Law of diminishing returns

Mark Greathouse

(4/2020) Some folks went downright nuts recently at President Trump’s mere suggestion that there might be a point at which the risks of a seriously damaged national economy might outweigh the risks of the coronavirus pandemic. I expect we must empathize with people hunkering down desperately fearing the unknown; panicky over the potential ravages of a killer disease. Kudos to the healthcare professionals treating victims and scientists developing cures. We nevertheless must ask ourselves at what point the possibility of contracting a virus no longer outweighs the serious long-term economic damage to the nation. Now, before I go on let me be clear: economies recover, dead people don’t. I get it.

Let me take you back to August 14, 1867 in Corpus Christi, Texas. The city’s population was about 1,000. According to a list in the local newspaper "The Advertiser" on that date, yellow fever took more than 110 lives, more than 11 percent of the city’s population. Five of the folks on that list were my own ancestors. The citizens of Corpus Christi hadn’t a clue as to what caused yellow fever. In fact, no one around the globe had any idea what the cause might be. Some attributed it to a miasma. It would be 40 years before Colonel William Gorgas discovered that the yellow fever killing workers building the Panama Canal was borne by the female Aedes aegypti mosquito. Gorgas implemented mosquito mitigation measures and gradually wiped out the yellow fever. You understandably ask what does this have to do with COVID-19 or coronavirus?

The yellow fever in Corpus Christi was devastating but didn’t stop hotels, haberdasheries, saloons, smithies, and grocers from plying their trades. Nearby ranchers raised livestock and farmers farmed. Staying in business was a risk, but this was frontier Texas. They were emerging from the War Between the States and in the midst of reconstruction. Life went on. Commerce didn’t come to a screeching halt. In fact, by 1870 the city’s population more than doubled as the economy thrived.

Fast forward to 2020. By now, we all know folks who have lost jobs or businesses due to the shutdowns from the government solution to preventing coronavirus spread. The impact of "social distancing" is far greater than being homebound, wearing masks, and bumping elbows in public. College students dependent on low-paying part-time jobs to cover expenses are out-of-luck. Work by independent residential building contractors has been frozen, and their projects suffer. Apprentice tradesmen are laid off. Schools and libraries are closed. Restaurants and cafes only offer carry out. Grocery shelves are bereft of eggs, bread, and toilet paper. Ever more stuff is rationed.

Meanwhile, there’s a sort of underbelly of unreported facts. Thousands are dying of influenza, heart disease, cancer…automobile accidents…and…suicides. Suicides? Some folks lose hope, lose jobs, lose businesses, can’t stand living on the edge. They give up.

The medical science folks seem unable to make decisions without their apparently all-important statistics. The "curve" must be flattened. That’s the petri dish those medical and scientific folks live in. Millions of people are told by their government to stay home, to wash hands frequently, to maintain distance from people. Failure to comply elicits an implied threat of more stringent measures. We dare not become statistics.

And its fair game for exploitive politicians as they cast all sorts of blame about the coronavirus as amplified by a pandering news media and relished by their acolytes. Facts are far too often bent to meet the needs of political expedience. While the curve is flattening, the United States economy is nose-diving. A falling stock market and trashed economy bring perverse joy to some who see it as a worthwhile price to pay to bring a different political party to power in November. How horrific that they would destroy so much and hurt so many to selfishly satisfy their particular agenda. Trotsky and Stalin would be so very pleased by their methods. (Folks might recall Stalin having starved 11 million Ukrainians to death mostly through economic deprivation.)

Let’s get to the "law of diminishing returns." As formally defined, it essentially means that any rate of profit, production, or benefits beyond a certain point fails to increase proportionately with added effort, skill, or investment. Applied loosely to the current coronavirus solution, there’s a point at which the effort expended to protect people from the malady costs far more than the benefit. I know that sounds terrible, heartless, even cruel.

We already know that the vast majority of people who do catch the coronavirus will have little or no symptoms. A very small few require intensive hospital treatment and may be in a diminished physical condition such that it kills them. On the other hand, and despite apparent medicinal stopgaps, we’re looking at 18 to 24 months to get a vaccine on the market. Are you willing to sit at home and wait for that vaccine? Of course not! There’s a point at which we say, "Enough!" We realize that we’ve mitigated so far as is reasonable and the cost to our livelihoods outweighs the possible risk of contracting the virus. It may be hard for some people to visualize, but there will be far many more lives destroyed by an extended lockdown than by the coronavirus.

Now, those folks in in Texas back in 1867 didn’t give a hoot about laws of diminishing returns much less locking down their lives. They endured the mystery of the yellow fever and went on with their lives. Many who caught yellow fever holed up in sweaty bedrooms waiting it out. Most did recover. Life went on. Families flourished. Businesses prospered. More diseases; more challenges would come. They were strong. They were up to the challenge. Are we?

Mark Greathouse an ardent student of history and economic is a retired business executive, private investor, educator, and community activist and resident of Carroll Valley. Mark is also author of the Tumbleweed Sagas western novels...

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