The US Has Low Prices for Most Prescription Drugs
The US has high prices for branded drugs but it has some of the lowest prices for generic drugs in the world and generic drugs are 90% of prescriptions. I’ve been saying this for years but here is the latest study:
U.S. prices for brand-name originator drugs were 422 percent of prices in comparison countries, while U.S. unbranded generics, which we found account for 90 percent of U.S. prescription volume, were on average cheaper at 67 percent of prices in comparison countries, where on average only 41 percent of prescription volume is for unbranded generics. U.S. prices for brand-name drugs remained 308 percent of prices in other countries even after adjustments to account for rebates paid by drug companies to U.S. payers and their pharmacy benefit managers.
Branded drugs are expensive but that is why we have insurance which works reasonably well, albeit far from perfectly. For example, insurance and the low price of generics is one reason that out-of-pocket costs for medical are low in the United States.
If you don’t want to pay high prices for branded drugs just use generics! As I wrote 20 years ago, in what was called a heartless and cruel post:
People talk about the high price of pharmaceuticals as if high prices lasted forever. In fact, within a year of the expiration of a pharmaceutical’s patents, prices will typically fall by more than 50 percent as generic producers enter the market. Patents nominally last for 20 years but the effective patent life is much lower because patents are typically granted years before a product has cleared FDA review. The effective patent life of the average new pharmaceutical in the 1990s averaged just 12 years [new reference for today, 13.5 years, AT]. Competition from competing but non-infringing pharmaceuticals makes the de facto patent life even shorter.
Thus, my response to the seniors and others clamoring for lower pharmaceutical prices is to be more patient. Does this sound harsh? Consider this, the people who are demanding price controls are not simply asking for lower drug prices they are asking for lower prices on the newest drugs. Lower prices for drugs introduced 15 years ago are already here. Remember, those drugs were recently considered the very best modern medicine has to offer, so it’s not like I am expecting those who can’t afford the newer medicines to go back to using leeches.
Price controls or other such plans such as reimportation may bring cheaper pharmaceuticals for a short period but we will then have a much smaller supply of new drugs forever. Only the shortsighted would buy that prescription.
Don’t fail the marshmallow test people!
People get upset when I say just use generics–shouldn’t everyone have access to the very best pharmaceuticals! Yes! But that illustrates another point–these drugs are worth the price!
Hat tip: Steve.
India and the US
Good op-ed from Arthur Herman and Aparna Pande:
[H]ow America approaches its relations with India — the world’s largest democracy, its most populous nation and very soon its third-largest economy — may determine the balance of global power for the 21st century…As the U.S. looks for a strong strategic partner to contain China’s current hegemonic ambitions, India stands out as the one country whose economic might, military potential and political values can decisively shift the balance of power toward the U.S. and other democracies around the world.
Over 17 percent of the world’s population lives in India. India is poised to become the world’s third-largest economy by 2030 (its GDP stands at $3.94 trillion and is expected to hit $10 trillion by 2035). Its economic growth has stayed around 7 percent per year for the last decade, and it promises to remain robust in the future.
…As for cultural affinities with the U.S. and the West, it’s important to remember that India is the largest English-speaking nation in the world. It’s a vocal supporter of the global norms and multilateral trade institutions such as GATT and the WTO, which sustain a liberal global order.
…For the partnership to really deepen, however, there are important steps both sides must take.
First, India needs to open up its still relatively closed economy, a legacy from its socialist past. It needs to undertake the next generation of market reforms, bolster manufacturing, continue to build up its infrastructure and invest even more in its human capital. India also needs to increase its defense spending from the current 1.6 percent to 2.5 to 3 percent, and diversify its suppliers to include more important ones from Western countries, including the U.S.
Second, the U.S. would benefit from American companies treating the Indian market as their alternative to China in the civilian manufacturing, high-tech and defense-industrial spheres. We also need to respect the fact that as a post-colonial country with a world-class economy, and one with a 5,000-year-old civilization, India will always see itself as a global power, not as a junior American ally, with strategic interests separate from — albeit largely aligned with — those of the U.S.
The emergence of India as a global power will permanently alter the dynamic of competition between the U.S. and China. A president who can correctly guide a closer strategic partnership between India and America will not only counterbalance China’s global ambitions and economic and military might, but could trigger a new era of growth and prosperity for both countries — indeed, for all three.
Civil War
I knew Civil War (now streaming on HBO/Max) was going to be good when just a minute or so in you see an explosion in the distance and only later do you hear the sound wave. [Mild spoilers may follow.] Shortly after, we meet war journalist Lee (Kirsten Dunst in a standout performance). I thought, “She looks like Lee Miller,” and seconds later, the name is dropped. In the next shot, Lee is in a bathtub—a clear sign you’re in the hands of a master. It is not without import that Lee Miller photographed Dachau or a little less obviously that she was a pioneer of the surreal. Both will reappear in Civil War.
In a scene where the journalists need to buy gas, they offer $300. The armed attendant scoffs, “$300 will get you a ham sandwich.” “$300 Canadian,” comes the reply, telling you everything you need to know about the state of the economy.
Civil War was written and directed by Alex Garland, who also made Annihilation, Ex Machina, and the underrated Dredd (the 2012 reboot not the Stallone movie). Many viewers expected Civil War to serve some lectures about red state/blue state politics, but it doesn’t. Tyler makes astute comments about the hidden politics (and reviews the movie here).
My interest was more on how the film portrays war—war is hell but it’s also fucking amazing. The photojournalists at the heart of the story justify their actions as serving a higher purpose, but in reality, they have become addicted to the adrenaline. Civil War shares themes with Nightcrawler. The journalists also share more than they think with the sick fucks who also love war because it gives them a chance to torture and kill.
A great scene at the climax incarnates the “when one dies, another is born” trope. The lead character starts to feel and gain a moral code, only to be killed for it, while the apprentice simultaneously sheds hers, emerging as a new, amoral hero. And it’s all caught on film. Karma is a bitch. The transition isn’t surprising given the logic of the setup but it is handled with originality and grace.
Recommended, given the obvious strictures about violence and serious themes.
AI and Biology
I think AI is going to have some if its biggest effects on biology. Biological pathways are among the most complex in all of science. People are good at handling two or maybe three variable problems but just keeping three variables and their interactions in one’s head is difficult. AIs with access to vast databases of genes, proteins, networks and so forth will enable new simulations and learning as has already happened with protein folding.
Equality Act 2010
The UK’s Orwellian sounding Equality Act 2010 is strikingly Marxist. It demands equal pay for work of equal value where these are defined as follows:
A’s work is equal to that of B if it is like B’s work, rated as equivalent to B’s work, or of equal value to B’s work.
A’s work is like B’s work if A’s work and B’s work are the same or broadly similar, and such differences as there are between their work are not of practical importance in relation to the terms of their work.
…A’s work is rated as equivalent to B’s work if a job evaluation study— gives an equal value to A’s job and B’s job in terms of the demands made on a worker
…A’s work is of equal value to B’s work if it is neither like B’s work nor rated as equivalent to B’s work, but nevertheless equal to B’s work in terms of the demands made on A by reference to factors such as effort, skill and decision-making.
In short, supply and demand have been replaced by judges and labor boards with the authority to deem which jobs are “equal” and therefore should be paid equally. And the labor boards do so based on vague and subjective considerations that do not change with changing circumstances. Imagine replacing “jobs” with “condiments” and having judges decide whether ketchup and mustard should be priced equally because they are similar, broadly comparable, or rated equivalent in terms of the effort, skill, and decision-making that went into their production.
You think I am joking. I am not. Here’s an example of a case just decided in the UK.
More than 3,500 current and former workers at Next have won the final stage of a six-year legal battle for equal pay.
An employment tribunal said store staff, who are predominantly women, should not have been paid at lower rates than employees in warehouses, where just over half the staff are male.
The tribunal ruled that retail workers and warehouse workers were “equal” and thus had to be paid equally. Next replied that they paid everyone market wages. Verboten!
Next argued that pay rates for warehouse workers were higher than for retail workers in the wider labour market, justifying the different rates at the company.
But the employment tribunal rejected that argument as a justification for the pay difference.
According to the tribunal’s ruling, between 2012 and 2023, 77.5% of Next’s retail consultants were female, while 52.75% of warehouse operators were male.
The tribunal accepted that the difference in pay rates between the jobs was not down to “direct discrimination”, including the “conscious or subconscious influence of gender” on pay decisions, but was caused by efforts to “reduce cost and enhance profit”.
It ruled that the “business need was not sufficiently great as to overcome the discriminatory effect of lower basic pay”.
No one is alleging that male and female warehouse workers were paid unequally or that male and female retail workers were paid unequally or that there was any direct or indirect discrimination. The only claim is that warehouse workers, who are less likely to be female than retail workers, earn more than retail workers. And since these jobs have been judged “equal,” the company has violated Equality Act 2010.
Who could have predicted that jobs as disparate as warehouse and retail jobs might one day be deemed “equal.” Yet because Next failed to foresee such lunacy they are now required to pay millions in back wages to their retail employees. Software engineers, particularly in AI, are currently in high demand. A British firm looking to hire them may hesitate to raise wages, fearing that a future ruling could classify software engineers as “equal” to a larger, lower-paid group like HR administrators. Such a decision could easily push the firm into bankruptcy.
The warehouse workers were almost 50% female (47.25%). So females were not barred from the higher paying jobs. The fact that 77.5% of the retail workers were female suggests that retail work has special appeal to females relative to males and thus that there are compensating differentials. Any of the three female plaintiffs could have taken jobs in the warehouse. If the jobs are equal and the warehouse jobs pay more this is, on the plaintiffs’ theory, “puzzling”. [Or, as Ayn Rand would say, blank out.]
In fact, the court case reveals that Next was struggling to fill the warehouse positions and offered any retail employee—including the plaintiffs—the opportunity to switch to warehouse work. On cross-examination, one of the plaintiffs admitted that, given the unpleasant conditions in the warehouse—described by the court as “the drone of machinery,…vibration, alarm sirens and the screeching of machinery, wheels and rollers, continuously present in all areas”—the warehouse job “did not seem particularly attractive” compared to the greater autonomy and more appealing environment of the retail job. The plaintiff added that she would only have considered the warehouse job if it paid “a lot more money.”
Thank goodness for the men and women who were willing to take such jobs for only a little more money! It should not shock that different people have different preferences over jobs, just as they have different preferences over ice cream. In particular, it will perhaps surprise only the judges to learn that men tend to be more wage-focused and “women are relatively more attracted to employers with low pay but high values of nonpay characteristics (NBER 32408).” The court, however, recoiled from this idea, noting that if they were to take demonstrated preferences seriously this would be tantamount to applying “an unfettered free market model of supply and demand.” The horror.
Now consider how the jobs were deemed “equal”. On the left is the job evaluation report for claimant Amanda Cox. The specific categories and numbers are not important; what is important is that the jobs are rated across 11 categories, and the point-scores are then added to get a total score at the bottom.
Amusingly, the evaluators emphasize that they use equal weighting across the categories. Of course, they did—because “equal” is synonymous with fair, right? An unequal weighting would surely be discriminatory!
I am not making this up:
Any scheme which has as its starting point – “This qualification is paramount” or that “This skill is vital” is nearly always going to be biased or at least open to charges of bias or discrimination.
Thus, if you think that a skill is vital for a job, that’s discrimination!
(Notice also that equal weighting is just another form of weighting. Given the subjective nature of both the categories and the points assigned, equal weighting holds no inherent superiority or objectivity.)
But no matter—we have yet to get to the best part. The evaluators selected three warehouse workers and assessed them using the same metric. For example, Amanda Cox was compared to warehouse worker Calvin Hazelhurst, resulting in the table on the right.
Can you spot something surprising in this table? I’ll give you a moment.
The obvious conclusion any reasonable person would draw from this table is that the jobs are clearly not equal. Amanda’s total score is 440, while Calvin’s is 340. 440 ≠ 340. Not even close! In nearly every category—except (no surprise!) physical demands and working conditions—the retail job requires more points, aka “skill and responsibility”.
At this point, most people would stop and ask some critical questions. If the jobs differ so much across multiple dimensions, isn’t it clear that they are not equal? And why do jobs that seemingly require less “skill” pay more? Could it be that our point-score rating system is oversimplified? Maybe the market is telling us something that this crude scoring system isn’t capturing? Is it time to check our premises?
But not the evaluators! Oh, no. The evaluators are thrilled–because the fact that the jobs are unequal proves that they are equal!
War is peace, freedom is slavery, ignorance is strength. UNEQUAL IS EQUAL.
Adam Smith had a much better understanding of wages in 1776 than UK judges have today.
The wages of labour vary with the ease or hardship, the cleanliness or dirtiness, the honourableness or dishonourableness, of the employment. Thus in most places, take the year round, a journeyman tailor earns less than a journeyman weaver. His work is much easier. A journeyman weaver earns less than a journeyman smith. His work is not always easier, but it is much cleanlier. A journeyman blacksmith, though an artificer, seldom earns so much in twelve hours, as a collier, who is only a labourer, does in eight. His work is not quite so dirty, is less dangerous, and is carried on in day-light, and above ground. Honour makes a great part of the reward of all honourable professions. In point of pecuniary gain, all things considered, they are generally under-recompensed, as I shall endeavour to shew by and by. Disgrace has the contrary effect. The trade of a butcher is a brutal and an odious business; but it is in most places more profitable than the greater part of common trades. The most detestable of all employments, that of public executioner, is, in proportion to the quantity of work done, better paid than any common trade whatever.
Today, the UK would convene a labor board to rule that the tailor and the weaver must be paid equally because they DO WORK OF EQUAL VALUE. Case closed.
Labor boards will inevitably lead to the misallocation of labor, diminishing both wealth and fairness. Severe misallocation may lead to further intervention, in the worst scenario, even to the allocation of labor by fiat. Politicization breeds division, rent-seeking, and a stagnant, unpleasant society.
More generally, it pains me that there is no recognition that the market is a discovery procedure, including the discovery of the value of different skills and people’s preferences over different jobs. No recognition that the market harnesses tacit knowledge and knowledge of particular circumstances of time and place–knowledge that is difficult to quantify, communicate, or communicate in a timely manner–and that “society’s economic problems are primarily related to adapting quickly to changes in these circumstances.” No recognition that a price is a signal wrapped up in an incentive.
I despair when I consider that these fundamental ideas are the foundation of our liberal, global, and prosperous civilization. On economics, as on free speech, the UK has entered the great forgetting.
Addendum: A special hat tip to Bruce Greig who brought this to my attention and had the receipts.
LLMs are Creative Reasoners
It’s bizarre to me that there are still people claiming that LLMs are not reasoning or are not creative when by any objective measure they are obviously creative reasoners! By objective measure I mean a test that evaluates creativity and reasoning by evaluating outputs not by idle philosophical speculation that rules AIs out by definition. Here’s a good paper, Can LLMs Generate Novel Research Ideas? A Large-Scale Human Study with 100+ NLP Researchers, which illustrates one such test. The authors asked top researchers in the field of natural language processing to propose research ideas which were then presented in a standardized format to a ratings panel of other NLP experts. The AI created ideas were judged more creative than the human ideas.
Now one might argue that the humans weren’t giving their best ideas–some data in the paper suggests they were giving ideas at the median of those for top researchers–and humans might also be looking for ideas that were perhaps easier to get funding precisely because they were less creative but more doable. Either way, however, the AIs are coming up with good ideas that could usefully supplement human generated ideas.
Peer Approval to Address Drug Shortages
Reuters: Mark Cuban’s Cost Plus Drug Company said…that it is working with the U.S. Food and Drug Administration to import and distribute penicillin in the country temporarily….Cuban’s Cost Plus will import Lentocilin brand penicillin powder marketed by Portugal-based Laboratórios Atral S.A.
There are two remarkable items in the above passage. First, there is a shortage of penicillin in the United States! Crazy. The second remarkable item is that the FDA has authorized the temporary importation of penicillin from Portugal. In other words, the FDA will accept the EMA’s authorization of penicillin as equivalent to its own, at least for the purposes of alleviating the shortage. That’s good. What is needed, however, is a more permanent form of peer-approval.
I have long advocated for peer approval or reciprocity for any drug or device approved in a peer country but notice that this form of peer approval is only for drugs already approved in the United States. Thus, the approval is really only for labeling and manufacturing, a pretty small ask.
Peer approval for imports would also help to discipline domestic firms who sometimes take advantage of monopoly power to jack up prices. Indeed, you may recall Martin Shkreli and the massive price increases for Daraprim (Pyrimethamine) to $750 a pill when the same pill was available in Europe for $1 or less and in India for 10 cents. Importation would have solved that problem entirely.
The Affordable Rent Act
Bloomberg: Moraal is among the growing number of Dutch people struggling to find a rental property after a new law designed to make homes more affordable ended up aggravating a housing shortage. Aiming to protect low-income tenants, the government in July imposed rent controls on thousands of homes, introducing a system of rating properties based on factors such as condition, size and energy efficiency. The Affordable Rent Act introduced rent controls on 300,000 units, moving them out of the unregulated market.
The Affordable Rent Act is like anything named the Democratic People’s Republic, you just know it ain’t so.
Addendum: Yes, the Einstein quote is fake. Today, I am in a mood and don’t care.
Why Don’t We Have Flying Cars?
In the 1970s the general aviation aircraft industry was selling 15,000 or more aircraft a year but that number fell by a factor of about 10 in the early 1980s. What happened? One factor was a massive increase in tort liability as discussed in my paper with Eric Helland, Product Liability and Moral Hazard: Evidence from General Aviation. Another factor was ever-increasing FAA regulation.
But Max Tabarrok raises an interesting puzzle. It’s not at all obvious that the regulation of personal aircraft has been more strict than that of automobiles. So why the big difference in outcomes? There is, however, one small but potentially very important difference between the regulation of cars and aircraft.
By far the costliest part of the FAA’s regulation is not any particular standard imposed on pilot training, liability, or aircraft safety, but a slight shift in the grammatical tense of all these rules. The Department of Transportation (DOT) sets strict safety requirements for cars, but manufacturers are allowed to release new designs without first getting the DOT to sign off that all the requirements have been satisfied. The law is enforced ex post, and the government will impose recalls and fines when manufacturers fail to follow the law.
The FAA, by contrast, enforces all of its safety rules ex ante. Before aircraft manufacturers can do anything with a design, they have to get the FAA’s signoff, which can take more than a decade. This regulatory approach also makes the FAA far more risk-averse, since any problems with an aircraft after release are blamed on the FAA’s failure to catch them. With ex post enforcement, the companies that failed to follow the law would be blamed, and the FAA rewarded, for enforcing recall.
This subtle difference in the ordering of legal enforcement is the major cause of the stagnation of aircraft design and manufacturing.
In some ways, this is an optimistic message, since it illuminates an attractive political compromise: keep all of the safety standards on airplanes exactly as they are, but enforce these standards like they’re enforced with cars—i.e., through post-market surveillance, recall, and punishment. This small change would reinvigorate the general aviation industry, putting it back on the exponential trend upwards that it lost 50 years ago.
Taxing Unrealized Capital Gains and Interest Rate Policy
First read Tyler on the practical difficulties implementing a tax on unrealized capital gains!
I have a different argument that I rarely see discussed. A significant fraction of what we call capital gains is due to variation in the discount rate rather than variation in income. Take the simplest Gordon model of stocks P=D/r where D is the annual dividend and r is the discount rate. If D=100 and r=.1, for example, then the stock is worth 100/.1=$1000. Now suppose people become more patient and the discount rate falls to .05 then P=$100/.05=$2000. The stock price doubles, a massive capital gain. But notice that income hasn’t gone up at all. It’s still D per year. Income hasn’t gone up and lifetime consumption possibilities haven’t gone up for someone who doesn’t sell (but recall this is a tax on unrealized gains. If there is a sale then tax the realized gain.) Ultimately, we want to tax consumption so we should not be taxing “capital gains” which reflect changes in discount rates rather than changes in income or consumption possibilities.
Taxing unrealized capital gains also connects interest rate policy even more tightly with fiscal policy. Need a tax boost? Lower interest rates! Fed policy already influences taxes but this adds another lever for political business cycles. More generally, interest rate volatility now adds to fiscal volatility. When we exited zero interest rate policy, for example, banks had huge capital losses. As rates fall, capital gains increase. Do we really want to add the tax system to this?
If we generalize the Gordon model to P=D/(r-g) where g is the growth rate of dividends then we can see that another cause of increased capital gains, an increase in g. It’s not obvious that we should tax unrealized changes in asset values due to increases in the growth rate of dividends. On the one hand, this is more income-like but it’s expectational. It’s taxing the chickens before the eggs have hatched.
The one clear increase in income which should be taxed is increases in D. An unrealized capital gains tax would do that but at the expense of also taxing changes in asset values due to changes in r and g which should not be taxed.
Now add the point I mentioned to Tyler, which is that taxing unrealized gains divorces the entrepreneur from the firm at a time when the “marriage” is likely at its most productive. Not good. Taxing unrealized gains might not even be a good idea from the point of view of the tax collector. Does the IRS want to tax X now or a much larger figure later? If the IRS taxes entrepreneurship too early it can reduce total discounted tax revenues.
Bottom line: I don’t see how taxing unrealized capital gains is a well thought out policy. Eliminate the stepped up basis, declare victory and go home.
Addendum: Aguiar, Moll, and Scheuer make some similar points but embedded in a fully GE framework. Ben Moll also points me to earlier pieces by Frank Paish 1940, Nicholas Kaldor 1955 and John Whalley 1979.
Crypto is the Money for AIs
Progress in crypto has been slow but one saving grace may be AI. AIs can’t get a bank account but they can use cryptocurrencies. Bryan Armstrong at Coinbase tweets:
This week at @CoinbaseDev we witnessed our first AI to AI crypto transaction.
What did one AI buy from another? Tokens! Not crypto tokens, but AI tokens (words basically from one LLM to another). They used tokens to buy tokens 🤯
AI agents cannot get bank accounts, but they can get crypto wallets.
They can now use USDC on Base to transact with humans, merchants, or other AIs. Those transactions are instant, global, and free.
This is an important step to AIs getting useful work done. Today if you give an AI agent a task and come back in a few days or hours, it can’t get useful work done. In part this is a limitation of the technology itself, and products like devin.ai are getting closer to this. But the other reason is AIs can’t transact to acquire the resources they need. They don’t have a credit card to use AWS, Github, or Vercel. They don’t have a payment method to book you the plane ticket or hotel for your upcoming trip. They can’t get through paywalls (for instance to read a scientific article), promote their post on X with a paid ad, or use the growing network of paid APIs to integrate data they need.
If you’re working on an LLM or AI model that you think could benefit from have a crypto wallet integrated to conduct payments, try integrating our MPC Wallets from Coinbase Developer Platform (CDP):
https://docs.cdp.coinbase.com/mpc-wallet/docs/ai-wallets/
And if you are a company that sells a service – get ready for your shopping cart to be AI checkout enabled. It turns out everyone benefits from having access to good financial services, including AIs!
How big will the AI to AI economy be a few years from now?
Mpox Vaccines Stuck in Limbo: WHO is at Fault
In 2022, Mpox, a viral disease endemic to parts of Africa and primarily transmitted through close contact—especially sexual contact between men—spread to developed countries, including the United States. The U.S. saw over 30,000 cases and approximately 58 deaths. Despite two available vaccines there was not nearly enough supply to vaccinate even the high-risk populations. Fortunately, health authorities adopted vaccination strategies my colleagues and I had recommended for COVID such as first doses first and fractional dosing. For example, several small studies (e.g. here and here) suggested that 1/5 doses delivered intradermally could be effective and the FDA, EMA, and the UK all recommended this fractional dosing strategy. As result, the US was able to vaccinate around 800,000 people and the epidemic ended (natural immunity and other preventive measures also played a role).
Unfortunately, a new Mpox variant is now spreading in the Democratic Republic of the Congo and nearby countries. Here’s the crazy part: despite declaring Mpox a public health emergency on August 14, the WHO has not approved any Mpox vaccines. You might think, “Who cares what the WHO authorizes?” After all, the FDA, EMA, and the UK have all granted emergency approval. But here’s the catch: the WHO’s approval is crucial for GAVI, the vaccine alliance that donates vaccines to developing countries. Without WHO approval, GAVI is reluctant to provide vaccines to the Congo. To add insult to injury, the Congo itself has approved the Jynneos and LC16 vaccines. Yet, the WHO refuses to authorize and GAVI to donate these vaccines, citing vague concerns about safety and efficacy.
Stephanie Nolen at the NYTimes has a very good piece on this mess:
Three years after the last worldwide mpox outbreak, the W.H.O. still has neither officially approved the vaccines — although the United States and Europe have — nor has it issued an emergency use license that would speed access.
One of these two approvals is necessary for UNICEF and Gavi, the organization that helps facilitate immunizations in developing nations, to buy and distribute mpox vaccines in low-income countries like Congo.
While high-income nations rely on their own drug regulators, such as the Food and Drug Administration in the United States, many low- and middle-income countries depend on the W.H.O. to judge what vaccines and treatments are safe and effective, a process called prequalification.
But the organization is painfully risk-averse, concerned with a need to protect its trustworthiness and ill-prepared to act swiftly in emergencies, said Blair Hanewall…
In addition, no one has followed the other practice my colleagues and I recommended for COVID (which Operation Warp Speed did), namely advance market commitments. So the vaccine manufacturers have basically been twiddling their thumbs and not gearing up for greater production. (The Congo can also be faulted for not buying more on their own account.)
All of this means that when the WHO does authorize and the vaccines begin to flow, we will still desperately need strategies like fractional dosing.
Hat tip: Ben H. and special thanks to Witold Wiecek.
Prescriptive versus Performance Codes
A great piece in the NYTimes on the history and future of factory produced buildings:
But the most remarkable difference between the United States and Sweden is regulatory. Building codes in the U.S. try to make buildings safe by prescribing exactly what materials must be used and how (a prescriptive code). In Sweden, the government does this by setting goals and letting builders come up with a way to achieve them (a performance code).
So, for instance, U.S. building codes dictate the thickness of drywall that must be used for fire resistance, how many layers are needed and how many nails are required to attach it. In Sweden, the code requires that a wall must resist burning for two hours, say, and lets engineers and manufacturers figure out how to accomplish that. The regulator’s job is to check the engineer’s work.
The result of both is fire resistance and structural safety, but in the United States, each residential building needs to be granted a permit. During construction, work often halts for inspectors to make periodic visual inspections. That contributes to a stop-and-go pace that frustrates pretty much everybody except lenders, who get interest on financing. Sweden’s codes require more work on the front end when builders have to demonstrate that their methods are up to snuff, but factory processes that comply with the performance code can be certified. This encourages innovative solutions and results in less waste.
As an example of how a performance code leads to innovation:
..Before Sweden adopted its performance-based code in 1995, wood buildings had been limited to two stories; almost overnight, wooden buildings could be as tall as engineers could prove safe.
Addendum: See the comments for useful argument that the US code is more performance based than the NYTimes article suggests. What would be very useful is to hear from someone with experience in both systems.
Rawls Killed Marx
I found this Joseph Heath post very informative. In essence, Marx was about exploitation but when no theory of exploitation without gaping holes could be developed, the analytical Marxists shifted to egalitarianism ala Rawls.
Back when I was an undergraduate, during the final years of the cold war, by far the most exciting thing going on in political philosophy was the powerful resurgence of Marxism in the English-speaking world. Most of this work was being done under the banner of “analytical Marxism” (aka “no-bullshit Marxism”), following the publication of Gerald Cohen’s Karl Marx’s Theory of History: A Defence (and his subsequent elevation to the Chichele Professorship in Social and Political Philosophy at Oxford). Meanwhile in Germany, Jürgen Habermas’s incredibly compact Legitimationsprobleme im Spätkapitalismus promised to reinvigorate Marx’s analysis of capitalist crises in the language of contemporary systems theory. It was an exciting time to be a young radical. One could say, without exaggeration, that many of the smartest and most important people working in political philosophy were Marxists of some description.
So what happened to all this ferment and excitement, all of the high-powered theory being done under the banner of Western Marxism? It’s the damndest thing, but all of those smart, important Marxists and neo-Marxists, doing all that high-powered work, became liberals. Every single one of the theorists at the core of the analytic Marxism movement – not just Cohen, but Philippe van Parijs, John Roemer, Allen Buchanan, and Jon Elster – as well as inheritors of the Frankfurt School like Habermas, wound up embracing some variant of the view that came to be known as “liberal egalitarianism.” Of course, this was not a capitulation to the old-fashioned “classical liberalism” of the 19th century, it was rather a defection to the style of modern liberalism that found its canonical expression in the work of John Rawls.
If one felt like putting the point polemically, one might say that the “no-bullshit” Marxists, after having removed all of the bullshit from Marxism, discovered that there was nothing left but liberalism.
That’s the opening. Read the whole thing.
Claude Reviews You!
I asked Claude to read my post, Go for the Gold! on using inequality in the NFL and NBA to get a different perspective on income inequality. I then asked Claude, “Which are the best comments showing they understood the op-ed and responded in a productive and reasonable way either critically or positively?” And following that “Which are the least informed, least useful comments?” Here are Claude’s answers for the best comments and the original comments (no indent on Claude):
Jack of all disciplines (2024-08-19 09:26:51):
The NFL is a clever analogy, but were this not such a small part of the economy we’d surely have fights over value creation, opportunity, and fairness even if we could measure performance in other careers as well as we can in professional athletics. Genes matter a lot for economic outcomes, for example. Is this fair or unfair? We’d be fighting a lot about that question even if we could provide every reasonable opportunity for everyone to increase their human capital to their full potential and could measure one’s contribution to society perfectly.
This comment acknowledges the NFL analogy as clever while pointing out its limitations. It expands on the discussion by noting that genetics play a large role in economic outcomes beyond just athletics, raising thoughtful questions about fairness and opportunity that go beyond the original analogy.
Marginalist Cormac (2024-08-19 11:42:54):
The point that most of the comments here are unwilling to accept is a undeniable fact of reality:
Every equal society known to man in practice has been way, way poorer than the more unequal societies. Across the board: poorer economically, socially, with more poverty, more resentment, less freedom, less access to health and leisure, less optimistic and less dynamic.
Voila!
While brief, this comment shows understanding of the op-ed’s broader implications. It productively shifts the discussion to empirical outcomes, noting the historical correlation between inequality and overall societal prosperity. This adds a valuable perspective to consider alongside the ethical arguments presented in the original piece.
Saturn (2024-08-19 08:10:08):
The analogy makes me think that Alex is now sympathetic to strong government, unions and price controls/salary caps. Go Kamala!
This comment, while brief, cleverly turns the op-ed’s argument on its head in a thought-provoking way. By suggesting that the NFL analogy actually supports “strong government, unions and price controls/salary caps,” the commenter highlights potential inconsistencies in using the NFL as a model for free-market economics. This response shows a keen understanding of the op-ed’s premise and critically engages with it in a witty and insightful manner.
Alex again: Here are Claude’s answers for the worst comments. In this case I do not include the original comment but I checked and Claude is correct. EdR is usually much better!
It’s much easier to agree on the worst than the best comments. I would have no problem letting Claude delete the worst comments.
- Skeptical American (2024-08-19 08:37:25): This comment attacks Bernie Sanders personally rather than engaging with the content of the op-ed. It uses inflammatory language and makes accusations without providing evidence or constructive criticism. This type of comment doesn’t contribute to a reasoned debate about inequality.
- EdR (2024-08-19 14:26:49): This comment veers off-topic to make personal attacks against Kamala Harris, including unsubstantiated claims about her personal life. It doesn’t address the arguments in the op-ed and instead engages in inflammatory rhetoric that doesn’t contribute to a productive discussion about inequality.
Hat tip: Robin Hanson who suggested the experiment.