CoViD-19 – Are we still appreciating reality?

Dear friends, colleagues, business partners and interested people,

A bit more than a month ago, I posted an article about what happens if we appreciate the reality of the CoViD-19 situation instead of just following news. Beside other hypotheses, I postulated that many issues around CoViD-19 can be viewed as ‘time problems’ or challenges and that reaction might be informed rather by cultural background than scientific fact interpretation.

Today, I want to give an update as my perspective on the situation changes constantly, too. And I collect observations every day which I would like to share with you and hope that it might spark further discussions and exchange of ideas between yourselves, with relevant people as well as – very much welcomed – with me directly, too.

I will start with some more time-wise and cultural crisis adaptation issues which will provide an interesting perspective on current CoViD-19 reactions. Those are based on the stages of crisis and adaptation and so called ‘problem behavior’ from psychological research. This will be followed by some thoughts around the issue of balancing the time-wise problem of shortening life expectancy vs. economic impacts, complemented with a provocative (and not quite seriously proposed) measure to contain the spread of the pandemic. Lastly, I want to comment on some mathematical observations and scenarios which touch on some of the timing aspects, too. Finally, I am going to derive some updated conclusions.

Stages of crisis

I have seen so far only limited discussions about crisis management from a holistic perspective. Meaning different determinations of how crises on personal as well as ‘organizational’ level enfold. CoViD-19 is a health crisis as well as an economical one and basically affecting most areas of personal, societal and economic life. That means it can be valuable to look at how crises enfold and how one (or a group of people) adapt to it based on psychological research. Based on different – but compatible models – of adaptation, crisis management or even grief cycles, the following stylized model can be used:

From my personal observations and interpretation of such, different parts of society are in different stages of crisis and adaptation according to this model. We can for sure say that most countries which are heavily affected are through the shock stage. But then, differences start already. Overexaggerating, one could say that people who are quite vocal about so called conspiracies or doubting CoViD-19 effects, are not really believing those theories but are prone to the denial state. What is interesting is, that based on the various psychological models people being in denial are much more certain – meaning that they think of themselves as being very competent – of their position than those people which are already through most of the rationalization or those who are at the bottom of the curve intellectually and emotionally accepting that they do not know everything about the situation. And that a lot of measures still need to be taken.

Even the questioning of scientific results by ‘non-experts’ and the proneness to believe statements by non-experts by a bigger part of society can be explained by this model if one would assume (stylized) that the scientific community is time-wise a step ahead in terms of crisis adaptation. Given the people of the scientific community in general, we can assume this as being true; however, this is not a judgement on personal level. That means current conflicts of public opinion (and sometimes even policy and decision makers) and the scientific community could be explained by the time-lag between parts of the society which are at different stages of crisis adaptation. Leading to what I call the triangle of overconfidence. Which only can be reduced by educating the broader public on the issue and incentivize ‘self sustainable’ and ‘self reliable’ behavior. This would need to lead to a shift of responsibility from public sources to individuals and enable individuals to take an informed decision about their behavior instead of just ordering things top-down.

Stages of problem behavior

Currently, those parts of society which are more to the left-hand of the upper graphs perceive that public sources decide on measures with limited understandable justification. Which might not be the case factually, but it is a direct result of the time-induced difference in staging of crisis adaptation. As those parts of society feel a threat to their current situation, they are indeed engaging in what in individual psychology, one could call problem behavior. Adolf Adler described five stages of problem behavior:

1. Demand for admiration – Meaning the wish to be acknowledged as being special compared to others. Generally, others would not classify this as outright problematic, but things start here. Mostly people with lower (real or underlying) self-confidence have the tendency to compensate with aspiring special positions in society and longing for explicit praise.
2. Attention drawing – If those individuals have the feeling that they are not getting what they wish for, they are provoking reactions and trying to direct attention to their thoughts/actions/statements.
3. Power struggle – If still the reaction is not yielding admiration or attention, the next escalation will be to start power struggles, meaning questioning the authority of people in charge or of experts.
4. Revenge – Should such persons lose the power struggle, they will engage into revenge to prove that they are right and have the right to pertain their position.
5. Proof of incompetence – The last stage of problematic behavior according to Adler is accepting that one cannot be of any value. Meaning that those people are – at least partially – lost for adding positively to any group or society as they have given up on themselves.

I would say that indeed we see such problem behavior currently enfolding quite significantly on all levels outside the scientific community. Unfortunately, when looking at the situation through this lenses, it is not because of a lack of explaining facts, but that some of those people want to be seen as being experts or special, which they most likely are not.

And the challenge will be – time problem again – to not ignore them but re-directing them back and showing their value to society as any problem behavior after stage 2. is disadvantageous especially in the current situation where economics and health issues are showing that we can only win together. Together is indeed better. Everything after stage 3. has the potential to disintegrate societal cohesion dramatically.

However, there is a significant challenge: A solution will involve to invest significant time and efforts and keep communication lines open and provide a lot of explanation to those engaging into such behavior. This effort and time needs to be used to explain the situation based on ‘intersubjective’ facts and allow for differences of interpretation of such instead of requiring an acceptance of the situation and measures only. All of us will need to take the underlying fears and doubts serious instead of just closing communication channels if we want to maintain our societies.

Unfortunately, since the end of the cold war, Western countries have reduced efforts for political and societal education (i.e. explaining the basic assumptions and mechanics as well as boundaries and shortcomings of ‘liberal’ societies) and exchanged this for a promise of unlimited economic development. Meaning the definition of a liberal society has been exchanged for the definition of the most successful economic system. Which is not the same, though there should be a long-term correlation (but not short-term or at any given point). And this makes the dealing with problem behavior related to CoViD-19 even more difficult as a common understanding about this needs to be established first. Otherwise, there is no possibility to confront the situation constructively.

Balancing and a provocative proposal

So what? From my perspective this leads ultimately to my previously stipulated underlying time-wise problem of CoViD-19. It is about shortening life spans and deferring – or now it might be even loosing – economic income and benefits. An argument brought forward is always that we should neither solve one at the expense of the other. And that there is a maximum bearing of economic damage which should not be exceeded to save more lives (which is extending average life spans).

I agree that there is a maximum economic capacity. Meaning if this capacity is exceeded, the following damage is bigger than if we would not have done anything against the pandemic. However, this borderline is only observable ex-post, though it is inevitable. If one tries to define this ex-ante, it would mean engaging into the discussion, what a humane or generally acceptable and worthy life expectancy is. And it would mean that some people decide actively about who should die for the benefit of the bigger society and the economy. Especially those feeling (and I mean feeling, see above) that they have nothing to fear from CoViD-19 are generally fast in requiring such a decision and think that they do so for the best of the broader public. However, they will most likely adapt each time they will have to fear health damages on their own. And the general difficulty is that all determinations would be discretionary only. Meaning somebody actively decides to kill other people. It’s disguised in the exchange of arguments. But it is something different if one cannot do something about other people dying because of CoViD-19 and its effects (e.g. if health system capacities are fully used) or whether one actively decides when to stop support. Active omission can be an act of killing. And – just for the sake of it – if one would draw the borderline at e.g. the age of 75, next time, it will be easy to lower the threshold to 70. Then to 65, 60, 55, 50 and so on. As long as there are enough ‘overconfident’ people arguing in favor.

Ultimately, this means to things:

• We should be conscious about the fact that after CoViD-19 we will be able to reverse calculate what the borderline has been (by observation) but that we should not set ex-ante thresholds.
• We should leave – as much as possible – individuals decide on their own how much value they place in their health and the health of their loved ones. However, only after reducing the level of overconfidence shown above.

This leads me to a provocative but not overly serious proposal: The real issue about managing CoViD-19 is that there are different interpretations of the severity of the issue and different preferences on ‘life expectancy’ vs. economic wealth coupled with the overconfidence triangle. Simultaneously, governments reduce self-responsibility of individuals either by severe mitigating actions or pretending that there is no issue at all. Both strategies de-value individuals as human beings, their problem-solving skills and ability to act responsibly.

So, let’s follow a thought experiment. What would happen if the following would be implemented:

• Public sources will provide a better formulated narrative and more information to the broader public in an information campaign about CoViD-19 and establish open and ongoing communication channels about latest scientific research without interfering in the interpretation.
• Then, every person who can prove that he/she has not had CoViD-19 will receive an amount of money, let’s say $ 100 per month (if certificates can be provided).
• And if a person is going to be infected with CoViD-19 and requires hospitalization, he/she needs to bear 50% of the costs themselves (meaning not being supported by health insurance for half of it) as from now on. I.e. it would be a personal decision to engage into risky behaviors (like smoking or extensive drinking or extreme sports).
• Additionally, if one has infected others due to his behavior, he/she needs to bear the other 50% of any induced hospitalization.
• The negative incentive could be amplified by requiring collateral to prove that the responsibility taken can be exerted in real terms.

All of which provides positive and negative incentives to act responsibly. Moreover, business models would evolve around those kinds of measures which means channeling activity constructively around the matter and enforcing self-sustainable and self-responsible behavior and taking people seriously. Lastly, because based on economic demand, test capacities would surge and physical distancing and hygiene measures will become a business case for everyone. Ultimately, leading to additional economic activity supporting the recovery and shortening the time-wise impact of the crisis by privately organized and self-directed containment of the virus.

Some mathematical observations

CoViD-19 is beside the medical, epidemiological and virologic issues one of math. Many of the misunderstandings or disbeliefs come from the effects of large numbers, mathematical trajectories and the rather limited ability to ‘feel’ or ‘perceive’ matters that are outside our immediate physical grasp. Therefore, I collected some (I’ve got many more) examples of such as anecdotal points of information:

• Sweden has roughly 1/8 of inhabitants of Germany. Sweden has ca. 4,000 deaths and counting. I.e. seeing Sweden as a role model for Germany in terms of tackling the medical part of the crisis would mean accepting a death toll of 32,000 and counting vs. ca. 8.000 actual. I wonder who sensibly thinks in this direction …
• Let’s do it the other way round (all numbers constantly changing and rounded) and look at the often criticized US: The US has ca. 330m citizens and a death toll of 90.000 and counting. Compared to Germany, that would mean a death toll of ca. 22,000 compared to 8,000 actual (90,000/330m*82m). However the US numbers are in relative terms much better than in the UK (18,000 at US rate vs 35,000 actual), France (18,000 at US rate vs 28,000 actual), Italy (14,000 at US rate vs. 31,000 actual), Spain (13,000 at US rate vs 27,000 actual) or Sweden (2,700 at US rate vs 4,000 actual) and roughly in line with the Netherlands (5,000 at US rate vs 6,000 actual). The US seems not to arrive overly outside the western ‘peers’ final counts and is currently performing still better than most.
• Some observations on testing:
• If Germany ramps up its testing capacities to 4m per week (officially stated), that means that we can test the whole population (without double tests) in ca. 21 weeks. This is half a year! in which we would need to stay in lockdown (everybody) to not re-spread the virus. Is this a good strategy, just looking at testing? Not taking into account that we do not know yet whether there is long-term immunity.
• Let’s cross check with the US again: Currently processed tests are roughly at 1m per day (significant absolute number!), i.e. one would need 330 days (one year!) to do a full testing run. Even with scaling to 2m per day (= doubling) we ‘only’ end up in roughly half a year in full lockdown if testing would be the only strategy.
• “Who knows a CoViD-19 victim or an infected person? I’ve never seen one, so it’s not real”: In Germany you would need to know ca. 10,000 people to certainly know one victim (82m citizens, 8,000 dead). And you would need to know ca. 450 people to know one infected person for sure (82m citizens divided by 180,000 positively tested). Indeed, the likelihood that nobody in one’s direct surrounding is infected, or a victim is much higher than the other way around. That is a good sign still but doesn’t mean that there is no problem.
• Let’s do the math on expected victims: Again, Germany first (*hahaha*); With 82m citizens, if we pursue the societies ‘natural’ immunity, 2/3 would need to be infected. Assuming an average death toll of 0.2-0.4% (i.e. without all measures taken now for increasing hospital capacities and reducing infections) results in 100,000 to 200,000 deaths. And again: Who decides this on what metrics? What a leader would we have to decide that this is ‘worth it’? Now US: 330m citizens, same death toll without counter measures leads to 440,000 to 880,000 deaths (ceteris paribus).
• As a comparison: The US lost roughly 300,000 soldiers during World War II and 60,000 during the Vietnam War. I wonder how conservative politicians can justify the CoViD-19 result. It means that even with 100,000 deaths (Donald Trumps stated target) due to CoViD-19, the US accepts without external threat and combat one third of the death toll of World War II and up to twice the death toll of Vietnam.
• The US (as a proxy for many countries; it’s not a US thing in itself) invest more than $ 650bn yearly into their military (direct spending only, much more if all intelligence is taken into account). It could be seen as investments into the protection of their armed forces. I.e. the more money spent, the higher the average life expectancy of a member of the armed forces. And they can expect to get as much investment as possible as they have signed up for servicing their country and putting their lives at stake for others they serve. However, with far below 1,000 casualties per year, the amount per live is enormous. And even if compared to the ca. 1,3m active armed forces members, one arrives at $ 0,5m per live per year! A fraction of this amount would have been enough to contain the spread of any given pandemic. However, now much higher amounts are necessary to mitigate economic damages. However, the blame is not with the policy makers only but with the wealthy and industry captains who rallied a long time that this is unnecessary spending and evading tax payments.

So what?

I would like to close with some hypotheses. All of which might not prove true afterwards. Happy to take the blame as we are not in the final stages of crisis adaptation yet:

• The job of policy makers is not an easy one. On one hand because of all the mistakes one could make and on the other hand for all he misjudgments that have been made already (see military spending proxy). Which actually leads to the fact that those who have performed extremely into the latter direction will hardly change their path as they would need to de-mask their own policies and most probably, they believed in their actions (which is not a bad thing in itself).
• Education will be key. Information provision through media alone will not work as the incentives are not there if business models depend on advertising income and/or audience share as most of the information would be boring in a way. Additionally, Western countries will need to spend much more on political and societal education again if societal cohesion is a goal of policy makers. If they won’t, you’ll know what’s going on.
• After education, more responsibility needs to be given back to individuals. Firstly, to include more people in the societal coping with the situation, then to take them serious as individuals and lastly as CoViD-19 will be longer lasting and more severe than expectations have adapted to yet.
• CoViD-19 will most probably not being dealt with mid-term (see numbers) only. Vaccination will not be available for the majority of world population and not even for G20 (it’s not about politics, but about ability to pay). Additionally, a campaign for vaccination would take even more time. This would be a separate chapter on mathematical observations. Just one scenario: If a vaccine will be licensed by end of 2020 and the pharmaceutical companies could produce 2bn charges of the vaccine during 2021 (without stopping other vaccines which are still needed) and it would be distributed only to G20, it would represent less than 50% of G20 citizens (roughly 5bn). I.e. not providing a sufficient immunity. Additionally, if produced in 2021, a vaccination campaign would last probably far into 2022.
• Therefore, money and effort would be better spent in improving hygienic situations around the globe and adjust production and service processes to a changed situation than into keeping the economies in a paused situation. However, this needs to be done prior any comprehensive re-start discussions. And it should be in the interest of companies.
• The transformation of the world’s economies because of demographic change and sustainability is increasingly difficult as most processes need to undergo operational changes.
• Ultimately, this can only happen constructively if the private sector is allowed to do what it can do best. State directed economies generally perform worse in times of severe changes (while they outperform in times of external stability - which we had the last 30 years since end of the cold war). And we will need privately organized capital markets to direct equity and debt capital to where it is placed best.
• But all of this will potentially work better if ‘the wealthier’ will bear their share of this voluntarily. What actually happened after World War II in major Western economies. So it has been done and it can be done again as long as we want to maintain the ‘liberal’ in society.
• Which means the ultimate truth is: CoViD-19 will destroy a lot of wealth in terms of current income. Less wealth means less ability to consume and invest. Which in turn reduces growth again. However, the effect can be borne better (or at all) by those who consume less than they earn. Which are not the lower two thirds of our societies. And there will be a need for a social narrative (see political and societal education). I still hope that there will be more than re-nationalization and xenophobia narratives. E.g. Europe’s wealth after World War II was built (with some help of the US) by a ‘together is better’ narrative. Let’s do it again.

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