In the panic of the pandemic, we are making a lot of category errors. A category error, or mistake, is a term coined by the Oxford philosopher Gilbert Ryle. In The Concept of Mind (1949), he gives a very English example. “A foreigner watching his first game of cricket learns what are the functions of the bowlers, the batsmen, the fielders, the umpires and the scorers. He then says, ‘But there is no one left on the field to contribute the famous element of team-spirit.’ ” Ryle went on to make his most famous point, that René Descartes was wrong to represent the human mind as a “ghost in the machine” — something distinct from the body. We no more have separate minds than a cricket team has a 12th player with the job of boosting the others’ morale.
Still, if the ghost of Ryle will forgive me, our minds today seem to be in a state of great confusion about what may befall our bodies. We are suddenly fearful of the invisible yet seemingly ubiquitous coronavirus. Yet we struggle to think clearly and to act consistently.
When I first warned readers of this column in January to “brace yourself for a coronavirus pandemic”, I was widely seen as an eccentric. Now, according to a CNN poll published last week, a “majority of Americans (55%) say it is at least somewhat likely that someone in their local community will be infected with novel coronavirus in the next few weeks”.
On January 29, I warned the clients of my advisory firm, Greenmantle, that “financial markets have not priced in the extent of the Chinese economic slowdown that the coronavirus — and Beijing’s belatedly aggressive response to it — imply”. Only a minority of them paid heed; as recently as 12 days ago, one was still mocking me as “a Debbie Downer, Fergie Frowner”. I’m still frowning. Despite Friday afternoon’s whistling past the graveyard, US stocks are down 20% from their peak.
The first category error I observe today is that many investors, seeing the extraordinary market volatility of the past week — which rivals the financial spasms of 1987, 2001 and 2008 — conclude that they are in a financial crisis. They therefore expect central bankers and finance ministers to deal with it, as they dealt with the last one.
But this is not a true financial crisis; it is a public health emergency with financial symptoms. Monetary and fiscal stimulus is no more likely to halt the pandemic than a quarantine of Wall Street would have halted the great banking panic of September 2008. No amount of quantitative easing and deficit spending can avert a recession in America if Covid-19 is spreading through the population at an exponential rate and if the combination of prudent cancellations and consumer panic will bring much economic activity to a halt.
An earlier category error was to confuse demagogy with leadership. I was not one of those who defiantly persisted with “never Trump” after the current occupant of the White House won the Republican nomination in 2016. I was more of a “seldom Trumper” — someone who, with all due reservations about Donald Trump’s character and temperament, was prepared to acknowledge the ways this president, in his feral, instinctive way, had improved on the foreign and economic policies of his predecessor.
But there was always going to come a crisis that would expose this president’s flaws — and it has come in the year he seeks re-election. Two weeks ago I argued that Covid-19 posed a mortal threat to his presidency. Last Thursday the prediction markets came around to my view, with Joe Biden edging ahead as the favourite to win on November 3.
Nevertheless, I feel as if I have read Peter Wehner’s latest piece in The Atlantic — “The Trump presidency is over” — a few times before. Oh yes, that was Steve Bannon’s line in August 2017, and numerous less interesting figures have used it in between.
This brings me to the third potential category error. Is California — or New York state — Italy? If so, then I agree that Trump is done. But are we sure? Will the impact of the coronavirus really be as devastating to one or more US states as it has been to Italy?
It is now quite widely assumed that it will be. That is why there has been panic-buying of hand-sanitising liquid and toilet paper in many of our local supermarkets. That is why a significant number of my friends are leaving California and New York for states they think will be hit less hard by the pandemic. John F Kennedy airport was thronged yesterday with people doing what, since time immemorial, they have done in times of plague: fleeing the big city (and spreading the virus).
If the whole of America goes the way of Italy then, adjusting for population, within two weeks there will 95,000 confirmed Covid-19 cases and nearly 7,000 dead. The war zone scenes in some Italian hospitals will be replayed in San Francisco or New York — and they may even be worse, as America has slightly fewer hospital beds per capita than Italy.
The puzzle is why this is not already happening. Between December 1 and February 5, roughly the same number of direct flights went from Wuhan to Rome (28) and Paris (23) as went to San Francisco and New York (23 each). Indeed, according to research by network scientists at Northeastern University in Massachusetts, America was the fifth most likely country to import Covid-19 from China, after Thailand, Japan, Taiwan and South Korea. The risk for Italy was substantially less. Moreover, according to a new paper from the same team, America should have begun to see local generation of more than 50 infections per day sooner than Italy.
Yet, although the curve of confirmed US cases looks about as steep as the curve for Italy, there appears to be a lag. Some have hypothesised that America is about 11 days behind Italy, so San Francisco will be where Milan is today by March 26. But why is it behind? The obvious explanation is the disastrous slowness with which America has been able to make functioning Covid-19 tests available. Even without testing, however, we would expect to see many more people already falling ill and dying in American hospitals. It is not as if older Americans are on average healthier than their Italian contemporaries — rather the opposite, I should think.
A better explanation, which I owe to two German economists, is that Italy’s social network may differ from America’s in terms of general gregariousness and physical proximity, and, more importantly, in terms of interactions between the older and younger generations.
A fourth and final category error is to confuse a real pandemic with science fiction. Just as it was underreaction to dismiss Covid-19 as “just the flu”, it is overreaction to think we are now in the film Contagion or the novel Station Eleven. We are entering the panic phase of the pandemic. Paradoxically, that is a good thing — because just a couple more weeks of complacency really would have been an error.
Niall Ferguson is the Milbank Family senior fellow at the Hoover Institution, Stanford
I know Joe Biden. Not well, but well enough to have had a good chat when we ran into one another at the Irish embassy in Washington on St Patrick’s Day last year. I must also confess to rather liking Biden. In 2015 I argued that he would win if he ran the next year. He would certainly have been a more engaging candidate than Hillary Clinton, especially in those key states — Michigan, Pennsylvania and Wisconsin — that carried Donald Trump to the White House.
A veteran professional politician of the homely, Irish-American, middle-class, press-the-flesh variety, Biden overcame personal tragedy (the 1972 car accident that killed his first wife and daughter and seriously injured his two sons) to become the reassuringly conventional vice-president to Barack Obama — not only the first black president but just 47 when elected. Because, folks, Biden is exactly what central casting used to think a US president should look like.
Yet in 2020 there has been something about his campaign that has been, well, off. I could give numerous examples of Biden losing his train of thought and stumbling over his words, but this is the one that has worried me the most.
Biden was speaking last Monday at a campaign event in Texas. The crowd was fired up; their man had been on a roll since winning South Carolina two days earlier. And this is what he said:
“We hold these truths to be self-evident. All men and women are . . . created by the . . . go . . . you know, you know, the thing.”
I hope you don’t need me to tell you that Thomas Jefferson’s preamble to the declaration of independence is a little more eloquent than that. “We hold these truths to be self-evident,” wrote Jefferson, “that all men are created equal, that they are endowed by their creator with certain unalienable rights, that among these are life, liberty and the pursuit of happiness.” No mention of women. No “you know”s. And no “the thing”.
Earlier this year, The Atlantic ran a sympathetic story about Biden’s boyhood stutter, suggesting that this was the reason for his verbal stumbles — though Biden himself kept telling the author that this wasn’t the problem. Listening to him since he launched his campaign, I’ve frequently wondered if he’s suffered a stroke since I last saw him, but we’d surely have heard about that, as we heard about his rival Bernie Sanders’s heart attack.
Maybe one day they’ll make an Oscar-winning film called The Veep’s Speech. Alternatively, Biden is 77 years old and it really, really shows.
These days many people in America struggle with basic arithmetic. On Thursday’s edition of The 11th Hour with Brian Williams, the show’s host and Mara Gay, a member of The New York Times’s editorial board, both appeared to accept the claim that if Mike Bloomberg had distributed to his 327 million fellow Americans the amount he spent on his failed presidential campaign — more than $500m (£383m) — each of us would have received at least million dollars, as opposed to $1.53.
Well, here’s another one for Brian and Mara. What age would Biden be at the end of his time in the White House if he won this November, secured a second term in 2024 and did not kick the bucket along the way? That’s right: 86.
All of which only adds to the mystery of Biden’s political comeback. Prior to his victory in South Carolina on February 29, Biden appeared to be out of it in both senses. By last Wednesday morning he was back where he began last year: the frontrunner, with 627 delegates to Sanders’s 551. Not only did Pete Buttigieg and Amy Klobuchar drop out last week, but they promptly pledged their support to Biden. Bloomberg followed suit on Wednesday, while Elizabeth Warren declined to back Sanders, to whom she is closer on the issues but from whom she personally recoils.
There have been primary comebacks before; indeed, an election year is incomplete without at least one. I remember vividly, as one of John McCain’s advisers in 2008, glumly anticipating his exit from the race, only for his almost-broke campaign to turn around and propel him to the nomination after he won New Hampshire. It was that same state that made Bill Clinton “the comeback kid” in 1992.
But Biden lost New Hampshire, finishing in ignominious fifth place. To find a comeback this late in the game, you need to go back to the 1996 Republican nomination contest, when the veteran Kansas senator Bob Dole went into the South Carolina primary having lost three states to the conservative firebrand Pat Buchanan.
The kingmaker then was Carroll Campbell, the state’s popular Republican governor. Just as House majority whip and South Carolina representative Jim Clyburn did for Biden, Campbell went all-in for Dole, signalling to the voters in the state and nationally that he alone had a shot at beating the incumbent president. Dole won South Carolina easily, after which he won every remaining contest with the exception of the Missouri caucuses.
Of course, Dole went on to lose to Clinton, so this is an analogy Biden would probably prefer to have a senior moment about. Yet I am not so sure he would lose to Trump if nominated.
The other key takeaway from last week is that the majority of black voters backed Biden — and not just in South Carolina. As the brilliant young African-American writer Coleman Hughes noted: “The fact that black voters went overwhelming for Biden is only surprising if you’re unaware that black dem voters are way more conservative than white dem voters. The progressive activist class may feel itself to be channeling black America’s politics, but it’s not.”
Black voters matter: the sharp nationwide drop in black turnout between 2012 and 2016 was a decisive factor in Hillary Clinton’s defeat. But black voters don’t necessarily gravitate towards black candidates — otherwise Kamala Harris and Cory Booker would have got further with their nomination bids.
In the coming months, the virulence and lethality of Covid-19 will almost certainly matter more than Biden’s charm and incoherence. A large outbreak in an American state and/or a recession caused by the global shock of the potential pandemic could make Trump a one-term president.
St Patrick’s Day is nine days away. If the luck of the Irish holds, Trump is about to be hit by a cross between Hurricane Katrina and Lehman Brothers, and the man he derides as “Sleepy Joe” will duly oust him from the White House.
And if Covid-19 hits only the Democratic states of the coasts? If the economy stalls for a quarter but doesn’t crash? If the message sticks in the Midwest that the outbreak was a hoax?
Then I fear we are in for one of the least intelligible concession speeches in . . . you know, the thing.
Niall Ferguson is the Milbank Family senior fellow at the Hoover Institution, Stanford
‘The coronavirus panic is dumb.” I hesitate to disagree with Elon Musk, but here goes.
The wrong way to think about the rapid spread around the world of the novel coronavirus, 2019-nCoV, and the disease it causes, Covid-19, is to say—as another smart and wealthy man put it to me last Monday—“Remember the H1N1-A virus of 2009? Neither do I. It infected a significant chunk of the globe, killed 20,000 U.S. citizens and we got over it pretty quickly.” He might have added that 20,000 is less than half the number of Americans who died of influenza and pneumonia in 2017.
H1N1, also known as swine flu, was a form of influenza. The reproductive number—the number of people a carrier typically infected, R0 for short—was 1.75. In the U.S., the CDC estimates that H1N1 infected 60.8 million people and killed 12,469, for a mortality rate of 0.02%
This new coronavirus—which is not influenza—appears to have a higher R0 and a much higher mortality rate. That rate is almost certainly lower than the World Health Organization suggested last week (3.4%), but it is still much higher than for H1N1. South Korea, which probably has the most accurate data given its aggressive testing regime, reports 50 deaths from 7,313 infections, a mortality rate of 0.68%. If as many Americans catch Covid-19 as caught swine flu, the death toll could exceed 440,000.
In short, Covid-19 has the potential to make 2020 much more than a bad flu season. To understand why, we need to apply more sophisticated frameworks than are being employed by most lay commentators, billionaires included.
“In Wuhan there also seems to be a new outbreak of pneumonia that’s bad.” That was the first mention in my email of the coming pandemic, on Jan. 4. Just over two weeks later, I noted that the new virus had “already caused three deaths in the city of Wuhan” but warned that it could spread rapidly, like SARS in 2003, as the outbreak coincided with the Chinese New Year celebrations. Ten days after that, on Jan. 30, the number of confirmed cases world-wide was 9,776 and the total deaths 213. As of March 8, there are more than 107,000 confirmed cases and close to 3,700 deaths.
At first, the number of cases outside China did not grow exponentially. But that changed in February. Three weeks ago, the number was doubling every eight days. Now it is doubling every five days.
Standard epidemiological models tend to understate the threat posed by a virus such as 2019-nCoV, because they don’t take account of the topology of the social networks that transmit it. Thanks to the work of network scientists such as Romualdo Pastor-Satorras and Alessandro Vespignani, we now understand the extraordinary power of modern transportation networks combined with the social-network hubs known as “superspreaders.”
To quote László Barabási, Mr. Vespignani’s colleague at Northeastern University, “When it comes to the spreading of a pathogen, the epidemic parameters are of secondary importance. The most important factor is the structure of the mobility network. . . . An influenza virus moves through a continent with the speed of a sports car or of a smaller airplane.”
That means travel restrictions tend to be imposed too late to stop the spread of a contagious virus along the routes between the world’s 3,000 busiest airports. What matters is not geographic distance but “effective distance” in journey time.
Then there are all the local networks on the ground, where airports, shopping malls, supermarkets and schools act as hubs connected to countless homes and offices.
Finally, and crucially, there are social networks, which have the same “scale-free” character as the transportation networks: A relatively small number of nodes have an amazingly high number of edges. In good times, these are the frequent flyers, the gregarious networkers, the sexual Lotharios. In times of contagion, they are the superspreaders, like Gaëtan Dugas, the Canadian flight attendant who claimed to have had 2,500 sexual partners and came to be known as “patient zero” in the early histories of AIDS, or Liu Jianlun, the physician from Guangdong Province who brought SARS to Hong Kong when he checked into the Metropole Hotel on Feb. 21, 2003.
Nicholas Christakis has shown that there was a similar pattern at Harvard when H1N1 came to campus. “The speed with which people acquired the flu during the epidemic, depended on various aspects of their social network position,” writes Mr. Christakis, who is now at Yale. “Those with more friends, those who were more central in the network, and those whose friends did not know each other got it sooner.”
Similar processes have caused Covid-19 to spread with startling speed around the world, then outward from transport and social hubs. A British businessman who went from a conference in Singapore to a ski trip in the French Alps was one of the first superspreaders to be identified in this epidemic. The virus reached Switzerland via a group of tourists returning from Italy.
For all these reasons, the number of known cases in the U.S. (436) must be off by at least one order of magnitude and more likely two, simply because of the disastrous shortage of test kits. According to Messrs. Pastor-Satorras and Vespignani’s Global Epidemic and Mobility model, the United States is the fifth-likeliest country to import Covid-19 from abroad—after Thailand, Japan, Taiwan and South Korea. If the U.S. turns out to have proportionately as many cases as South Korea, it will soon have some 46,000 cases and more than 300 deaths—or 1,200 deaths if the U.S. mortality rate is as high as Italy’s.
Network effects are the reason it is anything but dumb to worry about the novel coronavirus. Not only is it spreading much faster than most Americans realize; it is also disrupting global manufacturing supply chains as well as all the economic activities that depend on travel and proximity. It could set off a cascade of defaults in the corporate bond market, disrupting the global financial network.
Finally, cable news and online social networks can be relied upon to disseminate alarmist and downright fake stories about the pandemic—like the widely circulated map of global air routes that, according to one Australian website, depicted the “flight data of an estimated five million Wuhan residents who fled during the critical two weeks before the outbreak city was placed under lockdown.”
That aspect of the panic is indeed dumb. But that doesn’t make it smart to underestimate the scale of the Covid-19 pandemic—a perfect illustration of the vulnerability and fragility of our networked world.
Mr. Ferguson is writer and host of “Niall Ferguson’s Networld,” based on his 2018 book, “The Square and the Tower,” which will air March 17 on PBS.
“As flies to wanton boys are we to the gods. They kill us for their sport.” Gloucester’s despairing words in King Lear have been etched in my memory since I first heard them as a schoolboy. The gods also amuse themselves by sending natural disasters to humble vainglorious leaders.
The world has all four of the horsemen of the apocalypse these days: pestilence, war, famine and death. There is, of course, the pestilence now known as Covid-19, the new coronavirus. There is war in Syria and a nascent civil war in the streets of India. There may well be famine, too, if the locusts continue to ravage the crops of east Africa and south Asia. And there will surely be more death in 2020 than in a typical 21st-century year.
Fortunate is the American president who is not confronted by at least one devastating hurricane or terrorist attack or mass shooting. Fortunate is the president who does not have to console grieving survivors in at least one devastated city. But 2020 is a whole different divine sport.
We had all grown complacent about the threat posed to humanity by disease. I’m not sure quite why. The new diseases of our time did their best to remind us of nature’s supremacy over homo sapiens. From Aids to ebola, from Sars to Mers, we were given repeated warnings that we were just one mutant virus away from calamity.
Perhaps our growing preoccupation with climate change gave the lie to our outward insouciance. But the gods have a cruel sense of humour. Even as we were becoming obsessed by the dangers of carbon dioxide emissions and rising global temperatures in the decades ahead, they sent a virus almost perfectly designed to throw us into confusion right now, at this moment.
The great plague narratives of the past were concerned with diseases that were highly lethal. Read Daniel Defoe’s A Journal of the Plague Year (1722), which starkly depicts the last great plague outbreak in London in 1665. Or read Katherine Anne Porter’s Pale Horse, Pale Rider (1939), about a wartime romance cut cruelly short by the influenza pandemic of 1918-19. (I especially recommend the latter if illness has never brought you to the brink. Porter’s description of near-death is unforgettable.)
By comparison, Covid-19 is not especially life-threatening. According to the best available data at the time of writing, there have been about 85,000 confirmed cases worldwide, roughly 94% of them in China, and 78% of them in the province of Hubei. The implied global mortality rate is 3.4%, but that is surely an overestimate, because the denominator (total cases) is being underestimated by infected people who don’t feel sick or don’t check themselves in for medical care.
We also know that, unlike the “Spanish flu” of 1918-19, Covid-19 disproportionately kills the elderly and those with existing conditions, such as cardiovascular disease, diabetes or chronic respiratory disease. Worry about grandparents: the mortality rate for people in their eighties is above 14%, whereas it’s close to zero for those under 40.
Yet those who blithely say, “This is no worse than the flu” — which will likely cause between 16,000 and 41,000 deaths in America this season — are missing the point.
What makes Covid-19 dangerous is not so much the threat it poses to the average person’s life, but the threat it poses to economic growth. Uncertainty surrounds it because it is so difficult to detect in its early stages, when many carriers are both infectious and asymptomatic. We don’t know for sure how many people have it, so we don’t exactly know its reproduction number and its mortality rate. There’s no vaccine and there’s no cure. Last week this uncertainty, crystallised by a leap in the number of Italian cases, gave the US stock market its worst week since the great banking crisis of 2008-9.
I have often been asked in the past few years where the next financial crisis will come from. I have said, time and again, that it will come not from America but from China, now the second-largest economy in the world. Sure enough. A pandemic is very different from a bank run, to be sure, but in each case we witness the same phenomenon, which is characteristic of a networked world: a cascade of consequences driven by fear of the unknown.
Though old enough to be in the vulnerable part of the population, Donald Trump, 73, is well known for his high standards of personal hygiene (“Germaphobia”). Yet it is his presidency, more than his life, that is in mortal danger from Covid-19.
Although his administration did indeed take the right decision, early in the Chinese outbreak, to limit travel from China to America, it did little to prepare for the eventuality of a large US outbreak. Worse, last week Trump made the mistake of playing down the risk. “This is a flu,” he said at his press conference on Wednesday evening. “It’s a little like the regular flu that we have flu shots for . . . We’ve done a great job keeping it down to a minimum. Tremendous success at keeping the virus away.”
Maybe. But it seems likely that there will soon be an outbreak in California. (Fact: the number of confirmed cases outside China continues to grow exponentially.) No one knows for sure because, we learnt last week, there are just 200 functioning diagnostic kits in the entire state.
As president, George W Bush had at least four brushes with the horsemen of the apocalypse. The first, the September 11 terrorist attacks, dealt a severe but temporary blow to an economy that was already in recession. Newly elected and initially blindsided, Bush struck the right notes of defiance and vengeance and experienced a surge in popularity. The second was the war of choice he launched against Saddam Hussein. Fortunately for Bush, he got re-elected before the public mood had truly soured on the Iraq War.
Then, in 2005, came Hurricane Katrina, which would have made him a one-term president if it had happened a year before. Finally, there was the financial crisis, which drove his popularity down to its nadir and doomed John McCain’s attempt to keep the White House in Republican hands.
A Covid-19 outbreak in one or more large American cities would inflict a September 11-level hit on the US economy and a Hurricane Katrina-level hit on Trump’s popular approval. The fact that the principal beneficiary in that scenario would be a lifelong democratic socialist committed to universal public healthcare must be the kind of thing the gods find entertaining.
Niall Ferguson is the Milbank Family senior fellow at the Hoover Institution, Stanford