Mask mandates are HARMING economic activity, says economist

01/02/2021 / By Divina Ramirez

With governments worldwide reopening their economies and lifting lockdowns, authorities and health experts have doubled down on their advice that people wear face masks when going out to shop or dine.

In fact, an economic report by researchers from the University of Utah even suggested that national mandates for face masks during the COVID-19 pandemic would “persistently” promote economic activity. But economist Peter Crabb doesn’t seem to think so.

In an article online, Crabb, a professor of finance and economics at Northwest Nazarene University in Nampa, Idaho, said that the Utah report is flawed.

For one, it assumes that spending would not occur if there were no mask mandate. This is shown to be false by the fact that consumer spending is currently only 0.5 percent below its level at this time last year. So statewide mask mandates have no new spending to promote.

Crabb also noted that the report ignores potential negative responses to statewide mandates for face coverings. For instance, people might interpret such mask mandates as a sign that the pandemic is worsening. This could further discourage people from spending or, in the case of businesses, investing.

To elucidate his point, Crabb cited the parable of the broken window by the French economist Frederic Bastiat. The parable shows that using resources to fix the window will not increase its economic output. The window is only restored to its previous existing situation.

Likewise, mask mandates will not boost economic output despite “fixing” a problem caused by the coronavirus pandemic.

Mask mandates don’t reduce transmission rates or deaths

Meanwhile, researchers from the National Bureau of Economic Research (NBER), a non-profit organization in Massachusetts, found that nonpharmaceutical interventions, such as lockdowns, travel restrictions, stay-home orders, business closures, curfew and mask mandates, do not affect overall virus transmission rates.

The researchers came to this conclusion after looking at countries and U.S. states with more than 1,000 deaths related to COVID-19 as of late July. In all, they looked at 25 states and 23 countries.

Their findings revealed that while nonpharmaceutical interventions varied in their timing and implementation across states and countries, the trends in COVID-19 outcomes did not vary significantly. Therefore, neither the timing nor the implementation of these interventions can be blamed for their ineffectiveness.

On the other hand, Denis Rancourt, a former physics professor at the University of Ottawa in Canada, studied randomized controlled trials (RCTs) and meta-analyses of RCTs on face masks.

Rancourt found that many studies say masks and respirators do not prevent respiratory diseases like influenza and other illnesses believed to be transmitted by droplets or aerosol particles.

Overall, Rancourt said his paper shows the degree to which governments and mainstream media can decide to operate in “a science vacuum” or select science that serves their interests.

Not a one-size-fits-all solution

Meanwhile, two American economists, Steven Horwitz and Donald Boudreaux, explained why mask mandates don’t work using fundamental concepts in economics.

One such concept is negative externality. The refusal to wear a face mask creates this negative externality. This means that the non-mask wearer imposes or externalizes the costs of their actions on mask wearers.

Horwitz and Boudreaux said that the economist’s ideal solution to this would be to tax non-mask wearers only to give them enough incentives to take the welfare of others into account and wear masks. This is what a mask mandate aims to do. (Related: Statewide coronavirus mask mandates spreading across the USA.)

But this solution assumes that people are selfish while authorities are concerned with only the public’s interest whenever they enforce policies or create laws.

As such, economists who fail to account for these factors in their models of good policies and mandates should not be surprised when actual policies and mandates turn out to be ineffective, added Horwitz and Boudreaux.

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