It’s said that all things are good in moderation. It turns out that’s even true with capitalism. I’ve written a lot lately about the need for regulation to contain the natural desire of business to abuse consumers and workers when competition and worker mobility are inadequate. But this is yet another way in which capitalism has its limits, and government intervention is needed.
The short story is that there is a looming anti-venom shortage. Specifically, the antidote to coral snake venom is going out of production. Pfizer has produced the anti-venom for 40 years, but it turns out the coral snake, while terribly deadly, just doesn’t bite all that many people. The expense of manufacturing the small amount of medicine required in the country is cost prohibitive. From a business perspective, the correct decision is to stop making coral snake anti-venom. There’s no money in it.
Yet that would be little comfort if my son were to be bitten by a coral snake. He could die, or in the best case spend weeks in intensive care on a ventilator, all for want of a simple medicine that is not profitable for anyone to make.
This is exactly the sort of situation where the government needs to provide subsidies to keep this medicine in production for the greater good of the people. This is not a huge issue. It’s not big dollars. It’s not thousands of people. But for the 100 or so people bitten each year and their families, it’s pretty damned important.
There are simply very few positions that make sense as an absolute doctrine. Add capitalism to the list (again).
http://www.popularmechanics.com/science/health/snakebites-about-to-get-more-deadly
“…There is also a coral snake antivenom produced by Mexican drug manufacturer Instituto Bioclon that researchers believe could be even more effective and safe than the outgoing Wyeth product. But that drug, Coralmyn, is not currently licensed for sale by the FDA. The tests required for licensing would cost millions of dollars, and for such a rare treatment (there are 15 times as many scorpion stings per year as coral snake bites), it could take decades for Bioclon to make its money back. “
I think somebody needs to stand up for Capitalism. It’s not Capitalism that’s preventing the anti-venom from reaching the market, it’s the FDA. You know, one of the government agencies that are supposed to be protecting us from Capitalism. Capitalism isn’t perfect, but you have too much faith in government intervention. Certainly government intervention had a role in the financial crisis.
http://bubblemeter.blogspot.com/2009/02/government-deserves-much-blame-for.html
It’s easy to handpick examples of Capitalism gone wrong , but these things happen in other paradigms. (Chernobyl anyone?) BP not using redundant blow out valves is an example of greed and Capitalism gone awry. But drilling is a regulated industry and there are regulations for redundant blowout valves in other countries. So isn’t it just as much a failure of our government that there weren’t redundant blowout valves in place? If they are that important, why weren’t there regulations in place. At least BP was trying to make money, what was the government’s excuse?
So be a little nicer to the capitalists. The government’s track record isn’t so great itself.
Good points but I am not sure the best business decision is to stop making it. Perhaps thats the easiest decision.
I think the best business descision is to figure out a way to make it work.
Brian raises a good point. I wasn’t aware of the Mexican alternative. Allowing that to be imported would be a preferable solution.
Government unchecked is clearly as dangerous as capitalism unchecked. The key is the balance. It’s just that at this point we’ve swung a little two far toward capitalism unchecked.
The FDA is an interesting example. They exist supposedly to keep us safe, but in many cases have acted in the interests of corporations by creating de facto protectionism for US drug companies. The MMS’s failure to properly regulate the BP oil rig was another good example. I think in many cases, recent failures of government can be traced to the government being controlled largely by the capitalists, who are pushing policy in their self-interest rather than the interest of the citizens.
In many respects, the capitalists are easier to respect than the government. Their motives are clear and on the table, while the government is way more subtle in the ways it abuses people.
My point in all this is not that capitalism is broken, but that government is. That’s what’s allowing capitalism to run unchecked. And the answer is not less government per se, but a more functional more effective one playing the vital role it was intended for.