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Which conspiracy theories should you believe?

by Index Investing News
December 17, 2022
in Economy
Reading Time: 3 mins read
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The Chinese government engages in all sorts of conspiracies. They conspire to deny the reality of the Uyghur concentration camps. They conspire to deny the crimes of Mao. They conspire to cast doubt on the fact that Covid likely originated in China (probably in an animal market, but perhaps a lab leak.)  But China’s government cannot hide the truth.  These conspiracies are almost laughably ineffective in affecting world opinion.

Here’s another example of a Chinese cover-up:

Evidence of a wave of Covid-19 deaths is beginning to emerge in Beijing despite official tallies showing no fatalities since an uncontrolled outbreak began sweeping through China’s capital this week.

Staff at one crematorium in Beijing said they cremated the bodies of at least 30 Covid victims on Wednesday and Financial Times reporters saw two body bags at a special hospital designated for coronavirus patients.

“We cremated 150 bodies [on Wednesday], many times more than a typical day last winter,” said an employee at the state-owned Beijing Dongjiao Funeral Home who asked not to be named. “Thirty or 40 had Covid.”

I didn’t need to read the Financial Times to learn this fact, as my wife often chats on the phone with people in Beijing and it’s common knowledge that China’s capital is in the midst of a big Covid outbreak.  So should we accept all theories about Chinese cover-ups?  No, only those supported by the evidence.

During late 2020 and 2021, China reported an extremely low number of Covid cases.  I do NOT believe that those reports were precisely accurate, but do I believe they were roughly accurate.  Oddly, while the FT story shows that the Chinese government is not to be trusted, it also shows that they cannot succeed in covering up major Covid outbreaks.  Of course the information will leak out.

During late 2020 and 2021, the Chinese government reacted to small Covid outbreaks with the most draconian policies in the world.  The conservative media in America argued that this zero Covid policy could not possibly be succeeding as advertised.  I believe it did succeed for almost two years (although I strongly oppose the policy in any case.)

The truth is that zero Covid policies can work fairly effectively in some cases.  Australia reported one death from Covid in the first half of 2021, a time during which the US reported 1/4 million Covid deaths.  I also believe the Australian claim to be roughly true.  There are other examples of successful zero Covid policies in various countries in the period before the virus mutated to become so infectious that it became almost impossible to control.  While I don’t believe those policies passed the cost-benefit test, especially after vaccines were available, they worked to a limited extent.  In October 2020, my wife visited Beijing and saw a city free of Covid, where life went on as normal.  Major Covid outbreaks cannot be hidden.

There’s also a conspiracy theory that China’s GDP is far lower than what is shown by official figures.  I tend to doubt that claim.  China’s reported GDP/person ($12,970) is much lower than the US figure ($75,180).  Even in PPP terms, China has a relatively low GDP per capita, comparable to a Latin American country.  I’ve been to China many times (including western and rural regions), and it always seems at least as rich as the official figures suggest.

Conspiracy theories should be accepted or rejected on the evidence, not based on whether one is predisposed to like or dislike the entity accused of a cover-up.

Conspiracy theories are seductive for the same reason that we like Hollywood thrillers.  It’s fascinating to contemplate a vast government conspiracy to murder JFK or to fake a moon landing.  Reality is more boring.  Most of the conspiracy theories that are true are the ones out there in plain view—such as the Chinese government cover-up of concentration camps or their current cover-up of Beijing’s Covid outbreak.  Be skeptical of claims of conspiracies so vast that they are not even known to the media.  It’s not that they never happen, but they are far less likely to be true.

 



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