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That sounds nice, but a singular entity within a government, entrusted with the necessary power to regulate the relevant parts of the market without too much co
by Slartie 5y ago
That sounds nice, but a singular entity within a government, entrusted with the necessary power to regulate the relevant parts of the market without too much coordination overhead with other government entities, is actually much more efficient at resolving market inefficiencies than the free market. Case in point: production of vaccines.
That's also obvious: the inefficiency in governments originates largely from coordination overhead between many competing entities with overlapping responsibilities. Self-regulating systems like markets do not eliminate that overhead, they just use other means of coordination that trade some of the complexity overhead for a time overhead - instead of having to coordinate a complex set of rules, you now have to give the system enough time to "find" its stable state. But when time is of the essence, an intelligent, singular entity without the need for coordination with anyone besides the entities to be regulated can always outcompete the self-regulating system when it comes to short-term stabilization (though not necessarily with regard to long-term stabilization, but that's not the issue here).
- freewilly1040 5y agoThe government did very little in managing vaccine production other than act as purchaser, how is this an example of them managing a market?
- Slartie 5y agoThe US government regulated critical parts of the supply chain of raw materials and preproducts in order to ensure that US manufacturers have no sourcing problems. It then compelled the manufacturers into exclusively servicing the US purchase contracts first before fulfilling competing contracts from other global buyers with any of the finished product produced on US territory. I'd call that quite a lot of "market management". But as everyone could see it resulted in the fastest vaccination ramp-up worldwide (excluding Israel, which was a bit faster, but is also much smaller than the US and which had its own way to get "preferred" access to vaccine produced in the EU).
- freewilly1040 5y ago> regulated critical parts of the supply chain of raw materials and preproducts I'm unfamiliar with this having happened, but if it did as you say that would definitely support your point. > It then compelled the manufacturers into exclusively servicing the US purchase contracts Wasn't this just a component of the purchasing contract? I would draw a distinction between cases where the gov was a purchaser and where it was not.
- lostdog 5y agoThe US government subsidized the vaccines, effectively pre-purchasing enough so that manufacturing could be ramped up faster than normal. https://en.wikipedia.org/wiki/Operation_Warp_Speed https://en.wikipedia.org/wiki/Operation_Warp_Speed