July 29, 2021

The protracted debate over the government’s role in combatting the spread of the COVID virus has become one of the more divisive issues of our time. Those on the right argue that the decision to wear a mask or be vaccinated should be left entirely up to the individual. Those on the left contend that mask mandates and required vaccinations are necessary to combat the spread of the virus regardless of the individual’s personal preferences; the greater good trumps individual freedom. Neither argument is dispositive, at least as a matter of economics.  

It is instructive to conceive of the spread of the COVID virus in terms of a negative externality. An externality may be defined as an action taken by a consumer or producer that has external effects on other individuals that were not party to the decision to take that action. Externalities may be of a positive or negative genre. A flower garden that is aesthetically pleasing to my neighbors is an example of a positive externality. Excessively loud music that annoys my neighbors is an example of a negative externality. Government intervention in the economy is often justified on the basis of externalities wherein competitive market forces cannot be relied upon to produce efficient outcomes. Efficient outcomes require subsidies for actions that generate positive externalities and taxes for actions that generate negative externalities. This explains why in the case of the COVID virus punitive actions have been taken against individuals who refuse to wear masks and financial rewards and prizes have been used to increase vaccination rates.

Absent government intervention, manufacturers may choose to pollute the environment excessively because abatement measures are costly to implement. As a result, the government enforces strict limits on emissions and forces firms to internalize these external costs of production. Larger cities often require that automobiles pass emissions tests prior to licensing a motor vehicle. Restrictions on public smoking is another example; the individual’s right to smoke when and where he chooses is restricted in order to protect nonsmokers from the health risks of second-hand smoke. In all three cases, the government seeks to mitigate the adverse effects of negative externalities.

The spread of the COVID virus is a negative externality that the government seeks to control to limit its harmful effects. Left to his or her own devices, an individual’s decision to wear a mask or be vaccinated would fail to take into account the harmful effects that doing neither would have on others. In other words, the individual rationally evaluates the private costs and benefits of wearing a mask or being vaccinated but would not necessarily take into account the social benefits of doing so as measured by the reduced risk of transmission. (Economists do not assume that individuals are altruistic, which is one of the reasons the discipline is commonly referred to as the dismal science.) As a result, an inefficiently low level of mitigation of the COVID virus should be expected in the absence of government intervention.       

To return to the negative externality of loud music, the government has a responsibility to mitigate the harm, but it does not have a mandate to direct the homeowner precisely how to internalize the externality. The homeowner may turn down the music, increase the sound-deadening insulation in the home or wear headphones. The government’s concern goes only as far as mitigation, not how that mitigation is achieved.

In the case of the COVID virus, the government’s interest goes only as far as mitigating its spread rather than the particular method of mitigation. This mitigation could be achieved through the wearing of masks, vaccinations, or even self-isolation. None of these remedies would be required, however, if the individual in question has antibodies against the virus. Vaccinations may be the Biden administration’s method of choice for mitigating the spread of the virus, but there are valid reasons why this method is not ideal for everyone. Individuals may harbor legitimate concerns about the rigor employed in comprehensively testing these vaccines and some serious, adverse reactions have been reported. Notably, the FDA has yet to fully approve any of these vaccines. For select population groups, the perceived risk of the vaccine exceeds the expected benefits.

Not all mitigation methods are equally effective. The data strongly suggests that vaccines are the most effective method for controlling the spread of the virus. That said, the United States is not an authoritarian regime. Freedom of choice, at least within certain limits, is a bedrock principle of our system of government. This means that the government should reject calls to mandate vaccines for the general population — particularly when the risk of not being vaccinated is borne largely, though not exclusively, by those individuals that make that choice. The increased risk to the general population in not mandating vaccines across the board is simply the price we pay to live in a free society.