 This is Jeff Deist, and you're listening to the Human Action Podcast. Ladies and gentlemen, welcome back once again to another episode of the Human Action Podcast. This is a bit of a bonus episode because, as you know, we usually focus on books and discuss various books in the Austrian or libertarian areas. But this week, we're actually going to talk about a paper. So it's something I rarely do, which is discuss and bring on a guest to talk about an academic journal paper because I think I find a lot of academic writing pretty dense and not particularly useful for our audience. But this one was too good to pass up. Our guest is Dr. Philip Boggess. A lot of you know him as a fellow here at the Mises Institute. He teaches in Madrid at Rewan Carlos University. He is an accolade of sorts of Huerta de Sota. And more importantly, you probably know him as a monetary policy guy because he's written extensively about inflation. He wrote the wonderful book Tragedy of the Euro, which is a fantastic short succinct summary and background of the creation of that awful currency. He wrote an amazing book about Iceland's crisis and how they dealt with that by the right way, by giving haircuts to the creditors of the banks and firing management. So he's written a lot about money and deflation. But more recently, he's written a paper titled COVID-19 and the political economy of mass hysteria. So you heard that right, the political economy. And Philip, before we get into this, I want to mention that you have two Spanish co-authors, Jose Antonio Pena Ramos and Antonio Sanchez-Bion, a couple of long names there. So it's not entirely Philip's work, but when I saw this and I was able to read it, I was so excited because obviously most of our listeners know that the Mises Institute, we have been strong critics of what we would consider a huge overreaction by governments across the world to the COVID-19 virus and also by their media accomplices. So this paper views all that through the lens of political economy. So with that lengthy introduction behind us, Philip, good afternoon. It is great to talk to you after a long time. Thank you very much, Jeff. Good afternoon to you. Well, I guess first and foremost, what prompted you to write this article? Well, obviously, this is one of the biggest crisis that we have experienced. And I think the biggest crisis after the Second World War and the measures that politicians are doing are just outrageous and very hard to explain because they are not what was done in the past. It's a total overreaction to the threat of the virus. And I thought I would try to give my contribution that this craziness may end and analyze it. And then I tried to, yeah, from different perspectives because it's an interdisciplinary approach. So we use psychology and political economy, mostly mass psychology and health issues put together in order to explain what mass hysteria is. And then, of course, from a political economy perspective, when is it more likely to occur and where can it create more destruction or problems in a free society or we put minimum state of free society or with the modern welfare state? Make this comparison. Well, I have to say the article is very readable. Now, it's heavily footnoted, but I'm going to link to this in our show notes. And thankfully, it's available publicly. You don't have to be a subscriber to a journal. It's the International Journal of Environmental Research and Public Health. So I'll link to it. And I encourage people to read it because it's only about 10 pages long. And I would argue that it's written in a very lay-friendly style despite all the footnotes. But Philip, you bring up psychology and the interdisciplinary nature of this. So I'm going to play devil's advocate. You know, normally when we talk about mass hysteria, you think, well, that's a subject matter for journalists or media experts or psychologists. So the criticism is going to be, who's this economist to talk about mass hysteria? Yeah, I guess if you asked like this, you could also ask, of course, why would psychologists write about the political economy of mass hysteria? Yeah. And then no one can do it. But actually what is missed in academia is one problem of it is the over-specialization. And then if you just focus on then on your over-specialized subject, then never ever such a synthesis, such an interdisciplinary work could be done. So someone had to do it and yeah, I did it. And was the journal receptive? Was it easy to get it published? Well, some of the referees had issues and academic editor, you said that it's very well readable. One of the critiques was actually that it reads very journalistic. So but I translated it as meaning that it's very well readable, the paper. So it was actually a compliment. And they wanted to have, of course, they wanted more numbers as always, more data. So we added also a table on what the availability rates and the mortality of other illnesses. But then I said, hey, look, from the very beginning, we wanted to make a qualitative analysis of the political economy, grounded in economic principles. We said this from the very beginning, you want this or not. And then they said, yes, they wanted it. Well, I think the data helps because when you look at the overall fatality behind COVID and then when you also compare it to other similar incidents in human history, I think that helps us decide whether or not this is in fact a hysterical approach that most of the world governments have taken. Yeah, yeah, surely. That was actually a good recommendation from the reviewers. I guess they would have liked to have econometrical analysis also, but we didn't do that. Well, so the term political economy is pretty broad. It means different things. How do you generally define it and how do you apply it here to the COVID crisis? Yeah, it's an economic analysis of policies and we apply it to the COVID crisis. But actually in the paper, COVID is more like the reason and the case to illustrate our general point, which is that mass hysteria become much more likely to develop and to grow in a modern welfare state. These are the minimum state of free society. And when we take COVID as an example, of course, it's hard to say if COVID-19 direction is really a mass hysteria because how would you measure that? Again, of course, say the mortality rates are these and then you say, oh, this is overreaction. But of course there does not exist any measurable numbers where you could say, okay, yes, this is a mass hysteria or not. I personally think it is because many people are totally overreacting and not meeting with other people and not leaving their houses. They drive alone in cars with masks. And of course the political reactions are totally overblown. Well, I think we've heard a lot of use of the magic phrase public health over the past year. And as you point out, if we're going to conceptually accept the notion of public health then this sort of necessarily implicates the welfare state because if it's public, that implies that the government is in charge of it and ought to be saving us. Yeah, exactly. Public health does not exist. There exists only individual health and the policy measures like the lockdowns, they may be good for the individual health of some people but they are bad for the individual health of other people, of the people who get psychological problems, who get depressed, who commit suicide, who fall to alcoholism and so on for those people and for the general population as the living standards fall and the living standards fall, life expectancy also falls. So there does not exist one public health where we would use where you could say something is good for this public health because there's only individual health. So the whole concept is totally wrong but what you mentioned is when the welfare state is in charge of it and then it gives itself a special authority that people believe the state should care for public health and they believe what the state says and when the state overreacts and portrays it as a horrible threat people tend to believe it and then they get stressed and they get into anxiety and this is the perfect environment for a mass hysteria to develop because when they're stressed and in anxiety people can fall or succumb to a mass hysteria, much easier. One thing you mentioned throughout the paper which strikes me is very different from big catastrophic events in the past like 9-11 or something like that is the prevalence of social media. It seems like social media plays a huge role in what we're experiencing. Yes, exactly. In fact, past mass hysteria and there's a huge literature that I discovered and read about it past mass hysteria are more in a localized restricted setting such in schools, there's cases of laughing hysteria people for some reason start to laugh and other people continue to laugh all day or in companies there's mass hysteria and then someone saw a bug and then he starts to have some symptoms and scratch and then other people do also and then finally comes out with a bug and never existed but with the social media the contagion of this anxiety and stress is much faster and much global so I think that we get to the point that there can be a global mass hysteria something that was not possible before because we did not have this social media this constant messaging because this is very important we have the human mind has a negativity bias for evolutionary reasons we concentrate on bad news because when our ancestors would not have concentrated on bad news they would have died so we look for bad news but if we get this bad news constantly 24 hours, 7 days a week and we see case numbers going up death going up and with social media we are connected all day to this bad news this creates an amount of stress and anxiety that is unbearable and has important psychological problems and it's a very fertile ground for a mass hysteria to develop So one thing you point out throughout is that there is now this nexus between not only state institutions which unfortunately have been viewed as the authoritative source of information and data about COVID but the way that they work with media with science, with politics, with the public and it's this nexus of all these things coming together which just feels different this time around because it's international in scope and so COVID-19 is sort of the first truly global pandemic in the public's consciousness Yeah, exactly, it's the first one and as you said, the media if it's politicized plays an important role in spreading the contagion of fear and stress and the mass hysteria because when the media that is also now we are connected with the media through the social media outlets they go on the side of the state and spread panic news and also sell, in the sense it's totally rational for them to do so but when we have this politicized media where we have public TV channels where you need licenses and of course the media they get the information from the politics so there's always this close collection between the media because the media gets insider information from the politicians and therefore they tell what the politicians want to tell and of course all we have this problem of state education that we have public universities and public curricula, state curricula so journalists went through this education and tend to be very statists not all but there's a tendency and then when we have this connection between the state the strong state and the media and they both foster the panic Now you talk about this concept of what kind of mechanisms in society either amplify or attenuate this hysterical thinking and you say that welfare states or let's just say bigger governments have certain mechanisms by which they amplify hysteria and you lay out five or six points can you just briefly touch on how a bigger government tends to amplify things and what happens mechanically? One is what I just talked about that there's a politicized mass media that then contributes and spreads the hysteria this would not exist in a free society a politicized mass media then what I also mentioned was that when we get negative information from an authoritative source we have a longer impact for us we have now people like Fauci in the US in other countries we have other experts but they are looked upon with much admiration because they have gotten the approval the sacred approval almost of the state and they have such a high authority and they are responsible for public health so we believe and when the government and then as an authoritative source bring us this negative information that it's a horrible threat and deadly threat and millions will die then people believe it or tend to believe it something that would not happen in a free society because there would be no such institution responsible for public health and there would be different many many different experts being good doctors maybe in the past but these experts today they are in the position where they are because they have a good connection to the state they arose to this position not because they are good doctors or so but because they are connected to the interests of the state and what I not have mentioned yet is that the state by its very nature deals with problems and threats in a centralized way which means that there is no alternatives allowed, experimentation is not allowed so in a free society we would have a virus and we don't know how deadly it is some people might say well I am a business owner and I close my business others would try other approaches and say ok people will get into my store they have to wear masks they have to wear temperature and some store owners may say well everyone can come in as before so there are different approaches that allow for experimentation also to observe the results and when people who have not fallen have not succumbed to the mass hysteria and they can observe ok these people these people have opened their stores immediately they are still alive so the stress and anxiety of those people is reduced and the group of the people who have succumbed to the hysteria shrinks and get smaller and smaller because you can observe the different results while when you have a centralized approach it comes together with group thinking then no alternative approaches are allowed in this country it's good that we don't have a world state a world government if you would have a world government then we would have a lockdown of the world probably at least we can look to other countries like Sweden or Japan to see that other approaches also work so the more decentralized the system is the more experimentation can go on and the more information is also created that is needed to deal with the threat and to know how big the threat actually is so the possibility of experimentation with alternative solutions is one point and then fear fear is used as a political factor by the state the state rests actually on fear it instills fear on the population and it's always present itself with people from some threat be it a foreign attacker a foreign attack that could be a threat someone who has weapons of mass destruction or whatever or also the threat of poverty or the threat of health problems so the state itself its story is I protect you against all the threats and it can increase its power by inventing threats and it has done so in the past it did so with the weapons of mass destruction it's using the threat of terrorism to increase its state power so the state deliberately plays with fear and if you have this in such a situation where there is a threat and the possibility of a mass hysteria and then comes the threat and the state and spreads panic then mass hysteria becomes becomes more and more likely and there are cases there are very clear cases for example in Germany last March there were like there was an internal paper from the Ministry of the Interior that was leaked to the public and the experts actually they did recommend the government to instill fear in the population how? first they said the government should appeal to the fear of dying without oxygen which is a primordial fear that people have the other thing was to instill fear in children if children would get it and play with their friends and then their parents would die a horrible death at home or their grandparents so actually very evil techniques and the third one was to say there may be very harmful long-term consequences of COVID even if you recover maybe in the future these people suddenly die so all this fear was deliberately and we know it because the paper was leaked is deliberately instilled in the population and the last factor that I mentioned and that Hans Hopper also has talked about is that politicians can pass on the costs of wrong decisions to third parties so if there's a lockdown the costs are not borne by politicians in fact they still get their salary and their power is actually increased so the psychic income is increased but the costs are borne by others by third parties, by everyone who's locked up locked down people who lose their businesses people whose families are destroyed people who get depressed or the costs are not borne by politicians and they face an asymmetric payoff because if they underestimate the threat that's the measure that they would underestimate the threat and then people die and when people die that's a problem for politicians if they can be made responsible they will tear it and feed it if something like this happens this problem does not occur for them because if they are right they are like the heroes because they protected the population if they are wrong, if they are overdoing it the costs are only seen later maybe later on people die because the cancer has been due to the lockdown the cancer has been detected later or people will get a depression or alcoholism they die maybe years later but this cannot be connected to the lockdown and it's also much longer when these politicians are probably already out of power so they have the incentive to exaggerate the threat and in any case, even though if they overdo it they can always rely on the experts and on the media to say it was necessary look, if you would not have done it millions of people would have died of Covid so they can always do it so the clear incentive of them is to over-exaggerate the threat and then do these measures like lockdowns and if people are locked down and the government locks them down they may think, well, this must be really a great threat if they do such harsh measures so this then contributes to the hysteria maybe that's the most important single takeaway from this paper is that the incentives are all wrong in other words, not only politicians but media figures, academic scientists, etc there's a benefit perhaps to them to creating hysteria and the detriment is spread out over all of us the citizens and oftentimes over time as well so that's what's so frustrating oftentimes about state action we saw this after 9-11 as well well, you know, if we don't act we're all going to be killed by terrorists in 20 years and say, well, because we put all these new measures in place at the airport and ruined your flying experience there haven't been any big terrorist attacks so that's what made you safe and of course we can't know that and this strikes me as certainly the biggest event since 9-11 you mentioned that it's maybe the biggest event since World War II and I guess I hadn't thought of it that way but it's staggering to think about it and you know, I just want to say this paper is fantastic again, we're going to link to it everybody take the time to read it this weekend you can read it very quickly it's the kind of important work that's going on out there that needs to be going on people like Philip Boggess need to be a better known you know, by media figures and by others because we have to be pushing back on the narrative, we have to be the counter hysterics of a sort so all that said I want to thank Philip Boggess Dr. Philip Boggess, Professor Philip Boggess for his time, we're going to link not only to this article but to my synopsis of it, to some of his other books and I'm just going to recommend all of you to follow him on twitter at Philip Boggess that is 1L2Ps at Philip Boggess B-A-G-U-S and to check out some of his work in our store because I got to tell you, if you're interested in the sordid background on the Euro and why the Germans gave up the Deutschmark the tragedy of the Euro is the book for you and if you're interested in what Iceland did after the financial crisis and why their crisis was rather short well, Dr. Boggess's book on that has the answers in part they let their creditors take a haircut, they fired all their management installed new boards and guess what they let their currency float so that employers could actually pay wages so Dr. Boggess has really a plethora of fantastic and accessible lay-friendly writing that I think you need to check out so Philip, thank you so much for your time have a wonderful weekend in Madrid thank you very much Jeff for your kind words and I really enjoyed the interview have a good weekend too for more content like this on Mises.org