The coronavirus command economy

Choice is bad, d’ye see? People might gain what they desire:

It is, however, important to recognise two further issues. One is that we are already moving, very rapidly, towards a command economy being put in place. It has already been announced that supermarkets and the government are working together on a plan to ensure that critical food supplies survive, largely at the cost of reducing the range of products available. This is de facto rationing. And it is the suspension of the availability of that supposedly critical element of the market, which is choice. That choice is, of course, largely created artificially by advertising for the purpose of product differentiation in the interests of profit maximisation. In practical terms, we might, within weeks at most, see the suspension of the market dogma this has underpinned our society for decades, and this will be necessitated by the simple requirement that we survive. Profits will be trumped by necessity. That imperative will close down choice, and transfer decision making to a bureaucratic system, whether we like it or not. And, I stress, this will be done by a Conservative government.

The long term implications are not clear. It might be that this imposition will only last for a matter of weeks, in which case it will be seen as an aberration. I suspect, however, that this is a decidedly optimistic view: the return to normality once what have been thought of as normal conditions have been suspended might take quite a while to manage. Rationing after 1945 lasted for longer than it did during war conditions. Once established, a command economy may take some time to reverse.

And there are good reasons for thinking that might be the case. If this epidemic is anything like as bad as some suspect it might be then the social and psychological impacts will last a great deal longer than the physical threat will. There are already signs that some patterns of behaviour will alter. I rather strongly suspect, for example, that there will be much less business travel after this epidemic than there was before: people will realise that videoconferencing is, now, pretty good. We are already seeing large-scale business events cancelled: I suspect business shows and conferences will be consigned to history, and not many people will mourn that. And people are, apparently already booking more UK holidays: I suspect that this might the start of a significant change in travel patterns. Together, it so happens that these changes contributes to a green theme.

So too, though, does the enforced reduction in choice. A command economy does, as one of its objectives, place priority upon the elimination of waste. People might get used to this, and even welcome it. They might even accept the need for coordinated economic planning to counter the much greater threat that we face from the climate crisis much more readily after this epidemic than they would ever have done before it.

Have you grasped all of that? Firstly, command economies are, apparently, less wasteful than free market ones. This is news to anyone who has ever actually observed a command economy. It’s also not obvious that having your 1,500 calories a day supplied by only turnips is less wasteful than getting 750 a day from each of turnips and swedes. That is, there’s no obvious reason why choice is wasteful. Consumption is 1,500 calories a day, production is, that it’s not a uniform product doesn’t seem to add inefficiency.

But we also need to note the thing he’s really not grasped. Sure, OK, ignore all of the above and agree, choice is costly, in extremis we’ll put up with less choice then. So, what does that tell us? That we humans like choice, that when we’re not in extremis – that is, when we’re richer than just surviving – then we take some of that greater wealth in choice. Just as we also take some part of rising incomes in more leisure etc.

Choice, like health care, pensions, insurance, leisure, being a luxury good. As our incomes rise we spend more of our greater incomes on those things.

What does that tell us then? Peeps like choice. And that’s where Snippa is truly wrong. He insists that we’ve got to give up the very thing we clearly and obviously, by our behaviour, like and desire. Because, not for any reason, just because.

51 thoughts on “The coronavirus command economy”

  1. “It has already been announced that supermarkets and the government are working together on a plan to ensure that critical food supplies survive, largely at the cost of reducing the range of products available.

    WTF is he blathering on about? Let’s say the supermarket has 3 suppliers of baked beans. Heinz, C&B and their own label. Each having 1/3 market share. And the canners are geared up to supply current demand. Now restrict the choice to Heinz & you only get a third of the quantity of baked beans on the shelves. Shortages. Heinz don’t have the capacity to supply more. Why would they be carrying surplus capacity? Manufacturing capacity costs money. And it would apply to any product.
    I can’t think of a single reason why you’d want to restrict choice in a shortage situation. Quite the opposite. You’d need to extend choice to take advantage of every possible supplier.
    Governments may be comprised of the barking mad, but I’m pretty sure the big supermarket chains aren’t.

  2. How dare humans be humans, humans must stop being humans! Ideally, be the cattle I demand they should be, with me the herdmaster.

    Of course, he never contemplates that he would ever be the cattle, in his dreams he’s the slaughterman.

  3. “Because, not for any reason, just because.”

    Of course there’s a reason. Spud wants to be the one doing the ‘commanding’.

  4. Andrew C, not just commanding, but wearing a nice Hugo Boss uniform whilst issuing forth his commands.

  5. He’s manifestly wrong. The word “staycation” was coined at the start of the 2008 financial crisis (see Google Trends). As the pound tanked to €1.02, holidaymakers looked closer to home to save money. But as soon as the economy recovered, foreign travel boomed again. Why? Because when they can afford to, people prefer foreign holidays over domestic ones.

    Same goes for business travel. Every so often some idiot claims that videoconferencing will destroy business travel; yet outside the occasional recession, business travel spending continues to rise. Even the tech giants, who should be leading the charge into videoconferencing, spend small fortunes on business travel.

  6. People might get used to this, and even welcome it. They might even accept the need for coordinated economic planning

    People did, during the war but rationing was detested and even more so as it went on after the war but look at this the other way …
    Why,if the market is always so super, was it not obvious to everyone,that food petrol and nylons should be provided by the free market during and after the war…I mean more efficient innit ? After all this habituationto a command economy did indeed have a long long shadow via the NHS and through to the prices and incomes policies of the early 70s.
    In fact we seem to be returning a new version of this State economy now with the Nationalist Socialist party explicitly directing moneys away form profit and towards politically expedient Northern pork barrel projects (whilst simultaneously making us all poor so the Volk from Stoke can satisfy their natural malice and bigotry ..Oh how I love the darlings )

  7. The Meissen Bison

    Rationing after 1945 lasted for longer than it did during war conditions

    Coincidentally, Labour came to power in 1945.

  8. Yes, but the Labour government didn’t last until 1954 when the last few things came off rationing.

    Oh, but the Labour government of 1945 had completely fooked the economy? I forgot that. (No I didn’t. I just wanted to get in before the Labour apologists did with a bit of satire. If that’s what it is).

  9. Quite… this is 100% wrong: A command economy does not aim to eliminate waste; it attempts to ensure a basic level of provision at any cost. Thus it is by definition less efficient than a free economy where incentives for efficiency and waste reduction are built-in. If your aim is to achieve overall reduction in consumption then there are much more effective ways to do that than a command economy (recession anyone?)… and even then avoiding mass secondary human suffering would be a huge challenge as the effects propagate through the world economy.

    The fun bit here is that everyone has a different definition of ‘waste’. In this case, it seems to be implying that most of the jobs in the UK are ‘waste’, and we should destroy them to get everyone doing basic manual labour instead. Thanks, but no thanks – that’s a shit plan.

  10. Yes, but the Labour government didn’t last until 1954 when the last few things came off rationing.

    Oh, but the Labour government of 1945 had completely fooked the economy? I forgot that. (No I didn’t. I just wanted to get in before the Labour apologists did with a bit of satire. If that’s what it is).

    The soft left approach was common to both Parties until the 70s so you can blame both Parties but, I would suggest, only one misapprehension about how a planned economy was likely to work. As we see now the Conservative Party is by no means averse to high taxes even if they are currently in the future

  11. A command economy does not aim to eliminate waste; it attempts to ensure a basic level of provision at any cost.

    And can’t even manage that.

  12. “It has already been announced that supermarkets and the government are working together on a plan to ensure that critical food supplies survive, largely at the cost of reducing the range of products available.”

    Brilliant example. Neither produce food. But they are going to control it.

  13. As a coda to the Excellent Bloke in Spain, I recall back in 2007 when I lived in Gloucester and the water supply ran dry due to flooding, the reason why water was available so quickly (literally supplies were being delivered to delivery points the evening the taps ran dry)was due to having multiple suppliers able to deliver quickly to the affected area from as far as the Scottish highlands and North Wales. Had that not been the case the impact might have been far greater in terms of potential fraying of the social fabric.

    His beef with advertising is well-known. It’s arguably the most idiotic passage in his Minimum opus ‘The Courageous state’

    As for the rest of the piece, it’s like a bizarre combination of pseudo – intellectualism you might hear in an Islington Saloon bar combined with a rambling reverie for a world where Coronavirus or the risk of Global pandemic is omnipresent and has profound impacts on human behaviour. I have said it before and at the risk of repeating myself will re-emphasize. What kind of person sees an epidemic as an opportunity to advance their own political agenda? Someone either mentally deranged or profoundly depraved. I think in Murphy we might have a subject who fits into both categories. He needs sectioning for the good of the wider community.

  14. an Islington Saloon bar

    I lived in Islington for some years and I cannot recall a “saloon bar”.There were post modern bars venue bars, destination bars, gastro bars and witty deconstructions of the bar …
    On no occasion did I see Terry Thomas swank into a saloon bar and tell everyone about his miraculous drive on the dreaded 9th….

    Van Patten might I ask you when the last time you actually lived in this country was?

  15. NewMania

    I’m still here – it’s a metaphorical reference to him being tedious – perhaps should have been updated to the current era I agree. Are you saying you agree with the potato that we need to move to the North Korean economic model?

  16. “Why,if the market is always so super, was it not obvious to everyone,that food petrol and nylons should be provided by the free market during and after the war…I mean more efficient innit ? After all this habituationto a command economy did indeed have a long long shadow via the NHS and through to the prices and incomes policies of the early 70s.”

    Ever heard of the Black Market? Spivs? GIs supplying British girls with nylons in exchange for favours? British merchant seamen stocking up on cheap US goods while in harbour to sell when back in Britain? That last activity developed into many import-export businesses when rationing stopped. Rationing led to crime. I bet the UK would have been much better off without it

  17. From wiki
    “In the late 1940s the Conservative Party exploited and incited growing public anger at rationing, scarcity, controls, austerity and government bureaucracy. They used the dissatisfaction with the socialistic and egalitarian policies of the Labour Party to rally middle-class supporters and build a political comeback that won the 1951 general election. Their appeal was especially effective to housewives, who faced more difficult shopping conditions after the war than during it.”

    That last sentence is telling, isn’t it ?

  18. Andrew M – the staycation concept have done it a couple times. But it’s not swapping Florida for cornwall – i think David swanning off to Rock and calling it a staycation kind of hijacked the term. It’s really, in my book at least, based on -what does most of the budget for a foreign hol go on?.. Airfare and accomodation. But what are aspects that make for an enjoyable break— not doing the washing, cleaning, cooking, doing activities together, bit of culture. Soo… staycation is keep the same budget but stay in your own home.. hire a daily cleaner, get a service wash, go out to restaurants, cafes to eat, see some shows, do some sightseeing locally or up to Town, hire a boat for the day, do a coastal walk…it’s pretty liberating.However those who expect sunshine for their allotted time off tend to think the airfare worth it.

  19. An interesting discussion of what happened in Germany when the Nazi price controls were lifted
    https://www.econlib.org/library/Enc/GermanEconomicMiracle.html

    A favourite passage:

    “Colonel:“How dare you relax our rationing system, when there is a widespread food shortage?”

    Erhard:“But, Herr Oberst. I have not relaxed rationing; I have abolished it! Henceforth, the only rationing ticket the people will need will be the deutschemark. And they will work hard to get these deutschemarks, just wait and see.”

  20. From HMRC’s Employment Income Manual

    “Seasonal flu immunisations Where an employer provides employees with immunisations against seasonal flu (“flu jabs”), the benefit should be treated as trivial. This treatment only applies to routine seasonal flu jabs and does not apply to medical treatment of any sort or to other immunisations, such as immunisations against pandemic flu or other diseases.”

    If your employer pays to inoculate you against corona-virus, it’s a taxable BIK.

    Whether you get the tax back if you die anyway is not known.

  21. Bloke in North Dorset

    If we do get any Corona virus driven shortages it will be caused by either:

    Government meddling at the behest of twats like Murphy or, more likely,

    A lack of workers due to sickness, in which case the solution will be to let prices rise to encourage supply where it is most needed.

    Sadly we know what will happen if prices do rise, Government will interfere because of public pressure and that will lead to lumpy supplies with nobody getting what they need.

  22. Bloke in North Dorset

    I beat Murphy was an enthusiastic purchaser of Ladas and Yugos when they still existed….

  23. Newmania

    I thought you were a ‘citizen of nowhere’ – surprised someone like you put down roots, even in Islington. Still hopefully now Brexit’s a fait accompli presumably you’ll be quitting the sceptred Isle, right?

  24. Newmania said:
    “I lived in Islington for some years and I cannot recall a “saloon bar”.There were post modern bars venue bars, destination bars, gastro bars and witty deconstructions of the bar …”

    The Crown, Cloudesley Square. Normal boozer, not trendified.

  25. Remember Eoin Murphy’s infamous coffee post from years ago, when he complained about excessive choice in the canteen and simultaneously that he couldn’t get the precise type of coffee he wanted (instant with milk, I think)?

    Murphy’s the same – what he wants is normal and righteous; anything else is excessive consumption.

  26. NewMania

    I lived on Islington fringes for some time too. Plenty of saloon bars round Chapel St, where the markets were held

  27. Bloke in Germany in Amsterdam

    Oh come on, surely we all knew that Newmania was the archetype for “Grim up north London”?

  28. “A lack of workers due to sickness”

    No. There will be a lack of workers due to precautions. Coronavirus is a nothing burger. 100,000 cases vs tens of millions for swine flu.

  29. Who is this nut; and what sort of universe does he inhabit? Lasting social and psychological impact? It’s little more than a touch of flu we’re talking about – a year from now everyone will be chuckling about the panic covid-19 engendered. As for the command economy: because I can afford not to, it’s been decades since I ate standard superstore produce, the only thing you buy from Tesco is bog rolls. People prefer choice because western society doesn’t regulate/mandate in favour of the bottom 20pct, and very few of us elect to stay in two-star hotels.

  30. OT, but still on the matter of pompous entitled [email protected] who are utter fvcking cvnts.

    Our good friend Jolyon is not to be prosecuted for killing the fox by clubbing it to death while displaying a semi-on through his wife’s kimono.

    The world’s most insufferable QC commented:

    “As to my actions, in the situation I found myself – needing to act in great haste to save the chickens my family keeps – I did not have the luxury of time to reflect on the competing ethical approaches of the RSPCA and Natural England. Of course, I respect the different assessments others might, equally reasonably, have made.”

  31. Our good friend Jolyon is not to be prosecuted for killing the fox by clubbing it to death while displaying a semi-on through his wife’s kimono.

    Oh to have to the spare time to run a crowdfunder and private prosecution…

  32. “Coronavirus is a nothing burger. 100,000 cases vs tens of millions for swine flu.”

    Deaths worldwide from Coronavirus since it was notified to WHO on 31/12/2019 – 3,308

    Deaths worldwide from road traffic accidents since 31/12/2019 – 213,000 (estimate based on WHO daily averages)

  33. My impression (maybe wishful thinking) is that corona will put a big dent imto environmentalism and socialism. A) because environmentalism is a luxury thingy and this should bring out more rational prioritisation. B) because people will rediscover how awful government control is. C) because it shows the importance of plastic, simgle-use etc in terms of sanitisation

  34. @Van_Patten
    “What kind of person sees an epidemic as an opportunity to advance their own political agenda? Someone either mentally deranged or profoundly depraved”

    A Leftie
    The deranged left is ‘blaming Trump’ for coronavirus
    https://www.youtube.com/watch?v=wQlCP4Gb4YA

    @Diogenes March 5, 2020 at 1:37 pm, @BiND

    +1

    Newmonia said “I lived in Islington for some years …”

    …in Jeremy Corbyn’s garden shed

    @Van_Patten

    The Ladas etc sold here were vastly better than in USSR, Lada UK ‘PDI’ was more a PD Rebuild and upgrade

    Skodas, the rear engine type, were actually quite good – one neat feature was front and rear seats converted into two narrow level >6ft long beds

  35. Morrisons this evening – No UHT Milk, loads of Soy etc UHT ‘milk’

    I wonder if Morrisons will respond by reducing shelf space for the fad ‘milks’?

    Command Economy:
    Lots of toilet rolls, no food – February is when toilet rolls are made in the ‘Universal Supermarket Supplies Facility’; this being a leap year a glut has ensued and excess must be sold before next USSF delivery permitted

    Overheard in car park:
    Soldier: SNP, Higher Tax in Scotland
    Woman: What you need to understand is in Scotland everyone, regardless of wealth or income, has a tax-free allowance blah, blah
    Soldier’s face: she’s a loon

  36. People might get used to this, and even welcome it. They might even accept the need for coordinated economic planning

    People did, during the war but rationing was detested and even more so as it went on after the war but look at this the other way …
    Why,if the market is always so super, was it not obvious to everyone,that food petrol and nylons should be provided by the free market during and after the war…I mean more efficient innit ?

    I think you’ll find people are more tolerant of rationing when the impressive German war machine has just steam-rollered through most of Europe, is hammering the Russians and looks across the channel to us with ill intent while raining bombs all over the country.

    Meanwhile, we’re facing… A bit of pneumonia type illness. Which the vast majority get better from. Majority of which don’t even need hospital treatment.

  37. 10-4, Pcar. Lefties think corpses make an excellent podium.

    “No tragedy is too severe for the Left not to exploit it.” – GC

  38. Nobody is right all the time, but some people / institutions are wrong ALL the time. The Guardian and Murphy fall into this latter category. As long as Murphy insists that the coronavirus is serious, I can rest assured it’s a great big fat nothing burger.

  39. Just for giggles . . . I just looked at Google Maps. Seattle. Where people are dying from coronavirus. Traffic looks pretty damn heavy. Might be a disconnect between the people and the panic in the press.

  40. It’s also not obvious that having your 1,500 calories a day supplied by only turnips

    No, no, you misunderstand Comrade. Its not 1500 *calories* in turnips a day – its 1500 *grams* you’ll get. Mostly dirt, of course.

    Because one thing we know command economies like to do is measure things. And if the things measured aren’t fitting into the desired narrative, well then, you go out and measure different things.

    Everyone knows that the *weight* of tractors produced is more important than the number of them.

  41. It has already been announced that supermarkets and the government are working together on a plan to ensure that critical food supplies survive, largely at the cost of reducing the range of products available.

    I get a different reading of this.

    1. Its not a ‘command economy’ – as in its market suppliers working with market suppliers to figure out what the customer wants and supply it. Definitely no government involvement. Not even and ‘command’ at all.

    2. It just sounds like they’re changing their orders to ensure they’re stocked with more staples at the expense of other things. Not reducing the variety of suppliers of staples. Not reducing the number of brands, just, at least, storing more staples in their ready-supply storage in place of a wider variety of things.

    3. Once the pressure is off – and there’s no government involved here to leap on this opportunity to increase its power by enforcing this completely voluntary action – why does this moron think that they won’t go back to offering the wider variety of goods they offered before.

    4. Why does that idiot think that people living on beans and rice – or, not even rice – and seasonal vegetables without access to soda or candy, or pan au chocolate, is a good thing? Is he really so far gone that he’s looking forward to a day when everyone is dressed in Mao jackets and spends their day grinding out labor from sunrise to sunset? Where every son can look forward to the day when they replace their father in his spot on the tractor assembly line? And nothing more?

  42. If your aim is to achieve overall reduction in consumption then there are much more effective ways to do that than a command economy

    Short of aerial bombing, I don’t think there is anything more efficient at reducing consumption than a command economy.

  43. Agammamon

    I’m a great believer that people like Murphy ought to be forcibly moved across to North Korea or Venezuela to see and experience the reality of the policies they promote. Indeed if we did that with all Corbinite voters, Thunbergites, XR supporters and Greens it’d be a way of solving our homelessness problems at a stroke.

  44. At the point of making it choice is binary. In economic terms exchange or don’t. What we seem to like is to have plenty of options, as in swedes or turnips. What command economies usually deliver is no swedes and no turnips!

  45. Re “never let a good crisis go to waste”… I’ve received my first phishing scam email based on covid-19 this morning. It’s from “HMRC” offering me a tax rebate to help cope with any problems it might create, all they need is my bank details… 🙂

  46. Baron J

    It’s from “HMRC” offering me a tax rebate to help cope with any problems it might create, all they need is my bank details

    That could be quite clever – or cleverer than some if it was worded well – because hasn’t that been vaguely topical (in the background), HMRC offering “sort of concessions” etc. A pathetically small enough amount being offered that might be credible / typical of HMRC, but just about enough to say “sod it, why not”.

  47. Southwest Airlines:

    ‘“In recent days, the company has experienced a significant decline in customer demand, as well as an increase in trip cancellations,” the Dallas-based airline said Thursday in a regulatory filing, citing the spread of coronavirus as a probable cause. Southwest expects a $200-300 million dollar dent, dropping as much as two percent — rather than the 3.5 percent increase of their original forecast.’

    Note a reduction of 2%. Not 80%, or whatever. People adjusting – not stopping.

    As I said above, “might be a disconnect between the people and the panic in the press.”

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