I just had a long argument about central planning of the Covid vaccine.
The occasion for this argument is that I drove someone to the other side of Phoenix for a 5:30am appointment. Why 5:30? Because the government is doling out doses ‘round the clock.
I marshalled all the facts. We’re nearly three months in to this exercise in central planning. And even people classified in the first priority group, due to age or medical condition, must wait a month or longer and take whatever time slot may be open such as 5:30. Oh yeah be there 15 minutes ahead of time. Did I mention it’s nearly an hour drive even without traffic at Oh Dark Thirty?
I showed him that we don’t have this problem with flu vaccines. I described how companies like Nintendo can manufacture and distribute tens of millions of units in a short time window for Christmas.
He said that Israel has given the vaccine to over 90% of its population. I said it’s absolutely true that central planners can deliver great outcomes, if you look only at the “seen”. What you must overlook is the “unseen”—the obscene cost. Government bureaucracies can deliver what appears to be the outcome of a free market. But the cost is a hundred times higher. They can squander the wealth that would be enriching the Israel people in 99 other ways—in order to deliver vaccines.
He said now that Biden is in charge, of course it’s not efficient. I said government cannot do what he wants, no matter who is in charge. This is because government does not have any of the incentives, systems, processes, management culture, or other characteristics that make it possible for Pfizer or Nintendo to distribute something quickly and inexpensively.
In Glendale, the government has quite an operation going. There were hundreds of people (maybe more) waving flashlights to each car to direct them to their respective lanes. Then when one lane would move a bit faster, they directed some cars to switch lanes. This was repeated in between each stage, where workers would ask for the appointment-card-holder’s name, date of birth, etc. They’d write something on the windshield, but who knows why because the next station would ask the same questions. With more flashlight wavers directing cars to switch lanes.
I asked if I could get a shot. For a while, people in the same car with an appointment-card-holder were getting vaccinated. But the Coalition of the Concerned or whatever this group calls itself, was outraged—Outraged—that anyone could get vaccinated prior to being assigned a number. So no joy.
The waste of everyone’s time, not to mention the labor of what must be thousands of people working 5 shifts a week, was staggering. Stupefying. But no worries, it’s all free.
I explained to this vaccine-card-holder that the purpose of central planning of vaccine distribution is not efficiency. He could not disagree, having seen a small bit of the inefficiency for himself. I said the purpose is to keep Pfizer from making too much money, and to keep the rich from getting vaccinated too quickly.
After he got his shot, there was more zigzagging in lanes, like the line for Immigration Control at an airport, only with cars and trucks. And more flashlight-waving workers. We then were told that this was intentional, because after the shot they want to make sure the newly-vaccinated have 15 minutes to verify there is no anaphylactic shock. Snaking back and forth in cars, because waiting for shock! A solution only a government planner could concoct.
After that, another worker washed off the numbers on the windshield. And we were free to go.
The newly-vaccinated person in the passenger seat said he was sorry I couldn’t get it too. I said no bread today, comrade. Government rationing turns everyone into supplicants, begging for their supper (and resenting those ahead of them in line, especially when the store runs out).
He saw all of this. And agreed. So it his next reaction was particularly disappointing.
I said we should have a free market in vaccines, and Pfizer (and Moderna and Johnson and Johnson) could produce and sell as much as they want, set their own prices, distribute through whatever channels they want. He reacted to this, “I don’t know about that. We have to make sure that everyone, even the poor, get vaccinated or else this public health problem will persist. If the drug companies made it very expensive, then the poor couldn’t afford it…”
The issue here is not economic. No one thinks that the free market in food has made food so expensive that the poor starve. This guy pointed out that drugs are expensive. But he did not want to hear that the government makes them expensive by its licensing and regulation. He defended that by saying, “well, we have to prevent pharmaceutical companies from selling bad drugs.”
The government controls everyone in the Covid vaccine game. From Pfizer to the medical professionals to the people, everyone is acting under government orders. Pfizer is commanded how much to produce, and when and where to ship how many doses. Providers are directed who to vaccinate (if they get any doses at all, which many aren’t, which is why everyone drives to Glendale to a stadium parking lot to get vaccinates—those lucky few who get a number). People are eventually given a number, a permission slip to get vaccinated, and everyone else is not allowed to get it, even if they could pay. Pfizer is not allowed to sell it to them.
I am told that Pfizer is being allowed to make some money. I don’t know if $20 a dose makes or loses money for them. Maybe. I do know that the rich, the middle class, and the poor are being kept from being vaccinated. Which I am told is to ensure that everyone gets vaccinated.
I just could not get him to question his idea that, well, the government has to step in to ensure the right outcome. At least in certain important things, like the Covid vaccine. Sure, we could risk something unimportant like Mario Bros. to the capabilities of free people in a free market. But not something important like a vaccine!
The issue is not efficiency or economics. It’s not for the sake of convenience or cost. He could see that the government was making a dog’s dinner out of it.
It was just an ineffable feeling, a pre-moral sense that this is Right. And besides, there is a genuine shortage of vaccines, so how else could we get it to those who most need it?
As one would predict in a government controlled, centrally planned situation, many not on the approved list have indeed been vaccinated through special connections to government officials. One has to marvel at the fact that we sold out our children and young people to save the very, very old who are not working or paying taxes and continue to do so.
My objection is not to the fact that old people have been vaccinated. And I do not diminish old people based on their productivity.
My objection is to the very regime of central planning, which creates all sorts of perversity. Including that I am forced to pay for the vaccines that go to the people who don’t pay (and for the incredible bloated vaccine distribution machine).
This is what a free market looks like. You had wealthier customers–governments–who made a decision to sign contracts with vaccine makers locking up supply based, in part, on the buyers’ ability to offset development costs and provide special entry into more lucrative markets, i.e. the United States and Europe. Had Pfizer and Moderna wanted to skip the limitations of those contracts, develop on their own dime, and build their manufacturing facilities and supply lines in unregulated places, they could sell their product in less-regulated markets elsewhere for whatever price those markets would bear.
You can be irritated that the United States has so much coercive power, but if you think that a normal state of affairs in a human marketplace is that no one uses coercive power, I have very, very bad news for you. There has never been a market in history where humans did not organize themselves in various ways to reap advantages by controlling some aspect of the market. Acting like a state is not a market participant, or that other kinds of powerful players would not also use their power (financial or otherwise) to alter outcomes in the market, is silly. This is an utterly predictable feature of a market economy that you will find in the vast, vast majority of all human marketplaces in all of human history. You might not LIKE the plans this particular powerful customer has for distributing its vaccine, that IT bought, but them’s the breaks.
Also, speaking as someone who has a long history with video games, it’s a really bad counter example. There is a long history of video game manufacturers–both on the hardware and software side–failing to deliver enough product to satisfy demand. Your implied claim that Nintendo, and video game manufacturers in general, never struggle to deliver sufficient quantities of product to satisfy demand at low prices indicates a kind of magical thinking about markets that is totally at odds with lived reality. It reveals that you are operating from a position of faith; you could just as easily replace your line about “incentives, systems, processes, management culture, or other characteristics” with “they do the sacrifices at the right time” or the old standby, “magic.” Nintendo, like a government, is an emergent organization composed of humans and intended to achieve a particular set of goals, and like all such entities, including governments, it does some things well and other things not so well, and sometimes the things it screws up are the things that it was supposedly motivated to do well. The world is complicated, and humans are deeply imperfect.
Not to mention that Nintendo, as a Japanese company importing products to the United States, operates under a whole suite of market interventions from multiple governments ranging from tariff restrictions to content moderation to workplace regulations. Video games are a market, but it ain’t the “free” utopia existing in total opposition to “central planning,” which is pretty clearly not what is happening in the vaccine market.
There are great arguments to make both in favor of market approaches to problems and against central planning. But this post is expressing a religious philosophy (in the sense of the argument being faith-based–no worries, no God required), rather than a rationalist argument.
You say free market and then coercive.
The root of this is the feeling that this sort of coercion is moral. Once that is accepted, then facts and logic can be denied or explained away, without anyone ever admitting the abject failure of the system they feel to be proper.
Coercion is just a fact of markets. In order to create exchange without coercion, you would have to somehow create a situation where all participants have exactly equal bargaining power. It’s possible that in the long run we’re headed for the kind of post-scarcity techno-utopia that Marx envisioned as the basis for a Communist society, but it isn’t here yet.
I’m assuming based on your comment that you mentally have “coercion” off in some special bucket, like pointing a gun at someone, so let me clarify. “Coercion” is a term that I’m using to describe a power differential within an exchange. You have something I want, or vice versa. We disagree about the “fair” price of that good. If what you have is food, and I am starving to death, then you can coerce me into paying more than I think is “fair” for the food. If you have food, and I have a gun, I can coerce you into accepting less than you think is “fair”–basically, I offer forbearance on shooting you–for the food.
You can argue that only certain kinds of goods and services are valid for exchange. That’s how you would argue that charging more money to a starving person is non-coercive, but offering to trade forbearance of violence is coercive. But that’s a religious argument; it reflects a set of rules that feel good to you but that are fundamentally untethered from either demonstrable reality or human history. And I get it! I’m a historian! If only we would follow the moral strictures of the Talmud / Sharia Law / Ayn Rand / Jesus as My Specific Church Describes Him we would have a utopian society where everything worked correctly, at least according to some people! But that’s not actually how the world works.
Moreover, you are making the usual mistake here, which is to look at an emergent system and conclude that it would work correctly if only Those People–that One Specific Player in the Market–would behave themselves. If you were a Bernie Guy, it would Big Banks / The Rich. Since you are an Ayn Rand / Gold Guy, it’s The State. But the reality is that this is an emergent system, and not a unique one. If your utopian “free market” system was viable, it would exist (and be out-competing its rivals). That it hasn’t is, at the very least, severely problematic for your claim. You need to seriously consider that if This Satan wasn’t thwarting your utopia, some other would immediately emerge, because they seem to have a habit of doing that.
Here’s the good news: vaccines are a market. If you have enough money or other resources to deploy, anyone get a Covid vaccine right now, today. What you are really saying in your post is that you don’t like today’s price. To which I reply: welcome to a market. They are useful, but they also kind of suck, which is an interesting paradox.
Coercion is the *negation* of markets.
In order to come to a free market, you have to produce something. Production is based on your use of reason. Then you trade, again based on reason, with someone else who, again, produced based on reason.
Coercion stomps on the use of reason in one more places. You want to buy–NO! YOU CANNOT!
The degree of coercion is the degree of disintegration of production, coordination, and civilization itself. See the husks left over from the Soviet era in Europe, the ongoing collapse in Venezuela, the collapsed buildings and old cars held together by spit and glue, the lack of light at night in North Korea, etc.
Once you define your terms that narrowly, you have already surrendered the point; you have adopted a set of facts so stylized as to be functionally meaningless in describing the actual world.
The feeling you reiterated throughout your post was frustration with your passenger. You write repeatedly that you were so “right,” so full of correct facts and irrefutable conclusions, and yet somehow unable to persuade your audience to your way of thinking. And what I am saying is that your analysis is unconvincing because it only works within the narrow confines of a rigid and simplistic model of the world. Models are very useful in economic thinking. But your analysis probably tripped your passenger’s BS detector because even someone not capable of immediately articulating the missing pieces and shortcomings with your analysis nevertheless had a fundamental sense that your way of describing the situation with vaccination seemed to be missing something. And fulminating about the usual boogeymen (and ostentatiously leaving out China because it makes the whole thing a lot less convincing) can’t solve that problem for the argument.
I am doing something unfashionable. I am *defining* my terms.
If you’re interested in the problem of how millions of people can coordinate their productive activities in a free market, and how every type of government interference reduces their ability to coordinate, I refer you to my dissertation.
Apologies for the delay. It has been a busy week.
Here is the thing: I am one of the eight strangers who has gone through your dissertation, and I did so long before this conversation. It is part of why I occasionally glance at this blog. That reading is, in part, the basis of my critique. This is how scholarship works. Maybe I am phrasing it too harshly (reading my comments from the other night), but this is my honest, good-faith assessment of your approach.
The reason that “defining your terms” with highly-stylized limits fell out of fashion is that the conversation today is more interested in real-world outcomes than in Marxist-style theoretical models. The good example of this in economics is the rise of “behavioral economics” with Raj Chetty, et al. That turn was a direct response to the consistent breakdown of theoretical models when you try to apply them in the real world. What people came to realize was that arguments that start with highly-stylized definitions are often interesting–everyone who has been an undergrad has spent some amount of time bullshitting over hypotheticals–but they quickly break down in the face of complex human behavior. Simplification has a tendency to obscure more than it reveals, in part because humans do not behave as purely rational actors (or maybe they ARE rational, but along multiple axes that are poorly described by economic thinking; racism is the classic example of this). The joke you sometimes hear in this space is a reference to “Homo economicus.”
The big problem with simplification is that it pre-commits you to a set of answers that are “always” correct. This is why I referred to your analysis as “religious”–your faith tells you the right answers, and then you contort the evidence backwards to suit the outcome. Your reference to Israel is a great example. In the face of evidence that the Israeli government did a pretty good job, you had to imagine why it was really a terrible job by assuming all kinds of terrible (“obscene”) waste on spec. Israelis would have been so rich but for that wasteful vaccine campaign! This is nonsense–like, literally, it is not something that you neither know with your own senses nor can prove with the available evidence, since that evidence doesn’t yet exist–and yet you know it with absolute certainty. Moreover, it’s an argument that totally elides any conception of downstream consequences (such as the economic benefit of quashing the pandemic) and assumes away the lack of alternative evidence (if your preferred solution is so great, why hasn’t anyone done it?).
You could do a deep dive analysis, and maybe you could prove that you are right about the waste in Israel and find a compelling explanation for the lack of people using your preferred model and the whole nine yards. It’s all possible. But you haven’t done that work, and your passenger knew it. And in the absence of that work, the sheer certainty of your views–your perfect knowledge of things unseen, I say as the son of a Baptist minister–made clear that what you were expressing was a statement of faith, rather than a compelling argument.
And that’s why defining your terms so rigidly is unfashionable. It’s a move that telegraphs that you are planning to make some religious statements, and religious viewpoints aren’t really open for discussion or responsive to evidence in the traditional rationalist sense. Your passenger understood you to be expressing a non-rational viewpoint–non-rational in the sense that ALL faith is non-rational–and down weighted your analysis accordingly.
If you want to be the apostle of free markets, you are going to have to figure out how to telegraph that you are able to engage with the complexity of the world, rather than fulminating about Venezuela and “central planning” on the basis of idiosyncratically defined concepts that bear little relation to people’s lived experience of markets, government, and other human beings.
Interestingly, this is a common reaction from those favoring central planning, or ‘statism’, or socialism, or communism, or any politico-economic system that sanctions legal force exceeding the full logical scope of defensive activity aimed at interfering with coercive force, fraud, and the like. I have observed it in many discussions. The common reaction is to reference the idea of a politico-economic system that is as laissez faire as possible within an organized structure of defensive legal force, and criticize it for having never actually existed. More succinctly, uncorrupted capitalism has never existed. I have seen this sort of final, er, squirming, many times, and it has puzzled me. It is as if the defender of collectivism, defeated by reason, gasps – “Yeh?! Well, that may be so, but it’s never been done!” The response here is apt: essentially – so, what? Your position is to be against good ideas, simply because they have not yet been carried out? If this is the case, then, the conception of a fully sacrificial society, utterly following the tenants of altruism, and utter egalitarianism, and ‘from each according to his ability to each according to his need,’ has never “existed” either. What are we to make of that? The implication from the collectivist is that the absence of an uncorrupted capitalism is evidence, conclusive even, that it just can’t work – that it must not be able to exist in the real actual world, because the idea is flawed in some way, or that humans, as they are, are simply unable to carry it out. This is deeply illogical, and applies just as well to their own favored ideas of political economy, and, for that matter, any invention that has been conceived but not yet brought into physical reality. And yet, we have thousands of years of history of ideas that were once not yet actualized, having been brought into real existence. The state of the world before the actualization of any idea is not, in itself, evidence against the possibility of that actualization. I suspect this is one of the kind of things Rand was referring to by the phrase “concrete bound” mentality.
J: I believe your comments are your honest opinions. No disagreement there.
It all depends on how you try to form concepts. If you define “power” such as to include a corporation’s capability to produce and set the terms by which it trades–and also to include a government’s force to compel obedience at gunpoint, then your concept is flawed. Ayn Rand called this a package-deal, which looks like a concept except that it unites different things under the same term. Not merely a bit different–diametric opposites.
If you recall my dissertation, I show that every kind of government intrusion into the free market (free from the latter kind of power) reduces coordination.
I am not merely defining things a certain way and then deducing from my definitions. I agree that this is not valid. I am showing that the economic actors are rendered unable to arbitrage spreads because of the government’s initiation of the use of force.
This is not at all the same thing as when economists declare that people are “rational”.
By the way, I have had many more than 8 strangers walk up to me and say they read my dissertation (or all of my work). 🙂
I feel like I keep saying, “you are eliding the point, which is that your analysis is hopelessly theoretical–it doesn’t work in the real world,” and you respond, “but the theory is sooooo good!” So why don’t you just give me a non-hypothetical example of an actual situation that fits your perfect definition of a free market, containing actors the size of international pharmaceutical companies and engaged in similarly complex levels of production. If your concept describes something that occurs in the actual world, then it must exist somewhere in the present, or, at the very least, have arisen at some past point in human history for which we have good records (as opposed to bullshitting). Like, I’m saying that your analysis of the vaccination campaign is faith-based, and that your arguments are utopian preaching about Heaven masquerading as analysis of conditions on Earth.
But maybe Heaven is a place, and that could help me reorient my thinking and suspend my disbelief. A smart enough person can “prove” virtually anything in the carefully confined decision space of a white paper, and it’s easy to show a bunch of individual outcomes, shorn of context. But either the thing works in full amidst the messy complexity of the real world, or it doesn’t. So where is it working today? Or where has it worked, in full, in the past? Or was it reasonable for your passenger to think that your ideas don’t quite seem to have proven out in the world, even if that person couldn’t articulate precisely why that might be the case?
Basically, I’m trying to get you to either 1) develop a better example than claiming stuff you couldn’t possibly know about current outcomes in the Israeli economy, or 2) reflect on the essay you wrote as having actual, complicated answers that might raise questions about your own thinking, rather than presenting it as a Cassandra-esque tragedy where you are cursed to know and tell The Truth, but The World Just Isn’t Ready.
Not sure if you’re saying good theories don’t work in practice. If so, then I would say that if you throw out all theories, in theory, that’s just an excuse factory for flailing about with any sort of policies.
Or if you’re saying that no country today is anywhere near laissez-faire capitalism. If that’s what it is, I agree!
The differences is: where do you go from there. Do you conclude from this that (1) free markets wouldn’t work, and that’s why we don’t have them, (2) there’s no way to know if free markets would work, or (3) we don’t have the example of a laissez-faire country so therefore we have to use our minds to think about how it works?
What I’ve said should be self-evident. If people cannot be trusted to conduct their own affairs using reason, they cannot be trusted to dictate the affairs of others by force. If freedom is not a practical way for people to coordinate their productive activities, then brutality does not make it any better.
This is because the key element in production, not to mention coordination, is: man’s mind. And that is what is disallowed when government takes over by force.