Balancing public health against all the other things people value is tricky.
There are very good reasons to want to eliminate the Covid-19 virus. If it ran rampant many people would get ill, and some would die or be left with long-term health issues. That also has economic costs: sick and disabled people tend to work less and, similarly, the younger someone dies the fewer years of productive labour you generally get out of them.
You’d therefore expect a pandemic to lead to lots of financial loss for individuals and their families. You’d also expect it to cause a big hit to overall GDP due to labour market shortages and decreased productivity at firms. There could also be a big loss of some specific, valuable skills if certain professions - say, doctors and nurses - were particularly badly affected.
On top of that, public spending bills would rise significantly in areas like healthcare and welfare. The government might respond to that by cutting spending elsewhere or pushing up taxes, or alternatively by taking on more debt which later down the line might translate to cutting spending elsewhere or pushing up taxes (this is what happened with the 2008 financial crash and subsequent austerity policies).
In theory, getting rid of Covid-19 is straightforward. Because it’s an infectious disease that is spread by human contact you could completely eliminate the disease if everyone remained completely isolated until all the currently infected people either recovered or died. However, nobody is seriously suggesting doing such a thing. The cost of doing this would also be humongous, from an economic and human perspective.
With no hospitals, carers, shops, deliveries, tradespeople or emergency services, you'd be on your own if you ran out of food, fell sick or accidentally set your building on fire. Lots of people would suffer and die. Many businesses would have zero revenue coming in and would quickly collapse. Many people would be unable to work (even people who can WFH often rely on someone else - from broadband engineers to factory hands - working outside the home in order to do their job). Individual finances and GDP would head steeply downwards. The government would presumably have to step in both during and after the pandemic in order to help rebuild society, and that would lead to the increased spending (and therefore the increased taxes, debt or reduced spending elsewhere) that we mentioned above.
This rock-and-hard-place set up is why pandemic policy usually takes a pathway between these two extremes. Restrictions to stop human contact are put in place, but they have limitations and exceptions. Of course, plenty of people think the government has got the balance wrong and that they're causing more harm than necessary. However, people disagree on which way the scales should be tipped. Some think the rules are too strict. Other think they're not strict enough.
Whenever we make a choice, economists refer to all the lost benefits we would have had if we'd taken another option as opportunity costs. If we skip a night out with friends in order to save money, the opportunity cost is the fun time we could have had. If we make the opposite decision, the opportunity cost is the cash we could have saved and other things we could have bought with it. It's not always obvious or possible to know exactly what all the opportunity costs of a decision will be at the time we make it. What if we ended up bumping into our favourite celebrity on the night out? Or the next day we discovered our car needed urgent and expensive repairs?
Knowing the true opportunity costs of each piece of pandemic policy is incredibly difficult, because it will affect millions of people in different ways depending on their individual circumstances, needs and values. And many of the opportunity costs we're talking about here are pretty major stuff, from being able to pay your bills to, er, not dying. It's no wonder it's such a difficult topic to reach consensus on.
One thing that is interesting to note, however, is how current policies show a value system that is not only about purely 'economic-y' things, but also some stuff that is more intangible but clearly important to our society.
During England's November lockdown, both schools and Remembrance services were allowed to go ahead. Uninterrupted schooling has an obvious economic component: education preps kids to be future workers, and school means parents can work without needing childcare. But what about Remembrance Sunday? Although it can be held in low-risk circumstances (outdoors, socially distanced), it tends to involve high-risk age groups (including the Queen!) and doesn't confer any obvious economic benefits. However, it is an event that encapsulates a lot of things many Brits really value, from patriotism, to mourning, to respect for veterans.
It’s easy to think you’ve got nothing to do with the economy – you can’t see it, feel it, or engage with it in any tangible way. But in fact the economy is just the result of how you live your life and how everyone around you lives theirs…