Market Thinking

making sense of the narrative

Logic’s Coming Home

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The last year has seen an extra-ordinary suspension of logic in a lot of policy announcements, with Governments seemingly requiring positive proof from those opposing their Covid restrictions that their (often random) policies don’t work, rather than the Government having to prove that they do. Post July 4th the majority of US States appear to have moved back to a state of near normality, even as the UK government ties itself up in knots as to why 45,000 football fans are not a risk but a wedding of more than 30 people is. In an encouraging sign however, the political winds seem to be shifting in the UK and indeed Europe. After a year in the wilderness, it seems that finally ‘Logic is coming home”.

Almost exactly 11 months ago we discussed the psychological experiment of the Five monkeys and in particular how quickly people assumed learned behavior and forgot the reason why that behaviour existed in the first place.

Sadly, indeed tragically, this appears to have got worse rather than better since then. The original idea of preventing health services from being overwhelmed led to an unprecedented policy of locking down everybody, not just the vulnerable. This, however, gave way relatively quickly to a mass vaccination programme that by contrast targeted the vulnerable as a priority, although the majority remain locked down. Now, with anybody who is deemed vulnerable (to death or severe illness) vaccinated unless they choose not to be, there appears to be a push to get everybody vaccinated. However, rather like the five monkeys, it seems nobody can remember why we locked people down in the first place – to protect the vulnerable and to prevent the Health Services being overwhelmed – two aims that are basically already achieved. It is this mission creep to a quixotic (and ruinous) policy of zero Covid that continues to throw uncertainty at financial markets.

As someone pointed out, with England’s Euro results to date being 0-0. 1-0. 2-0 and 4-0, were Imperial College to be forecasting the next result they would presumably be going for 8-0

The parallels with Climate Alarmism remain powerful. The ‘science’ for both is based largely around computer modelling* with worst-case scenarios ‘re-purposed’ as central cases from which even more extreme projections are then made and which are then seized upon by activists to leverage politicians into policy actions that are disproportionate to the actual threat. Moreover the ‘opportunity cost’ of the policies is rarely considered and indeed is glossed over by powerful vested interests. The rhetoric of both camps is riddled with logical fallacies, such that it is also worth revisiting the note we wrote almost exactly a year ago on this very topic.

Or you could revisit our Logical Fallacy Bingo card and see how you do – click link for original article with descriptions of each logical fallacy.

A Logical Fallacy Bingo Card

Appeal to ignoranceAppeal to AuthorityAppeal to traditionSlippery SlopeComposition/division fallacy
genetic fallacyAnecdotal fallacyAd Hoc ergo Proctor HocMoral EquvalenceAd Populum
Appeal to IncredulityFalse DichotomyDENIER!
(free square)
tu quoqueStraw Man
Appeal to noveltyBegging the questionTexas sharpshooterAppeal to moneyMiddle ground fallacy
Special pleadingAppeal to anonymous authorityCircular argumentAppeal to EmotionBurden of Proof
Logical Fallacy Bingo

The bottom line is that one year on, the political classes are reluctant to give up their ’emergency powers’ over Covid, while lobbyists are hoping to exploit this to get similar, non-democratic, powers for their own vested interests. This seems to be the case in Europe and the UK in particular, the US having largely abandoned most of the Covid restrictions – probably because with Trump gone they feel they can not be blamed for earlier policy mistakes.

However, in a positive turn of events, the UK seems to have broken the spell that had suspended logic for the last year or more. Recent statements highlighting low hospitalisation and death rates instead of high positive test rates are equivalent to pointing out to the monkeys that there is nobody there with a hose any more. The shift in personnel (the expulsion of the Zero Covid Health Secretary Matt Hancock to be replaced by seemingly more pragmatic ex Chancellor Sajid Javid) has marked a change in the political winds and a return to a more pragmatic and logic based approach. Sadly, it is probably too much to expect the same degree of logic to apply to the ‘Green’ driven Build back better agenda, although as previously noted, the logic of small nuclear power has certainly been accepted in the US and of course China. Whether the UK and Europe wake up to the competitive losses associated with high energy costs remains to be seen.

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