Monday, November 01, 2004

What Free Market?

(I'm back)

In this column in the Washington Post (thankfully just a column, but I think it betrays some larger issues), the "free" market is blamed for the flu shot shortage. The juiciest part of the article is here:
Why doesn't the market work?

One reason is product liability, drug companies said, which keeps them out of the flu vaccine business. That is not a big issue, however, Pavia said, because lawsuits over flu vaccine have not been successful.

Another is the high cost of regulation...

Exactly which parts of the regulation constitute the "free" market? But there is a deeper problem here than blaming the negative effects of regulation on a "free" market. What exactly is the solution to product liability lawsuits? I cannot see any possible way to address this issue other than yet more regulation, either in the form of limiting lawsuits, which protect the vaccine makers from their mistakes, or in the form of regulatory oversight of the production and maintenance of vaccines, which will of course raise costs for the vaccine makers. Given how strongly the author feels about protecting the nation's health, I can't imagine him supporting a solution that increases the chance of a mix-up in the system. But since regulation is, according to him, such a huge problem, why do we want more of it?

The problem, of course, is a failure to understand what exactly the free market is. It is telling that the author quotes two people:
"The market has failed," said Andrew Pavia, chief of pediatric infectious diseases at the University of Utah, who chairs the flu task force of the Infectious Diseases Society of America, based in Alexandria.


Drug companies don't want to take on those costs because of the third problem with the flu vaccine business: it's a low-profit business and the demand for flu shots is "exceedingly fickle," said Poland, the Mayo clinic expert.

Neither man, along with the author, appear to have much understanding of, or much to say about the "free" market other than that it must be the root of our problems.

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