Politics & Policy

The COVID-19 Externality No Longer Exists

People walk by a sign requesting guest to wear masks, following the CDC recommendation that fully vaccinated Americans wear masks, as they enter the Disney Store in Times Square in New York City, July 27, 2021. (Brendan McDermid/Reuters)
As a result, neither does any legitimate case for renewed government restrictions on individual liberty.

The case for COVID-19 restrictions can be summed up with a simple cliché: My right to swing my fist ends where your nose begins. 

Elected officials used this logic to justify mask mandates, stay-at-home orders, and more throughout 2020. The idea was that the usual deference toward individual liberty and personal responsibility was not going to cut it in the midst of the COVID-19 crisis, because individual actions could spread the virus and impose large costs on society.

This notion of large external costs to individual behavior is what economists call an externality. And the spread of COVID-19 presented policymakers with a textbook example of an externality, which is typically viewed as just cause for some degree of government intervention.

In this telling, the government had to mandate masks. Because your decision to wear one or not didn’t just impact your chances of contracting COVID-19 and possibly getting ill or dying — it imposed risk on unwitting third parties. In a similar vein, the logic of externality was used to justify business closures, stay-at-home orders, and other forms of mandatory “social distancing.” The decision to go to work or not wasn’t simply a risk evaluation you could make for yourself, you see, because it potentially endangered others.

Whether the pandemic externality was significant enough to justify sweeping, unprecedented government interventions remains an open question. One can plausibly argue that centralized-government actors lack the knowledge to accurately redress the externality, as prolonged school closures and often-arbitrary rules imposed on businesses suggest. One can also argue that the government interventions themselves had massive externalities, from fueling mental-health problems to contributing to drug overdoses to increasing unemployment.

But, at the very least, there was a legitimate and serious case to be made when the pandemic began that the externality implied by the virus’s spread was too great for a laissez-faire approach. Even many free-market-oriented economists and analysts reached this conclusion. Yet a lot has changed since 2020.

Nonetheless, recent weeks have seen a return of government restrictions such as mask mandates in cities across the country, from Washington, D.C., to Los Angeles County. In New York City, Mayor Bill de Blasio just announced the imposition of a government mandate requiring proof of vaccination in order to “participate in our society fully” through such activities as indoor dining, attending concerts, etc. Politicians have justified these renewed incursions on individual liberty by citing the rise of the “Delta variant” and the evidence suggesting that — in very rare cases — it can be spread even by fully vaccinated people.

Yet this reimposition of government mandates is entirely unjustified, because, thanks to widespread safe, free, and highly effective COVID-19 vaccines, a significant COVID externality no longer exists.

Set aside for now the debate over whether vaccinated individuals can spread the Delta variant. Scientific authorities agree that the COVID-19 vaccines available for free are nearly 100 percent effective at preventing illness serious enough to lead to hospitalization or death, even if in rare cases vaccinated individuals may test positive. According to Centers for Disease Control data, “More than 99.99 percent of people fully vaccinated against Covid-19 have not had a breakthrough case resulting in hospitalization or death.”

Simply put, just about every adult in America who wants a COVID-19 vaccine can get one. Once they do, they have a near-zero percent chance of facing serious illness or death from the virus. So, thanks to these miraculous vaccines, there’s barely any externality still associated with the spread of COVID-19.

Yes, 42 percent of the population has still not received the COVID-19 vaccine, and thus could still get ill or even die from the virus. Yet, at this point, that’s a cost-benefit analysis they made for themselves. If unvaccinated people continue to get sick and pass away from the disease, that’s tragic, but it’s no one’s fault but their own.

There is no justification for restricting the liberty of vaccinated people in order to protect people who have willingly chosen to remain unvaccinated. There’s no longer any significant externality associated with my decision, as a fully vaccinated individual, to enter a restaurant without wearing a mask. Anyone who might be adversely affected by my decision has knowingly and willfully chosen to impose that risk on himself by forgoing vaccination and entering the restaurant.

Through vaccination, the COVID-19 externality has essentially been eradicated. So, too, has any serious or legitimate case for government measures trampling on individual freedom. The renewed imposition of mandates is thus little more than an unjustified attempt by power-hungry politicians to flex their authority and prolong their expanded control over our lives.

There are a few small caveats or exceptions to acknowledge here.

One might immediately reply, “But children under 12 aren’t eligible for the vaccine yet.” This, while true, doesn’t actually suggest much of an externality at all — because children are generally at a statistically negligible risk of serious illness or death from COVID-19 in the first place.

Out of more than 3.5 million confirmed COVID cases among those aged 0 to 18, there have been just 340 deaths. (Even those rare deaths often involved individuals with preexisting conditions that made them vulnerable). That’s a death rate in the US of roughly 0.009714 percent for children. According to Johns Hopkins professor Dr. Masty Makaray, who researched this subject, COVID-19 has a “mortality rate of zero among children without a pre-existing medical condition such as leukemia.” While any child’s death is tragic, this virus presents children with a statistically negligible risk that simply does not justify sweeping government infringements.

Another sticking point interventionists might cling to is that there does exist a relatively tiny but non-zero group of people who, for legitimate medical reasons, cannot receive the COVID-19 vaccine. But this only complicates the negation of the COVID-19 externality very slightly. These individuals are still free to take as many protective measures as they want, such as wearing N-95 masks or voluntary social distancing. And we do not shut down or restrict society to protect this group from any other communicable disease or generally make public-policy decisions based on rare outlier cases.

In perhaps the most valid counterargument, some would point to the crowding of hospitals with unvaccinated COVID-19 patients and ensuing delays in medical care for others as evidence of a remaining externality. This is happening in some Florida hospitals, for example, which have been forced with the rise of Delta variant cases to delay other services.

But the scale of this problem is relatively minor in the grand scheme of things. As reported by the New York Times, the typical rate of occupancy for Intensive Care Unit beds in 2010 was 67 percent. Right now, the average is 69 percent — hardly any increase, let alone a massive externality.

The final common objection is that allowing COVID-19 to transmit without government intervention could fuel the rise of dangerous variants. One should always be skeptical of those who would seek to restrict our freedom based on some hypothetical future danger. (The convenient thing about such excuses is that they always exist for those seeking pretense.) But more importantly, this concern can be dismissed out of hand because the real threat from variants comes from overseas.

For the foreseeable future, huge swaths of the global population will, sadly, remain unvaccinated, and the disease will continue to spread across millions of people beyond our borders. The possible threat of variants from this large-scale global transmission is the real threat, and any threat from small-scale transmission among the U.S. unvaccinated pales in comparison.

Indeed, the “Delta variant” now gripping the country did not come from unvaccinated Americans. It originated in India.

There may be other small quibbles advocates seeking to justify government intervention can come up with. But none of them change the fundamental reality that in 2021, the COVID-19 externality no longer exists as it did in early 2020. And, therefore, nor does any legitimate case for continued government infringement on our liberties.


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