The Empty Corona Chairs and the Spare Capacity Fallacy

by Joakim Book
The American Institute for Economic Research

If we have ventured outside our homes in these corona times, we might have seen that cafés and restaurants that remain open keep some seats and tables empty. Some have put up signs asking patrons not to use every table, while others ask its guests to keep an adjacent seat unoccupied or have altogether removed tables to create additional space. Even restrooms at airports or other public areas do this, closing every other stall or urinal. Some stores keep a strict limit on the number of people browsing for goods at any given time.

We can disagree with those decisions, object to them or even ridicule them, but many establishments across the world have still implemented them under various degrees of governmental duress. They raise a contentious economic point: are our economies suddenly inundated with spare capacity?

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