COVID-19 gave India a skin in the game problem
“Behave as if your action can be generalized to the behaviour of everyone in all places, under all conditions.” — Immanuael Kant, summarized by Nassim Nicholas Taleb
Scrolling through Twitter you can get two very different views of the 21-day lockdown imposed in India. Some state this enforced social distancing is what is required to prevent community spread of the virus and thereby allow the domestic healthcare system to work. Others suggest is it is a government cop-out to distract from other inefficiencies. Both camps seem to have their merits and seem to agree on one thing — the disproportionate impact of the lockdown.
While listing down the pros-and-cons of each argument should be left for more knowledgable minds, think of this as another way of looking at the lockdown, through the sharing of risk, using a simple analogy.
Nassim Nicholas Taleb in his book “Skin In The Game” explains the asymmetry of everyday life. This asymmetry starts off with information withheld, leads to flawed decisions, resulting in decentralized consequences, and often times decentralized risks. The summary of an otherwise well-explained book may have been botched but you get the idea. To put it simply, in Taleb’s words, the book helps in, ‘bullshit detection.’
The structure of this asymmetry is explained through four tenants — lack of reliability of knowledge, lack of symmetry in human affairs, an elusive information gap, and [ir]rationaility. Looking at India’s COVID-19 handling and its disproportionate consequences across demographics, we’ve landed up in a unique, but perfect skin in the game, or lack thereof, scenario.
Imported problem
The novel coronavirus or COVID-19 first emerged in Wuhan, China. A product of the infamous wet markets of China with origins in either bats or pangolins leading to an ‘imported problem’ for India. The first few cases recorded in the country were students returning to India from Wuhan. Returns like these were a sign of things to come.
As the virus began disseminating from Chinese airports to every continent in the world, India with its large diaspora began to retreat. In February and March, domestic cases began to grow, this time due to returning Indians and even foreigners from Europe, the Middle East, and the United States.
Community spread still nascent, India’s cases began piling up with each international flight. With this segment of people able to afford international travel, and hence domestic travel, the case for domestic spread without proper prior domestic screening was, in all likelihood, possible, further intensifying dire ‘community spread’ should it arise.
Taleb’s first essence of having skin in the game allows for easier identification of bullshit, and presents the demarcation between “cosmetic [knowledge] and true expertise.” The people who retreated, or were allowed to retreat back to India represented this case of expertise-inefficiency. To them, the case represented less a humanitarian cause, but more cost-efficiency, comfort-seeking, and short-term decision making, which presents a flawed or a stake-less view of expertise, especially when a pandemic is concerned.
By moving across various highly contagious channels of possible spread, public transport, airports, airplanes, terminals, they became virus-inhabitors and inevitably spreaders. Eventually entering a country, like India, with minimal testing facilities and capable treatment measures, caused an influx of cases and the possibility of domestic infection. This list will inevitably include people who did not have a choice but to retreat, people on holiday, students, temporary workers, they do carry insufficient risk while bearing sufficient rewards, as we will see later.
Safe and sound
The returning Indians who knowingly created a bridge for the virus to enter the rest of the country did so at everyone’s expense, less so for themselves.
Travel at the time of COVID-19 was already red-flagged by the Indian government, with returning passengers, from infection-heavy countries screened, but it did little to faze them. Many owing to pre-booked flights or hotels continued on with their trip, reaped the leisurely rewards of being tourists, experienced cultures, sites, and tastes, and some brought with them, in addition to souvenirs, a fatal virus. Further, in the context of skin in the game, they brought with them a disproportionate amount of risk.
Being immediate returnees from infected countries, the health authorities took more caution with this group. Providing quarantining facilities, complete isolation, as the healthcare system coped with temporary infancy of cases. While many recovered, they opened the flood-gates to further spread, through the lack of expertise, and increased the disproportionality of risk, infecting others in the process.
Subsequent patients infected by these returnees did not bear the reward of foreign vacations, education or work, yet they have to pay the price of such asymmetry. Referring to risk with no reward, Taleb writes, “If you have the rewards, you must also get some of the risks, not let others pay the price of your mistakes.” But others did pay the price for their mistakes, the returnees who infected, family, friends, and colleagues despite having no skin in the game, are at risk of the virus more than the ones who do have skin in the game and will be at a time when the healthcare system is overburdened.
Taleb further adds, “If you inflict risk on others, and they are harmed, you need to pay some price for it.” Risk was inflicted, or rather infected, people and systems harmed, by size and scale larger than initially thought, but no price paid.
Need to know basis
With a virus as deadly and contagious as COVID-19, there is a tremendous need for containment. This need is not only present to the healthcare and administrative authorities, but also to those around the ones infected, and fear of life is a far greater motivator than fear of authority.
As returnees are being flagged as arriving from COVID-19 hotspots such as China, before and Italy and the United States now, there is a case of social policing, in addition to distancing. Neighbors are taking it upon themselves to protect the community, by inspecting the movement of potential societal patient-zeros, and ensuring they are isolated.
In such a situation, patients, if not compelled by authorities, or probed by neighbors, feel the need to keep travel history hidden, and widen the information asymmetry. To maintain privacy, freedom of movement and liberty of choice, although selfish gains, does exacerbate a disproportionate amount of risks within the community, especially if symptoms develop.
Taleb compares this to how much information a used car salesman shares with inquisitive customers, a retelling of 2001 Nobel Prize-winning economist George Akerlof’s paper titled “The Market for “Lemons””. Akerlof explains the foundation of information asymmetry, through the concept of “lemons,” or bad cars. Used car salesmen here have tremendous potential for information asymmetry as they can keep the flaws of the “lemons” hidden.
In the current situation, the used car salesman are those returnees who have kept their travel history under wraps. The ones who suffer, are at first the ‘customers’ or the members of the locality they inhabit, but once this skin in the game is revealed, the locality takes charge.
Doctors, nurses and other healthcare professionals treating those spreading a disproportionate amount of risk have themselves become the risk-bearer. Localities these healthcare professionals or direct risk-transferees inhabit are, in many cities, restricting their access. Owners are threatening eviction of healthcare workers, neighbors are prohibiting entry, in fear of a transfer of risk. Here, the behavior of the owners and neighbors are akin to ‘risk-off’ investors, who liquidate[evict/prohibit] risky assets [healthcare professionals] for safe-haven assets [any non-healthcare tenants].
Limited occupancy only
Any response to a national crisis like this is insufficient. With authorities inevitably facing an excessive demand for hospital beds, ventilators, and intensive care units [ICUs], the decision was taken to scuttle the supply of the virus, or the risk proportionality, by enforcing a 21-day lockdown, beginning on 24 March.
The fourth tenant of the book, as laid out by Taleb, is about “rationality and the test of time.” For India and Indians, there can be no other test of, or race against, time than this 21 days half-marathon. But while some are racing towards the finish, either survival or another containment, others are barely moving, ironic because they have the greatest distance to cover.
While the 21-day lockdown was taken with the best of intentions to combat the spread of the virus, it failed to take into account the drop in consumer spending on daily necessities would halt the supply chain, and those who need it to function would be disbanded. Disbanded of economic opportunity, disbanded of housing, and disbanded of livelihood.
Daily wage laborers who migrated to the city felt the impact of the lockdown more than the rest of the country. With no money to purchase essentials, let alone sanitation products, and no shelter to ‘social distance’ they set off, on foot, back to their homes, some walking for days in order to fight off, not just the virus, like the rest of the country, but also hunger.
Taleb, quite fittingly, juxtaposed “rationality” on two spectrums. One which made sense to a “New Yorker journalist” writing about haute couture and the like, or the “psychologist using first-order models,” hearing the complaints of his lavish clientele paying $500 an hour, but rationality is “vastly deeper and statistical, linked to your own survival.”
Here the ‘journalist’ and the ‘psychologist’ are the ones who can afford to social distance, sanitize, and hoard months of essential supply. The poor of India are burdening a disproportionate amount of risk which they reaped no reward from and had no skin in the game in. The [ir]rationality of the ones who did have some skin in the game have exacerbated their risks, and while they will survive the lockdown, their survival is the one that is ‘deeply linked.’