The coronavirus (COVID-19) infection has spread through online discourse into criticism of libertarianism, including the ridiculous claim that, “There are no libertarians in a pandemic”, as well as another claim that the current crisis is “annihilating” the libertarian worldview.
Of course, the arguments backing up these claims range from weak to nonexistent. If anything, state responses to the crisis are, predictably, showing the problem with state “solutions” to these sorts of problems.
State action is typically slow, bureaucratic, and distant. In other words, the complete opposite of what is needed during a global pandemic. Thus far, many standard regulations by the Food and Drug Administration (FDA) have made crisis response in the United States slower and more difficult, costing lives rather than saving them.
The FDA initially required the Centers for Disease Control and Prevention (CDC) to double every test. At a time when testing is in high demand and in incredibly short supply, surely it would do more harm than good to mandate that every single test require twice the resources.
The CDC is not innocent in this either. Rather than following guidelines already established by the World Health Organization (WHO), the CDC instead created its own, more complicated test. This broken test reported numerous false positives for other viruses. The CDC and FDA began limiting use of the only established test solely to state labs, thus delaying and preventing the private sector from responding with their own testing. As the weeks went by, these organizations eventually backed away and lifted restrictions on testing.
Seattle, Washington is facing one of the worst coronavirus outbreaks in the US (with over one thousand confirmed cases in the county). Unfortunately, regulations greatly delayed the local response. Dr. Helen Chu and others as part of a research team had been collecting nasal swabs from locals with flu symptoms for months prior to use for a research project. To test these swabs for COVID-19 required prior approval from state and federal officials, who rejected her plan. After enough refusals, she began testing anyway, and discovered numerous positive results.
Regulatory agencies in many countries, including the United Kingdom and Australia, have been easing their burden on non-medical industries like banking. These government agencies are conceding that they can help simply by backing away.
The US Transportation Security Administration (TSA) recently began allowing small bottles of hand sanitizer on flights. Either they are willing to put national security at risk to help stop the spread of the virus, or they realized banning hand sanitizer didn’t make much sense to begin with.
Of course, the problem with burdensome government regulations is that they stop the private sector from responding to the virus outbreak. Although necessities quickly disappeared from shelves as people rushed to stock up, they were soon restocked, and medical supply companies are rushing to produce what is needed.
This is standard practice for the market, thanks to the price system that naturally adjusts over time based on changing supply and demand. When demand sharply increases, supply drops and prices increase, thus incentivizing production of that product. If the price is not allowed to adjust, and is instead restricted by government price controls, this removes an important market mechanism for allocating important resources to where they are most needed. (More on the price mechanism and “price-gouging” during disasters can be found here.)
With the increased shortage of hand sanitizer, Twin Valley Distillers (producers of whiskey and rum) experimented and developed their own hand sanitizer. The approval process to sell it would typically take three weeks, but was approved within two days. Other industries are seeing the change in demand, and are responding to it by switching production. Under normal circumstances, this distillery would’ve had to sit around and wait for approval before responding to an urgent need.
While these government agencies were slowing down the response and costing lives, and eventually just getting out of the way, the private sector was developing working tests and producing what people need the most. This crisis is not a refutation of libertarianism. It is another example of how the market handles situations better than bureaucratic central planning.