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There's a shortage of masks because the production facilities for masks cannot be built and staffed instantly. If you tried to start one up now, the price will

There's a shortage of masks because the production facilities for masks cannot be built and staffed instantly. If you tried to start one up now, the price will likely have collapsed by the time you have it running, leaving you with an unprofitable facility.

beaner 7y ago
If the price will have collapsed, that means demand is expected to fall, meaning whatever's causing the current demand isn't a real problem. Is that the case?
- arpa 7y ago
  Of course! Covid-19 panic is not going to last forever either way.
  - beaner 7y ago
    So there's no harm in short term price rise.
    - anigbrowl 7y ago
      Of course there is, people who need them may be unable to economically purchase them. Basic price theory only obtains under specific conditions like perfect competition, perfect information, fungibility of commodities, and zero friction for market entry and exit.
      - baddox 7y ago
        Isn’t the fact that some people will be unable to afford them (or some other potentially lifesaving product) when they need them a problem that needs to be addressed either way? I feel like we’ll be talking around the problem forever if we ignore the fact that “willingness to pay” is a useful concept economically but probably doesn’t match most people’s moral intuition about who ought to get lifesaving resources.
        anigbrowl 7y ago
        It works great for consumer goods, like coffee and beer. As soon as you start trying to apply it to things like medicine and the producer surplus comes with a body count.
      - beaner 7y ago
        If people can't afford them then they won't be purchased and the manufacturer will not make a profit. The manufacturer must price it's goods such that they will still be purchased, and higher prices in periods of high demand means people won't buy more than they need. This makes products more available, not less.
        anigbrowl 7y ago
        Not to poor people, an extremely obvious fact that some people seem to wilfully ignore.
        beaner 7y ago
        Yes, it does. Poor does not mean abject poverty. If the good is actually a necessity, someone who is poor is unlikely to refuse spending $20 instead of $10, to avoid death.
nullc 7y ago
If it were possible to sell supplies like this at inflated prices during times of need there would be more incentive for parties to maintain stocks during low demand times.
- bostik 7y ago
  There would also be an incentive to manufacture more times of need.
  - bryanrasmussen 7y ago
    right, the odds are that mask makers would invest in the bio-engineering facilities to manufacture a new pandemic to make a killing in new sales.
    - nullc 7y ago
      hah. Be charitable, you could just as equally say that there would be an incentive to over-hype risk. This is a potential conflict of interest people could suffer from without even realizing what they were doing.
      - bryanrasmussen 7y ago
        sure there could be an incentive to overhype risk, however when was the last time you listened to a mask maker's analysis of risk? People barely listen to WHO, the CDC, and their local physician, it's really quite a bit much to suppose that they would listen to the mask maker.
        sokoloff 7y ago
        Which is why you don't do it as the mask maker. http://www.paulgraham.com/submarine.html http://www.paulgraham.com/submarine.html
- sixothree 7y ago
  Nothing is stopping you from selling these supplies at inflated prices. There is no market failure here.
buzzkillington 7y ago
Mask production is not a terrible bottle neck [0] I could have a factory setup within a week with 5 million in capital. [0] https://www.youtube.com/watch?v=bR5GV8shCz0 https://www.youtube.com/watch?v=bR5GV8shCz0
londons_explore 7y ago
I own equipment, have stock, and have staff that could start making masks this afternoon (I normally make decorative covers for custom car interiors). It probably isn't as fast as other production lines, but I could probably make 2 masks per second, and if I brought in night workers, that works out to a million masks a week. Not much, but profitable if I could sell them at inflated prices, but not at regular prices. I don't though, because I don't have the contacts to be able to sell them. And anyway, I'm scared of liability if my masks don't work as expected. That equipment will sit idle if coronavirus spreads to my bit of the world.
- hef19898 7y ago
  Also medical rated masks that are actually any good against COVID-19 or just dust masks? Medical certification, unless it is sped up considerably, will most likely take longer than the shortage itself.
- MertsA 7y ago
  It's absolutely crucial that masks actually filter out very fine particulates. N95 masks are rated to filter out >=95% of 0.3 micron particles. You probably have the stock to make something close enough to a typical surgical mask, but that's not going to protect the wearer from Coronavirus, at best it would prevent a contagious patient from spreading it. You also need to form the mask such that the edges will seal against the face. I doubt you have suitable filter media on hand, and tight woven fabric will not cut it here. It's significantly harder to trap virus laden particles in the air after they've dried out, so coarse filter media is only going to be effective if it's right in front of the source where the breath is still hot and humid.
  - voidmain 7y ago
    In fact, at least one study has found plain old surgical masks noninferior to N95 masks for preventing infection by flu (others have found them a little worse, and that's probably the smart way to bet). Common sense suggests that anything that prevents you from touching your mouth would help at least a little. There is a difference between the best tool for the job and better than nothing. Our civilization has a dangerous habit of mandating the best tool for the job, and then unnecessarily suffering with nothing in an emergency. Moreover, even if the party line that coarse unsealed masks are completely worthless at protecting the wearer from infection were true, it would still make a big difference in the rate of spread of the virus for everyone to start wearing masks! Who cares what the private benefit is when there is definitely a public benefit? And yes, we could make plenty of masks for everyone if we weren't crippled by regulation, hatred of supply and demand, and the attitude that inaction is better than imperfection.
usrusr 7y ago
Yes, that is why it is important to allow businesses to profit from costly overcapacities. Funding overcapacity in a free market through regulation would be even more prone to abuse than most other regulatory projects. Perhaps the public stockpiling that is done anyways could buy in an artificially erratic pattern to reward manufacturers for readiness? Regarding eBay in particular I think that it is very valuable that they block at least block sellers that haven't routinely sold the product before, to hinder not only opportunistic speculation but also outright theft which is currently an epidemic of its own.

beaner 7y ago

If the price will have collapsed, that means demand is expected to fall, meaning whatever's causing the current demand isn't a real problem. Is that the case?

arpa 7y ago
Of course! Covid-19 panic is not going to last forever either way.
- beaner 7y ago
  So there's no harm in short term price rise.
  - anigbrowl 7y ago
    Of course there is, people who need them may be unable to economically purchase them. Basic price theory only obtains under specific conditions like perfect competition, perfect information, fungibility of commodities, and zero friction for market entry and exit.
    - baddox 7y ago
      Isn’t the fact that some people will be unable to afford them (or some other potentially lifesaving product) when they need them a problem that needs to be addressed either way? I feel like we’ll be talking around the problem forever if we ignore the fact that “willingness to pay” is a useful concept economically but probably doesn’t match most people’s moral intuition about who ought to get lifesaving resources.
      - anigbrowl 7y ago
        It works great for consumer goods, like coffee and beer. As soon as you start trying to apply it to things like medicine and the producer surplus comes with a body count.
    - beaner 7y ago
      If people can't afford them then they won't be purchased and the manufacturer will not make a profit. The manufacturer must price it's goods such that they will still be purchased, and higher prices in periods of high demand means people won't buy more than they need. This makes products more available, not less.
      - anigbrowl 7y ago
        Not to poor people, an extremely obvious fact that some people seem to wilfully ignore.
        beaner 7y ago
        Yes, it does. Poor does not mean abject poverty. If the good is actually a necessity, someone who is poor is unlikely to refuse spending $20 instead of $10, to avoid death.

nullc 7y ago

If it were possible to sell supplies like this at inflated prices during times of need there would be more incentive for parties to maintain stocks during low demand times.

bostik 7y ago
There would also be an incentive to manufacture more times of need.
- bryanrasmussen 7y ago
  right, the odds are that mask makers would invest in the bio-engineering facilities to manufacture a new pandemic to make a killing in new sales.
  - nullc 7y ago
    hah. Be charitable, you could just as equally say that there would be an incentive to over-hype risk. This is a potential conflict of interest people could suffer from without even realizing what they were doing.
    - bryanrasmussen 7y ago
      sure there could be an incentive to overhype risk, however when was the last time you listened to a mask maker's analysis of risk? People barely listen to WHO, the CDC, and their local physician, it's really quite a bit much to suppose that they would listen to the mask maker.
      - sokoloff 7y ago
        Which is why you don't do it as the mask maker. http://www.paulgraham.com/submarine.html http://www.paulgraham.com/submarine.html
sixothree 7y ago
Nothing is stopping you from selling these supplies at inflated prices. There is no market failure here.

buzzkillington 7y ago

Mask production is not a terrible bottle neck [0] I could have a factory setup within a week with 5 million in capital. [0] https://www.youtube.com/watch?v=bR5GV8shCz0 https://www.youtube.com/watch?v=bR5GV8shCz0

londons_explore 7y ago

I own equipment, have stock, and have staff that could start making masks this afternoon (I normally make decorative covers for custom car interiors). It probably isn't as fast as other production lines, but I could probably make 2 masks per second, and if I brought in night workers, that works out to a million masks a week. Not much, but profitable if I could sell them at inflated prices, but not at regular prices. I don't though, because I don't have the contacts to be able to sell them. And anyway, I'm scared of liability if my masks don't work as expected. That equipment will sit idle if coronavirus spreads to my bit of the world.

hef19898 7y ago
Also medical rated masks that are actually any good against COVID-19 or just dust masks? Medical certification, unless it is sped up considerably, will most likely take longer than the shortage itself.
MertsA 7y ago
It's absolutely crucial that masks actually filter out very fine particulates. N95 masks are rated to filter out >=95% of 0.3 micron particles. You probably have the stock to make something close enough to a typical surgical mask, but that's not going to protect the wearer from Coronavirus, at best it would prevent a contagious patient from spreading it. You also need to form the mask such that the edges will seal against the face. I doubt you have suitable filter media on hand, and tight woven fabric will not cut it here. It's significantly harder to trap virus laden particles in the air after they've dried out, so coarse filter media is only going to be effective if it's right in front of the source where the breath is still hot and humid.
- voidmain 7y ago
  In fact, at least one study has found plain old surgical masks noninferior to N95 masks for preventing infection by flu (others have found them a little worse, and that's probably the smart way to bet). Common sense suggests that anything that prevents you from touching your mouth would help at least a little. There is a difference between the best tool for the job and better than nothing. Our civilization has a dangerous habit of mandating the best tool for the job, and then unnecessarily suffering with nothing in an emergency. Moreover, even if the party line that coarse unsealed masks are completely worthless at protecting the wearer from infection were true, it would still make a big difference in the rate of spread of the virus for everyone to start wearing masks! Who cares what the private benefit is when there is definitely a public benefit? And yes, we could make plenty of masks for everyone if we weren't crippled by regulation, hatred of supply and demand, and the attitude that inaction is better than imperfection.

usrusr 7y ago

Yes, that is why it is important to allow businesses to profit from costly overcapacities. Funding overcapacity in a free market through regulation would be even more prone to abuse than most other regulatory projects. Perhaps the public stockpiling that is done anyways could buy in an artificially erratic pattern to reward manufacturers for readiness? Regarding eBay in particular I think that it is very valuable that they block at least block sellers that haven't routinely sold the product before, to hinder not only opportunistic speculation but also outright theft which is currently an epidemic of its own.