Prudence is a virtue. Aristotle considered it among the nine most important. Economist Dierdre McCloskey considered it the lead virtue in a commercial society.
Punishing prudence is not a good idea. It undermines the ethical underpinnings of a free society.
On Wednesday, the New Zealand Government decided prudence is a vice to be punished rather than a virtue to be celebrated.
I spent the summer as a visiting Erskine Fellow with the Economics Department at Canterbury, my old home turf. The Department wanted me to help teach Masters students about economic writing.
McCloskey’s “Economical Writing” is unsurpassed, so I spent a bit of time re-reading her.
Two decades ago, McCloskey started work on what she called the Bourgeois Virtues.
A free society needs more than the incentives provided by the rule of law and the discipline of profit and loss. Both are underpinned by and help to reinforce a set of virtues – prudence chief among them. The prudence to buy low and sell high. And the prudence “to trade rather than invade, to calculate the consequences, to pursue the good with competence.”
For the past two years, prudence required preparation for inevitable Covid outbreaks.
Business operations during outbreaks overseas required regular staff testing. Businesses here tried importing Rapid Antigen Tests, so they could be prepared. Prudent.
The Ministry of Health had banned the tests in April 2020.
Rapid tests could have complemented more-accurate PCR tests during lockdowns. Workplaces could have used them between PCR tests.
The Ministry of Health would have none of it.
But MBIE proved more accommodating. After months of frustrating work, businesses were finally allowed to start ordering rapid test kits.
On Wednesday, the Government provided the prudent with their reward.
It ‘consolidated’ their tests.
The government had been imprudently late in ordering the tests that it ultimately decided were needed for the public health effort.
But no matter. The government had set itself a call option. It could simply take the results of others’ prudential efforts.
When the prudent expect predation, expect less prudence. Expect as well that many businesses will have cancelled remaining test kit orders rather than wait for them to be stolen by a predatory state.
McCloskey emphasised the prudence of trading rather than invading and stealing; of calculating the consequences of actions; and of pursuing the good with competence.
It is hard to see much evidence of prudence in this government. Prudent and imprudent alike will bear the cost.