Trade-offs and scenarios

Trilemma

A trilemma is a choice among three favourable options of which only two are possible at the same time. Simply put, if you choose two of them, you have to sacrifice the third. In IT projects, the trilemma is that the output can be any two of these three – cheap, good or fast. You can’t have all three together. In monetary policy, there’s the famous impossible trinity (also known as the Mundell-Fleming trilemma) – a country must choose between free capital mobility, exchange-rate management and monetary autonomy and only two out of the three are possible. A country that chooses to control the value of its currency and freedom to set an interest policy can’t allow free movement of capital across its borders. If it chooses free capital flow and autonomy to fix interest rates, it can’t have a fixed exchange rate. So on and so forth.

The New Statesman has a trilemma for the current times here. In the current crisis, a country has to choose any two out of these three options – containing the contagion, keeping the economy open (no shutdown) and respecting civil liberties of people (free movement, privacy, contact tracking etc). The countries that have managed this well so far (South Korea, Singapore) have given up on the civil liberties option and chosen the other two. Western democracies have liberty so deeply embedded in their social mores they have struggled with this trilemma. The results have been unfortunate at least in the short-term. India has chosen the path of eschewing civil liberties and opting for the other two. But it has used a sledgehammer of complete lockdown so far. This method works when you completely bring the spread under control which then allows you to lift the lockdown. But that might be too late. The scalpel needs to be brought out now that restricts civil liberties in a manner that allows partial lifting of lockdown. This includes location tracking and contact tracing app downloaded on every phone as a requirement for the next 2 months and much larger scale of testing in a randomised manner.

The western democracies can continue to flounder their way out of this using masks, rapid testing models etc. But they will have to bite the bullet on civil liberty in ways more than partial or complete shutdown. In any case, citizens have been giving way more than this data to private firms who have used it to build profitable business models and maybe, influence an election or two. I don’t see how long the state can remain coy about transgressing these liberties in an emergency like this.  

The sum of all fears

It is remarkable how many negatives surround us at this moment and how we have no idea how long the repercussions of them will last. There’s a pandemic and deaths because of it, a complete halt in economic activities, large fiscal and monetary packages whose long term impact is unknown and the ramifications of social isolation on the mental health and well-being of society. Nobody knows how long we will be counting the costs of this. That’s the worrier in me.

On the other hand, though who knows if the virus like other flus simply disappears as the summer progresses and by mid-May we are all back at work. Migrants come back to cities, the laid off workers are back at their jobs, demand rebounds, supply chains are back humming, oil is at its lowest, interest rates are at an all time low, stimulus is cranking up the economic engine, there’s a huge amount of household savings that floods the markets and scientists have got the vaccine. What’s more we have a response mechanism to manage any pandemic that might come to blight us again ever. It will be boom time.

The future could be the best of times or the worst of times.

Lastly,

There’s a slow but sure momentum building for some kind of an alternative mechanism than a complete shutdown to tackle the pandemic problem in India. Today, we have launched an app to do contact tracing which we have been talking about for a while. Singapore first launched this app and then opened up the code for anyone to pick up and use. Contact tracing is a start. We must try out all other options between now and April 15.

Of course, the government can now track all your movements. But how do you know they weren’t already?

1 thought on “Trade-offs and scenarios

  1. […] and South Korea) have done so by increasing surveillance on their citizens. As Raghu SJ wrote in this excellent blogpost, countries are facing an “impossible trilemma” in terms of protecting citizens’ […]

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