A Historical Event & A Great Historian. Niall Ferguson Talks to Armstrong & Getty

we talked to one of the world's greatest historians. It's Armstrong and Getty extra large because four hours simply usn't enough. This is Armstrong and Getty extra Large. Neil Ferguson is the Millbank Family Senior Fellow at the Hoover Institution, Stanford University for twelve years, the Laurence ay Tisch Professor of History at Stanford, among other credentials, and more importantly, is a hell of a good conversation. That's been too long, Neil,

how are you, sir? Very well? Indeed, I'm happy to report. Yeah, well, I'm excited to talk to you because Joe and I were throwing us around the other day. Um, you know, you're a professional historian, so it's good to ask you where word amateur history bubbs buffs? Are we living through

like a top ten world event? I mean, because by a number of measures, it seems to me it would rank pretty high in world history, maybe below the meteor that killed the dinosaurs, but certainly above Prince Harry moving to Canada. Somewhere in that range. Yes, I certainly think it beats Prince Harry, So I'm not sure we're quite at the extinction event level. I think if it were just a pandemic, it wouldn't really be top ten because it's clearly not up there with the Black Death of

the fourteenth century. I don't think it's as a dangerous disease actually is the influenza of eighteen nineteen. But what's making it world historical is the extraordinary economic consequences, and particularly the ways in which government mandated lockdown, the causing that the biggest economic shocks since the Great Depression, much bigger than the two two tho nine financial crisis. I

think that's really the differentiating factor here. We're really in the midst of one of the biggest economic shocks in history well, and similar to the still shocking lack of knowledge about the specifics of the virus, how it infects, how it spreads, how it kills. We don't have the slightest idea do we what the aftershocks are likely to look like or how long the last Well, that's right, because we know more now than we did back in January when I started writing about this warning that the

Woolhan coronavirus was likely to become a global pandemic. But but we we still don't really know the critical things we need to know. We don't really know what the infection fatality rate is because the case motality rates are very skewed. We don't really know how many people have been exposed. For testing is getting up to the level where we can start to get a fix on it. We have no idea when a vaccine will be ready. It certainly won't be this year and can't even be

relied on to be ready for next year. So for a whole bunch of imponderables here. But history can be in some ways of helpful, if not more helpful than epithe theology. One thing is very clear from the great pandemics of the past. This will not be one wave and done. And I think we've been letters of public to believe. But as alably flattened the curve and the great phrase of the year, we'll be fine and we'll be looking back on this by July fourth saying gee,

that was rough but over. That's not the case. Almost all the great pandemics are multiple waves. The second wave was bigger than the first one, and I think it's it's only a matter of time. It could be soon trying to get the economy back to work. It could be after the summer, but there will be a second wave, and I think it's time that people face that realistically, rather than kidding themselves that it will all be over

by July four. Your opinion piece in the Boston Globe, the economic legacy of a coronavirus lockdown, the old battle between security, um uh, you know, security and safety and your economic security and your health and all that sort of stuff. The way it's playing out here, it seems like it transferment to flatten the curve. As you said, it's the phrase of the year, flatten the curve. But originally we're going to flatten the curve to try to

keep the hospitals from being overwhelmed. Now all of a sudden, we've gone to it seems, flatten the curve to make sure nobody dies from it. And I don't know if I'm willing to trade how many tens of thousands deads for something worse than the Great Depression. I think that this trade off has has sometimes been over sympathized in the way that some politicians are said, we should be ready to satisfice the elderly to get the economy back. I don't think we should think about it like that.

I think that the truth is that we just have a lot of uncertainty about the disease, and therefore we need to err on the side of caution. We certainly needed to err on the side of caution right at the beginning when we knew nothing about it. Unfortunately we

did it. But I think the projections that were so crucial in March in leading to lockdowns implied that up to two million or more Americans would die if we did nothing, and I think that was all was certainly wrong because it implied or it was based on an assumption that the infection fatality rate was about point nine percent, in effect, to the epidemeologists, who confusedly included somebody with the same name as me, Neil Ferguson of Imperial College, London,

were saying, this is as bad as nine and I'm pretty sure it's not. I think we now know enough to see that it is not as deadly. It's more like actually the ninety seven fifty eight pandemic, which not many people remember. And the reason they don't remember it is that killed quite a lot of people around the world, including many Americans. It didn't lead to they can lockdown. It didn't need to this kind of man made depression.

So I think, although I'm going to be careful here, I think we're starting to see that we actually went in for overkill in the face of a disease that was highly contagious, certainly, but not as injurious as we at first thought. And that's why I think it would be very, very urgently desirable for the US to switch to a more subtle form of containment of the disease, of the sort that we've already seen in countries like Taiwan and South Korea, which haven't had to lockdown their economies.

We used a very blunt instrument based I think on an exaggerated fear of the excess mortipality that was going to be It can like lockdown. I don't think have been especially affected compared with social distancing, which is something different. And I think the lesson that we can learn from successful countries like Taiwan and South Korea is that with testing and contact tracing, you don't need to create your

economy to manage this disease. Well, and we're discussing the trade off between the lives of the old in your example and versus the economy. I think it's brutally under discussed the fact that if the economy tanks or is left in rubble, there will be many, many deaths of poverty, despair,

lack of medical care, suicide, depression, addiction, etcetera, etcetera. And I could easily see a two hundred thousand deaths of despair being sacrificed to save thirty thousand lives of Wuhan flu, which is obviously not to sort of bargain anyone would strike. I think the risk in terms of potential mortality due to code of mountin was was higher than a thousand if we if we'd really done nothing, I think, yeah,

I meant going forward really bit higher. But you know, we're in a situation now when it's quite hard to say what the result would have been if we if we've done nothing. But the distinction I want to draw is between a rational policy of social distancing that tries to minimize the exposure, especially vulnerable groups to this virus under very blunt instrument of economic lockdowns, which I think have almost certainly done more harm than the net public

health benefit. I mean, in the end, we're using a lot of quite confusing metrics, and the result I think has been to lead ordinary Americans to to feel very uncertain about what they should do. I think the best way of thinking about this is just excess debts. Are we seeing right now much higher mortality than we would expect at this time of year? And that's I think a good way of thinking about it. And the answer is that we're starting to although at the moment it's

still very confined into states such as New York. In Europe, there's excess mortality certainly in countries like Italy and Spain, and it's clear that it would have been much higher if if they done nothing, and if we've done nothing, So I don't think we should underplay this. It was always a mistake to say, oh, this is just the seasonal influenza. That was a terrible uh, that bad bit of analysis that that attracted a lot of comment pators on both the left and the right back in January, February,

in the first half of March. So I don't think we should underestimate this, but nor should we While be exaggerated, this is really not as dangerous of virus as the influenza. If if you actually imagine that virus coming back today, then we'd be looking at death death count potentially up to two million. But I really don't think that was the mere scenario we faced. I think it was much closer to being something like ninety seven fifty eight, with

maybe maybe five a thousand people potentially at risk. So it's a very fine balance that governments have to strike.

I think the mistake that we may have made was to say, our first we'll try in cicions, why why shouldn't we worry, And then let's try what the Chinese did in Coupe problems, which was economic lockdown, and we failed to see that actually there was a much smarter policy being done in the other China, iwan we're testing and policing enabled them to avoid the contagions spreading far the god very few deaths, and they haven't had to

lock down their economy. I think, guys has to be why did all those people in the federal government whose job this was failed so badly. It's not like we didn't have a plan for a pandemic. We had I think at the last count, six different plans. We had legislation, we had task forces, we had people inside the Department of Helping Human Services whose one job it was to deal with the pandemic, and for some unexplicable reason almost

brought completely failed. That's the conversation I think we need to have when this finally is over, which I don't think we'll be until next year. We need to ask why big government failed so ethically in the United States this year. Yeah, I hope that's looked at um UH and by people being nonpartisan, just trying to get to the bottom of it. I've read about the first half

of your Henry Kissinger book just absolutely fantastic. And the reason I bring that up as I was reading an opinion piece from Henry Kissinger just the other day, in which he thinks this is really going to have an effect on the world order, particularly um the power struggle between US and China. How do you feel about that?

How gool with that? I mean, Richard half of the Council on Foreign Relations wrote a kind of alternative piece saying, Oh, it's not going to change that much except to accelerate existing trend. I think I think that that's definitely wrong. This is a huge shift that is going to happen. I think in some ways it is laying bare what I've already called Cold War two, revealing that there are fundamental,

irreconcilable differences between the United States and China. Perhaps I should say the Western China, because Europe's in this too. I think prior to the pandemic, a lot of people wanted to pretend this wasn't happening and that somehow we could resurrect the old relationship between the US and China that I used to call chi America. But ch America is dead and Cold War two is very much with us,

and I think the pandemic has has revealed that very clearly. Chinese, of course, they're trying to bend the narrative and say oh, well, this may possibly have started in China, but actually it might have started somewhere else. But hey, anyway, we're here to save the world, and that that I think is a pretty ill conceived propagandam move from China's part that's probably going to backfire on them. It's certainly not playing

well in Europe as I understand it. So no, I think this is a big moments of truth for the U. S. China relationship. But it's a moment that has revealed all that is rotten at the core of the People's Republic of China's governance. But there's other stuff to be looked at too. I don't think it could be without consequences that the price of oil has essentially collapsed to zero

or even in some cases into negative territory. For countries like Russia or for that matter, Saudi Arabia that rely primarily on these revenues from oil, it's it's got to be an existential threat that they face. So I think the political consequences, or maybe I should say the geopolitical consequences of the pandemic, will be enormous, much closer to kissing to the Richard hearts, and that changing direction just a bit. Those of us of a libertarian banter are

concerned about a couple of aspects of this power. Once grasp is not easily taken back, and right surrendered are not easily regained, And there seems to be an awful lot of uh, you know, too too easy acquiescence to We're putting you essentially under house arrest, and we're not even going to indicate that we understand how serious that is. You have no right to peaceably assemble, but it's because

there's an emergency, and again it could be necessary. But the fact that the powers that be don't even say, look, we understand, we're asking you to surrender your most precious rights. Were very sorry, We'll get back to normal as soon as we can. The casualness of it is bothersome to us. Any thoughts on that, Yeah, I think the United States has a bit of a public actually with the way

in which emergencies operates. They have a tendency to get declared and never undeclared because the National Emergencies Act, which dates back to the nineteen seventies, has essentially being abused by sess of administrations. Again, this is not a partisan point. Emergencies get declared and then they kind of stay in force, and I think it would be very very dangerous indeed, if certainly the emergency measures that have been introduced since

the pandemic came along became a permanent feature. I think it's urgently needed that the National Emergencies Act be reformed so that there is an expiry mandatory expiry of sticks of emergency, because otherwise we end up in a situation which I think is very troubling that a whole range of different statutory provisions supposed to be for emergencies only become permanent features of of American life. And I don't think any president should be in a position to play

a permanent state of emergency. Frankly, that's how the publics die. Don't really matter who the president is. My final question is how long do you think there will be reverberations economically worldwide out of this? But I don't think the public health crisis is going to be over for quite a while because the virus is not going away. We don't have therapy is we don't have a vaccine, were

nowhere near to her immunity. A great proportion the population hasn't even been exposed to it yet, We're still going to be playing some game of whack a mole with covered nineteen inter next year and beyond become a regular teacher of life. In fact, if it turns out that you don't get more lasting immunity once you've had it, which I think is quite possible. So that's the that's the public health problem. It's certainly not going away in

a hurry. But the consequences of what we've done really traveled me more because we have inflicted an enormous shock to our economy. That's there in the data that you and I can see every day. Soaring unemployment, business is teetering on the brink of insolvency, relying on checks from the federal government to steer This can't continue for much longer. With really sustained UH, you can come a damage that will not be easy to recover from. I certainly don't

see a v shaped recovery under these circumstances. Imagining that this is financial prices two points oh, and that you just need to throw money at it in the form of a large federal deficit and lots of wanted di easing is delusional. All those measures are doing is propping up the economy that would otherwise be flat on its face. But I think it's going to be a long road back, even if we successfully begin to unwinder lockdowns in the next couple of months. So I'm afraid we aren't going

to be out of this for a long time. Remember how long it took actually for the U. S economy to get back to where it was in arnds of just an employment after two thousands, more like six years before we were really back to where we had been. This is worse, and so I think we need to prepare our for a slow crawl back to something that I don't think we can call the new normal, because

I don't think it's going to be that normal. It's not going to be that normal if we can't go to the all game, if we can't go to crowded restaurants, if we can't go to the movies, if all of those things that involve social proximity are essentially off for the indefinite future until there's a generally available vaccine, and talking about normal is probably just another form of self delusion. Well, and the universe has a funny way of throwing things

at you as you're recovering from the last shock. To Neil Ferguson of the Hoover Institution, Stanford University, we don't want to be too greedy with your time, but we thank you very much for the conversation. Always enjoy it in a pleasure sor I'm not more cheerful. Thanks nonetheless. Yeah, well, I understand why he said there at the end. I was thinking while he while he was laying that out, I thought, I hope he's wrong. I hope he's wrong about that. It is not ten years before we get

back to even where we were before. Well, you know, my might comment about the universe throwing things. Actually it works both ways too. Sometimes the universe throws enormous opportunities your way and and things turn out much better than anticipating. You know, tearing down and chaos is the natural state

of things. That's what you're always fighting against just in life, entropy, right and uh and so well, you know, like you said, there will be other things come along over the next six eight ten years as the world tries to get back to where it was three months ago. Um, there will be wars and earthquakes and hurricanes and political unrest and who knows what. So, you know, the optimist in me thinks that a lot of crap that is addling our society, that's hurting us is going to be shaken

out because we don't have time for it anymore. We're gonna be a leaner, meaner, more practical people. Then there's the other part of me that thinks, no, it appears to me bureaucracies are growing. Uh, the the power of the government and the bureaucracies is growing in things might just end up worse. I don't know. We've got We've got a whole generation that's has spent a good chunk of their life being taken care of by the government because there was no other way to do it. And

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