The Government Doesn’t Seem To Realise Business Reality Makes Our Elimination Strategy Untenable
On Tuesday morning I had a very difficult conversation with my staff. With tears in my eyes I told them that due to the likely renewed lockdown there was a good likelihood I would eventually have to let some of them go. These are young people with responsibilities and the same problems we all have, problems that will be exacerbated by losing employment. I worry about what will happen to them. You see, I love my business and the team that works in it, almost as much as I love my family. I view the business as a painting, and the team as fellow artists, that we are working together to create something beautiful. It’s corny I know, but a lot of business people feel this way, it is why we work crazy hours when we probably should just get jobs instead. The really great small business is about more than the bottom line; it’s the place we make new friends, provide for ourselves and our families, and for a lucky few who pick the right job, live out our dreams.
At repeated press conferences I have heard the Prime Minister say that after the reemergence of this virus, that the best thing for business is that the virus is stamped out quickly and we can return to lower levels. I find myself wondering who on earth can possibly be advising her of this?
We have a market economy; our productivity and increases in living standard are driven by a process of creative destruction. The destruction comes from competition, which drives innovation and causes us to use resources more efficiently. The creation comes from investment, expanding capacity and trying new ideas that require capital. With the confirmation from the government that we are going to be hurled into lockdowns every time there are new cases of community transmission the creative part of this process will cease. No business person in their right mind will be investing capital in expanding capacity or new ideas, the creation part, they will instead invest their energy and ideas into trying to use what they have more efficiently or, the destruction part. This process of destruction will go into overdrive as demand craters as well. Unemployment will skyrocket as new jobs dry up and old ones are destroyed.
We don’t expect our public health officials to understand this, it’s not their job, but we do expect our politicians to have some inkling, and to take it into account when making decisions. The scary thing for business is that our current decision makers do not understand this at all. Continuing to chase elimination make no sense given that the future looms as one of continual lockdowns until the country collapses economically via repeated cycles of closure and reopening, while waiting for a vaccine that may never be coming and will not save us when it does. Europe and increasingly America are in the final stages of their epidemics, in a few months’ time their lives will return to normal and their actual recovery will begin. We will be stuck in limbo, closed off from the world and forced to repeatedly thrash our ability to sustain ourselves every time there is a breach of the border, mounting up debt upon debt till we are completely uncredit worthy, with an exodus of talent that makes past brain drains pale in comparison.
Lockdowns are increasing being shown to be unethical globally. Poland, Norway, Denmark, France and other countries have sworn them off as mistakes that cost exponentially more years of life than they save. It is important to remember that GDP and health have a direct causal relationship. If we go into a national depression which this most recent decision makes likely, it will result in millions of years of life lost by all NZers as opposed by the thousands of years of lives that may be lost to the virus. The lives and years lost due to economic decline are not visible as those due to Covid-19; they are the 22 year old who loses his job today and cannot find a new one for a few years, starts to have problems with alcohol, and dies of liver disease at 55, instead of having a healthy family life and living to 75. It is the 45 year old Mum who needs a cancer drug in 10 years’ time that PHARMAC now cannot afford because we are forced into austerity due to trashing our national debt today. And so she dies when she could have had 30 more years with her family. These precious years of life count just as much as those that Covid-19 will take, and will outnumber the virus’ threat at least 100 to 1. By the way that is a government estimate - not mine. Eventually, reality will force us to make the hard decision we should be making now.
To anyone thinking rationally, these facts mean that elimination is now untenable. The young and healthy must be allowed to get on with their lives and to provide for the country.
Bio: Jeremy Harris is a businessman and investor from Auckland, New Zealand.