Entrepreneurship And Investment Now Face The Ever-Present Threat Of A Smashing Sledgehammer.
Reading the late Hans Rosling’s 2018 book, Factfulness, during the summer of 2020 creates a sensation of surrealness that would have been absent had I read this volume in 2018 or 2019. On nearly every page of Factfulness Rosling busts the popular myth that we denizens of modernity face imminent calamities that will destroy us and the earth. Widespread fears – such as of overpopulation, of terrorism, and of the rich getting richer while the poor stagnate – are methodically revealed to be either completely unjustified or exorbitantly exaggerated.
But today, in the midst of the ongoing lockdowns and with no end in sight to the hysteria over COVID, I’ve lost all of the natural optimism that has long resided within me and that would have otherwise been fortified by Rosling’s splendid work.
The image that keeps coming into my head is of a sledgehammer. With brute force, a blunt and heavy instrument was swung down on society by the state. Sledgehammers crush. They demolish. That’s their only function. They do not build. And for as long as the dreadful weight of this particular sledgehammer – the massive mallet that is the COVID-19 lockdown – continues to press down on the rubble that it caused, there is very little opportunity for the human creativity and work effort unleashed by markets to bring about the kind of improvements that Rosling documents.
Will humanity recover? Will we – when the sledgehammer is lifted – rise, dust ourselves off, and climb back on to the happy track that we were on before March 2020? Of course it’s possible. But there’s now a novel reality that makes a renewed continuation of pre-COVID progress much less likely: the sledgehammer itself.
When this sledgehammer is lifted off of us, it won’t be lifted for long. We now know that this awful hammer is there, looming overhead. We have good reason to worry that government officials are likely to smash it down upon us when another communicable pathogen emerges and makes news – as such a pathogen inevitably will, for viral pathogens have been part of human existence from the start. How will entrepreneurship and investment be changed by this ever-present threat of a smashing sledgehammer? The creation, funding, and operation of venues in which individuals come into close physical contact with each other – either for recreation or for work – will surely be much less attractive.
More generally, the newly demonstrated willingness of state officials to destroy, with just a few executive diktats, hundreds of billions of dollars of capital value cannot but push some entrepreneurs and investors into inactivity. Why build, or build grandly, when some pompous governor or mayor – someone whose only ‘skill’ and most intense itch is to exercise power over fellow human beings – can, with a mere signature, smash down a sledgehammer and turn to mush the fruits of years of hard work and sacrifice?
And how will those in power – and those who seek power – be affected by the display by so many people of a sheepish willingness to be ordered by the state into house arrest? Did prime ministers, governors, and mayors know in mid-March just how easy it would be for them to herd millions of the rest of us away from the activities that we human beings have for generations enjoyed? Were these officials aware of their power to convince so many people under their command that each individual poses a poisonous threat to every other individual?
To prosper, we human beings must cooperate in production – Adam Smith called it the division of labor – and trade extensively. Most of these activities require face-to-face contact among individuals who see each other as partners in cooperation and exchange rather than as threatening carriers of death. And to enjoy what we produce also requires face-to-face contact, for we are a social species.
In possession of dictatorial power unknown just a few months ago, government officials – a group undeserving of much trust even in the best of times – will not shy away from wielding their newly discovered powers. The results will be ugly.
Attentive to Fear
Ironically, in his upbeat book Hans Rosling himself unintentionally offers justification for my pessimism. He does so in a chapter titled “The Fear Instinct.” Here’s a key passage:
When we are afraid, we do not see clearly…. Critical thinking is always difficult, but it’s almost impossible when we are scared. There’s no room for facts when our minds are occupied by fear.
This undeniable reality means that a people in fear are a people who are unlikely to assess with much rationality the pros and cons of government policies. And the greater the fear, the less able people are to detect and resist government overreach.
Who is so naïve as to deny that this reality gives to government officials strong incentives to stir up fear? People who seek positions of political power generally are people who, by this very seeking, reveal that they are especially keen on exercising power over fellow human beings. And so if more power for the state grows out of more fear in the people, state officials have every incentive to exaggerate real dangers and to concoct fake ones.
The result is a vicious cycle. The possession of power includes a disproportionately great ability to stir up fear, and stirred-up fear creates more power.
Further, Rosling’s insights about the media imply that they contribute to this vicious cycle. Here again is Rosling:
[W]e have a shield, or attention filter, between the world and our brain. This attention filter protects us against the noise of the world: without it, we would constantly be bombarded with so much information we would be overloaded and paralyzed…. Most information doesn’t get through, but the holes [in our attention filter] do allow through information that appeals to our dramatic instincts. So we end up paying attention to information that fits our dramatic instincts, and ignoring information that does not.
The media can’t waste time on stories that won’t pass our attention filters.
Here are a couple of headlines that won’t get past a newspaper editor, because they are unlikely to get past our own filters: “MALARIA CONTINUES TO GRADUALLY DECLINE.” “METEOROLOGISTS CORRECTLY PREDICTED YESTERDAY THAT THERE WOULD BE MILD WEATHER IN LONDON TODAY.” Here are some topics that easily get through our filters: earthquakes, war, refugees, disease, fire, floods, shark attacks, terror attacks. The unusual events are more newsworthy than everyday ones.
An invisible virus is the perfect troublemaker to portray as an existential monster. Like an evil spirit, it can live, usually silently, within the breast of each of us. And so if a large enough number of us can be convinced that an unseen, vile monster lurks in everyone else, the resulting widespread fear empowers government officials to do what government officials do best – and what they’ve done so horribly over the past five months: destroy.