As the novel corona virus spread during the early months of 2020, governments worldwide acted quickly to institute stay at home orders, closed businesses deemed non essential, and put millions of people out of work. To compensate workers for lost wages, governments offered generous unemployment benefits, stimulus checks, low interest loans to businesses, rent and student loan assistance, and other "free stuff". We may never know how effective these measures were toward slowing the spread of the virus, and will likely debate the appropriate level of response in perpetuity. The authorities were faced with a threat only seen about once every century, and it would be impossible to formulate an appropriate response without the benefit of hindsight. However, we have an extensive historical record showing that statist economic policies will make the economy less resilient, and lead to depression and serfdom.
This is by no means to say that we should have done nothing. The novel corona virus presented one of the greatest threats to human kind since the Second World War. Months after the virus emerged, we still don't understand fully how the virus spreads from one person to another, or its actual mortality rate. Until we find a medical solution, or humanity develops herd immunity, the virus will remain a serious threat. Slowing the spread of the novel corona virus was, and still is, our best option to bounce back from this threat. The medical community's experience with similar airborne viruses indicated that physical distancing, frequent hand washing, wearing face masks, covering sneezes and coughs, and disinfecting commonly touched surfaces would reduce the spread of the virus. These measures continue to be essential to buy more time while researchers develop a vaccine or a cure.
Rather than focus on the science of stopping the spread of the virus, many governments worldwide immediately resorted to statism, restricting people's individual rights and dealing a devastating and long term blow to the world wide economy. Politicians took the unprecedented step of claiming the authority to declare jobs and businesses as "essential" or "non-essential", rather than allowing business owners and customers to make those decisions for themselves. Many small businesses have already closed, and many people will never regain their livelihood. While decimating the economy on the one hand, these same politicians sought to gain the approval of the populace by lavishing them with money and "free stuff". All the government asked in return was that they obey.
“In a country where the sole employer is the State, opposition means death by slow starvation. The old principle: who does not work shall not eat, has been replaced by a new one: who does not obey shall not eat.”
Free markets and political freedom are inexorably linked, as stripping people of one will invariably strip them of the other. People have acquiesced to losing their economic and political freedoms in the belief that doing so is for the common good. Some people bemoan the "evils" of the free market, as they complain that it causes some to become too rich. In reality, everyone who participates in the free market gets richer. Everyone who participates in the free market by definition does so of their own free will, and for their own gain. Those who wish to abandon the free market wish to wield force on one or both sides of a transaction. But who decides who should wield the force? Who should be forced to obey the authorities for the common good?
Abandoning the free market will inevitably put us on the road toward poverty, as every trade made by force necessarily results in loss of value. Government stimulus measures will inevitably cause grave harm to the economy, as the only service governments provide is the use of force. The government can only spend money taken from people by force through taxation. The government then uses that tax money to pay for things people would not have paid for if given the free choice.
Imagine, for example, if you had $100 in your hand. What would you spend that money on? You may decide to spend it on groceries. You may decide to spend it on your electric bill. You may decide you want to get your nails done. You may decide to save it and collect interest until you can make a larger purchase in the future. However you choose to spend that $100 is your free choice, and no one knows your personal needs or wants better than you do. If, however, the government were to take that $100 from you, and spend it on what they think is in your best interest, would they spend it on the same things you would have? Almost certainly not. You will likely find that the government thinks it is in your best interest to fund a large government agency, or support corporate bail outs, or support whatever cause the lobbying groups think is in your best interest. The government would not likely spend that money on your groceries, electric bill, or nails. They certainly would not save that money for future needs. By forcing people to spend their money on things they would not have chosen, these government stimulus efforts will invariably hurt the economy for years to come.
Money represents choice. If you have that $100 bill, you have the choice to spend it on anything you can afford. No one could control your choices. In this sense, money may be the greatest instrument of freedom ever invented. When the authorities take your money from you, they take your freedom to choose how to spend that money. If, instead of a paycheck, you were to receive food and housing and basic necessities, you would lose the ability to choose what to eat, where to live, what hobbies you would pursue, etc. When they take away your ability to create value by deeming your work "non-essential", they take away your ability to make your own freedom. When the authorities make you dependent on them for unemployment benefits and other "free stuff", they make you their serf.
The great lesson here is that we as individuals need to become more financially resilient to bounce back from the looming threat to our economic and political freedom. We need to develop multiple streams of income to avoid becoming dependent on any one source that could be cut off. We need to get out of sinking debt, which robs us of our freedom. We need to position ourselves to take advantage of opportunities that others may miss. Most importantly, we need to take responsibility for our personal finances, and resist government intrusion into our choices. The economic recovery will not come from government actions, it must come from individuals making personal financial decisions to improve their own lives.