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