THE SUBTERFUGE OF USING THE GDP AS A MEASURE OF ECONOMIC WELL-BEING

Meet Mr. GDP. He claims to be the definitive measure of the health of our economy. He's not very good at subtraction, but he really excels at addition. What most citizens would consider to be catastrophic losses, according to Mr. GDP's calculations are actually really good things. Mr. GDP treats  increases in public and private debt, oil spills, tailings pond breaches, floods, forest fires and tornadoes and the like the same as he would economic activities that actually add to and increase the number of  available goods or services. He makes no distinction between replacing a burnt down house and building a new one. That little accounting trick really makes our economic growth rate look good! Our elected officials really love his way of doing math because it makes the economic growth rate look higher than it actually is. And higher economic growth rates make politicians  and their economic policies look much better than they actually are. 

 

 

This way of calculating the Gross Domesdtic Product (GDP) should never be used as the only, nor primary way of measuring a nation's economic well-being. It is in large part subterfuge. Nevertheless the GDP has become the primary, often the only, measure used by governments and financial institutions across the globe to calculate economic growth and decline. This practice masks many very serious problems. It paints the citizens of any country with a far rosier picture of reality than warranted. The image is grossly distorted because all expenditures, for whatever reason, are assumed to contribute to economic growth and the creation of wealth. Nothing could be further from the truth.

This is how GDP and economic growth rates are calculated: 

GDP = Consumer spending  + Government Spending + investments + Net Exports.

Economic growth is calculated  from  changes in the GDP over time: 

Economic growth =  ( GDP2  -  GDP1)  /   GDP1   

Here are but a few of the reasons that the use of the GDP and economic growth rate derived from the GDP give us a very distorted image of improvements or declines in the economic health of a nation:

1. GDP and Debt: The GDP makes no distinction between expenditures financed through debt (both public and private), and expenditures financed by savings and the spending or reinvestment of profits. Therefore an increase in the debt load of individuals and/or governments is misconstrued as economic growth and therefore desirable and encouraged. Governments often misleadingly portray an increase in private borrowing as an indicator of improved consumer/investor confidence. Many households are but two paychecks away from bankruptcy. Yet the GDP discounts the possibility that even a small down-turn in the economy may result in many of these borrowers unable to finance their debts. Never mind the number of devastating bankruptcies something like a global pandemic might cause! Yet the GDP puts volatile debt-financed expenditures on par with the investment of savings and the reinvestment of profits/earnings.

2. GDP and Destruction: Another major shortcoming of measuring economic growth using the GDP is that something citizens consider to be a catastrophic event –for instance a flood, a forest fire, a hurricane, an oil-spill, or a war-- registers as a positive economic boom by the GDP; such catastrophes result in major expenditures to rebuild and replace everything that was destroyed. Despite the jobs created by the clean-up and reconstruction efforts, most reasonable citizens experience all this as a net loss to the country. At best they might recoup much of what they had before, but reasonable citizens would not consider themselves or their nation to be further ahead, however much the GDP may have increased as a result.

3. GDP's Failure to Distinguish Between Wasteful and Useful Spending: Perhaps the most poignant way to illustrate this point is to use the example of the US criminal justice system. The US has one of the highest incarceration rates on the planet. Instead of spending money on providing supports for drug addicts, homeless people, education, programs to help offenders reintegrate and reduce recidivism are all eschewed in favour of investing in mega prisons. The annual cost of incarcerating a male is roughly $100,000 per year, and a female often twice that amount. Most of these prisoners on the outside would have earned and spent and contributed less than $20,000 per year to the GDP. Once incarcerated they are worth five times that much! It is in the interests of both the privately-owned mega-prison lobby and the government to spend the money on incarceration rather than social programs. The former reap the profits while the latter can boast economic growth based on the resulting increase in the GDP. The same can be said of preventative medicare vs. treating ill patients, private vs. universal healthcare, private vs. universal drug plans, etc. In all cases the former may be more cost effective and produce more desirable outcomes, but the latter contribute more to the GDP.

4. GDP's Failure to Include the Contribution of Unpaid Household Services: The GDP completely disregards unpaid work. Using strictly the GDP as an indicator, the unpaid work of stay-at-home home-makers, care-providers, garden-growers, all volunteers in whatever capacity, contribute absolutely nothing to the economic well-being of a nation. Nothing.  Zilch. Hiring a maid, or paying a daycare centre for these very same services, however, does contribute to the GDP.

5. GDP's Complete Indifference to the Distribution of Wealth Created. There is an increasing awareness that wages and income of the majority of citizens have stagnating or are in decline, despite a steady increase in the GDP. People are cluing in to the fact that national economic growth is meaningless if they don't have a share in it. Similarly an increase in the GDP will result in an increase in the per capita income even while people's incomes have stagnated or are in decline. Here we see that the errors in using GDP as a measure of economic well-being are compounded when used to calculate per capita income. The increased profits of Bill Gates, Mark Zuckerberg and Jeff Bazos are more than enough to offset the decline in wages of everyone else, so the GDP and per capita income continue to climb. Absurdly we are expected to celebrate and consider the increase in the already obscene profits of 1% of our fellow citizens as an improvement in our personal and national economic well-being. In fact per capita income and GDP figures tell us very little unless the are accompanied by distribution of wealth data. (The genie-coefficient is a very good tool for measuring wealth distribution.)

6. The GDP vs. the True Basis of the Economy: Every economy, regardless of ideology, has its base in the biosphere. Domestic as well as foreign products are produced by the processing of raw materials we find in nature. The GDP disregards the value of natural wealth until it is extracted, processed, and can be bought or sold. A pristine lake has no value unless you can attract tourist and fishermen to it, or convert it into a tailings pond for some mine, or allow Nestles to “buy” the water, or until an oil spill occurs in it and it has to be cleaned up. In its natural estate it contributes nothing to the GDP and is therefore, like a mother looking after children and making a home, not considered to be of any value at all. Air is of value if it can be compressed and sold; water is of value if Nestle sells it to you; land, along with everything growing on it or buried beneath it, is of value only if it can be fenced off and the resources contained in it bought or sold. For these reasons governments are reluctant to pass or enforce laws that protect our natural environment. Taking away DaBeer's tailings pond would hurt the GDP, and therefore the economy.

Decision making and government policy based on the distortions of reality resulting from the continued use of the GDP as the measure of economic well-being has caused, is still causing, and will continue to cause a lot of short-sighted, ill-conceived, often destructive policy and investment decisions that will detract from, rather than contribute to an increase in our collective and national economic and social well-being.

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For more detailed information on the the GDP and the limitations and shortcomings of using GDP as a measure of economic well-being I refer you to the MSG website “Common Sense vs. GDP”.

 

 

COVID 19: Whose bubble will be the first to burst?

"We are all in this together" we are repeatedly told. It is true that the COVID 19 virus doesn't discriminate on the basis of nationality, race, gender, or class. In the early stages it seemed that relatively wealthy business travellers, international tourists, and cruise ship passengers were more likely to be infected than those who lacked the means to travel. Snow Birds, returning from their southern winter homes, tourists and business travellers were the primary carriers responsible for the rapid global spread of the virus. A slow and sometimes reluctant response, further exacerbated  by a lack of PPE, undermined efforts by countries to trace, isolate and quarantine all likely carriers in order to prevent community spread of the virus. Healthcare systems were quickly overwhelmed, unable to cope with the large numbers of critically ill COVID 19 patients. Most governments responded with lock-downs, shutting down all but the most essential businesses and confining people to their homes in an effort to curtail the rapid spread of the virus --in an effort to flatten the curve. Economies ground to a halt. Countries with enough credit to do so, Canada included, introduced multi-billion dollar quantitative easing programs to sustain industries, businesses, and newly unemployed individuals during lock-downs.

But, although the virus itself didn't discriminate on the basis of class, the measures to control the spread certainly did! Most countries unable to finance quantitative easing, implemented and enforced lock-downs nonetheless, resulting in a dual crisis --the novel corona virus and a food security crisis for the majority of their citizens no longer able to buy food because they were prevented from going to work during the lock-downs.

Even in wealthier countries it quickly became apparent that the virus was spreading far more quickly among the most vulnerable sectors of the population --the aged, the homeless, those in long-term care facilities, those living in overcrowded substandard housing, foreign workers on farms or in the meat-packing plants. Low-income front-line workers in grocery stores, public transit, healthcare professionals and support staff, personal support workers (often forced to work at two or three part-time jobs in different long-term care facilities and/or private homes to earn a living wage) were all far more exposed and vulnerable than those able to social distance and safely work from home. While the virus itself didn't discriminate on the basis of class, wealthier individuals were certainly far more able to socially distance themselves from the high risks of exposure to which much of the workforce  employed in the essential service sector were subjected. Consequently the latter was far more frequently infected. 

But while more privileged citizens are better able to limit their exposure to the virus, they are nevertheless not immune to the economic impact of the virus. Much of the economic impact is due to a sharp decrease in global demand for the goods and services produced by formerly lucrative sectors of the economy in the pre-COVID 19 world; sectors like tourism, fossil fuel production, hospitality, air-travel, food services, etc. Even extractive industries, livestock producers, etc. have suddenly found themselves without buyers, while fabricating industries suffered interruptions in overseas supply lines. Governments portray this decline in demand as something temporary, attributing it to the lock-downs. They insist that once lock-downs are lifted, and people are free to resume their  former activities, they will once again flock to restaurants, travel to tourist destinations, book flights, burn fossil fuels, etc., and the economy will rebound. Our leaders seem inclined to see their task as building a bridge, an overpass of sorts, that will allow us to transcend this pandemic until it passes and things return to the way they were before, ostensibly complete with all its gross inequities, disregard for vulnerable populations, and climate crisis.

Here in Canada, as elsewhere, governments are now easing lock-downs. Despite low levels of testing, and the relatively recent discovery that screening people based on symptoms may miss 50% or more of contagious asymptomatic carriers, governments are confident that they can shut things down quickly enough to avoid a second wave that would once again overwhelms the healthcare system and further decimate the economy. While many business owners, alarmed by the prospect of losing their investments are eager to reopen, many of their workers are far less confident that the safety measures in place will adequately protect them. They don't want to be the expendable canaries in the coal mine, and may need a lot of persuading. Here in Canada PM Trudeau recently unveiled his plan for such persuasion.

By disqualifying people who prefer getting EI benefits or $2,000/month CERB benefits to returning to their high-risk service-sector minimum-wage jobs, they will be left with no choice but to return to work. People who somehow miraculously manage to pay their rent and buy groceries with a mere $2,000/month may be unwillingly to return to work and unnecessarily expose themselves and their families to  higher risks of COVID 19 infections. Especially if their pay-cheques wouldn't amount to much more, or in come cases even less, than what they are receiving under EI or CERB benefits. Such workers must, therefore, be subjected to the same harsh options as poor people living in poor countries --the option of staying at home and watching their families slowly starve to death; or assume the risk of going out to work in the hopes that they won't take home and pass on the virus to family members and loved ones. In most cases it is highly unlikely that any Canadian who can both buy groceries and pay rent with a mere $2,000/month can afford accommodations that allow for much social distancing anyway. It may seem unjust, but in most cases their risk of exposure in the workplace can't be that much worse than futile attempts at social distancing in cramped, often substandard and overcrowded housing --the only standard of housing that a total income of $2,000/month will afford them.

Sure, it may be a misnomer to refer to most service sector jobs as essential.  Imported goods and clothes from far away places, hair styling, manicures, restaurant  meals and coffees are things most fellow Canadians. even those from the relatively privileged work-from-home crowd, can live without. But those unaccustomed to their newly acquired work-from-home duties, what with doing their own childcare, home-schooling and all, really miss the contributions of the service sector. They don't have time to prepare their own food, and despite everything must still appear competent, presentable and in control during their work-related Zoom calls. In addition to ordering skip-the-dishes take-out food, some may even want to venture out once in a while! After all the slight risk of being exposed to one vetted waitress/waiter/hair-stylist/store clerk or whatever in a well PPE equipped facility is almost negligible when compared to the risks assumed by the service providers themselves who are exposed to dozens of customers every day! A little relaxation of social distancing rules is okay if one is careful not to unnecessarily mingle socially with the service-sector class. A visit to the hair stylist should be a brief sortie, not unlike a fleeting encounter with the native chambermaid who changes your bed sheets in a tropical island resort.

In any case, even those services provided by service sector workers that are more appropriately described as desirable rather than essential, in a country were 70% of the workforce is employed in the service sector, even non-essential service sector jobs are essential to restarting of the economy! Flattening the curve was never about eliminating the risk; it was about reducing the spread to a numbers that our healthcare system can cope with. It just so happens that it is easier to reduce the risk for the work-from-home crowd than for service sector workers. But we are all in this together! The economic futures of both service sector workers and the work-from-home crowd are at stake!

So, since we cannot reduce the level of risk for service sector workers to that of the work-from-home crowd, we must at least put in safety measures to mitigate that risk. Service sector workers reticent to return to work need to be convinced that with new safety measures in place continuing to provide them with EI and CERB benefits can no longer be justified. However, there is one remaining impediment preventing may service sector workers from going back to work: the lack of childcare. For that reason, regardless of risk, daycare services and schools must also be reopened.

It is totally unrealistic to expect children –especially very young children-- to adhere to the rules of social distancing. Children want and need to touch each other or the physical reassurance and/or help from their care-givers and teachers. While the majority of children infected with COVID 19 will not get very sick --some will remain completely asymptomatic, they can and some will nevertheless become carriers and spread the virus to more vulnerable people they come in contact with --their teachers and childcare providers, siblings, parents, grandparents and whoever else is part of their household bubble. And some children will become sick with inflammatory syndrome, usually some time after previously having contracted and developed antibodies to the COVID 19 virus. Screening for and reducing the risk of spread where children are involved is going to be far riskier than other workplaces where only mature adults who fully understand the need for and rules of social distancing are present. Nevertheless too many of our service sector workers cannot return to work if there is no one is looking after their children. Therefore restarting the economy leaves us with no choice but to put both service sector workers and childcare providers in double jeopardy. If the service sector workers themselves don't unknowingly bring the virus into their home, there is still a good chance that their children will have caught the virus from an asymptomatic classmates and bring the virus into the house! 

Be that as it may, given that 70% of Canada's workforce is employed in the service sector, they must go back to work. Lending billions of dollars to failing airline and oil industries that in all probability will go into bankruptcy long before they can repay these loans may be an extremely foolhardy investment on economic grounds, but  it is nevertheless a wise investment in the political futures of elected representatives. But that does not extend to giving free money to service sector workers minions so they can stay safely at home and sit on their duffs! An economy cannot be restored if people forget their proper place in it! Fortunately the problem of childcare too can similarly be solved by ensuring that daycare providers, school teachers, school bus drivers, etc. will also find themselves without any source of  income should they fail to take up their yoke and choose to continue safely social distancing with their own children in their own homes.

Decision-making power was never the purview of the lowly underpaid service sector workers. Much care has been taken to maintain the pecking order --to ensure in the post-COVID 19 economy it continues to be the employers, not the employees, who retain decision-making power. That's why whenever possible, instead of directly providing an income to unemployed workers, governments choose to subsidize employers in exchange for them keeping unemployed workers on the payroll. Similarly, rather than providing individuals and businesses unable to pay their rent with money, governments instead encouraged landlords to apply for subsidies with the expectation that they would pass on their savings to tenants. (Many landlords who had long wanted to get rid of their tenants so they could increase rents turned down the subsidies.) Thus it is the employers, not employees, who will determine whether or not the benefits of reopening up for business outweigh the risks. Once employers feel that they have put enough safeguards in place to keep their employees “reasonably safe" as stipulated by government guidelines, they will be allowed to re-open. Former employees who refuse to return will suddenly find themselves ineligible for EI or CERB benefits, and therefore obliged to return regardless of whether they feel it is safe to do so or not. Workers who think their working environment is unsafe can appeal. If they live long enough for their appeal to be heard, and if they and their legal team manage to convince the province that they were indeed exposed to an unreasonable amount of risk, and if after all that they are still being exposed to unacceptable level of risk, their benefits will be reinstated. Until then they and all those who share their household bubble must accept whatever level of risk their employers deem to be acceptable under the circumstances and in accordance with their interpretation of government guidelines.

"We will get through this" is refrain we often hear from our leadership. And undoubtedly most of us will. But there will be a few bubbles burst before this pandemic is over. Bubbles based on false assumptions that former levels of demand for tourism, air travel, fossil fuels, restaurant food, hotels, office space etc. will be restored; Bubbles based on the assumption that the economy will recover in time to fend off a recession and an unprecedented increase in declarations of bankruptcy; Bubbles based on assumptions that governments and society have learned their lesson and will henceforth place a higher value on the welfare of its most vulnerable citizens, and acknowledge and properly remunerate the contributions and sacrifices of their most essential workers will also deflate, succumbing  to pressure from the usual more influential decision-makers in the economy. But these won't be the only bubbles to burst. Nor will they be the first.

The first bubbles to burst will we the protective household social-distancing bubbles that for a short while protected the working poor, primarily employed in the service sector, from disproportionate risk and exposure. Their protective bubbles are about to be deliberately burst by the state in an effort to force them back to work. This group includes racial minorities, foreign workers, personal care providers, and indigenous peoples. They and their children and households, much like Greta Thunberg and her generation, will be sacrificed on the alter built to that old but omnipotent and increasingly demanding God --the God of economic growth.

It will be thus. We are all in this storm together, but we're not all in the same boat. Some of us are treading water, clutching to a plank like a refugee in the Mediterranean. Others are social-distancing in their mansions complete with swimming pools and gymnasiums.

Unless we seize this opportunity to build a new, just, sustainable and inclusive economy on the rubble left by this global pandemic; an economy that values the lives, safety, health and rights of workers no matter what their nationality or where they live on this planet; an economy rooted in the abundance provided by a healthy, appreciated, respected and well cared for planet; an economy that prioritizes our collective and universal well-being and seeks to promote our collective opportunity to thrive. An economy that rejects and has completely abandoned the unsustainable annihilating environmentally destructive perpetual pursuit of economic growth .

NOW'S THE TIME!

NOW'S THE TIME! Now's the time for a new economic development model. Small is beautiful. Worker-owned, worker-managed co-ops. Stringent worker safety, workers' rights, and environmental laws will take out the Corporatocracy. Kick 'em while they're down! Not one more $ in bailouts or subsidies for corporations. We need an inclusive economic development model, not one for the 1 %; a model that allows everyone to thrive, and limits growth to environmentally sustainable levels. Now's the time!

A Meme I made last night

Some services are essential. I'm thinking of things like: Airline services to Canada's remote indigenous communities; services  to provide food security, housing, healthcare, clothing; education, etc. Most of these services could be provided by many small, worker-owned, worker-managed, co-ops. Instead of bailing out and subsidizing humongous transnational corporations who have only enriched themselves and their shareholders while paying little or no taxes, government money should be used for start-up costs of small co-ops. Allowing oligopolies to control the food supply is no longer working; its not working for consumers who face shortages in the food supply as plants close, nor for producers who rely on these plants to purchase their goods. There are better alternatives. For instance, the butchers who traditionally only butcher deer or moose on the side during hunting season could increase both worker safety and food security by forming small butcher-owned, butcher-run co-ops. Such co-ops could better provide essential and other services in ways that are easily accessible to, and benefit the communities in which their members live and work. 

No more shipping raw materials to distant off-shore factories so corporations can take our jobs to exploit the low wages, lax worker-safety and environmental standards of other countries, only to further pollute the environment by shipping our raw materials all the way back to us in the form of consumer goods for local consumption.No more broken supply chains, no more personal protection equipment shortages. All trade should benefit producers and consumers of both trade partners equally and fairly. Tariffs could be placed on all imports to remove any economic comparative advantage derived from underpaying, disrespecting, or disregarding the safety of workers and/or polluting the environment. Any revenues generated by such tariffs could be channelled back to those same countries, but to non-governmental workers' organizations and/or social organizations that promote the rights, freedom and well-being of people, especially people in countries exploited by unjust corporate practices. Workers in such countries should be producing to meet the needs of their own impoverished  fellow citizens,  not contributing to the over-consumption of people living in far-away wealthy countries.

The financial sector too needs a major overhaul. Instead of enriching only themselves --money making money with money without providing a good or service-- all banks and financial institutions should be replaced with community-based credit unions. No more currency speculation and tax evasion services for corporations and the uber-rich. A Tobin tax --a small 1% or less tax on all financial transactions-- could provide enough government revenue to eliminate many other forms of taxation. It would also eliminate currency speculation and reduce tax-avoidance. Everyone, big or small, would pay more or less  1%  every time they put money into, or took money out of their account. Hardly a progressive tax, since the wealthy would pay the same 1 % as someone earning and spending $20,000 or $40,000 per year. (Someone earning $40,000 say,  would pay a total of  2% if they didn't transfer money between accounts; 1 % when they bank earnings/profits and another 1 % when they withdrew money it to spend or invest it,  for a total of $800 in taxes per year.) Similarly, someone moving millions of dollars to an off-shore tax haven would have to pay 1 % on that money, and another 1 % if they moved it back to the country of origin. Corporations could .no longer avoid paying taxes on its profits by transferring them to a subsidiary in another country with low or no corporate taxes without paying 1 % tax on the transfer. (Corporations often transfer their profits to out-of-country subsidiaries or parent company or tax havens so the can show a loss on the books in the country in which they make most of their profits, thus avoid paying taxes on those profits. Some even have the audacity to ask that government for bailout based on those losses, threatening thousands of job-losses if they don't get the bailout.)  1 % is a pretty minimal tax, but it is a lot more than many corporations are are paying now! Currency and  stocks & bonds traders would be all but eliminated by a Tobin tax. They make their millions by trading currencies, bonds and stocks on the global market, often on very small margins (0.0002 or something) every time the value of these holding go up or down, thus increasing the volatility of the marketplace.  Every time Trump tweets out the deregulation of an environmental protection measures, or Boeing grounds a fleet of airplanes, these speculators exploit the change in value of the stock/bond/currency, selling large amounts to further reduce the value, only to buy them all back again at bargain prices when they reach rock bottom before the market reaches equilibrium the next hour/day week. Some of this is completely automated using AI bots. A 1 % Tobin Tax would be greater than the small margins these traders operate on (they make their money by trading huge amounts on very small margins). A 1 % tax would put them pout of business, and  force such speculators to get a real job, producing an actual good or providing an actual  service that would benefit someone other than themselves. They'd still be part of the 1 % though.  With a 1 % Tobin tax we'd all  be part of the 1 %!

The idea is to build an new economic development model in which everyone can thrive.  No more vulnerable populations. Environmental and social costs of doing business can not be externalized; an environmental deficit or practices that leave large sectors of the world's population vulnerable to pandemics or diseases or poverty cannot be tolerated. Instead of the pursuit of economic growth we must seek to limit growth to levels that sustain the environmental health of the bioshere --the true basis of every economy-- and enable all members of the global family to thrive. We'd all have to stay between the lines --between the dark green lines on this diagram depicting Kate Raworht's vision of a doughnut economic development model. (Click on the link in the caption to learn more.)

Doughnut Economics: Kate Raworth

There are doubtlessly many more or even better ways to design and implement an inclusive economic development model that would allow us to all to thrive without destroying the basis of our economy --the ecosphere. I'd like to hear about them. The one we had wasn't working, and now its dead or dying, killed by COVID 19. It and cannot be resurrected. Those who wait are waiting in vain. There will be some death throws, but there will not be a second coming. However most governments seem unable to envision an alternative; they continue to invest immense amounts of resources on flogging this dead horse. Those of us who know better must come up with an alternative. The shorter we can make this transition, the less painful it will be. The time to act is now!! 

--Stewart Vriesinga  

COVID 19: Projections and Conjectures

COVID 19: Projections and Conjectures

   

This essay explores some of the strategies being used to mitigate, contain, and eliminate the threat of the COVID 19 virus. My interest is primarily the global impact, but I have used local data --specifically Ontario data-- to illustrate the effectiveness of the strategies being used to i) lessen the mortality rate of the virus, and ii) eliminate the threat posed by the virus. I make a sharp distinction between  these two, often conflicting objectives, their limitations, and how the pursuit of these objectives is playing out in the world.. I will begin with the "flattening of the curve" objective, followed by the "elimination of the threat" objective, and go on to explore how these two objectives may be at odds with each other, and some of the implications of that both locally and globally. I draw some tentative conclusions from my analysis, and end by posing unanswered questions about the impact of COVID 19 on the world.

The Flattening of the Curve:     
The objective of “flattening the curve” is to reduce the spread to numbers that will not overwhelm healthcare systems. That means that the available healthcare resources are enough to identify and meet the needs of those who have been infected and are consequentially in need of healthcare services. Most of those who have been infected will recover without medical intervention (about 97%). It is the vulnerable populations –the elderly, those with compromised immune systems, those who have preexisting medical conditions, those whose employment and/or social conditions don't allow for self-isolation, etc.--that may need medical intervention if they become infected. 

The capacity of the healthcare system to provide care for critically ill patients is limited by: available infrastructure like hospital beds and ICU beds; the number of ventilators; the number of trained medical professionals; available cleaning, maintenance and administrative staff; and access to the personal protection equipment (PPE) needed to protect all personnel from infection. If the numbers of vulnerable people infected exceeds any of these capabilities to safely treat infected patients, many COVID 19 positive patients will die.

The capacity of the healthcare system is exceeded when the number of  COVID 19 cases rises above the red line. Herd immunity is reached only after the number of recovered COVID 19 cases (people who have developed antibodies) rises above the green line.

There are three primary ways of reducing the burden on the healthcare system. One is to identify and isolate/quarantine all carriers of the virus –testing. The second is reducing opportunities for people --both those who have tested positive and all those who may be positive but not yet been tested-- from passing on the virus to others --physical distancing. The third is to identify the most vulnerable populations and take additional steps to ensure that they don't come in contact with anyone who has been infected --making sure seniors and long term care homes residents and staff, shelters, prisons, etc. are isolated from the virus --a sort of inverse quarantine. 

Testing: The numbers of available tests, personnel, and PPEs to safely carry out tests is increasing, so more people are now being tested. While more testing is increasing the number of confirmed positive cases, knowing who is a carrier, even if they are asymptomatic, is very beneficial. Testing helps identify additional carriers by tracing the movements of positive patients back to likely source carriers (tracing) so that sources too can be identified, isolated/quarantined, and treated if necessary. 

Testing capacity, although increasing, remains limited, so not everyone is being tested. Those prioritized for testing are primarily members of vulnerable populations, and the medical personnel and personal care workers who look after them. Those who are otherwise exposed to large numbers of people in the course of their “essential employment",  and/or who live in overcrowded or otherwise adverse social conditions, may also get higher priority for testing than others. Those who aren't members of vulnerable populations, aren't essential workers, and aren't displaying symptoms remain a low priority, and are simply being asked to stay at home, wash their hands, sneeze into their elbows, and avoid all unnecessary contact with other people.

Physical Distancing: Physical distancing is not about preventing the spread, but rather reducing the rate of the spread. The virus cannot spread very quickly if the opportunities for transmission aren't there. (see Herd Immunity diagram below.) Physical distancing reduces these opportunities, which will help flatten the curve. Flattening the curve will help reduce the burden on the healthcare system at any given time. Social distancing won't ensure that people are never exposed to the virus; it can only buy time, so that future transmissions occur some time after those currently in acute care have either recovered or died, thereby freeing up beds and other healthcare resources necessary to accommodate new cases.

Identifying and Protecting the Most Vulnerable Populations: Identifying and protecting the most vulnerable populations is also very important, because it is these people who, if they contract the virus, are most likely to need a lot of healthcare resources. We already know that the elderly and those with suppressed immune systems and other preexisting medical conditions are among the most vulnerable. Healthcare and personal care workers must take special care to ensure that they don't contract, or, as importantly,  transmit the virus to their patients or each other. In addition to hospitals another large proportion of the vulnerable are living in institutions for long-term care, so steps must be taken to ensure that staff working in these institutions are not introducing the virus into these vulnerable populations. Some care providers work in two or more institutions. These must take special care that they are not inadvertently cross-contaminating one institution with a virus they may have contracted in another. Because staff are often underpaid and only offered part-time work with no benefits, many are financially obligated to take on two or three jobs in similar institutions, thus increasing the risk of cross-contamination.

Those living and/or working in shelters, prisons, reservations, refugee camps, on the streets, or any other over-crowded and/or less-than-sanitary conditions are also more vulnerable. Social distancing, hand-washing, etc. are very difficult, if not impossible, in such social conditions. Also, for those whose 'home' is a small room somewhere, which may or may not have cooking facilities, or may require sharing a bathroom, or not allow for the option of working from home, cannot maintain the same level of social distancing that more affluent citizens can. When it comes to vulnerability, class is very much an issue. It is no longer only those who can afford to take a cruise on a cruise ship, or winter in Florida, who are contracting the virus. The latter may be primarily responsible for bringing the virus into the country, but at this point there are as many, if not more community-based sources of infections as there are traveller-based sources. Everyone is at risk, and the most fertile ground for spreading the virus is on the very bottom rung of the socioeconomic ladder.

Herd Immunity --Eliminating the Threat of Infection:

In the measures described above the goals were i) reducing the rate of the spread to numbers the healthcare system can safely handle, and ii) increasing the ability of the healthcare system to provide care for all those in need of it --more ventilators, PPEs, tests, etc. These measures will neither exterminate the virus, nor eliminate the threat. The only people currently not at risk are those who have already been infected and recovered –those who have built up a sufficient supply of antibodies to fight off any future exposure to the virus. But for how long will we continue to be at risk? For however long it takes the community of people we interact with to develop what is called “herd immunity”.

Herd Immunity

The bottom two quadrants depict herd immunity.

The risk of infection will remain until we have developed what is called “herd immunity”. Herd immunity is reached in one of two ways (or a combination of both): The first way is a vaccine. People who have been vaccinated against a virus generate antibodies that both protect them from becoming ill due to exposure, and prevent them from becoming carriers –from transmitting the virus to others. The second way of developing herd immunity will come about naturally when enough of the population has become infected and recovered from the COVID 19 virus. Like people who have been vaccinated, recovered people will have developed antibodies that both protect them from becoming ill due to new exposures, and unable to carry enough of the virus to allow for transmission to others. 

 

A Vaccine: If enough people get vaccinated, a vaccine against the virus would quickly put an end to the threat. But there isn't a vaccine. The best-case scenario for developing a safe reliable vaccine is at least six to twelve months away. There is still no vaccine against the coronavirus MERS (Middle East respiratory syndrome), which has been around since 2012. Seventeen years after the SARS outbreak (COV-1, or severe acute respiratory syndrome coronavirus) in 2003 there is still no reliable vaccine against that virus either. However, unlike vaccines for HIV, malaria and tuberculosis, which primarily threaten millions of people living in poor countries, there is plenty of economic incentive to develop a vaccine against COVID 19, because it also infects rich people on cruise ships and people living in wealthy countries. Rich people/countries will handsomely reward anyone who comes up with a vaccine, so a lot of resources are going into developing one. Even so...

Coronavirus: Are we getting closer to a vaccine or drug?

Tests like these are taking place much quicker than would normally be the case, and some are using new approaches to vaccines. ...But even if these -or any other tests- do prove successful, it's not expected that manufacturers will be able to produce a mass-produced vaccine until the second half of 2021.

--BBC, April 2, 2020

Herd Immunity reached Through Infection and Recovery: Without a vaccine herd immunity will only be reached when enough people have been infected and recovered from COVID 19. Presumably these people will have built up enough antibodies to protect themselves from becoming ill a second time, and to prevent them from being carriers --from spreading the virus to others who have not yet been exposed. I say 'presumably' because there is much that is still unknown. For instance, it is unknown whether or not the antibodies these recovered people develop will last indefinitely, or will need to be replenished by repeated exposures to the virus. Without a vaccine there can be no booster shots. It is also unknown whether or not their antibodies will be able to fight off mutations of the original virus. The virus will undoubtedly mutate, but so far it looks as if the mutations will not be more severe than the original, and the mutations will resemble the original closely enough for antibodies to effectively fight off these mutations. 
 
Without a vaccine, how long will it take to develop herd immunity? Experts say that, in the absence of a vaccine, somewhere between forty and seventy percent of the world's population will likely become infected before herd immunity eventually eliminates the risk. World-wide that is somewhere between 3.1 and 5.5 billion people. On average about 3% of those infected are likely to die as a result –somewhere between 93 and 165 million people. (This number excludes the hundreds of millions who will die as a result of economic hardships brought about by lock-downs, other infectious diseases, extreme weather events like droughts and floods, locust plagues, etc.) The rest –somewhere between 3.0 and 5.3 billion people—will recover and develop immunity. The sooner all these people become infected and recover, the sooner we will develop global herd immunity. Once that happens the risk of COVID 19 epidemics will be all but entirely eliminated, (At least until our bodies stop producing antibodies or until a rogue mutant COVID 19 derivative virus manages to slip past the antibodies designed to fight off the original.) 
 

But how long is all this going to take? Weeks? Months? Years? The answer to that question depends on a lot of variables. In wealthy countries one variable is the ability or success of such countries in 'flattening the curve' –slowing the spread. The objective there is minimizing the number of fatalities at the cost of delaying the development of herd immunity (not to mention assuming unthinkable amounts of public debt --a topic for another article). The flatter the curve, the longer it will take to achieve herd immunity. Because many wealthy countries like Canada have an aging population, they are in some ways particularly vulnerable to COVID 19. But precisely because Canada does have a universal, albeit somewhat dilapidated  healthcare system, it can, at least to some degree, save many lives by bolstering the healthcare system  in response to this pandemic. Wealthy countries like Canada also have the economic resources to put a large proportion of their population in lock-down while still providing them with a livable income. In the national context, therefore, minimizing the death toll by containing the spread seems to make a lot of sense for countries like Canada.

But citizens of many poor countries lack the healthcare systems and socioeconomic where-with-all to provide medical attention to those who become infected, never mind practice social distancing. Overcrowding in slums and the need to go out and hustle for even the most basic necessities for a meagre subsistence for much of the world's population precludes any possibilities of staying home and self-isolating. In Ecuador, for instance, even the morgues are overwhelmed, never mind the hospitals. In the tropical climate of Guayaquil the stench of decaying corpses in many houses is forcing families to put the bodies of their loved ones out on the curb, alongside the bags of household garbage. But because the curve in many countries like Ecuador is not at all flat, citizens who survive the infection will reach herd immunity long before Canadians do.

Herd Immunity in Canada: So when will Canada reach herd immunity? Its anybody's guess. But, despite the many variables, let's at least take a stab at coming up with a somewhat educated guess. In Ontario, according to the numbers in the adjacent table, we have about 10,000 known cases. The total population of Ontario is around 14.4 million people. If we go with the lowest number of infections required to reach herd immunity –40%-- we will have to wait until another 5,760,000 citizens become infected and recover:
 

(40% = 5,760,000 citizens required to reach herd immunity:

5,760,000 – 10,000 currently confirmed as positive = 5,750,000 more to go)

(A chart also linked to on the WHO website,  suggests that in Canada  a minimum 56.5 % of the population will have to be infected before herd immunity is reached)

 

How long will it take for another 5,750,000 Ontario citizens to become infected? Well, it took over a month for the current 10,000 to become infected. But a large proportion of the population has never been tested –even relatively healthy people displaying milder symptoms were being discouraged from going for testing and further clogging up an already over-burdened healthcare system. So lets say, for the sake of optimistic argument, that five times as many as the official confirmed numbers --that would be about 50,000-- Ontario residents have already contracted the virus. If it took a month for 50,000 people to get infected, and if we manage to completely flatten the curve (we haven't), at an infection rate of 50,000/month, a month from now a total of 100,000 people will have become infected. Twelve months from now, maintaining a flat curve, 600,000 Ontario residents will have become infected. Five years from now 3,000,000 million Ontario residents will have become infected with COVID 19. Even with a flat curve, five years from now we'll only be a little over half-way to acquiring herd immunity in Ontario! 
 

Even if there were actually already 500,000 mostly unconfirmed infections, at a rate of 500,000 infections per month it would still take at least a year to reach herd immunity in Ontario.

Conclusion:

It is difficult to come to any meaningful conclusions, given the fluidity of the crisis, the great number of variables, the great number of unknowns, and a great deal of conjecture. That said, I will nevertheless assert the following: 

In Canada:  

1. While the Provincial and Canadian governments may be able to pay non-essential workers to stay at home for a few more months, they cannot continue to do so indefinitely; there are not enough tools in the toolbox to support a lock-down for the number of years it will take before herd immunity is finally reached.
2. Therefore the current lock-down will be lifted long before herd immunity is reached.
3. Once those currently in lock-down resume circulation as part of their daily social and economic activities, the curve will begin to rise again --the rate of infection will again increase and continue to do so exponentially until social distancing is resumed.
4. Healthcare facilities will be operating at full capacity, albeit at an increased capacity as scarce resources such as tests, ventilators, PPEs, etc become available, but may quickly become overwhelmed again as more and more after formerly locked down people begin to circulate and become infected and critically ill.
5. With the increase in the rate of infection, herd immunity will be reached more quickly than it would have under a perfectly flat curve. How much more quickly depends on how great the increase in the rate of infection.
6. Only the development and wide dissemination and administration of a safe and effective vaccine within a year or less would make reaching herd immunity possible in a timely manner.

Globally:

1. The ability to protect themselves and their neighbours through self-isolation, social distancing, and accessing medical services is a privilege that most people on this planet don't enjoy. While the COVID 19 virus itself is not discriminatory --it just as happily infects wealthy people on cruise ships as those living in abject poverty in overcrowded slums or refugee camps-- the economic hardships incurred by vulnerable populations living in poor countries will be much greater. Those with few or no healthcare resources, or no ability to provide for the needs of citizens in a in lock-down situation, will suffer millions of deaths over and above those dying as a direct result of being infected by the virus itself.
2. Countries in which the majority of the population lack the means for self-isolation and social distancing will reach herd immunity long before wealthier countries who do have the means and do practice social distancing.

There are, of course, many more questions than answers that arise about the implications of this pandemic. But trying answer them is beyond the scope of this essay. Here are a few big questions for your consideration:

1. What will be the long-term consequences of the public debt incurred by attempts to mitigate the worst effects of this virus? Who is going to pay that debt? 
2. Will the dominant global economic development model survive this pandemic? If not, what will replace it? 
3. Will there be a decrease in global inequality and a levelling of the playing field? Or will the pandemic increase global disparity? 
4. What is the primary objective of governments' unprecedented "quantitative easing" spending? Saving lives or saving the economy as we knew it?
5. Will addressing the climate crisis become easier or more difficult as a result of this virus? 
6. What are the geopolitical implications of this virus? Will it result in a new balance of power globally? 
7. Will there be dramatic changes in the out-sourcing of manufactured goods? 
8. Will wealthy countries grant special privileges and employment opportunities to recovered COVID 19 victims  for jobs in essential services? And/or rich countries import cheaper recovered workers for from poor countries? (grant them what is being referred to as an "immunity passport"? If so, how will this cause a brain-drain in poor countries as specialized workers in healthcare and other essential services take up more lucrative jobs in rich countries? 
9. What about the banks and financial institutions? Now that they are once again deregulated, will they extend credit to dubious businesses with few future prospects in a totally restructured global economy? Or will they choose to use the money to cancel the debts of clients the deem to be unlikely to succeed in a post-pandemic world? Are they laughing all the way to the bank? Are they poised to demand yet another bailout should their old and new clients prove unable to service existing debts? 
10. What will the long-term effect of unprecedented  disaster capitalism --humongous corporate welfare checks and bail-outs, roll-back or elimination of environmental protection standards, resumption of arms sales to known human rights abusers, etc.-- be on the distribution of wealth and power in the post COVID 19 world? (See also this interview entitled "Coronavirus Is the Perfect Disaster for ‘Disaster Capitalism’" with Naomi Klein, author of  "The Shock Doctrine" and  Antony Loewenstein's "Disaster Capitalism: Making a Killing Out of Catastrophe".
11. Which poses the greater existential threat to humanity: COVID 19? or the Climate Crisis?

These are but a few of the many questions for which I have no answers. Your thoughts?