prevention plan? The population is vulnerable to being led astray, particularly in the age of social media and international media, into thinking that one thing is far more important than everything else would indicate that it is. And this is what happened, a loss of perspective during this time.

What I would have done – and I’m quite happy to talk about what I think should have been done, and I talked about it in March 2020 – would be to aggressively protect the elderly population. We should have thought about where the vulnerable parts of our people are, and this includes in the aged care homes, elderly people living in multigenerational households, anybody who is immunocompromised. We should have been targeting protection and protective measures to the best of our ability to those people and letting everybody else get back to work and stay in work, because of how important the economy is for saving lives in general. This is a point that was missed and was certainly missed for almost all of 2020, by virtually all politicians who spoke about these issues. Our choices were killing people. We were killing people.

This was a trolley problem, where you have the trolley coming in and it’s about to hit five people, but you can’t see their faces, and if you change the track, it will hit one person who is looking at you right in the eyes, and whose parents and children and sisters and brothers are going to blame you for that person’s death. What is the right thing to do in that situation, Gerard? I think the right thing to do is, you switch the track and you take the hit. That is part of the pain of being a politician; knowing that you’re not going to be loved. Economists as well. We are not loved by almost anybody because we are never fully in any one person’s corner; we are on the side of the group as a whole. And the group as a whole is better served if you save those five people, or ten people, or 100 people, rather than saving one.

Gerard Henderson: It’s not quite like a meteor hitting the earth, is it? You’re dealing with a general health problem; politicians have to handle a general health problem. Any sensible politician would say the chances of a meteor hitting the earth are non-existent, but the chance of people contracting and dying from Covid aren’t –

Gigi Foster: What are they?

Gerard Henderson: – They’re quite different, aren’t they? It’s a different kind of decision.

Gigi Foster: They may be different from the likelihood of a meteor hitting, but in terms of, for example, the likelihood that a child dies from Covid, it’s comparable to dying from a lightning strike. Most people in Australia don’t know that. The reason is because of the fear-mongering messaging and the lack of attempt by the government or other bodies in our community to actually allow truth to surface about how dangerous this virus truly is.

Gerard Henderson: So, you’ve pretty well broadly covered what’s in the book, and there’s a lot of material in the book. Why do you think people want to cancel you? Why do you think people don’t want to hear you? As I said, I think your book is a libertarian book. You make suggestions and you look back on the great panic, as you call it. So, what’s the problem with that view being heard?

Gigi Foster: Well, firstly, there is quite an appetite for it, apparently, it seems to me. It’s selling very well here in Australia, as well as overseas, even though we have a very tiny little publishing house. The Brownstone Institute is basically a one-man operation. But the people in power do not want to hear the story in the book for very obvious reasons. The book basically points to the fact that the emperor has no clothes and has had no clothes during this period. What has happened is a whole bunch of people have betrayed a population, and they have done so criminally. I hope, and we do sketch out in the book the possibility, that there will be, in 5-10 years, a real reckoning and politicians will be brought to justice through Nuremberg Code style trials. Because they have betrayed their populations. They have absolutely not prioritised and upheld the interests of the people who elected them. They have abandoned them in their hour of greatest need. It’s been absolutely shameful.

Gerard Henderson: That’s something of an overstatement, isn’t it? The Nuremberg Trials came into existence after you had a Nazi regime in Germany that was responsible, probably, for the deaths of 20-30 million people worldwide and within Germany, of the Jews, some 6 million worldwide. I don’t think Scott Morrison and Gladys Berejiklian are in that corner, are they?

Gigi Foster: Well, we ask that question in the book, and I would encourage you to read that section where we compare the loss of life created during this period to the loss of life created, for example, during the Great Leap Forward period.

Gerard Henderson: The Great Leap Forward loss of life is now estimated as 45 million. In Australia, the suicide rates have not gone up. We don’t know what else is going to happen. In the Great Leap Forward you had a deliberate decision, by the Chinese Communist Party, led by Mao Zedong, to bring about a forced famine in order to achieve certain industrial aims. That was a deliberate decision, it ran for about four years between 1958 and 1962, something like 45 million people died. It’s not quite like Scott Morrison and Gladys Berejiklian, is it?

Gigi Foster: Well, again, what I’m saying is, globally, the impact of our developed Western decisions, that impact has been comparable to the humanitarian impact of the Great Leap Forward, depending on how you calculate things. But, Gerard, you’re missing the fact that our decisions do not just kill people in the short run. There are people who, of course, will lose their lives in the short run because of what we’ve done, there are also people who will not die because of what we’ve done, there’ve been fewer car accidents with people locked in their homes, for example. But that’s a very shallow analysis of the full consequences of the political decisions during this period. For example, if you’ve read Chapter 5: “The Tragedy” in this book, we detail the kinds of impacts that have occurred in the developing world, particularly where the impact has been most cruel and most heartless, and millions of people have died, because of the decisions in the developed West to, essentially, stop economies and reduce the amount of trade, the amount of travel happening.

And there’s more violence, political violence. There is a huge amount more starvation, cessation to vaccination programs, cessation to clean birth exercises and all number of other kinds of horrific regressions back towards misery in developing countries. Here in Australia, the long term effects are still, obviously, uncertain because we haven’t gotten there yet, but what you would generally expect is because of the enormous government outlays during this period to support people, which is now in the government debts ledger, we will have to pay that government debt back, and that means that those payments are going to be – for political reasons, if not for accounting reasons – crowding out other expenditures on everything from education, to health, to infrastructure.  Everything else.

We’ve also disrupted the education of our children, which will be a cost they will bear for their entire lives, including babies and toddlers going around trying to learn speech from people in masks, and people who are very scared and anxious. We’ve postponed cancer screenings and otherwise crowded out health or health services for basically the whole population during this period. So, the full effects of what we have done will not be known for many years. We can’t simply count how many people have killed themselves and say well that’s the amount that we have sacrificed. It’s far more complex.

Gerard Henderson: Yes, a lot of the points you make, to me, make sense, but it’s not quite the same. These would be the unintended consequences of political decisions, or sometimes decisions made by bureaucrats. But the Great Leap Forward was not an unintended consequence, it was a deliberate consequence. And Nazi Germany was not an unintended consequence, it was a deliberate decision. There’s a difference between what’s plausible and what’s over the top.

Gigi Foster: Well, you talk about the effects of the policies. I think they are comparable. In terms of intentions, I agree that, in the Covid period, we haven’t had politicians outright saying we need to kill the unvaccinated people. We haven’t had people saying we need to kill people who don’t have masks on, but that’s because we have held onto this notion that politicians are supposed to be preserving health. But that is very much of an artifice.

These policies have not been preserving health. That is a dance that has been done for political reasons. Early in the 1930s, in Germany, you also didn’t have people saying that Jewish people should be killed either. I don’t think we are at the point in history where it is possible for someone to say those people who aren’t wearing masks should be killed, but I’ve heard some things, from Victoria particularly, that are quite troubling and are moving in that direction of dividing society into those who are okay or clean or vaccinated or otherwise acceptable and those who are unclean or not okay or silenced or otherwise disabled.

Gerard Henderson: That’s happened already with people not being allowed to enrol their children in kindergarten if the kid is not vaccinated. That’s not a new decision. So, what you’re saying here is that, apart from Sweden and Denmark, every government has got it wrong in the world, except for the men and women at the Brownstone Institute.

Gigi Foster: I wouldn’t say that entirely. Those two countries are the most obvious country examples, but we do have a section in the book that divides countries of the world into three camps: the minimalists, the pragmatists and the Covid cults. Australia has been in the Covid cult category in terms of its political settings, and we use the Blavatnik School of government stringency index to group those countries into those three groups. So, it’s not just two countries in the minimalists, there are quite a number of countries and regions in that group as well.

Questions and Discussion

Question: I’m a former very senior public servant, I’ve led departments at the Commonwealth level and in NSW, and I regard the Australian response as one of the most profound public policy failures that I can recall. There were clear pandemic response plans at the State and the Commonwealth level. An enormous amount of money and effort had gone into preparing those plans, and they were completely ignored. The response flew in the face of all the pre-prepared planning the government had done. So, I do think that we have a profound public policy failure and if we don’t recognise that, then we’re destined to repeat it. I think you’re inviting a conversation that’s essential. I’ve been in your camp since March last year. I think the initial responses were over the top and I think the same of the responses ever since.

So, it’s not so much a question but a commentary in relation to public policy failure and something that I think must be confronted, either now or in the future, if we’re not going to continue to repeat it. Thank you very much for your contribution.

Gigi Foster: Thank you, I appreciate your words, and I think there are more people than we think, of like mind around the country. They will slowly, hopefully, start to feel safe in speaking their mind. That has been one of the big problems during this period. I’ve received so many emails from people saying they couldn’t speak out, but they agreed with me. We need to make it okay to talk about these things, through the publication of the book, and having events like this and encouraging more engagement. I do wish that someone from the opposing camp had come on to discuss this with me. But I think the failure to do that is actually a sign of the times.

There is just not much appetite for real engagement. As you can tell, I’m very open to debating about where exactly the truth lies. Indeed, the truth is really a fantastical notion anyway. We are all pursuing it always, this is the way science works. We are always looking for truth, but never quite arriving there. As soon as we feel that a question is settled, then we’ve basically died as a scientist. We need to keep alive that notion and bring it back to life, and then nurture it more. To arrive at good public policy, we must be able to listen to each other, to listen to different perspectives and engage truly with those perspectives and deeply respect each other as we’re doing it. That’s what will build a better society.

Question: I don’t know how many on the call are Victorians, but I live 85km out of Melbourne and, technically, I’m regarded as living in metropolitan Melbourne. I cannot visit my two sons who actually live 25km closer to the CBD, because they are classified as regional. Like you, I’m trained as an economist, so, I tend to look at the macro picture and try and look at things holistically. I recognise that one of the problems with economists is that we search for this magical nirvana called equilibrium but, of course, it doesn’t exist and if it does it’s only there for a moment.

The last 20 years, I’ve spent my career as a company director and I’ve been involved with very large, complex businesses such as Telstra and Wesfarmers, and sat on audit and risk committees. So, I tend to look at a lot of these things as a risk management process. The most striking thing is the point that you’ve already made. Covid response planning existed and, yet, when it arrived all planning was thrown out. If I was the chairman of a risk committee, and the company had a risk management plan and, then, as soon as the risk eventuated they threw away the plan, I would be strenuously wanting to understand why and need absolutely convincing. Presumably, the plan was developed at a time when there was no pressure, no crisis, was clear thinking and well thought through.

Gigi Foster: One of the things that propelled governments into the lockdowns, in addition to the pressure from the “Janes” who are very scared, is the ICL modelling that came out in the middle of March 2020 and was very quickly replicated and parroted around the world. We see similar kinds of simulation-based modelling from the Doherty Institute here. I was speaking just this morning with a gentleman from New Zealand where they have an institute also doing simulation-based modelling on potential deaths and that kind of thing. Those models sound sophisticated and smart and we imagine the people who are running them must really know what they’re doing. That is dangerous.

If you start to buy in too much to what is, really, just a simulation, you forget to look at real data, you forget to look at what we thought was a good idea initially, based on the data that looks like what we are seeing from this new threat. If you put all your faith into this simulation, you are going to have a wedge develop between what you’re doing and what you’re thinking is happening, and reality. That’s where we’ve gone. We have a chapter about science during the pandemic, and how it has broadly failed the world in terms of informing us about what was really happening, and how big a threat this really was. I encourage you to read that.

Question: You’ve already commented on some of the, potentially unintended, consequences as they will play out over the long term. Yes, suicides have not gone up dramatically, but mental health has deteriorated alarmingly. The amount of deliberate self-harm, the amount of stress we’ve put on our younger people, will play out over the years to come. In debates with people who take a very opposite view to me, they criticised Sweden and praised what we are doing in Australia. I’ve taken the view that it will take some years, maybe four or five years, before all of this plays out, and we truly know who managed it best.

Gigi Foster: Well, as I said, I think the children who have been deprived of normal schooling during this period, have their whole life to carry this disadvantage. I do fear that it will be multigenerational. I do think many things are passed through generations, and habits die hard. Wellbeing has declined hugely during our lockdowns and that has generally been discounted. It hasn’t been a risk that has been accommodated in any of the modelling or supposed cost-benefit analysis. This should have been done last year, by governments, and never was. I have not seen a proper cost benefit analysis, taking into account those sorts of costs produced by our governments during this period. So, in terms of how long? A generation?

Question: I don’t think I’m as worried as Gigi about the resilience of character and individual human mental health. Children missed school during the Second World War, the Great Depression and, there have been hugely larger upheavals for the globe. But I do want to draw attention to what Sajid Javid said in Great Britain when he was made Minister for Health, earlier this year, after the previous minister for health was caught in a compromising situation and had to resign. Javid basically ended the UK lockdown very quickly and said, “We’re going to look back on this in a few years and just say why did we do it?” I thought that was the most fundamental question for the whole two years. We can look back and say it was to do with social media, or it was to do with the fact that we’ve got far too much modelling, which is usually wrong, and most of the modelling on cases and everything in Australia has been way out. Whether the science or whatever else, it did build that fear. What I see as having that bigger impact for my grandchildren and children is the economy. Could you take us through some of the pitfalls for the next ten years in what we’ve done to the economy.

Gigi Foster: Again, the first thing to say about that is that when you put out so much government expenditure to support people, basically staunching their income flows because you’ve prevented them from doing their work, you have to pay it back. That will crowd out expenditure in the future. GDP produced by people goes into taxation. You’re not getting as much of that, and you’re accumulating this huge amount of debt. Those things, together, combine to make a lower expenditure on everything that society will need. The second big thing that’s happened, and we talk about this in the book, is that during this period, there was a whole litany of “Covid safe” restrictions placed on businesses, like a chain around their necks that they have must conform with. The latest is this check to see whether everybody’s vaccinated entering a business. These can be accommodated and absorbed as extra costs for businesses that have a little more money in the bank alongside businesses that are a little bigger, businesses that can withstand a few storms.

So, who are you going to kick out of the market with those kinds of regulations? The Mum and Pop businesses, the small and medium sized enterprises, the entrepreneurs, the risk takers, the people who are already on a little bit of a margin just trying to get going and then they can’t. In addition, because of the nature of the restrictions we’ve placed on people, we have encouraged them to not frequent shops, but instead, go online. Now, where do you buy your stuff online? Amazon – even this book is on Amazon because that’s where everybody gets everything now. So, we’ve played right into the propulsion of Jeff Bezos and a few other big, big players. We’re on Zoom right now. Whoever invested in Zoom in March 2020 is a gazillionaire. So, we’ve encouraged the increased concentration in these industries, which, as we know, from an economic perspective, is a bad thing. Competition is good. Competition keeps everybody in line, it keeps everybody honest in a sense.

If there’s competition, then, I, as the consumer, can say to a supplier, “I don’t want to pay that high price for your product, I’m going to go to this other guy and pay another price.” That means the first guy must lower his price or get out of business and do something else with his capital. That is the mechanism of competition. That’s why consumer choice is so important. But in the past two years, we have smacked consumer choice in the face. We have smacked little businesses in the face. We have disheartened people, and we have also gotten workers into bad habits.

You see these signs and calls by companies and café owners saying, “Please, we need people. Come and work.” And people aren’t really keen to do that. They’re used to sitting around, they’ve lost their will and motivation to go to work. So, that will take a little while to get back into gear. We’ve got whole CBDs’ worth of office space that aren’t being used. What’s going to happen there? Are we going to continue to stay so far away from each other? I don’t think that will happen. We will eventually go back to living in cities, and it won’t be that long.

But I disagree with you about the disruption to schooling. We have had disruption to schooling in the past, such as in World War II. But those disruptions also carried costs, and we just haven’t seen the counterfactual world in which the school wasn’t disrupted. That’s also the case now. We won’t see the counterfactual scenario in which our children didn’t have those two years of schooling disrupted. All we’ll see is what we actually get. That’s one of the reasons that it’s very difficult to make these arguments, because you’re always talking about what would the counterfactual have been? You must make educated guesses about that. I’ve used, in my own papers about the cost of disrupted schooling, estimates from the economics of education literature about how much it costs children in terms of their foregone wages when you take them out of school for a period of time.

I’ll say one more thing: we have damaged our brand overseas, hugely. So, when we open borders, I do not expect the inflow of tourists we would have otherwise had because people no longer think of us as the hail-fellow-well-met, down-to-earth, Paul Hogan style people. We are a totalitarian dictatorship to a lot of people overseas. Whenever I have an interview with someone overseas, that is what they say, and it’s shocking. So, that will take a while to repair.

Question: Do you not see any positives at all? You’ve been very negative. It seems to me there are a lot of positives that have come out of Covid. One is the ability of people to, instead of having to fly halfway around the world for a meeting, to meet through Zoom. We have got comfortable doing that. That reduces emissions. People have got back to nature, by going out for walks in their local parks and reserves, which they wouldn’t have before. They would have got into their car and driven somewhere. People have realised the benefit of human beings, of being able to meet with people. They’ve missed their families and now they can appreciate their families again, which, in the hurly burley pre-Covid, probably meant not putting much effort into spending as time with loved ones as perhaps they should have. Finally, there is improved digitisation of the economy and the flexibility of working to allow so many more people, particularly women, to be able to juggle children and working from home, and employers being required to be more flexible. Whereas, previously, lots of employers said, in the old-fashioned way, we need to see you in the office, or you’re not productive unless you’re in the office.

Gigi Foster: I do agree with you that this period has forced us into some experimentation with different technologies that will definitely stick with us. We’ve discovered as a group that the previous equilibrium was perhaps not as good as the potential that we were forced into trying. For example, Teams meetings will stick. How great is it to be able to dial into a meeting and then you can have a chat with somebody that is useful, along the side, and get something done, and you don’t have to come into the meeting? Definitely. Those sorts of things will stick to a certain extent.

In terms of women being able to juggle work and family more easily, I don’t think it’s entirely positive. Certainly, being able to have flexi work, where some days you stay home and it’s considered okay to dial in, sure. On the other hand, the productivity of people who have small children under foot, when they’re trying to do their work, is going to, at least, be less than if they don’t have those children underfoot, than if they’re in a working environment. I also think the structure of a working environment, with people who are like minded and right there with you, is helpful for many people, and certainly for people who are not established.

With respect, I will say, you are probably speaking from quite a privileged position, as am I, during this period. I’ve had a secure job, a perfectly comfortable family, a lovely family home, we have great conversations, in a very supportive milieu, great income, no problem. We, indeed, are the class who have been making the decisions during this period, so, we’ve seen a lot of benefits. I agree with you. Being able to appreciate your partner, your children, your dog is a plus.  Pet animals have loved this period.

But there are many people whom our policies have affected who do not see things that way at all. They do not have a secure job, a secure income; they may have dysfunctional families, no place to work in the home that is acceptable. It’s those people who are the most voiceless during this period, who have been the most voiceless. So, I feel it’s a bit disingenuous to say, “Well, we’ve all gotten back to nature, isn’t that great?” because those people living much more hand to mouth than we are have felt the brunt of these changes. So, the changes have been regressive, by and large. I do agree, however, that there are – not just the ones you mentioned – silver linings, from what has happened during this period.

One of them that I’m hopeful about is that we’ve probably discovered how best to treat influenza and other similar respiratory illnesses using different treatments that we had never really thought of trying out before. The combination therapies that are now working so well in early-stage Covid are a plus. There are going to be trials of those in the case of influenza and other kinds of respiratory illnesses. We may discover other ways of doing things; mRNA technology may be developed to the point where it’s truly safe and effective in treating any number of other diseases. So, we shall see silver linings. But, would I have chosen to go this way for the world, just for the sake of those linings? No. That is the choice, the total costs versus the total benefits.

Question: Fifty years ago, I was involved in road safety. That was a time when Victoria’s road deaths were around a 1000 a year, 3-4000 around Australia. They introduced three things; seatbelts, random breath tests and more speed controls, and deaths around Australia are now around 1000 a year. Otherwise, in the absence of those things, they would have been 18,000 deaths in Australia each year. Are you able to quantify the number of deaths that you regard as acceptable? Someone like me dying – economically – is a benefit. I’m 74. Someone like you dying is a great loss to the economy. But getting someone like me out of the way is an economic benefit. In the early months of Covid, the deaths were in older people and people with co-morbidities, but the current deaths are amongst the unvaccinated 20- and 30-year-olds. As a general question, are you able to put a figure on the number of deaths that you regard as acceptable, in terms of opening up without any forms of controls.

Gigi Foster: There are a number of things to say about that. First, you sound like my father, who says, “I’m not worth killing!”. He’s 90. But I disagree with that vehemently. I have never thought that the right response is to take an action that will kill off some people who are elder and co-morbid. We don’t want to do that, we want to protect them, it’s the very reverse. I feel we have a moral obligation to promote life and, of course, you’re right, when you compare two different lives, you get into very thorny and hairy ethical territory and we have to deal with this in other situations, pre-Covid and post-Covid. Such as, who gets the next liver that comes from one of the thousand traffic accidents around the country? Who gets the next heart?

Generally speaking, if we were only making the decision based on who’s got the most high-quality life years remaining, and therefore can get the most benefit out of this thing, then we would give all of the organs to young, white women. We don’t do that, thank goodness, because that is basically an extreme form of that kind of calculus which, nevertheless, does have to happen at some level. It happens in triage units at hospitals, it happens everywhere, and we have to make those very gut-wrenching decisions.

In terms of what is the acceptable level of death, you remind me of a comment someone made; “Economists are the only people who will be prepared to say, ‘How many dead babies do we want?’” which is, what level of speed are we going to allow on our roads. That translates directly into a number of accidents, and therefore a number of deaths. So, you are saying, I accept this number of dead babies. Similarly, with Covid policy, I felt it was important to say what are we expecting will happen if we have an alternative policy where we don’t lock people down and we don’t block the borders, and we simply try to protect the people who are at risk?

I was waiting for the government to do this because I feel it was the government’s responsibility. If it’s going to propose these draconian restrictions on everyone, it should produce a justification for those restrictions in terms of costs and benefits. That would be my thought as a member of a democratic civil society. That’s the government’s job. Instead, the burden of proof has been shifted onto the shoulders of people like me. People who are saying those draconian restrictions are a bad idea. I, then, am expected to prove to everyone, and people like me, that these are not a good idea. The burden of proof should be on the person proposing the radical departure from our normal policies, that’s point one.

Point two, I waited and waited for the government to come out with a cost benefit analysis of these policies. Finally, in August 2020, I did it myself, in draft form, as a proof of concept for the Victorian government. I presented it to the parliamentary Public Accounts and Estimates Committee, by invitation of David Limbrick. I can send you the link if you want to see my testimony; it’s a four-page, very simple proof of concept saying these are the classes or categories of cost that you need to have taken into consideration, and these are the possible benefits. To deliver the benefit estimates, I had to first assume that lockdowns were actually saving people, and it turns out, ex-post, it’s unlikely they really were, based on everything that’s been seen now, in the world and in governments that have used lockdown restrictions and those that haven’t, and looking at their outcomes in terms of Covid deaths.

Secondly, if they are, how many are they saving? So, to do that, I looked at Sweden, and how many people they had lost, and I did a per capita recalibration and took my best guess about how many were due to lockdowns versus people doing endogenous responses of their own, like staying home when they’re sick and washing their hands more. I came up with an estimate that somewhere between 10-20,000 Australians might have been lost by a non-lockdown proposal, and that’s what I ran with. Even with that, you still find that lockdowns were way costlier than they were delivering benefits. Based on that, I was advising the parliament that they should not do that.

Question: It seems that whoever you spoke to overseas, suggesting Australia was a totalitarian dictatorship, was a bit over the top. As you know, if we are that, then you wouldn’t be on here tonight. But in your book, you make the point that we’re a neo feudal society these days. What do you mean by that?

Gigi Foster: Back in the Middle Ages, the feudal system was one in which the peasants were overlorded by several layers of hierarchy, including the aristocracy and the Church, and essentially had to comply with what those elites wished them to do. In a similar way, today, we are very much under the control and power of very high status and rich people at the tops of, particularly, industries, who also will do deals with all sorts with governments, and we see that in Australia. If you don’t know how that works, I would encourage you to read the book Game of Mates: How Favours Bleed the Nation.

Because of that, there’s the same tension, the same dynamic that happens with the peasants, or the people who are wanting to buy a product, being at the mercy of these very large companies. The difference today is that it’s much easier for us to leave. For peasants, it was a lot harder to simply pack up and go someplace else, because they were leaving their land, they were leaving the only thing they had that could be used to produce their wellbeing, and their family’s. Whereas, today, people in Australia can choose to move overseas. I’ve seen examples of this in my own circles, where people are choosing to do that, because they are sick of what they are seeing. It makes them ill, and they want to go overseas, where at least some countries are starting to open up – areas like Texas and Florida, are starting to open up at a faster pace. So, it has shown the very unpleasant underbelly of Australian culture that we have allowed ourselves to go as far as we have. I agree with you that “totalitarian dictatorship” is an over-the-top comment, but this is what people overseas in the media are starting to say, and the image is there. The image is definitely something I’ve heard from not just media personalities, but others overseas, saying, “Gosh, you guys are living in a controlling, 1984 state. The images we see are horrific.” So, we need to fix that brand if we want to continue to grow and support Australia going forward. I do hope enough people will stay here in Australia and build back a better future for ourselves and our kids.