Try the invisible hand
At this stage of the pandemic, the main problem afflicting the economy is the heavy hand of government.
After over three months of lockdown, only some—I think less than half—of the nation’s jeepneys are returning to service now. It is not because jeepney operators (the supply side, in tens of thousands) are unwilling to provide the customary service, or because commuters (the demand side, in the millions) are unwilling to use the customary service.
It is because the government is unwilling to allow the supply and demand sides to freely transact with each other.Why have a few sectors—agriculture, banking, the stock exchange, business process outsourcing, offshore gaming—always been allowed freedom to operate, but not the extremely vital transportation sector, which links very many sectors together?
Without need for prodding, public transport operators have reconfigured their vehicles to cope better with the pandemic. Without need for special warning, public transport users have limited their demands to travel. Both sides do this out of their own self-interest, for the sake of their livelihood and health.
This is how a free market works, for the benefit of both sellers and buyers. Of course, prices of commodities and services shall have to adjust accordingly, in order to equalize demand and supply; so be it. (That’s the time for parties that feel socially mistreated to seek assistance from government.)
How did the government set 30-50 percent of pre-pandemic transport rides as a target number for the economy? Why not 80-90 percent, to allow for voluntary reduction of consumer needs, which the transport operators will also anticipate? Where did the government get 50-percent occupancy of workstations in private establishments as a target for the pandemic?
That seems like a deliberate plan to cut employment by half. Why not let the private sector establishments work out their own staffing policy, following their own good sense on physical distancing and other measures to prevent the spread of COVID-19 among employees?
Adam Smith, one of the founders of economics, observed centuries ago (“The Theory of Moral Sentiment,” 1759; “The Wealth of Nations,” 1776) that there is “an invisible hand” that keeps an economy in order, and benefits society as a whole, even as individual people freely pursue their personal self-interest.
It was my good fortune to study at the University of Chicago, and learn first-hand from the great economic freedom fighter Milton Friedman (“Capitalism and Freedom,” 1962: “Free to Choose,” 1980). For Friedman, freedom is the end, and capitalism is a means.
I am a founding member of the Foundation for Economic Freedom (fef.org.ph), where the prevailing general sentiment, I believe, is that the people’s economic well-being has already suffered too long from the government’s overly restrictive policies.
The authorities, both national and local, have issued too many questionable rules. Preventing senior citizens and youngsters from going out is discriminatory. Many families have children cared for solely by the grandparents; when outdoors, they would not want to walk six feet apart, for the children’s security.
Curfews are not justified by the pandemic. The COVID-19 virus does not travel any more swiftly by night than by day. Using the nighttime for work (as well as play) allows more physical distancing in the daytime.
Family members who live indoors unmasked do not need to avoid close contact with each other when outdoors. It is cruel to disallow masked riding on a motorcycle behind a spouse, parent, or sibling (and to question their family relationship is an invasion of privacy).
The invisible hand promotes cooperation without coercion, at no financial expense.
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