Mises India : This Pandemic Is a Good Time to Wake Up to the State’s Utter Impotency

FREEDOM, LAW & ECONOMICS, MONEY / Monday, April 6th, 2020

By Madhusudan Raj on the Mises India Blog

Covid-19 Pandemic

The world is in an unprecedented lock down over a threat of a flu virus’s new strain called SARS-Cov-2 that causes a respiratory disease called Covid-19. All the data so far coming suggests that the only group most vulnerable to this disease are very old people with underlying health issues like diabetes, heart surgeries, organ transplant, cancer, hypertension, asthma, tuberculosis etc., which has compromised their immune system, and those young people who also have above mentioned underlying health issues or who are smoking or drinking or doing drug abuse etc. Basically, anyone with a compromised immune system is at risk of dying because of this virus. Worldwide data also suggests that the mortality rate of this pandemic is approximately 0.1% or even less. All in all, the data coming out so far tells that the virus is benign and not a monster that is out to kill us all.

But governments around the world have seized this opportunity and announced this virus as the biggest enemy of mankind against which they have now waged a war. WHO has announced this as a Pandemic and world is under a “lock down”. India’s Modi government has freaked out totally and it has now locked down whole nation of 1.35 billion people for, at least, 21 days. All trains in India are now suspended. All inter-state road traffic is also suspended. All international and national flights are also suspended until 14th April. Businesses have come to a standstill. As usual, Modi government announced the lock down without giving anyone any notice or time for preparation, and that has caught millions of migrant workers by total surprise. These poor people cannot live in cities for 21 days without daily wages and so they have started an exodus towards their native places. This has basically nullify the whole lock down exercise. Modi has, basically, turned a health issue into a major humanitarian crisis.

There is panic and paranoia everywhere. Governments have no exit strategy as there is no guarantee that the virus will go away even after the lock down is over. No one knows for how long the lock down will continue. Politicians are just busy grabbing more power because there is no one to call their bluff amidst this hysteria. Feared population is simply complying, and those who are not complying are facing the wrath of the authorities in terms of fines or arrests or FIRs filed against them.

Economic, Social, Health and Political-Legal Fallout

As Frederic Bastiat and Henry Hazlitt taught us, the evaluation of any governmental policy action should be done by not only looking at its immediate consequences on some selected group of people but also its long run consequences on the whole human society. We not only have to look at the seen impact of Coronavirus but also the unseen impact of this governmental lock down. When the authorities are justifying this draconian lock down by citing absolute number of deaths then we need to see how many will die precisely because of the Covid-19 and how many will die because of consequences of this lock down. A cost-benefit analysis is a must in this situation.

Even before the virus came as a trigger, the world economy was ripe for a collapse because of years of unsound economic policies of governments and their central bankers. Now that collapse is accelerating. Indian economy was long dead because of Modi government’s muddleheaded polices like demonetization, GST etc., and this lock down is buying it deep underground. The Indian stock market has collapsed from 42,000 level to 25,000 within ten days time; it is world’s worst performing stock market right now. Indian currency rupee has hit its lowest of below 76 rupees against US dollar. Unemployment was already very high and it has now accelerated as factories and businesses are shut. According to initial estimates Indian economy is going to lose some 9 trillion rupees because of this lock down. The world economy is going to suffer unimaginably badly. World trade is at a standstill right now and that means whole human civilization, which depends of the system of market and its division and labor and specialization, itself is at danger.

In India in the immediate aftermath of the haphazard and surprise announcement of lock down by Narendra Modi, millions of migrant workers are left stranded. Many of these migrant workers have already died trying to reach their native homes walking on highways under the scorching summer sun. Many farmers are forced now to throw away their precious crops and in coming days many of them will likely commit suicide because of lock down related bankruptcies. Hundreds of thousands will die because of ensuing starvation and hunger, but we will never know this number of deaths because no one is tracking these deaths the way they are tracking Covid-19 deaths.

Central bankers around the world have opened their unlimited money spigot which has generated a tsunami of possible hyperinflation and following deep depression which will kill more people compared to covid-19 disease. Indian central bank RBI has very aggressively cut its interest rate by 75 basis point and it is also using all kinds of so-called innovative ways to flood the economy with paper rupees. Indian government has cut interest rates on most saving items like PPF etc., which will discourage saving resulting in future mass poverty.

On the social front, this lock down is straining relationships as many cases of husband and wife fighting and calling their lawyers for divorces are now reported. We saw this trend in China. Many migrant workers are now facing Covid-19 related discrimination when they are reaching their homes. Few people are lynched by crowd suspecting they carry the virus. Health professionals working in Covid-19 hospitals are facing discrimination from their landlords and many are evicted from their rented homes in the middle of the night. Fear has gripped our society.

This lock down will also have long term dire consequences for the overall health of people. As the US President Donald Trump has warned, the battered economy and higher unemployment and poverty rates will result in suicides which will likely far outstrip the total deaths because of Covid-19 disease. Amidst the on-going Covid-19 emergency, hospitals are almost ignoring other health emergencies. Many of these sick patients of other ailment will die because of lack of attention due to this virus related hysteria and lock down. Not only physical health of people is at danger, but most importantly, this lock down is having a mental toll on people. Locked inside house for 21 days is not a good feeling after all.

This lock down is alarming from the political and legal point of view also. We are witnessing total violation of human rights by the state in the name of stopping this disease and supposedly saving our lives. Prime minister Narendra Modi said,

From midnight today, there will be a complete lock down. To save India, to save every citizen, to save you and your family, from 12.00 hrs, there will be a complete ban on stepping out of house. Every state, every village, union territory is being locked down. This is a step further than the Janata curfew. It is a step that is needed.

This is a sham. An excuse to grab more totalitarian power for himself. Instead of worrying for a virus, which is part of the nature, people should worry about this tremendous power that they have given in the hand of one person. Without following any kind of legal process like informing the parliament and taking their consent or approaching the supreme court to discuss legality of this lock down or taking a vote of people, one person Modi can come on television at 8 PM in night and lock down 135 crore people inside their homes for 21 days. This is alarming situation. Is this democracy? He basically locked us down in our homes supposedly to save our lives without asking us! As I said above, this is just an excuse to wield his absolute power over our lives. The whole point of state wanting to save our lives is bogus. The state is never interested in saving our lives. Modi’s own policies like demonetization, GST, abrogation of article 370 and CAA-NRC have killed more people than this Covid-19 disease so far. Did he announce a lock down of Delhi to save citizens’ lives when communal riots erupted few months back? No. Did he stop all the mob lynching? No. This very same Narendra Modi, and all other politicians from all parties, will very happily send all of us to fight and die in wars with Pakistan or China which can erupt because of his aggressive muddleheaded foreign policies. India has become a totalitarian police state. During this lock down police were beating innocent people as if there is no law in this country. Local body governments are literally locking people inside their houses, snooping and tracking them via mobile apps etc., without following any kind of due process. Covid-19 has given a carte blanche to state authorities to do whatever they want to with us without worrying for any kind of legal or other consequences. Modi government went as far as to petition supreme court to issue an order that no media will publish Covid-19 related news without taking government’s permission first! Instead of worrying about this virus, people should seriously worry about this rapidly emerging totalitarian authoritarian police state in their country.

All in all, the death and misery resulting from this lock down is going to dwarf few hundred deaths that have supposedly so far occurred, supposedly because we still don’ know and will never know if these deaths occurred precisely because of Coronavirus or because of some other underlying illnesses in mostly old age people, because of Coronavirus. The (opportunity) cost of this lock down is going to far outstrip any supposed benefit of it.


This pandemic has proved one thing beyond any doubt is that the State is not in a position to tackle any scare like this manufactured health crisis. It also proves beyond any doubt how inefficient and incapable whole government run public health system is. Politicians and their health bureaucrats have locked us all down only because their health system can’t even handle a few thousand patients of flu! Arguendo, if the virus is dangerous then Narendra Modi failed to take it seriously from the very beginning because it was only he and his government that air lifted Coronavirus infected Indians from countries like China, Italy and Iran and, more importantly, after bringing them to India, it failed horribly in keeping them in isolation for the prescribed time period which resulted in these sick Indians spreading virus in local population. This lock down is announced by Modi just to hide his failures and nothing else. The state is not ready now and will never be ready as its focus is not saving our lives, but to exploit us to live parasitically and gain more power for itself under the guise of one crisis after another.

Under the state officials’ manufactured hysteria and paranoia, people are mindlessly repeating the mantra that other than this lock down there are no other alternatives to tackle this pandemic. These people forget that alternatives are always available. We just need to look around. Even in case of governmental response, not all governments have responded by imposing this draconian lock down. Many countries like South Korea, Taiwan, Sweden or Brazil did not lock down their society and economy and still managed to control the pandemic very successfully.

Above all, the best option that no one is talking about is, the free market capitalist system. A truly free market society is well suited to tackle this kind of pandemics. Unlike the Modi government, who locked us down for 21 days and left us to our own devices, the market, even in its hampered form, is hard at work finding out innovative solutions to serve its customers when they are most in need. In India, Zomato immediately introduced contactless delivery. Amazon and Wal-Mart hired more than 1 lakh employees because online demand surged during this lock down. Governments have no incentives to make any kind of improvements in whatever they are doing because they don’t have to earn their income; they get their livelihood from tax robbery. In the free market system entrepreneurs can only make profit when they fulfill the most urgent needs of their customers. And for that they will use all kinds of innovations. Market system is very flexible so it can continue to evolve and adjust according to the evolving situation and wants of their customers. Governments, in comparison, are rigid. Because of this characteristics of the market system it can efficiently handle this pandemic. Instead of government imposed lock downs, we need to free the market forces to deploy all their means to handle this crisis. It will be fascinating to see the innovativeness, brilliance and efficiency of the true Capitalist system. Profit is such a wonderful system that it ropes our fellow human members to serve us without anyone coercing them or us.

Covid-19 pandemic is quintessential of state failure. One important thing we all need to do after this pandemic is over is to immediately dismantle our public health system. As long as the government is in charge of our health, or anything else, our lives will remain in grave danger. The only virus that we need to worry about is this parasite called the State. As long as this parasite exist, we are not safe. Coronavirus won’t kill us, but our government will.

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