Supermarkets Explained

Some Really Simple Questions about the Supply of Vaccines

  1. Do we have enough vaccines for India to roll out doses to everybody who is 18+?
    No.

  2. Will increasing the price at which these vaccines are purchased increase the supply?

    Yes. I teach this for a living, as do thousands of economists the world over, and there is no way our answer to this question ought to be anything except a resounding “Yes”.

    An increase in the price at which we’re willing to buy a good will increase the supply of that good.

  3. Is that the only way to increase the supply of these vaccines?

    No. Murali Neelakantan and I outlined some of the possible ways in this article. A fuller explanation is available here, but it is behind a paywall, alas.

  4. But… aren’t we suggesting nationalization, or something like that? It doesn’t sound free-market-ish.

    And indeed it isn’t. Price based market mechanisms are, under normal circumstances, infinitely preferably to other mechanisms. I strongly disagree with anybody who states otherwise.

    Growth maximization above all, subject to the right to live and climate considerations is a philosophy that is hard to argue against. And growth maximization happens best with market based price mechanisms.

    But I also strongly disagree with people who will say that these are normal circumstances!

    And under these circumstances, I think it makes sense to ask if other options have the ability to increase supply. Especially in the short run. A 350,000 daily caseload number with a CFR of even 0.1% is reason enough for me.

    Put another way, if the opportunity cost of sticking to only market-based price mechanisms is lives lost because of insufficient vaccines, is it worth the trade-off?

    To me, no. This is that one year out of a hundred where you do what it takes, no matter what.

  5. So what do we do next?

    Run the numbers! If we adopt the solutions that have been outlined in the Scroll piece, how much does vaccine production go up by? And by when? If we find out that it goes up by only 1% against the baseline (do nothing) scenario, and that only after six months, then it is not worth it.
    But, on the other hand, if we find that it is possible to increase supply by 25% by the end of May as against the do-nothing scenario, then sign me up for this plan.
    Again, run the numbers.

  6. So have we run the numbers?

    As best as I can tell, no. There is no analysis that I can find online (published by the government or otherwise) that has run these scenarios.

    Running the numbers is complicated, I appreciate that. It is not just a simple question of saying “x” is the monthly capacity of plant “y”. There’s supply chain bottlenecks, efficiency considerations, learning curves, technology transfers and much more involved. But is developing this model necessary? For reasons answered in questions 1-5, I think so, yes.

  7. So why don’t I run the numbers?

    Why not indeed? But before I try, if any of you have…
    …any information about whether or not this has already been done by somebody
    …arguments for why this should not be done…
    Please, do let me know.

    Also, if any of you have any links that will be helpful in this analysis, please, do let me know.


RoW: Links for 16th October, 2019

Five links about the NBA, China and the United States of America

  1. “Apple removed an app late Wednesday that enabled protesters in Hong Kong to track the police, a day after facing intense criticism from Chinese state media for it, plunging the technology giant deeper into the complicated politics of a country that is fundamental to its business.”
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    The NYT gives us useful background about the topic…
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  2. “But Apple is in a particularly difficult position, due to the company’s success in China: Unlike several other big consumer tech companies, which either do little business in China or none at all, Apple has thrived in China. The country is Apple’s third-biggest market, which generates some $44 billion a year in sales. And Apple’s supply chain, which lets it produce the hundreds of millions of iPhones it sells around the world each year, is deeply embedded in China.”
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    Recode explains the perils of integrating too successfully with China in terms of both backward linkages as well as final sales (that’s a loaded statement, worthy of a deeper analysis!)
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  3. “This morning brings new and exciting news from the land of Apple. It appears that, at least on iOS 13, Apple is sharing some portion of your web browsing history with the Chinese conglomerate Tencent. This is being done as part of Apple’s “Fraudulent Website Warning”, which uses the Google-developed Safe Browsing technology as the back end. This feature appears to be “on” by default in iOS Safari, meaning that millions of users could potentially be affected.”
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    Via John Gruber, over at Daring Fireball (please follow that blog!), a somewhat unsurprising, yet depressing revelation.
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  4. “I am not particularly excited to write this article. My instinct is towards free trade, my affinity for Asia generally and Greater China specifically, my welfare enhanced by staying off China’s radar. And yet, for all that the idea of being a global citizen is an alluring concept and largely my lived experience, I find in situations like this that I am undoubtedly a child of the West. I do believe in the individual, in free speech, and in democracy, no matter how poorly practiced in the United States or elsewhere. And, in situations like this weekend, when values meet money, I worry just how many companies are capable of choosing the former?”
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    Ben Thompson provides useful background and an even more useful overview of the larger picture.
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  5. “Daryl Morey wrote a pro-Hong Kong tweet and had to retract it, and then both the Rockets and the NBA had to eat crow. ESPN — part of the Disney empire I might add — has given only tiny, tiny coverage to the whole episode, even though it is a huge story on non-basketball sites. I’ve been checking the espn/nba site regularly over the last 24 hours, and there is one small link in the upper corner, no featured story at all.”
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    And finally, Tyler Cowen explains how incentives always and everywhere matter.