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The Emeritus Professor of International Economics at Stockholm University, a researcher at the Industrial Economics Research Institute and a member of the Royal Swedish Academy of Sciences is critical of Sweden’s strategy, even from an economic point of view. Lars Calmfors notes, however, that government-funded home and business support programs have worked well. And he says that in decades of being in difficult public debates, he has never had so many negative reactions.
In an article for him Washington Post made an attack on Swedish strategy on a purely economic basis, calculating how much a life would have to be worth to benefit …
… I would like to emphasize that they are actually “grocery accounts”, because it is a very difficult question to answer. How much do we earn? We can look at the development of GDP, but this is too simple, because we should compare it with what would have happened otherwise, and we cannot be sure. Of course we can count the dead, but the number of deaths from covid is not the same as that of excess mortality. [comparada com a média nos anos recentes], and a large portion of the dead were already very sick and might have died shortly after anyway. And we have other effects that are difficult to assess, many medical treatments are on waiting lists, and there are long-term health consequences for many recoveries from coronavirus infections.
Basically, I just wanted to give some indications of an order of magnitude. My conclusion was that we would have to place a very low value on the lives lost during the pandemic to be able to say that the Swedish strategy was “financially profitable”. Generally speaking, it would be less than a million euros [nas avaliações estatísticas para decidir medidas de segurança rodoviária, o valor é mais de quatro vezes superior]. Some people will say that it is reasonable, because almost 90% of the dead are over 70 years old. I do not share this assessment. I think the lives lost should be valued more.
Lars Calmfors
DR
Sweden has become a flagship of those against the restrictions, also arguing about the dramatic effect on the ability of many people to be able to support themselves. In Sweden, which has a strong social support system, wouldn’t that be a reason to consider less the health and financial aspects?
I wish I could have seen more restrictive measures, including temporary containment of cafes, restaurants, gyms, nonessential stores, some workplaces. And we could have done it because, as you say, we have a generous social support system. We also have support programs for both private companies and households during the pandemic. On one thing, the government got it right: it launched big budget-backed support programs, which we can pay for because Sweden has very strong public finances. And the shows ended up costing a lot less than we thought. Public debt cannot rise more than 35% of GDP at the beginning of the year to just over 40%, which is still very low in international terms.
Why was it less expensive? Were there fewer people to go to?
That seems to be part of the reason, but the main thing is that the economy is doing better than we thought. It recovered pretty quickly, GDP is expected to drop around 3% this year, just half of what we estimate in late spring. As you know, we have a very tough second wave at the moment. [de covid]but it came so late that I think it won’t have a big effect on GDP this year anymore. The measures we have taken have certainly contributed to this. I think that in the short term it is reasonable to say that the Swedish economy has gained with less restrictive measures than in other countries. But in the long run it is still difficult to make this assessment, because there will also be negative economic effects of not maintaining a low level of virus transmission. This means that there will be big adjustments in the behavior of people who will consume less, especially where physical presence is required.
Precisely for this reason, many people argue that there is a false dichotomy in the choice between saving the economy or saving people’s health. What is your opinion?
Yes, there is much in favor of this argument. It is very difficult to separate the effects of formal confinement from the effects of spontaneous adjustment of people’s behavior. This is a troublesome topic to research. If we look at countries that have had severe limitations, we may have less spontaneous behavioral adjustments. But this question is really difficult to analyze because those who imposed strict restrictions generally did so in response to an already high transmission of the virus, so how do we know what caused what?
We are talking about the economic effects, but seen from the outside, doesn’t the government seem to have invoked the economic argument, or was that a point that was talked about and less reported outside the country?
You are right, at least partially. It was never well explained because we chose the strategy we follow. The Government withdrew and practically followed the advice of the Public Health Agency, signing below. The agency has not been very transparent. At times, their caregivers seem to have aimed to achieve group immunity quickly, by allowing the virus to spread widely; They will deny it, but some of their statements point in that direction. On other occasions, they stressed that the strategy must be sustainable over time and, therefore, the measures cannot be too harsh. At times, they have denied that economic considerations have been made, but at other times they have underlined the economic benefits that they believe the strategy has brought. I think all these considerations played a role.
Why do you think the Government has signed the recommendations of the Public Health Agency below?
A pandemic is a new political issue and politicians are used to arguing about the economy but not about a pandemic. Another possibility is that they prefer not to have the responsibility and have a possible scapegoat. Another very strange thing is that the opposition did not protest. There was a lot of criticism from the scientific community, which could have been used by the opposition to attack the government. But that didn’t happen, which is very unusual.
I’ll tell you something more personal. I have been in public debate for about 50 years. I have already discussed many controversial topics. But I have never received so many reactions, comments, emailssaying to shut up. I think a lot of people don’t even want to think that the authorities may not be doing the right thing.
I think the opposition must have seen this in their polls and realized that politically it is better to support the government. And this could be seen, for example, in spring, although the number of infections has increased, support for the Government has also increased. And now it seems the same is happening, at least according to a recent survey.
