Economics show why politicians' mask mandates don't work

By Steven Horwitz and Donald J. Boudreaux.

"Most economic analysis assumes that people reap all the benefits and bear all the costs of their decisions. But what happens when that’s not true? In particular, what happens when some of the costs of our decisions fall on the shoulders of others? This question is at the heart of the debate over mask mandates.

Refusal to wear a mask creates what economists call a “negative externality.” We impose (externalize) some of the costs of our actions on non-consenting others. If I am contagious with the novel coronavirus, my refusal to wear a mask imposes costs on those around me.

A classic example of negative externalities is air pollution. And unmasked COVID-19 carriers do actually pollute the air as did 19th-century smokestacks: In both cases, costs are inflicted on non-consenting others. The economist’s blackboard solution is to tax polluters just enough to give them incentives to behave as they would if they were to take into account the welfare of all who breathe the air.

While elegant and successful on the blackboard, however, this solution might well backfire in reality. That’s because the blackboard solution assumes that private actors are self-interested, yet it assumes that political actors are conversely concerned with only the public interest and not their own. Of course, experience teaches us that politicians are just as self-interested as are the rest of us — including polluters.

Politicians act in ways that win them votes, whether or not such actions truly promote the public welfare in reality.

With actual pollution policy, taxes and regulations are not designed to reduce pollution to “optimal” levels. Instead, by imposing mandates that fall with disproportionate costliness on smaller firms when compared to larger firms, real-world environmental policy too often is used to shield large and politically influential firms from the competition of smaller rivals. This, ironically, results in net harm to society — a negative externality.

Economists who fail to account for political self-interest in their models of the “best” policy should not be surprised when the actual policy turns out to be a failure.

And so it is with the call to address the negative externality of virus contagion with a mask mandate. This mandate, like a tax on polluters, forces mask wearers to bear additional costs that hopefully capture the full social costs of their decision. In theory, that should discourage people from going maskless. Or so says the blackboard solution.

But as with actual pollution policy, we cannot assume that the political process will produce a mask mandate that resembles what economists might draw on the blackboard. First, we have to ask what the actual gains from the mandate are likely to be, just as we have to be realistic about just how much pollution an actual tax would discourage. With masks, the question is how mandates work when compared to the next best alternative. How many more people would use masks if they are mandated versus simply relying on strong social pressure and private sector no-mask, no-service rules? It might not be many.

Second, we must think through the costs. In the same way that empowering politicians to solve pollution does not automatically produce the black-and-white results on the economist’s chalkboard, mask mandates might also have unintended negative consequences. By creating more opportunities for encounters between law enforcement and the citizenry, mask mandates create yet one more way for authorities to harass the relatively powerless. We’ve already seen that mandates are disproportionately enforced against people and communities of color.

Especially in the current political environment, these costs are not to be taken lightly.

We all want to stop the spread of COVID, and mask wearing is key to achieving that goal. But, in contrast to mandates, the more decentralized and nuanced processes of social pressure and rules created by private owners do not carry with them the use of force and the potential for abuse that comes with a government-enforced requirement.

Avoiding mandates would also allow individuals and firms to experiment — and discover the best ways to provide the protection that they and their customers, friends, or families desire. With a disease that is significantly riskier for some than others, one-size-fits-all mask mandates do not necessarily fit us all.

Steven Horwitz is a senior affiliated scholar with the Mercatus Center at George Mason University and Distinguished Professor of Free Enterprise at Ball State University. Donald J. Boudreaux is a professor of economics at George Mason University and a senior fellow with the F.A. Hayek Program at GMU’s Mercatus Center."