Economics in One Virus: An Introduction to Economic Reasoning through COVID-19

Bourne (economics, Cato Inst.) uses the COVID-19 pandemic to explain basic principles of economics. A guiding theme of the book is that economic policies involve choices, and these choices should be evaluated based on the benefits and costs of the available options. “Cost” here does not mean simply the monetary cost of a program, but rather “opportunity cost.” As an example, lockdowns and social distancing save lives, but policymakers also need to consider the economic and social costs that result from restricting people’s activities. Bourne argues that, for the most part, governments are bad at assessing such costs and benefits, and that sometimes (though not always) it is better to rely on local knowledge possessed by free market actors than to impose a one-size-fits-all central plan. The book introduces many important economic concepts, such as the Peltzman Effect, which theorizes that people respond to safety measures by adopting riskier behavior than previously.