Opening the economy: how far should “age” matter?

by Lucia Dore

Businesspeople everywhere are screaming for economies to re-open. Countries across the globe are formulating plans to do just that. Trillions of dollars, euros and pounds, have been pumped into economies by individual governments, usually by buying government bonds – a policy known as quantitative easing. Whether all this extra money swishing around will be enough or will do any good in the long run is open to debate.

There is a concern that the extra money – or maybe it’s just debt- going into economies is propping up big business or big businessman. In New Zealand, former finance minister Sir Roger Douglas (1984-1988) recently argued that big business should fend for themselves. “Why, when the good times suddenly come to an end, have they gone cap in hand to the Government?”, he wrote in an article in New Zealand’s Stuff. (Full disclosure: I was an economist in NZ Treasury during this period so Douglas was effectively my boss).

Then he added that big business going to the government for handouts was an example of “the old maxim rendered true — there is never someone more socialist than a wealthy capitalist in a time of crisis”.

Along with pumping money into economies, governments are finding ways to open them by introducing policies that can only be described as discriminatory- not of the rich or poor, or of colour or nationality, but age.

It is the over 70s who must remain indoors, in isolation- often from their friends and family- and go out in some countries on a limited basis. This is wrong, although there is some research to back-up this policy.

A research paper from Warwick University, entitled: “Age, death risk and the design of an exit strategy – a guide for policymakers and for citizens who want to stay alive” by researchers Andrew Oswald and Nick Powdthavee argues that a person over 50 is more likely to die than someone younger and modelling shows the number of deaths by coronavirus increases markedly by age. The researchers argue that there a five key benefits of a rolling release policy.

1. It recognises that we cannot wait indefinitely to reopen the economy;

2. It is the safest way to do that before a vaccine is available;

3. It is the least likely strategy to require that people will have later to be painfully recalled into further rounds of lockdown, because in principle the young should be able to stay out once released;

4. It usefully plays for time as researchers work on a vaccine;

5. It targets the group currently the hardest-hit financially.

Arguing for any sort of discrimination is wrong and people would find it abhorrent and disgusting if a certain group of people were discriminated against by colour or nationality. Yet, it seems discriminating by age is acceptable and a policy that is adopted in many parts of the world.

Baroness Altmann, who was formerly Minister of State for Pensions and Child Maintenance under the Conservative David Cameron Government, put it this way: “I think using an age-based criteria is fundamentally wrong and would potentially cost the lives of many people, and risk social unrest.” She was speaking to Sky New’s Sophy Ridge on 3 May, 2020.

The life peer also said many elderly people have only accepted lockdown conditions “because everyone else has got to do it,” and “lots of them” have said they would “risk going to prison” rather than continue isolating.

She added “nobody would dream” of applying restrictions on the basis of skin colour, despite a higher death rate [of coronavirus] among black and minority ethnic (BAME) people.

“It's not OK to discriminate on grounds of gender, or obesity, or colour of skin, but everybody is saying, let's think about somehow discriminating on the basis of age,” she said.

So, is age a valid reason for keeping people locked up? Is society trying to hide “older” people away? What if a 70- plus person is fitter and healthier than an obese person in her 40s?

These are difficult questions to which governments must find the answer.

Photo: by Carole Railton (Copyright). How do governments re-open economies?