Academic freedom requires evidence and knowledge – not a desire for headlines

The University of New South Wales Business School seems to be making headlines for all the wrong reasons. They have (at least) two attention-seeking academics that are not helping the reputation of the University. The first, thought he was being smart by trying to put Modern Monetary Theory (MMT) down and lie about my own work only to make a fool of himself. I note that someone at The Conversation, which damaged its credibility publishing the piece, has now edited the original piece (taken my name out of the text). The stupidity of the attack on MMT remains however. I dealt with that in this blog post – When mainstream economists jump the shark and lose it completely (January 23, 2107). Now, another academic who thinks somehow she is a wonderful communicator bringing economics to the public, is causing a national debate about freedom of speech and all the rest of it. She is arguing that the Australia should not have followed its lockdown strategy, and, instead should have allowed around up to 25,000 Australians to die in order to protect the economy. So far, only 155 have died. The controversy is being constructed as one of free speech and academic freedom. But academics should only be free to make statements using their university attribution if they are based on evidence that can be supported. I don’t dispute the academic’s right to be provocative. I do dispute her command of the evidence and her ignorance of matters macroeconomic. That is the problem here. Short recommendation: I would not study economics in this Department.

As the reality of a pandemic was becoming clearer to me, I wrote this blog post – Learning about epidemics (March 25, 2020) – to help sort out my ideas.

I was seeing all sorts of Tweets from those claiming that the world’s increasing lockdown response was a dramatic overreaction to what was conjectured to be a nasty influenza episode.

I saw people holding out Sweden as a way forward and all sorts of arguments about herd immunity and all that sort of stuff.

It was early days in the pandemic. Iran had been devastated and I left Italy in February just a few days before their northern situation became a reality.

There were all sorts of statistics and ratios being quoted telling us that the death rate and the contagiousness was relatively low.

I examined various emerging databases that attempted to compare a bad flu season with what was going on with the coronavirus.

On February 26, 2020, we heard this from the US President – Remarks by President Trump, Vice President Pence, and Members of the Coronavirus Task Force in Press Conference:

The flu, in our country, kills from 25,000 people to 69,000 people a year. That was shocking to me.

They were reciting data from the US Centers for Disease Control and Prevention.

And if you were to make a comparison, the latest deaths from COVID in the US are 150,444 persons and the ‘season’ isn’t done yet.

But more thoughtful people understand that such a comparison requires like with like, which is not possible in this case.

This Scientific American article (April 28, 2020) – Comparing COVID-19 Deaths to Flu Deaths Is like Comparing Apples to Oranges – tells us that making such comparisons:

… are based on a flawed understanding of how flu deaths are counted, which may leave us with a distorted view of how coronavirus compares with it.

The evidence suggests that while the CDC was justified in:

… substantially overestimating flu deaths, in order to encourage vaccination and good hygiene, at this point the CDC’s reporting about flu deaths is dangerously misleading the public and even public officials about the comparison between these two viruses.

And that sort of erroneous analysis then leads to people claiming the lockdowns and the economic damage they are causing are unnecessary.

Careful analysis can provide some more accurate comparisons of the actual deaths from influenza relative to Covid.

The SA article concludes:

… we have to compare counted deaths to counted deaths, not counted deaths to wildly inflated statistical estimates. If we compare, for instance, the number of people who died in the United States from COVID-19 in the second full week of April to the number of people who died from influenza during the worst week of the past seven flu seasons (as reported to the CDC), we find that the novel coronavirus killed between 9.5 and 44 times more people than seasonal flu.

I was trying to do that sort of analysis myself in March 2020 and as far as I was able to get, given data limitations, my conclusion, outlined in the blog post cited above was that nations cannot allow this disease to run loose.

And that rather ‘naive’ conclusion, naive in the sense that we hardly knew anything about the virus – its contagiousness, longer term effects, how long immunity lasts, different impacts on different age cohorts (they were all calling it an old persons’ disease – they were wrong) – I think is supported by the evidence that has emerged since.

We still don’t know much about those questions – impacts etc.

What we know is that it is a very nasty virus that attacks all ages, is very contagious, and will decimate a population if allowed to run free.

Which brings me to Gigi Foster.

This ABC news report (July 28, 2020) – Heated Q+A discussion sees economist Gigi Foster deny she is ‘advocating for people to die’ – provides some information about this debate.

Foster has infuriated people by claiming that Australia cannot eliminate the virus from our nation and that the economic ‘costs’ are too large to try.

She appeared last night on the national broadcaster’s prime Q&A program and said:

If you look at what’s happening to those death counts around the world, in every country that has had a proper first wave, [they are] somewhere between 0.5 per cent and 0.1 per cent of the population …

That translates in Australia to about 12,000 to 25,000 deaths for people who are predominantly elderly or immunocompromised.

But it’s a body count.

You can see the segment on last night’s Q&A program – HERE

The official UNSW Twitter account distanced the University from her views.

I also note many people are advocating her being silenced by the University.

My views on that are clear.

Various politicians and others have tried to silence me over the years by putting pressure on my university to discipline me over public statements I make.

The rules are clear.

Freedom of speech for academics is a crucial part of an open society, a democracy.

One of the things I was taught when I was entering academic life was that I would enjoy ‘tenure’ (which in those days meant I could only be sacked for ‘gross malfeasance’, which included sexual predation and things like that) but I was only open to speak publicly in my university capacity on matters on which I had expertise and for which an evidence base could support my statements.

Thus there were two dimensions to me having ‘free speech’ using my university status to gain access to the public debate.

1. Expertise.

2. Evidence.

I differentiate this concept of ‘free speech’ to the broader rights that citizens have in open societies to say what they want within the constraints of discrimination and libel.

Value of Life concepts

Foster was just advertising why people should be careful in deciding to study economics.

Her comments were unsurprising to me given I have heard this sort of stuff all my career and particularly during my early years in postgraduate studies (microeconomics and welfare economics).

When I was a young academic, I was often commissioned by a major legal firm to provide expert testimony in worker’s compensation cases. This required me to estimate foregone earnings and other related parameters.

The opposing side always tried to reduce the size of the payout that the injured (or family of a dead) worker would receive.

They wheeled out the standard microeconomic analysis, which in this case, centred on the – Value of Life concepts.

The analysis comes up with a dollar value on a loss of a limb or life in total.

We would have to argue with sociopaths in the courts about whether lost legs, which destroyed the worker’s life quality and work opportunities, was worth x thousand dollars or y thousand, when the loss was infinite in terms of quality and decency.

It really was a daunting introduction to this sort of analysis.

And whenever I raise this issue, non-economists look at me in horror and say how can we tolerate that and all the other bleeding heart arguments (which should not be taken to conclude that I oppose them).

Then I tell them that the design of the road that they had driven on to work or leisure was based most likely on ‘Value of Life’ analysis. The road builders (state) cut their investments on the features of the roads that will reduce accident carnage and know there will be lost lives.

But to them the reductions in fiscal outlays (dollars) more than compensate for the estimated deaths per year or something that have been forecast from Value of Life studies of the road design.

Provision of health care is similarly blighted by this sort of analysis.

So I wasn’t surprised that Foster would implicitly have the same sort of reasoning.

In this sort of mentality, if the losses of GDP and related costs outweigh the estimated dollar losses arising from the deaths (persons times their ‘value’) then the lockdowns are unjustified.

That is the reasoning.

The presumption is that there is some inevitable trade-off between economic losses and deaths in this coronavirus crisis.

As this story from Wired (May 11, 2020) – How Much Is a Human Life Actually Worth? – notes:

… the choice seems stark: Continue strict social distancing and shelter-in-place measures to minimize the spread of Covid-19 and save thousands of lives, or end the lightweight lockdown—open all the shops, restart the factories—and save the economy.

I will come back to that later.

Some evidence

But Foster was pathetic on national TV last night when grilled about her views.

She claimed Sweden to be the example of the sagacity of her opinions.

She said:

I think that Australia can follow in the footsteps of many other countries in the world, some of which have not had lockdowns as strict as we have had here, such as again, Sweden — and look at the death tolls in those countries.

Yes, let’s compare the Australian and Swedish records over this crisis, which are summarised in the following table.

The Swedish – Covid Statistics – show that it has had 5,697 deaths from 78,997 confirmed cases. Its 2019 population was 10,348,730 in May 2020 (Source).

Australia’s – Covid Statistics shows 14,403 cases and 155 deaths. Australia’s population as at July 28, 2020 was 25,637,283 (Source).

Country COVID cases Deaths Cases per 100 thousand Deaths per 100 thousand
Australia 14,403 155 56.2 0.60
Sweden 78,897 5,697 763.3 55.05

Sources: Swedish Covid Statistics, .

Now the Arbetsförmedlingen (Swedish Public Employment Service) issued a report (July 13, 2020) – Arbetsförmedlingens verksamhetsstatistik juni 2020 – which provides the most recent unemployment data for Sweden.

We learn that:

1. 466,000 people were registered as unemployed, a rise of 130,000 over the last 12 months.

2. In terms of the official labour force, the unemployment rate had risen to 9 per cent (from 6.7 per cent a year ago).

3. The unemployment rate for females was 8.8 per cent and for males 9.2 per cent.

4. The unemployment rate for foreign-born workers in Sweden in June was 21.2 per cent and 5.5 per cent for domestic-born workers.

I analysed the latest Australian labour force data in this blog post – Australia labour market – one step forward up a gigantic mountain (July 16, 2020).

That data shows a very challenging situation for workers and I don’t want to understate that.

But compared to the deterioration in the Swedish labour market, it would be hard to say that the Australian labour market is in worse shape.

They are both in terrible shape.

So what is the return Gigi Foster thinks has accrued to Sweden as a result of its more ‘desirable’ approach to the pandemic?

It certainly isn’t coming in the labour market.

The real GDP forecasts for Sweden are also not flattering.

The latest forecasts from the Ministry of Finance, the central bank (Riksbank), various Swedis banks and the NIER are presented in this graphic (taken from this – IMF assessment).

The latest forecasts for Australia – Economic and Fiscal Update July 2020 – show that:

Real GDP is forecast to fall by 33⁄4 per cent in calendar year 2020, the largest fall on official record, and fall by 21⁄2 per cent in 2020-21

That is a smaller projected fall than the range of forecasts for Sweden.

I wouldn’t quibble over a few percentage points – given the inaccuracy of these exercises – but there doesn’t seem to be any output payoff for Sweden.

Those seeking to defend Sweden’s track record deploy the ‘herd immunity’ argument and claim that Sweden will ‘recover’ more quickly as a result.

But even the IMF is cautioning against this sort of optimism:

Any final verdict will also depend on whether, as a by-product of its approach, Sweden is closer to achieving herd immunity, thereby increasing its resilience in the event of another wave of infection. Medical knowledge about Covid-19 is still accumulating, and recent tests indicate that immunity gains have been lower than initially projected.

This is the point about evidence.

Gigi Foster doesn’t know much about this disease. Even the medical experts are in the dark about many of the characteristics, especially the immunity issue and the long-lasting disabilities that ‘recovered’ patients may have to endure.

There is growing evidence that the impact on young people who acquire the disease is quite debilitating and may cause permanent brain damage.

And all the rest of the uncertainties.

I also thought it was interesting that even for economists who work within the standard framework, the lockdowns get the support.

Some US academics have published an article – The Benefits and Costs of Using Social Distancing to Flatten the Curve for COVID-19 (April 14, 2020) – in the Journal of Benefit-Cost Analysis, which examined the “net benefits of social distancing to slow the spread of COVID-19 in the United States”.

They found that:

1. “Social distancing saves lives but imposes large costs on society due to reduced economic activity”.

2. Without lockdowns, the GDP loss (present value) would be $US6.49 trillion, but the value of lives lost would be $US21.8 trillion (using the standard methodology).

3. With the lockdowns, the GDP loss would be $US13.7 trillion, value of lost lives $US9.41 trillion.

4. The net benefit in trillions of $US of the lockdown would be 5.16.

So even operating in the mainstream paradigm using its dodgy analytical techniques and methodologies, leads to a conclusion that the lockdowns made economic sense, notwithstanding the economic carnage that has been created.

Foster is correct in saying that there are life threatening consequences arising from the rising unemployment and lost incomes.

The ‘Value of Life’ concepts do not incorporate these difficult to measure ‘costs’. Clearly, the lockdowns have devastated peoples’ lives – their future prospects may have been severely compromised.

It is also too early to add up the health impacts of the coronavirus pandemic.

But here is where MMT comes to the fore

Most of this discussion would be passé if people understood Modern Monetary Theory (MMT) and realised that the sort of trade-offs that Foster is talking about are not inevitable.

And once you realise that, more ethical views on human life would come to the fore.

At the start of the crisis, I argued that the national governments, which issue their own currency, could take up the entire wage and profits bill if it wanted to – to reduce the ‘economic costs’ of the lockdowns to close to zero.

Unemployment did not have to rise.

Businesses did not have to be destroyed.

If we had an enforceable lockdown and eliminated the virus, with our borders strictly controlled until a credible health solution was introduced, then no economic damage was necessary.

Foster just adopts the neoliberal bias, that dominates the mainstream economics discipline, in assuming that if we have lockdowns there will be devastating GDP losses and elevated unemployment.

Once you understand the fiscal capacity of the Government then the concept of a trade-off seems rather flawed.

The economic losses that have been recorded to date – and they are massive – were avoidable.

They are not due to the lockdowns which were the sensible strategy for governments to adopt. I am thankful the Australian government took a relatively strict approach although I think they have relaxed the lockdown too early.

They did that because they were being confronted by the sort of nonsense that Foster peddles.

The economic losses arise because the governments adopted a flawed fiscal approach. They knew they had to expand fiscal deficits but were still thinking surpluses.

Our own Treasurer has even been channeling Margaret Thatcher in recent days – which means they are gearing up to further cut the already inadequate fiscal support.

If Gigi Foster understood macroeconomics she wouldn’t be making the sort of statements she has been making in the media.


I certainly believe that academics should be able to present their ideas to the public unfettered by university management as long as those ideas are within their expertise and are supported by research evidence that is held to scrutiny.

No university should seek to stop such speech on ‘commercial’ grounds (damage to their bottom line).

But in this current discussion, I do not believe that the evidential standard has been met.

Further, Foster’s intervention reveals her ignorance about macroeconomics

I also agree with New York Governor Cuomo who said:

To me, I say the cost of a human life, a human life is priceless. Period.

That is enough for today!

(c) Copyright 2020 William Mitchell. All Rights Reserved.