Book review: Sanjeev Sabhlok’s The Great Hysteria and the Broken State
Sabhlok, then an economist in the Victorian Department of Treasury and Finance, quit his job in September 2020 at the tail end of a massive Melbournce-centered covid-19 outbreak in Victoria in early July that led the Andrews government to impose harsh lockdown restrictions that were partially eased only in early November and are still in place, at reduced severity, as of the writing of this review. As Sabhlok makes clear in the Preface to his book, “[His resignation] was to lodge a protest against the Victorian Government.” (p. 9)
Like others (including myself), Sabhlok — who voted for the Andrews Labor government in the 2018 state elections — finds himself these days often in the company of uncomfortable fellow-travellers: the Director of Policy at the “free-market” think tank Institute of Public Affairs, for example, who wrote the foreword to the book. States Gideon Rozner— correctly I fear — that “from day one, the coronavirus has laid bare Australia’s sharp divide between … ‘inners’ and ‘outers’. Well-heeled ‘inners’ — politicians, public servants, academics and scores of rent-seekers subsisting off the public teat — have dreamed up pointless restrictions, safe in their taxpayer-funded, six figure salaries. The consequences of their decisions have been borne almost entirely by ‘outers’ — parents who’ve had to moonlight as teachers while struggling to hold down a job, the hundreds of thousands of Australians who’ve been thrown out of work, and above all, small business owner who’ve seen their life’s work destroyed with the stroke of a pen.” (p. 7)
While massive fiscal stimuli have covered up some of the worst consequences of the lockdowns, as JobKeeper and JobSearcher payments get reduced and eventually terminated in early 2021, the sharp divide will become inevitably more salient, with millions un(der)employed, ten of thousands of livelihoods lost, millions of superannuation accounts raided (not to be replenished any time soon, if ever), not counting various (mental) health costs. It is easy to predict that inequality in income and wealth will have increased dramatically a couple of years forward and that much of this increased inequality will be borne by women. That will be just fine as far as the IPA goes and its motley crew of supporters (Rinehart, Murdoch, Abbott/Credlin, Pell, Bolt) but it really should be of major concern to unions, ALP, Greens, and everyone else who thinks that a harsher Australia is not a development in a good direction. I do.
Not surprisingly, Sabhlok’s public resignation letter in the Australian Financial Review foreshadowed the themes of his book which is essentially a compilation of articles that he wrote earlier this year for the Indian Times (p. 12). Even though he slapped it together in a couple of weeks, the book is well-structured and a trove of relevant links and thinking that challenges.
Sabhlok’s key argument, as laid out in chapter 1 on “big ticket issues”, is that a public health crisis — any public health crisis — does not justify throwing away “well-thought-out published pandemic plans” (p. 13) that existed for exactly those situations. And surely in his view it does not justify the harsh lockdowns that were performed in Victoria: “All prepared plans and laws have been abandoned on the basis of a hunch — playing God with the lives of 6.7 million real humans as if we are Daniel Andrews’s chattel. We must never let any politician tell us tomorrow, when they are grilled by a Royal Commission that is sure to be established, that they were ‘following the science.’ They have not followed the science. In preparing for pandemics, governments carefully consider the science. Lockdowns (on any pretext) are rejected outright by the science. That is why they are not in our pandemic plans.” (p. 14) In fact, lockdowns are not recommended by the WHO “in any circumstances” and they breach many international covenants. Sabhlok lays out the evidence for these claims in chapter 2 on pp. 41–44 and 45–47; he also argues on pp. 47–52 why a moral (prudential) algebra or cost-benefit test of lockdowns is unlikely to provide counterarguments: “Voluntarism trumps coercive, untargeted lockdowns in all circumstances.” (p. 52)
Whether that is indeed so remains the subject of ongoing disputes in a toxic debate about the merits of the different strategies that different countries have chosen to adopt. Unfortunately, in Australia this discourse — like the incidence of the lockdown measures — has, from day one, laid bare Australia’s other sharp divide between ‘inners’ and ‘outers’; inners typically being equipped with huge megaphones and sitting on safe sinecures, outers on struggle street rarely being given a voice.
Sabhlok accuses the Andrews government that, by throwing its pandemic plans out of the window (and having made decisions as it goes), it has facilitated the massive run-up in covid-19 related deaths, mostly in old-folk homes: “It is for a future Royal Commission to ask why we squandered billions of dollars to pay those whose jobs forcibly took away, but were unable to find money to protect our elderly.” (p. 34)
Good question (and one that has partially been answered since then in the interim report of the Covid-19 Hotel Quarantine Inquiry.) It is one of many good questions in this slim volume (all 127 pages of it).
Sabhlok’s key argument warrants repeating: a public health crisis — any public health crisis — does not justify throwing away “well-thought-out published pandemic plans” (p. 13) that existed for exactly those situations. Or, as he wrote in his resignation letter published in the AFR, “The need for good policy process does not disappear just because we face a public health crisis. In fact, it gets even more urgent.”
This should be familiar terrain for economists who, ever since Kydland and Prescott published their classic 1977 article, have pondered the distinction between time-inconsistent and time-consistent policy and understand that the latter typically dominates the former. Time-inconsistent policies might please the public in the short run (bailing out those who have built in floodplains, for example) but are likely not to implement long-run policy goals (enticing people not to build there in the first place). Time-consistent policies are likely to implement the long-term goal but might displease the public in the short run. They also give the ‘inners’ with their huge megaphones the opportunity to dominate the discourse with false arguments just when a cool and rational debate about the trade-offs would be of the essence.
“Governments back in February”, wrote Sabhlok in his resignation letter, “needed to commission a cost-benefit analysis of alternative policy options that took into account different scenarios (such as with and without a vaccine). Thereafter, the best option had to be picked given the uncertainty, but consistent also with the need to intrude minimally into human freedoms. This cost-benefit analysis and policies needed then to be updated as new information emerged (such as the fact that epidemiological models have badly exaggerated the risk).” That was, scandalously, never done.
In chapter 5 Sabhlok discusses why the Victorian government — like all of Australia it has to be said — lost its head during the first wave and abandonned its pandemic plan; he offers some preliminary leads including the role of “Neil Ferguson’s modelling” which was indeed alarmist, the sensationalist nature of the media that “loved the scare and drummed up the panic” (p. 84), the WHO praise for China’s lockdowns, the exporting of its experts and technology to Italy, and UK politicians’ strategy reversal: “our politicians then followed their ‘mother country’ faithfully down the hole.” (p. 84); he contrasts Aussie politicians decision-making — poorly thought-through and implemented discretion galore — with that of Sweden’s which stuck to its guns, or rules as you will, and let its Public Health Authority define its pandemic response understanding that the fight against the virus is not a sprint but a marathon and ought to be fought this way. I am on record as giving the Swedish model the benefit of the doubt, so am not unsympathetic to this hypothesis but I do have my reservation about some of the assessments (e.g., Richard Epstein an expert? I don’t think so.) and conjectures (e.g., Ghebreyesus, the Director-General of the WHO, a communist from Ethiopia who delights in watching the West burn? Hmmmh.) That said, Sabhkol is right that who runs the WHO does have consequences and there are legitimate questions to be asked about the WHO’s handling of the pandemic. Any post-mortem, however, will be yet another politicized affair. Hopefully an affair that establishes the pre-eminence of rules over discretion.
In chapter 6 and 7, Sabhlok calls for immediate and longer term actions. Some of the discussions here are based on problematic assumptions laid out in chapter 3 (“Herd immunity now likely already exists or is very close in many countries”; see section 3.5) that the last couple of weeks have demonstrated to be clearly wrong (e.g., worldometer).
That said, while I disagree with a number of calls (in particular those for immediate actions), there is enough provocative material here that warrants discussion, last but not least the legality of some of the actions taken over the last few months. Plus there is of course the important question what the plan for the endgame is for Australia and New Zealand alike if — as is quite possible — a vaccine will not materialize any time soon.
P.S. Since he published this book, Sabhlok has drafted (and now submitted) a “Complaint to the International Criminial Court against the policies of Daniel Andrews and Scott Morrison”; it is a looooooooooooooong read in which Sabhlok tries to establish the case for the prosection of Andrews and Morrison for “crimes against humanity” in the State of Victoria and across Australia.
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Thanks for the extensive and thoughtful review, Andreas. Will share on my social media accounts and link at: https://gh.sabhlokcity.com