Monday, December 7, 2020

Free Market Vaccines

Part 1: Who should get the vaccine first? Sell to the highest bidder. The disease and recession go away faster. 

 Part 2: The cost of perfection. The vaccine was invented in a weekend, available in February. In free market land, we would not have had a pandemic, or a recession. 284 thousand people would be alive today. That is the cost of FDA "protection." 

Part 1: Who should get the vaccine first? 

Absolutely nobody* has mentioned in public the free market answer: Sell to the highest bidder. 

(Or just allow some sales to the highest bidder. Don't put people in jail for selling some to the highest bidder,) 

It's not as dumb as it sounds. Sure, there is an externality. A good vaccine policy might be to give it to those most likely to spread it to others, with the goal of swiftly reducing the prevalence of the disease. That argues for giving the vaccine in bars. 

That is not our public policy. The entire discussion centers around who should be protected first, from a disease whose prevalence is taken as given. Old people, nursing homes, health care workers, essential workers -- the argument is not the externality. The argument is entirely who should get the individual benefit of protection from the vaccine.  Just why "to the highest bidder" is wrong is then much less clear. 

The case is stronger than usual, for there is a second way to avoid infection: Stay home. Social distance. Wear protective gear. So the question is not, really, "Who should be protected from the virus?" The question is, really, "Who should get a treatment that allows them to be out and about, risking contact with the virus, rather than protect themselves by traditional means?" It is really mainly an economic benefit, avoidance of the cost of other measures to stay healthy. There is an economic answer: people should be out and about first who generate the most economic benefit from being out. And, therefore, are willing to pay the most to get the vaccine. 

To say nothing of the incentives. If vaccine companies can charge what they want to first adopters, and the cost to the rest of us is to stay home for a few more months, they can make boodles and boodles of money, incentivizing new vaccines even better. The government does not decide who gets the iPhone 12 first. 

"But the rich will be able to afford it first," I hear you complain. Yes indeed. Principle one of economics, don't mess with the price system to transfer incomes. "But we won't make the income transfers, so we have to control prices and ration" I hear you complain. So, here we are in the midst of a pandemic, in the midst of an incredibly dangerous economic situation, with $5 trillion of federal debt in the rear view window, the main point of fixing prices and rationing vaccines is... to transfer incomes. 

If it goes to the highest bidder, then the highest value activities, that benefit most from reduction in social distancing, come back faster. I don't know what those are, but pretty much by definition, the economy recovers faster. That brings back jobs a lot faster than stimulus checks. Heck tax it and transfer the money to people who choose to stay home. 

I'll stretch free market nirvana this far: If the government wants to hand out vaccines to whoever it thinks should go first, ok, let it buy the vaccine on the free market, on budget, paid by visible taxes, and hand it out. But it should not forbid anyone who wants it from paying for it, nor forbid vaccine makers from selling to whoever wants it, to artificially keep the price down and hide the immense transfer in its actions. Looked at for what it is -- only and entirely a ban on private transactions -- it is amazing that we meekly put up with such wholesale trampling of our rights to transact, to property, and to pursue our own health. In the most important market in the world right now, vaccine producers may only sell to governments.  

No, it's not as dumb as it sounds. At least economics should start with "to the highest bidder," and come up with some well documented market failure, and a public allocation system that mimics the highest bidder allocation. That nobody dares say this in public, not even my favorite libertarians (that I have seen -- send links to anyone else nuts enough to say this in public!) is a little surprising.  What happened to America, and to economics, that absolutely nobody seems to even question the holy writ that drug companies shall only sell to governments, governments shall allocate vaccines, and severe legal penalties shall accrue to anyone who doesn't like it? 

Instead... Well, here is (second hand and I may get this wrong, corrections welcome) how Stanford is going to do it. Our first allocation goes to health care. OK, that is a likely answer to "if Stanford had to bid for it, what is our highest value use." The hospital system, however, can't figure out who within health care should get it. Is it "fair" for doctors to get it first, but not custodial workers? The crack team of medical ethicists couldn't come up with an answer. So they're going to do it randomly. I don't have to tell you in the middle of a pandemic who gets it first under the discipline of actually having to bid a market clearing price to get it first.  Watch the normally crystal clear Scott Gottlieb run around in circles on the pages of the Wall Street Journal trying to figure out who should get the vaccine when. Well, without a guiding principle, there is no where to go but circles. 

In India, meanwhile, that bastion of... informal..  if not free markets, it appears you can sign up to buy the vaccine, for about $8. Markets in everything, as Marginal Revolution says documenting the story, but not here.

Part 2: The cost of perfection 

We had the vaccine the whole time, documents  David Wallace-Wells in New York's intelligencer, documenting and popularizing a known but overlooked fact. 

Moderna’s mRNA-1273, which reported a 94.5 percent efficacy rate on November 16, had been designed by January 13. This was just two days after the genetic sequence had been made public

the Moderna vaccine design took all of one weekend. It was completed before China had even acknowledged that the disease could be transmitted from human to human, more than a week before the first confirmed coronavirus case in the United States. By the time the first American death was announced a month later, the vaccine had already been manufactured and shipped to the National Institutes of Health for the beginning of its Phase I clinical trial.

Even under operation Warp Speed -- a truly commendable accomplishment of the Trump Administration that, maybe a year or so from now the TDS crowd might acknowledge -- the only thing we have been waiting for is FDA certification: Randomized clinical trials to prove safety and efficacy, before anyone is allowed to take the vaccine.

What's the free-market way? A drug company can sell a vaccine on January 14, and you can buy it, without fear of going to jail. 

Sure, there is an FDA, and a Federal Trade Commission which monitors drug labeling. The vaccine has to say "this is totally untested, and has not been proven safe or effective in clinical trials" and offer a stack of paper about known risks. You sign a stack of consent forms. If you take it, you're enrolled in our big national database -- you just volunteered for the national non-random clinical trial. (We don't collect much data on drugs that are out there).  The FDA rapidly collects information. At the same time, randomized clinical trials are going on. Drugs can give more and more hopeful labels as the results roll in. At some point after Phase III and FDA review, a drug can get the official FDA seal of approval. No, insurance and medicare don't pay for non-approved stuff. This is free-market nirvana, you pay for unapproved medicines if you want them (see part 1). There is an FTC and a tort system. Drug companies that sell things they know are unsafe or ineffective pay billions.  

What happens in free market nirvana? Yes, there are quite a few more cases of people who are hurt by side effects. Not that many actually, as we are following the early adopters carefully and broadcasting data as it comes out. Quite a few useless drugs get tried a bit more widely. 

But, going on the current assumptions that these made in a weekend vaccines work, we would not have had a pandemic at all. Every job lost, every business closed, all 284 thousand US deaths, $5 trillion of federal spending, the biggest (though mercifully short) recession in US history, would not have happened. All of this cost stems from one thing -- the ban on using any medicine before the FDA approves it. 

Reflect also on the vast asymmetry of effort. Two or three vaccines were invented in a weekend. Then we spent the next year testing those few, not developing better ones. The vaccines have serious side effects. Think how much better we would be now if we were using vaccines that had been developed... in the next weekend alone, to say nothing of 8 months of constant innovation.  This ratio of invention vs. testing is off by orders of magnitude. 

Now, free market nirvana: The developers start selling the vaccine to wiling guinea pigs on Monday morning, as well as running randomized trials. In a matter of weeks some side effects get noticed. They or other developers start tweaking and building better vaccines! In a rough tumble of competition, within a few months we have much better vaccines. But you can't try anything at scale without the one-year FDA approval -- and that by itself is a miracle compared to the usual multi-year process.   

The benefits of FDA protection -- the prohibition of selling drugs before full randomized clinical trials have been run and then painstakingly reviewed -- are not zero. They are the people who are not hurt by the slightly larger (than in clinical trials) experimentation with new drugs. 

The costs of this FDA "protection" are immense: In the free-market world, we would not have had a pandemic. 

Maybe free markets aren't so dumb after all. 

(We also would have had home tests months ago, which at zero side effect to anyone would have slowed if not stopped the pandemic. But you all know that story.) 


our approach to the pandemic here raises questions, too, about the strange, complicated, often contradictory ways we approach matters of risk and uncertainty during a pandemic — and how, perhaps, we might think about doing things differently next time. That a vaccine was available for the entire brutal duration may be, to future generations trying to draw lessons from our death and suffering, the most tragic, and ironic, feature of this plague.



DWAnderson commenter below makes an excellent point that I am embarrassed to have omitted. I need to recheck my free market catechism. To restate it, ok, keep the current allocation system, which we now realize is about transferring income. But don't give out vaccines, give out the right to receive the vaccine. And allow people to trade that right--properly, remove the legal prohibition against trading the right, the threat of being thrown in jail for taking money in return for your place in line. If the Stanford hospital custodian wants to sell his right to a hedge fund manager, and take the  month off in quarantine in a nice hotel, let him. Everyone is better off -- the magic of trade. 

Forbidding ex-post trade is one of the silliest of market interventions. 

From Twitter,  the first person in the UK to get a vaccine. She's 90. She looks like a very nice lady. But what is the chance she gives the virus to anyone else, goes out to a bar or a party, works at an ICU, or gets the economy going with her vaccination? How much would it cost to protect her from covid by other means? Of course I want her to have a vaccine as soon as possible, but when we only have so many doses is it faintly reasonable that this is the single most important person in the whole UK to get the first vaccine?  

Update 2: The more I think about it, the more ridiculous this is. We waited a year for "science," clinical trials. We know there are side effects. How many 90 year olds were in the clinical trials? Zero. There weren't enough 75 year olds in the trials to get confidence intervals between 0 and 100%. And they put the 90 year olds first. How many 90 year olds will get complications? How many will die from complications? Nobody knows because they have never tried it on a 90 year old. Until now. They are unleashing a vaccine completely untested on the most frail vulnerable population. 

As above, I'm fine with unleashing completely untested vaccines on willing volunteers. But we might as well have done that last January. 

Update 3:

"A vaccine auction" by Romans Pancs

Steven Landsburg on trading the right to get a vaccine. 

*Update 4. 

I hadn't looked hard enough. Tyler Cowen had it back in May. Of course. 



  1. I think there are efficiency reasons why the vaccine shouldn't be allocated by free-market.

    (a) externality - much of the cost of younger people catching the disease is the risk of them passing it onto someone who passes it onto someone who is older. Carefree young people don't internalise this externality and don't have too much money, so vaccinating wealthy business people doesn't reduce social spread or their personal risk.

    (b) Lack of information - there has been all sorts of crazy news about the vaccine and the perceived risk of death doesn't slope anything like as steeply as the actual mortality figures. Interesting question about whether this is scare-tactic from authorities trying to encourage young-people to stay at home, or just information not being processed that efficiently. The impact of this is that free-market situation young/middle-aged people getting the vaccine because they overestimate actual risk before less wealthy care-home residents that underestimate the actual risk.

    (c) Social incentives - I think normal free-market argument that higher market price increases supply may not apply as well to Covid. Many people (including you with blog posts and Covid models) have been very focussed on doing what they can to solve this social problem. This is also evidenced by vaccine availability in months rather than years. I accept the argument that vaccine costs are dwarfed by economic harm but I imagine everyone involved in the manufacturing process are trying to move mountains already because they can tell how many lives are at stake, and the social backlash they will face following criticisms.

    Beyond this, I think there is a fairness argument here, particularly since the pandemic has hit working-class jobs the hardest, or required them to continue to work and take risks. It feels gross if a banker is paying for vaccine so they can go to the pub whilst an Amazon warehouse worker continues to risk infection and work more inefficiently. I think the perceived unfairness of situations like this outweigh possible efficiency benefits of price-mechanism.

    The UK approach of identifying risk-groups, allocating according to priority and vaccinating 25% of population that represents 99% mortality risks seems like a good approach to me for reasons discussed above. I'm normally very pro market-pricing for allocation.

    1. "It feels gross if a banker is paying for vaccine so they can go to the pub whilst an Amazon warehouse worker continues to risk infection and work more inefficiently."

      There is nothing intrinsically moral, let alone desirable about equality of outcomes, and it most definitely is not 'fair.' More to the point, while you start with this claim that you're making a fairness argument, you end with a different argument about managing public perception of fairness. While I understand politicians will likely do something at least moderately stupid from a policy standpoint to achieve exactly this objective of managing public perception, I regard this as deplorable fact, not as an argument to actually do it!

    2. We don't have any evidence that vaccinated people don't transmit the virus. All we know, after all these months, is that vaccinated people are 90 something less likely to develop symptoms and do not suffer relevant side effects.

      "Externality" is a concept that is used much more often than it should. To the point that we will be better off banning the concept: its inappropriate use cause much more harm that is, very rare, appropriate use prevents.

      "Unfairness" is a concept extremely difficult to define and almost impossible to agree on.

      To avoid your problem, think of your savings as the difference between the monetary value of what you have contributed to society minus the monetary value of what you have consumed from others contributions (actually Jesus Fernandez Villaverde was working on a monetary theory along those lines if I remember right. It was a long time ago, not aware of the results). Money would then be the "ledger" of this universal free exchange system.

      When you define your concept of "fairness" you are just putting your personal "sense of justice" in place of this ledger system. The burden of proving that your system is better is on you. We have developed very sophisticated home heating systems, indoor plumbing, cars, medical treatments, air travel, .... following the system of providing these service/products first to the people who could afford them. It has worked great for all of us. So, you have to be sure that your "personal perception of fairness prioritization system" match this extremely impressive track record.

      Socialist in the Soviet Union had the same debate when dealing with relative prices. After all, why Tom Brady should be paid many times the salary of a doctor or of an Amazon warehouse worker? he does not produce nothing useful. They come up with a committee of extremely clever Russian economist (the Gosplan) charged with the task of establishing all the relative prices in the Russian economy (obviously with a criterion based on "fairness"). As you are probably aware it worked out terribly bad (ironically, they ended up using Sear's catalogs to stablish relative prices).

      I am always amazed by the fact that we keep trying schemes that we have tested before and know, for sure, that did not work at all.

    3. "We don't have any evidence that vaccinated people don't transmit the virus."

      There is a clear public health consensus that vaccination reduces community transmission. This is also just common sense. You have to have a very strange model of the world for this not to be the case and requiring vaccine trials to measure this endpoint seems similar to me to requiring a double-blind clinical trial to test effectiveness of parachutes on aeroplanes :).,matched%20to%20the%20flu%20vaccine.

      This externality, combined with the demonstrated inability of public to understand how steeply mortality skews with age (already linked above) suggests to me that UK-type system allocating based on age and risk factors is most efficient.

      Philosophical debate about 'fairness' of market-systems is interesting. I'm pretty pro-market, but not quite as extreme as you are. This seems to be a question of values rather than facts, I agree about this one.

      "We keep trying schemes that we have tested before and know, for sure, that did not work at all".

      All recent public vaccination programs I know of haven't used the price system, and have been heavily encouraged and subsidised by the government. This is a tried and tested way of eradicating infectious diseases. I don't want to switch to this for other goods, but for vaccines it seems like a reasonable approach.

    4. "the demonstrated inability of public to understand how steeply mortality skews with age”

      Indeed! in fact, the relevant question is not what the mortality rate from Covid19 for each age range is but how does covid-19 increase my probability of dying at my age.

      Surprisingly enough between 02/01/2020 and 12/02/2020 the probability of dying increased about the same (8.5-10.5%) for all age groups above 45 (compare with around 3-5% between 15 and 45).

      So certainly, you should fear death more being 85 than being 45. But your "increase of fear of death" during the abovementioned period (life with COVID-19) should be about the same. skews with age"

  2. Also, re the cost of approval. The public health issue here is how astonomical the life-expectancy gains from MMR, polio and other vaccination programs are. I agree that that challenge trials was a no-brainer, and there was an argument for allowing older people to take vaccine once we realised how steeply mortality skewed with age but there is some not-insignficant risk of undermining public faith in vaccination schemes if there were some heath impacts of an untested vaccine, and this could have pretty crazy implications for future child-mortality rates if we scare parents away from participating in vaccine schemes.

    I don't think the approach we had got this tradeoff right, but there is a quite significant cost of 0 regulation approach.

    1. The point is not that a 0-regulation approach has no cost. The point is that, very likely, has a significant lower cost than the “waiting for FDA approval” approach. Which as John points out is just huge!

      "0" is not the only cost that is better than "huge", "significant" is also better than "huge".

      We prefer "huge caused by a governmental agency" vs "significant (if "significant" were the case) cause by the free market" because we suffer a very significant (and very expensive) antimarket bias.

    2. My point is that untested vaccine --> lots of bad side effects --> loss of trust in vaccination --> lower vaccination rates for MMR, polio and other vaccines is astronomical.

      It's hard to assign exact probabilities to all of these but it's how much of modern expectancy gains come from vaccination projects, plausibly +10 years

      "America’s prevalence against infectious and parasitic illnesses denote a notable accomplishment for the medical community. [3] Researchers have developed vaccines to alleviate several conditions, such as measles and polio. As a result, more United States children mature into adults. This improvement accounts for a 60-percent increase in life expectancy among women."

    3. "If there were some heath impacts of an untested vaccine, and this could have pretty crazy implications for future child-mortality rates if we scare parents away from participating in vaccine schemes."

      Is this pop-psychology or are there any studies to back the "Regulation theater increases social trust" hypothesis? Because I know vaccine hesitant people around me ( ranging from people who don't trust the Vaccine because of Trump to those brainwashed by TikTok videos claiming that MRNA vaccines will change your DNA) to whom all of this doesn't make much of a difference.

      Not criticizing your common sense, just wondering out loud if we there was any difference in social trust between what the FDA allowed vs running Phase 1, 2 and 3 all in parallel with human challenge trials.

      Also, now that China and Russia have released promising results, I'm wondering how much of a difference Operation Warp Speed made to the Vaccine project.

    4. At the very least, I fail to see how weeks of analysis of data the average American simply does not understand help at all with public assurance that this thing is safe.

      The meeting had a lot of solar people debate the efficacy results of a vaccine. No outsider would be able to understand a sentence of what was going on without a fairly detailed background in immunology and statistics.

      I'm not saying Americans are dumb, I'm saying the specialized knowledge required to understand this stuff is fairly complicated and specific to this field.

      If you release it right away, and people can see, oh my friend got it, he seems fine, that would be useful. Delaying everything so smart people can discuss incomprehensible details no one understands DOES NOTHING to calm the public. If those discussions are necessary they are necessary. But I am growing really tired of the excuse that it is needed to calm the public, whatever that means.

  3. "The argument is entirely who should get the individual benefit of protection from the vaccine." -J.C.

    This statement is patently false. The purpose of vaccination of high-risk individuals is to lower the burden on the health system facilities. The "individual benefit" is a co-product of reducing the burden on health-care system. Your argument needs to be reframed.

    1. No, if the point were not to overwhelm health care facilities then the government would give -- force -- the vaccine to people most likely to give it to someone else. Vaccinate one super spreading 25 year old bar hopper, you stop the 25 people he or she would give it to. That would be the containment objective, and that's not what's going on. It's the protection objective. Grandma in the nursing home is not going to give it to anyone else.

    2. With all due respect to your work in the field Mr. Cochrane, you should consider the bigger picture.
      1) Your bar hopper example is not a good one - the government simply closed the bars when it deemed necessary to. Much easier to do that, rather than to establishing the 'bar-hopper' population and so forth.

      2) Consider the physical nature of the spread of the decease and current prevention mechanisms. Stay home and social distance options are only available to a small number of jobs (and adults without kids) such as financial services and upper-management roles. The jobs that involve actual labor can not be done from your home office. The stimulus package by any measure did not take care of the majority of individuals' lost income when they were not able to work.

      Then, imagine a wealthy individual who owns and manages multiple businesses, and, thus, employs a vast amount of people. What happens when this wealthy individual buys a vaccine for himself and stays healthy, while his employees and businesses get sick and shut down. This wealthy individual becomes losing his wealth fast.

      Moreover, when you put the price tag on the vaccine, how do you put the price tag on an individual human's life? When you are optimizing for a society's cumulative wealth, take in consideration not just loss of income due to business closures, but also cost of healthcare for COVID patients and cost of lost lives.

      The idea of vaccinating people based on risk-groups is based on the fundamentals and probabilities of virus-human and human-human interactions. Why wouldn't you optimize for the 'min # of people infected', 'min # of people died', and 'min time of virus affecting > n amount of people' if you were in charge of running the country and representing ALL people?

      How much does a human's life worth, Mr. Cochrane?

    3. While you make some good points, John, you are oversimplifying things with your bar-hopper example. We have a high degree of confidence that being vaccinated protects you individually from the disease. We have much less confidence that it prevents asymptomatic transmission.

    4. "the government simply closed the bars when it deemed necessary to"

      What? Federal government didn't. Maybe some states did, but many have not.

    5. "Then, imagine a wealthy individual who owns and manages multiple businesses, and, thus, employs a vast amount of people. What happens when this wealthy individual buys a vaccine for himself and stays healthy, while his employees and businesses get sick and shut down. This wealthy individual becomes losing his wealth fast."

      And what exactly would prevent this wealthy business owner to buy vaccines for his/her employees so that he/she would not lose his/her wealth fast, imagining that they cannot buy it themselves?

    6. Actually, speaking of Covid and its' affect on businesses -- I'd like to focus on real estate companies everywhere, especially in California which affects many other states indirectly... and the Covid effect on property and property taxes directly in the west...

      I was hoping to discuss the Covid-19 tax credit for employers who are good enough to keep paying workers at full rates. This is important, since unemployment is at a disastrous level right now, and has been for awhile now. In California and in every state, a small tax credit is OK, but it's a weak GOP type of effort. How about real tax relief? And robust property tax breaks, for the middle class not for the few rich families here & there.

      California still has more property tax relief options than any other state, for middle class people. Not just rich folks. Anyway, we are moving well on a vaccine. Fine. But since we’re talking about if the Governor of California and his team really want to move the needle for middle class residents, and genuinely help working families survive the disastrous pandemic economic effect — why don’t they repeal an equally disastrous tax hike called Proposition 19, which limits parent to child transfer rights... of inherited property.

      As the pandemic is leveling the California economy -- the realtor community and the powers that be are promoting this foolish Proposition 19 tax hike in 2021 -- watering down the parent to child exclusion from being reassessed at current property tax rates... Limiting every middle class homeowners’ ability to avoid property tax reassessment; weakening their ability to transfer parents property taxes, as they are inheriting property taxes from a parent they get only 12-months to move in, and only as a primary resident, not more ability to avoid property tax reassessment for investment properties.

      So if you miss the 12-month deadline -- prepare to pay extra dollars at full freight... meaning thousands of dollars, probably tens of thousands. The right to keep parents property taxes, and transfer parents property taxes upon inheriting property taxes at a low base rate is still all there, as per Proposition 58 and Prop 13 -- but the walls appear to be closing in on us fast! I'm reading up on these property tax breaks and complex processes at the official CA State Board of Equalization Website, at – and researching tax relief on property tax blogs like and websites focused on loans to irrevocable trusts, making it possible to lock in a low Proposition 13 property tax base, while buying out co-beneficiaries that have inherited the same property as me but want to sell their property shares… Another option we have in California that works with Proposition 58, found at websites like California business and residential property owners, in addition to having the right to keep parents property taxes, and transfer parents property taxes upon inheriting property, can still continue inheriting property taxes at a 2% maximum tax rate as long as it happens within a year upon inheriting, and it’s not an investment property, just a primary residence – maintaining a property tax transfer forever as a parent to child transfer, or parent to child exclusion as the lawyers call it; as long as all requirements for Proposition 58 have been met. And that is the situation regarding Covid and real estate, and companies tied into the real estate business, in California. It's a fine mess!

  4. "there is a second way to avoid infection: Stay home. Social distance. Wear protective gear." - J.C.

    Certainly a possibility, until it becomes apparent that the unvaccinated stay-at-home cohort (a) earns no income, (b) becomes undernourished, (c) avoids treatment for treatable diseases or conditions (e.g., cancers, heart failures, etc.), (d) is at risk of losing its homes or rental accommodation and will become homeless and a burden on society, etc., etc.

    Face masks do not provide protection to the wearer unless the face mask is an N-95 rated mask (and these are not obtainable today in any sort of volume). Face masks provide protection to the other guy who may or may not be wearing a face mask.

    You have improperly framed the question.

    The question is not one of who has the greatest wealth and therefore can buy for himself and his affinity the greatest amount of protection, but a question of what course of action benefits society the most. Does the laissez-faire alternative provide a greater improvement of social welfare versus the alternative of government interference in the free market to procure vaccines for wide-spread 'free' distribution to the largest number of members of the population at risk? The answer should be fairly obvious, given the experience of the past 10 months.

    1. "Does the laissez-faire alternative provide a greater improvement of social welfare versus the alternative of government interference in the free market to procure vaccines for wide-spread 'free' distribution to the largest number of members of the population at risk? The answer should be fairly obvious, given the experience of the past 10 months."

      Why is the answer obvious given the last 10 months? The last 10 months seems like an endless debacle for the regulators. Vaccine distribution would have begun long ago with a free market, isn't that the point of this post?

  5. Consider two jurisdictions: "O-Land", governed by Clan Ellisson; and, "A-Land", governed by Clan Pagesson. Vaccination has an efficacy of 90%. Population size in both jurisdictions is comparable (i.e., within 10% of each other).

    In "O-Land", the governing clan has decided that vaccines are made available to the highest bidder. In "A-Land", the governing clan takes the position that vaccines will be distributed without charge to any and all who want to be vaccinated--the clan will pick up the cost and defray that cost from the clan's revenue obtained elsewhere.

    In "O-Land", only 10% of the population can afford the cost of the vaccine and the vaccination service--90% must do without. In "A-Land", 90% of the population can tolerate the side-effects of vaccination, but 10% cannot and must take alternative measures (self-isolation, avoidance of social interactions, etc.)

    In which of the two jurisdictions is the virus eradicated first? Run the numbers. In "O-Land", a.s. In which jurisdiction is the hospital system most likely to be overwhelmed? In "A-Land", a.s. Which alternative produces produces the greatest social welfare, all things considered? This question cannot be answered without obtaining additional information, but it is probable that "A-Land" produces the higher social welfare.

    1. The stipulation is that there are only enough doses available for a certain number of people. Therefore, we must assume that the same number of people will be vaccinated in each of the two jurisdictions.

      Your premise that 10% of the people get vaccinated in O-land, but 90% of the people get vaccinated in A-land is false. Either both jurisdictions get 10% vaccination, and most of that goes to people who cannot or will not take non-pharmacological measures, or 90% of the people get vaccinated in both jurisdictions, and the epidemic is gone in both places.


    2. In O-land rice (the only known food) is provided to the highest bidder in free markets that operate along the country.

      Meanwhile in A-land the government decide that rice should be provided to everybody based on their needs (which an special agency of bureaucrats: “The National Committee for the Fair Distribution of Rice” duly evaluated). So, in A-land government centralized the production and distribution of rice.

      In which country (O-land or A-land) will more people die from starvation?

      ... wait ... we know the answer to this, don't we?

    3. I like how this communist ignoramus sincerely posits that the consumption of a resource is far lower when it's sold on the market than when it's provided for "free" by the government. What truly astounding economic illiteracy.

  6. I agree with all of this. You can also make a couple of tweaks: (i) sell to highest bidders and use the proceeds to fund relief for those staying home; or (ii) allow people to sell their right to receive a vaccination.

    You end up with the same allocation of vaccines, but with different beneficiaries of the auction proceeds. Which of course then raises the question: which allocation of auction proceeds is the most "fair"...

  7. Similar points made in Healthy Competition:

  8. Regarding your second point, there are broader reasons why this unregulated approach is a bad idea in medicine, mainly related to the fact that it is very difficult to determine whether treatments are beneficial and there is no way the consumer is going to be able to sort this out for themselves. However, it is even less practical with vaccines. The only reason vaccine production is economically feasible is that manufacturers enjoy extremely stringent liability protections, and this is necessary because when large numbers of people are taking a vaccine, by random chance all sorts of bad things will happen to some of them after getting it. It would not be wise to extend such protection to a completely untested product. Nor, in the absence of regulation, would most things being sold as protective actually be miraculous mRNA vaccines. Probably most would be things like vitamins and HCQ.

  9. Great post! Small typo at the end. "But what is the chance she gives the vaccine to anyone else." I think you meant virus not vaccine.

  10. The US government front-loaded the money for vaccine research, by "free-market" mechanism does that not entitle them to the vaccines contractually tied to those funds as they were the "early investors".

    It seems ironic that every free-market solution forgets the government input in creating the solution.

    1. I think you mean the 'taxpayer' input. So taxpayers should have the contractual entitlement to behave just as John suggests.

    2. Ya I do not know how the answer the question of who gets the vaccine first from a government selection standpoint, my argument is more that the government should be entitled to the first batches as they front-loaded the research funding.

      I do not contest the idea of a marketplace for vaccine vouchers (something similar to cap & trade for emissions), only that the first batches should not be sold on the open market if doses were secured contractually as part of the public funding.

  11. Author: "Absolutely nobody has mentioned in public the free market answer: Sell to the highest bidder. " - wrong. I, Ray Lopez, mentioned this a few weeks ago in the comments section of Marginal Revolution. And it's pretty obvious as a free market solution.

  12. Your arguments do not account for the essential features of covid-19 which is absolutely critical. Here are some facts:

    1. The probably that an 85 year old dies of covid-19 is about 10,000 times that of a 25 year old. This is known from large scale serology studies etc. Essentially the IFR is exponentially skewed to the elderly. Because of this, of the roughly 280k dead in the US, roughly 200k are above the age of 70.

    2. The current vaccines have been shown to be protective but NOT that they will prevent transmission. In principle, based on the available data, it is not clear that a vaccinated individual cannot transmit the virus. so vaccination may only be effective to reduce disease severity.

    Based on these two facts it is clear that vaccination priority should be 100% age based. Anything else is not based on the known characteristics of the virus and the effect of vaccination.

    One last point. If elderly are vaccinated first that 3000-4000 dead per day will drop down to say <500. think of the psychological effect of seeing those numbers drop. I bet that will be a lot effective than vaccinating bar hoppers, or rich bankers,...or whoever has the money to pay for it.

    1. 1. Translate into Qualy's, or even life years, and the case for immunizing the aged disappears.

      2.If the vaccinated individual still transmits, the vaccine is a purely private good. Sell to the highest bidder a fortiori.

    2. In a politicized "market," the favored distribution might be the one that implants the "spin" of life-saving by providing living specimens, like fewer deaths among the very elderly. The cartoon appeal will attract many who otherwise wouldn't notice. "Shots save lives" needs a visual representation, like Smokey the Bear.

    3. "it is clear that vaccination priority should be 100% age based"

      No, it is not. You have to consider that the older than 85 has, on average, a 4-year life expectancy while the 25 years old has 60 years of life left. And you have to also consider the difference in "quality of life". Most of us will very likely trade 4 years of our 80 something for 1 year (or even less) of our 20s.

      And who do you think should receive the vaccine: a 25 years old Einstein or Pasteur or an 85 years old Einstein or Pasteur? ... take into account that at 25 most of their contributions are still to be done while at 85 humanity has already benefited from them ...

      I don't know … being part of this government designated "Committee for the Fairly and Just Distribution of the COVID-19 Vaccine" is so damn complicated!

    4. It's anything but "clear". Basing allocation strictly on age confuses quantity with quality of benefits.

    5. The point about quality of life is not valid when applied to covid because of the numbers. Let me simplify a bit and focus on the 25 and 85 year old. here are the numbers:

      25: probability of death <0.01%
      85: probability of death roughly 10%.

      This is more than a 1000 factor difference. So even though the life expectancy of a 25 year old is clearly greater--it will be difficult to argue that account for that factor of 1000. Of course my argument will not work if the factor was say 5. but it is not, it is >1000.

      Then there is the issue of the health care system which is RIGHT NOW getting overwhelmed by precisely the elderly. To ease this load the best option is vaccinate the elderly directly.

      Finally, the reason why this pandemic is affecting the economy is because of FEAR. Fear of death. Or more precisely the fear of the counting of death. The most effective way to control this fear is to reduce death--and the way to do that is to vaccinate on an age based basis.

    6. The point is years left to live decreases linearly whilst covid risk increases exponentially with age, and so older people the vaccine has a higher personal benefit.

    7. yohannes, your basic assumption is "every year of life is equally worthy to preserve" but this is not a "positive" truth.

      you can also say that
      a) "one year of life" have a different "value" in your 20s than in your 80s and/or
      b) "one year of Nelson Mandela's life" has a different value than "one year of Hitler's life" (paying tribute to Mike Godwin)

      and these are also equally valid truths.

      These are different normative positions that not positive discussion can unify. Different persons will have different preferences on how to value "one year of life". And given the complexities of trying to "normalize" years of life, we know, thanks to Arrow's Impossibility Theorem that theses preferences cannot be aggregated.

  13. 70% of the pulmonary specialists in my area have been infected, and you want Elon Musk or Al Gore to jump the line because they can afford it?

    Who's going to take care of these rich people when the caregivers are incapacitated or dead?

    This is yet another misguided health care analysis on this blog, forcing square pegs into round holes to support an economic philosophy. There has never been, and I suspect there never will be, a philosophy of any kind that doesn't fail at some point.

    1. If they have already been infected, they don't need the vaccine (at least for a while ... we believe).

      Pulmonary specialist can afford the vaccine. They are very likely in the 15% top American earners (i.e. make more than 150 k per year).

      Actually, if the government "pays" for the vaccine the pulmonary specialist will be "paying" much more than if they only pay for theirs (consider that "government paying for anything" is just an euphemism)

  14. Small objection as someone who works in the development part of pharma: it takes a tremendous amount of effort to scale up and make quantities of a medicine. Even with a protein sequence and a way to deliver it, months, if not years are needed to figure out how to make the stuff. You can't go from designing it to making it much faster than we are right now.

    The FDA certainly slows it down in a huge way as well, but even with no regulatory hurdles, 9mo would be crazy fast.

  15. Again, interesting comments. It seems that selling to the highest bidder is the incentive for supplying the vaccine in the first place.

  16. Great solution, especially given that the wealthiest age cohort is also most likely to experience serious negative health effects from Covid-19.

  17. I don't think we need free market mechanisms applied to everything, especially when, here in California, ICU capacity is below 15% That's dangerously low. The idea of allocating a majority of the first batch to Frontline Healthcare workers is to prevent a collapse of the human capital needed to support the Healthcare system, even if people still choose to act irresponsibly.

  18. Excellent commentary.

    Although, at $8 a shot, we could have vaccinated everyone in America for $2.6 billion or so. Less than an afternoon's blip on the federal budget

    At that price I will be a Marxist for a day, and just get everyone vaccinated and we can go back to normal.

    1. I guess that for $8 to be the total cost, an Indian nurse (and not an American health worker) has to deliver you the shot.

      You have to be Marxist for much longer than a day to have people working for those kind of salaries ... they eventually manage to get that in the (now extinct) USSR though (and they are getting closer to that for young workers in Southern Europe too)

    2. Probably true, although I live in a Third-World nation and the inefficiencies sometimes outweigh the lower labor costs.

      When I was about six years old (in the US), the whole school (600-odd students) got polio shots from a lady who jabbed a needle into our arms, then jabbed the needle into what looked like a square blob of jello, and did the next arm in the long line.

      Perhaps I should say I would be a technically efficient Marxist for a day, if we could put this blasted C19 pandemic behind us.

      For sure, free markets usually work better than Marxism....

  19. Though I agree in principle with the high costs imposed on society from FDA “protection,” the vaccine may have been developed to a degree in a weekend but still requires at least some testing before distribution to early adopters. Issues such as administration, storage, dosing need to be optimized. The fact that these issues and a full Phase 3 study are completed by this time is astounding. Now, I agree, some accelerated approval in March or April would have made a significant difference.

  20. Though I agree in principle with the high costs imposed on society from FDA “protection,” the vaccine may have been developed to a degree in a weekend but still requires at least some testing before distribution to early adopters. Issues such as administration, storage, dosing need to be optimized. The fact that these issues and a full Phase 3 study are completed by this time is astounding. Now, I agree, some accelerated approval in March or April would have made a significant difference.

  21. I thought your post was excellent. I agree with your post 100% and the additional comment about trading the rights (a subtle but good point).
    People often defend the FDA and gov involvement on the grounds of "setting everyone's mind at ease about a medications efficacy", consumers can't decide for themselves in this market, etc. And recently, in the Covid vaccine context, "we need the FDA to prove efficacy and safety to convince people to vaccinate... just look how many are worried..."
    Consider in this case the positive spillovers/externalities from the market approach vs gov approach. Today we have a gov approach. People don't trust the vaccine. On one side people worry Trump rushed it and say they wouldn't take anything from his administration, etc. On the other side, people worry about any gov-mandated vaccine even in normal times and today's no different. It's so bad that Jason Riley in the WSJ today ( argues we should PAY PEOPLE to take the vaccine in the name of ensuring public safety.
    Now consider the market approach... news headlines "Rich people buying vaccine first - [moral outrage] - and already seen back at luxury restaurants and high-end bars where they can exclude the poor [more moral outrage]".
    Which news headline is going to encourage the most people to go out and get vaccinated? Everyone's always mad the rich got nicer cars and phones first, but only because they want want the rich have!
    I suspect that people will complain in both systems, but the vaccine would get distributed much faster through society (if that's your goal) under the market system than under the government system.
    And to all your points, it also would have happened months ago so we'd be a long way by now to having mass vaccination and tons of home/private testing for those not wanting a vaccine who, today, have no other options.
    Okay, one final point. Those concerned about the vaccine would have the best and most transparent trial: watch the rich people who buy it first! I guarantee there would also be a bunch of think tanks following the numbers, posting reports, and so on. You'd also see the rich and famous on TV. If they grow gills or 3rd eyes or get sick or whatever...don't buy! stick with your at-home test kits you could buy by the box-load online for $9.99 and free shipping in a free market.

  22. Elaborating on the "give out rights" solution.

    What if you don't give out whole "rights to get the vaccine" but "1 tenth (or twentieth or whatever the initial availability is) to everybody and then let them be freely traded?. You need 10 1/tenth rights to get a shoot.

    The mechanism will be great at price discovering. The government can buy rights in this open market (the FED has great experience now in doing so). New rights would be issued following new doses availability affecting the spot price that would reflect the new offer-demand equilibrium.

    Even a "futures" market can be developed and would be very useful helping pharmaceutical companies to plan for future demand and allowing them to lock in future prices at the very early stages of investment in the manufacturing of the vaccine.

    This free market would work wonderfully at price discovery and resources assignment (or, at least, much better than any “Committee for Justice and Fairness in Vaccine Distribution”).

    Still wondering the best way of allocating the initial "1 tenth of a vaccine right"

    * Thru an "IPO style” issue?
    * At a regulated cost+ price with every citizen/resident having the right to get one at that price?
    * Free rights that the government would have previously purchased from the pharmaceutical companies at an agreed upon price?


  23. My question is how long the production and distribution ramp up was with the current plan / would be with the free market from day 1 approach.

    I thought I understood part of operation warp speed was to get manufacturing going early by agreeing to pay the vaccine makers regardless of whether their vaccines got approved. This should mean that they started going as fast as they could on this months ago. Yet I have heard numbers in the 20-40 million dose range (perhaps that was per vaccine, and note that 2 doses are needed per person) available for distribution now. This seems to imply that it could take 4, 6, 8, or more months for the vaccine makers to make enough doses to get enough people vaccinated to significantly slow or stop the virus.

    Also given some of the requirements of at least some of these vaccines (low, or super low temperatures for storage along the entire supply chain), developing distribution mechanisms would not have occurred overnight either.

    Perhaps these aspects would have gone faster on the free market from day 1 approach, and doubtless deaths would have been lower, but the time it would take to ramp up production and distribution seems like it was non trivial and could significantly impact the date of an effective solution difference (and therefore the deaths difference) between the free market from day 1 approach and the current method.

  24. The problem with Cochrane's argument is here:

    "What happens in free market nirvana? Yes, there are quite a few more cases of people who are hurt by side effects. Not that many actually, as we are following the early adopters carefully and broadcasting data as it comes out. Quite a few useless drugs get tried a bit more widely.

    But, going on the current assumptions that these made in a weekend vaccines work, we would not have had a pandemic at all."

    The claims about side effects and useless drugs are wrong. Many millions more useless drugs would be produced, and their use would completely drown out the use of efficacious drugs. This isn't a guess, it's known, because it happened in the 19th century. Individual consumers have no way at all to determine the efficacy of - almost any drug, but particularly a vaccine - and so they will not be able to create a strong market signal. What incentive for Moderna to produce real vaccines when Alex Jones silver solution is marketed better and sells better?

    So, would the pandemic have been averted? Highly unlikely, because on this model, no vaccines would be produced.

    1. Maybe yes or maybe no.

      In any case, nothing prevents Moderna, if you are right, from getting for their products a "privately issue quality seal" (companies in different markets do this all the time). If you are right companies providing this seal will mushroom and their survival will depend on their reputation (always risking an Arthur-Andersen- like kind of fate if they made a mistake).

      The point is: the FDA has the wrong incentives: they do not benefit in any way for rushing the approval of a new drug: they don't pay any "cost" for the delay (and these costs can be huge). On the other hand they will face serious criticism if they make even a formal mistake. So, they will have unnecessarily lengthy approval periods. Just by responding the right way to their wrong incentives.

      Poisoning clients is a horrible strategy to do repeating business with them. Private companies bearing full responsibility for their mistakes (even unintentional ones) and benefiting from their successes work with a much better incentive scheme. Being accountable, by the way, would be a huge difference with governmental agencies; considering, as Tetlock points out, “the ingenuity and determination that political elites display in rendering their positions impregnable to evidence".

      For the real (or imaginary) problems that somebody could think of, the market will provide solutions if they are material (or do exist at all, most of the times they won’t).

    2. "The survival [of companies selling unregulated medicine] will depend on their reputation"

      Exhibit 1: Boiron. Homeopathy was a $3b market in the US in 2007 (says Wikipedia). I would assume the market is roughly the same size, inflation-adjusted, today (too lazy to look proper figures). Boiron et al. sell overpriced sugar, and the consumers come back for more, due to efficient marketing (and a large-scale science education failure but that is another topic).

      You can argue that those who buy homeopathy are idiots and deserve what they get. You might be right. In standard times homeopathy has fairly limited externalities (some people turn to actual doctors with problems that cost more to fix after six months of non-treatment, some die).

      Now, this is a communicable disease. if you let Boiron produce a homeopathic "covid vaccine" and compete against Moderna etc. they are going to win - their R&D cost and time is basically zero. Yet such a "vaccine" will not stop the epidemic the slightest.

      It is probably that the regular FDA vetting process could be streamlined. It is virtually guaranteed that in the current situation they could have accelerated (by trading money for time while keeping quality constant). But doing away with the vetting process is simply not a viable option for the control of communicable diseases.

    3. Trying to protect all the idiots from themselves is a Sisyphean task that is doomed to fail: the more you protect the idiots the more idiots you will create. And even trying this impossible task will cost us dearly.

      People can tell an iPhone from a cheap Vietnamese terminal. You can tell a Ferrari from a Chevrolet. You can tell an American 10-year bond from an Argentinian one (no matter the marketing involved) and yet, when it comes to protect their lives, you think people will be more stupid than when picking their phone or they car? I don’t think so.

      Design the system for "smart adults" and they will come (and we will gain hugely in efficiency and living standards along the way).

    4. What do you mean this "happened in the 19th century"? That was a period of substantial improvement in medicine, and efficacy proof wasn't required by the FDA until 1962, at which point life expectancy in the developed world was up to almost 70. In fact, the period from 1906 to 1962 saw the highest growth rate in life expectancy, and it's essentially the policy that Cochrane is recommending.

  25. One thing I would like to see considered is the incentive for certain employers to bid for quantities of vaccine to coax their workers back to work.

    Another is the incentive for health insurance companies to bid for quantities of vaccine to reduce their risk of payouts for expensive COVID treatments.

  26. Cochrane: "Two or three vaccines were invented in a weekend. …Think how much better we would be now if we were using [then the] vaccines that had been developed."

    The polemicist returneth. Let's address this by recalling the old philosopher's yarn:

    A friend invites you over to see his latest acquisition: a life-size, perfect replica of Michelangelo's masterpiece David. In marble, of course. Upon arrival your friend directs you to the garage, whereupon you behold a large, crudely rectangular block of stone. "Well, I haven't gotten around to unpacking it yet, but I know it's in there", your friend exclaims.

  27. If you wanted the vaccine back in February, you could have simply signed up for the clinical trial yourself. You can find recruiting studies here:

    Note, they typically have to pay people to participate in these studies, because nobody is willing to "volunteer" to get an untested vaccine.

  28. I'm a biochemical scientist, and I worked in tech transfer for years. (Tech transfer is the field that moves initial technology breakthrough like cancer drugs or new solar panel designs from the University lab bench through to production).

    A classic saying in this field, "We have tons of drugs that cure cancer in a rat -- few of them are ever effective in humans"

    The vaccines are the same way. You are AWARE of three Covid vaccines, in reality, there were hundreds of those "designed in a weekend" vaccines. It's just that most don't work.

    The average drug in Phase I clinical trials has a 14% of being approved. Vaccines tend towards the high end at 30%, and cancer drugs at 3%. Source:

    It should be pointed out that most new vaccines are redundent. For example, the new Shingles Vaccine (Shingrex) made headlines because it was approved in 2018. There was already a Shingles vaccine on the market (with 60% effectiviness), the Shingrex vaccine was special because it was 95% effective and did not rely on a live virus the way the old vaccine did. --- It still had to go through clinical trials though. Most new vaccines are redundant -- and they still have a 70% failure rate.

    What causes such a high failure rate?
    Here's study on that from NIH:
    To summarize those results:
    About 70% of clinical trials fail because they can't get enough people to enroll in them.
    About 22% of clinical trials fail because they run out of funds to complete them.
    About 17% of Phase III clinical trials fail for safety reasons (despite passing phase I and Phase II which are designed to test the safety of these drugs)
    And about 54% of Phase III clinical trials fail because they weren't effective once they were tested in a large population.

    I feel like you're suffering from survivorship bias.
    Certainly, it would have made sense to produce and allow people to take those 3 vaccines back in February --- the question is, how would you know which 3 out of 100s would have worked?

    1. Several of us agree that Cochrane served up a howler here. Of course there was no vaccine in February, 2020. No, there was not. At that stage, at best, we had a vaccine-candidate.

      For me the interesting question is, why such a straw man from an otherwise brilliant and sound thinker?

      My thesis about this: virtually speaking, there are actually two John Cochranes who post here: 1. the scholar (logic and rigor) and 2. the polemicist (emotion). The two Cochrane personas are often quite distinct, something discernable to long term readers.

    2. Of course there was a vaccine. The trials are there to tell "vaccine", "placebo" and "poison" apart. The word "candidate" is largely misleading. Now the safety and efficacy of a vaccine can be estimated and as the time progresses estimates become more accurate.

      And the whole point raised by John Cochrane is that vaccination could have started when the substances were confirmed to be safe, and even if some of them weren't effective (while some were effective), it would have been better than nothing at all.

    3. Of course there was a vaccine. The trials are there to tell "vaccine", "placebo" and "poison" apart. The word "candidate" is largely misleading. Now the safety and efficacy of a vaccine can be estimated and as the time progresses estimates become more accurate.

      And the whole point raised by John Cochrane is that vaccination could have started when the substances were confirmed to be safe, and even if some of them weren't effective (while some were effective), it would have been better than nothing at all.

  29. Yaron Brook is talking about your article on his podcast.

  30. Mr. Cochrane brings up several interesting points, which I appreciate.

    His argument suffers, however, because he insists on going too far with his claim that "there wouldn't have been a pandemic at all" if Moderna (and other developers of vaccines) had been allowed to sell their vaccines immediately to willing purchasers who had full disclosure of their experimental nature.

    What's one simple reason that I disagree with him? Manufacturing capacity. Pfizer has, for example, reportedly been ramping up to full-scale production since June to get to the current point of having the amount of vaccine available that it does. The WSJ ran a lengthy article last Saturday on Pfizer's efforts to ramp up production of COVID vaccine. Even allowing for the likely self-congratulatory bias of reporting that by necessity has to rely heavily on Pfizer executives describing their own efforts, it rings true about the effort required to manufacture and distribute a new vaccine in quantities of tens of millions (and eventually hundreds of millions, perhaps billions) of doses.

    The money (including time from lots of people in its production organization) to do that was reportedly being spent well ahead of vaccine approval. To anticipate a counterargument: perhaps a free market in early vaccines would lead to some additional amount of spare capacity sitting around waiting for the opportunity of early returns from selling product. I struggle to see, however, that the numbers would add up to spend that money waiting for a pandemic that might (or might not) occur over a period of many decades. Adding to that calculation, of course, it's not as simple as just buying a bunch of equipment and sticking it in some tilt wall buildings in industrial parks, waiting to flip switches. Complicated production equipment needs to be maintained. Additionally, there's also the question of all the skilled labor involved in setting up and operating this capacity. And, in this particular case, my understanding is that both the Moderna and Pfizer/BioNTech vaccines require vastly different production equipment and processes than previously existing vaccines. That's because they are both mRNA vaccines and, again per my understanding, no mRNA vaccine has previously been brought to market.

    Now, all of that said, could the impact of early, "caveat emptor" availability have been non-zero, and in fact non-negligible? That milder claim is plausible. The latest U.S. CDC information on deaths involving COVID-19 (for which the CDC has demographic information) is that 59% of those deaths have occurred among the 7% of the U.S. population (about 23 million people) who are older than 75. There is, as has been discussed in many contexts of COVID policy, easily observed age-stratification of risk. That age stratification of risk was apparent in February and March to anyone who dug into available information.

    (A somewhat separate, but related point, bolstering the argument for early vaccine availability is the extreme difference in standards for a vaccine relative to other measures. The various aspects of government-mandated lockdown imposed huge costs on many people with nothing close to the level of scrutiny required from vaccine development. Meanwhile, people weren't allowed - even voluntarily, with disclosure of risks - to take the risk of an unproven vaccine (at least not outside of clinical trials with limited participants and 50% probability of receiving placebo).

  31. Respectfully, this is the sort of thing that gives free-market thinkers a bad name.


  33. What a wonderful, informative article, thank you! Just started following you, heard about you via Yaron Brook. I'm a committed capitalist so I'm not surprised to read that capitalism is the best way to handle vaccinations, but it's great to hear it concretized as you did.

  34. Why the super long post? Cochrane should just summarize it by saying he thinks money is more important than human life. That is where he is getting with this.

    The vaccine doesn't protect you at all. You are still contagious and you can still get it and experience milder symptoms. I know as I was on the Phase II of the AZ trial. The message was clear, even with this, you will need to continue to adhere to social distancing and face mask in public places.

    Hence, people working from home already, the most likely people who would be able to purchase the vaccine and who arguably add more output to the economy (think professional services, bankers, etc,), would just stay home while thousands who need to work out on warehouses, cleaning, delivery, food production (all of which have a lesser economic output) would continue getting sick and die.

    Let alone the fairness or not of the situation, but the argument is nonsense from any perspective, not only from a public health and ethical perspective, but even economics. People who can afford to work from home are already doing it. People saturating hospitals are already lower income people. What happens to the economy if hundreds of thousands of workers get sick, get long term issues, or die? What is the impact to the economy then? Or what? Libertarians think the markets are not influenced by labor shortage? I think this guy David Ricardo already established that centuries ago. Or are we just suggesting the surplus of labor is big enough with people willing to die and risk their families to meet the month's rent that we are ok with it?

    So no, claiming that a few bankers should be able to buy their vaccine so they can go to Stone Street for happy hour makes zero sense if the bartenders, cleaning crew, security, etc. workforce is dying by the thousands.

  35. If I were an economist I'd be furious at the damage this kind of propaganda does to the whole discipline. In your point #2 you demonstrate you have no idea of what you are talking about when you talk about drug development so why should I assume you do when you talk about anything else?

    This is akin to economists denying co2 causes global warming : they take religious or fideistic positions and they lose what is dearest to an academic: credibility and intellectual honesty

  36. Vaccine is no child’s play!

    In the fight against the coronavirus pandemic, those aged under 21 have received limited focus. This is primarily because the virus affects older people much more.

    Oxford and AstraZeneca, Johnson & Johnson, Novovax, and Covaxin have announced plans and clinical trials for vaccines catering to children aged 12 and above. Pfizer and Moderna have already begun their trials.

    To build herd immunity in the community and bring this population back to school, vaccination becomes necessary. For a pandemic to end about 70-90% of the population will need to be vaccinated. Governments are likely to face challenges including those who do not want to get vaccinated.

    India has a largely young population so the fight against the virus will depend heavily upon how quickly they are vaccinated. Besides, the longer the pandemic rages on, the worse the effects on education which is currently online.

    Here's the lowdown about COVID-19 vaccines for children:

  37. Hi John, excellent article although free market Nirvana wouldn't have the FTC - rational tort (i.e. w/o the tort lobby) is entirely sufficient. Another argument for the pandemic not having happened in the first place is that in free market Nirvana where no gov would come to the rescue, the health insurance and health care industries would invest heavily in prevention as being hit by a pandemic would be a threat to their existence. I wrote this article back in March 2020:
    And I included a chapter (slightly revised) in my book "Think Right or Wrong, Not Left or Right: A 21st Century Citizen Guide" last year:
    All the best,


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