People are worried about the long-term effects of the COVID-19 pandemic on the economy and our common future. While you are hiding in your homes, try to make the most of this rare opportunity to watch extremely rare real-time events. Not all news is bad. There are economic benefits to be considered, according to Vernon L. Smith, a professor at Chapman University and a Nobel Laureate in Economics in 2002.

Consumers emptied supermarket shelves and drugstores. This means that these and related industries are thriving. Workers in these industries are also thriving. The pharmacies, grocery stores, and major retailers are hiring more part-time employees and paying more overtime.

“We still have a variety of choices in this stressed but mostly decentralized economy. My wife Candice realized recently that we needed a printer-copier-scanner, which machine would allow us to sign and send documents. She calls several stores before finding the device she is looking for – the latest one in stock! All household appliances are being sought as people become more aware of the needs of the home. Managers properly use local context-sensitive information to provide access to goods”, said Vernon L. Smith.

Once again, it became clear to me what Alfred Marshall calls Adam Smith’s “unsurpassed powers of observation, judgment, and reasoning”. In The Theory of Moral Feelings (1759), Smith models human sociality as it stems from our sense of empathy. Among other very deep insights, he points to the asymmetry between joy and sorrow. Our suffering is much greater when we fall from a better situation to a worse one than our joy in rising from a worse to a better one. Therefore, we seek security while avoiding exposure to loss of health, wealth, rank or reputation.

Our security concern is the first motive for saving and investing. If an investor loses sales because an item is not in stock, all other investments in the supply chain are worthless.

Reputation and respect require us to be appropriately compassionate with our fellow citizens who become infected with COVID-19. In general, we are focused far more on downward movement and its price than on upward movement – the relief and eventual return to prosperity. Perhaps this position better prepares us for what is to come. It is always better to be pleasantly surprised than disappointed.

“Now is also the time to learn from our misconceptions. The mistake is what teaches us everything we didn’t even know we could figure out. In my career in experimental economics, my beliefs have been tremendously wrong three times. Each of them has brought about new knowledge of lasting importance. First, I thought that the patterns of supply and demand for perishable goods were abstract ideals that could not predict prices and results. They could and did. Second, I thought that asset markets with fully transparent information about their fundamental value would not lead to price bubbles. They could and did reach them. Third, I predicted that anonymously selected couples in games of trust between two and three would not overcome their personal interest and achieve results of cooperation. It is amazing that many could and did. Adam Smith, who understood the human sense of reciprocity, would not be surprised”, said also Vernon L. Smith.

When we are right, we simply confirm what we already thought we knew. This is the source of “confirmation bias”, a form of self-deception that Smith claims are “causing half the trouble in this world”.