Yet again FEE.ORG, the Foundation for Economic Education, comes up with a winner. The headline is Senators Are Urging Trump to Nationalize the Medical Equipment Supply Chain. That Would Be Lethal. “As the famed British economist Lionel Robbins once observed, economics is about finding the best ways to allocate scarce resources that have alternative uses. While it’s tempting to believe that experts could coordinate the use of resources through a centralized government better than individuals can, centuries of studying economies has taught us that that just isn’t true.
“An economy is the result of millions of people’s constant interactions—cooperating and competing to produce goods and services, trading with each other, and coming up with entrepreneurial solutions to human problems. They are complex and organic, not machines that can be directed by policy-makers. No single producer and central authority can possibly know what is most needed in a given economy consisting of millions of people and products. We overcome this problem by relying on information that comes from price signals. Prices are knowledge wrapped in incentives, and they’re the best tool an economy has to allocate resources.” Read that again, my fine-feathered “price gouging” complainers. When was the last time you refused to buy buttered popcorn at the movies because of price gouging? You people need to think rather than sloganize!
“The solution to shortages of items such as respirator masks, ventilators, and protective eye gear is to harness the massively productive power of what produced them in the first place: profit-seeking entrepreneurs. This can be achieved by lowering regulatory barriers, which are inhibiting production and distribution of essential products, and by incentivizing more production through pricing. Despite easing of regulations in some areas of the economy, the market remains hogtied when it comes to ramping up production of needed medical supplies. It can take up to three months to approve facilities for production of essential products we need now. Elon Musk just delivered 1,255 life-saving ventilators that he purchased from China’s surplus, but it would be far better if he was allowed to produce ventilators that are in short supply world-wide. He’s indicated that this is something his team can do, but the Food and Drug Administration has to agree to waive their lengthy approval process.
“The FDA has been a major barrier to an effective coronavirus response from the outset, not only by restricting the production and distribution of life-saving medical devices like ventilators, but by imposing strict limits on who was allowed to develop and conduct tests. The outbreak in Washington State was only discovered once a Seattle lab went around the FDA and conducted tests in their own clinic. The lumbering regulatory structure of our healthcare system delayed the collection of essential information on the spread of the disease for weeks. Nationalizating the distribution of ventilators—or any other critical resource urgently needed by coronavirus patients—would put the entire country at risk. Central planners will never be able to match the efficiency of the marketplace, even with the help of Big Data. They simply lack the knowledge, though few are inclined to admit this, as the famed economist F.A. Hayek once observed.” Why is it that the bureaucratic mindset seems to be associated—as in conjoined, like Siamese Twins—with inefficiency, stagnation, shortages and inevitably, tyranny? The last one is simple: No populace would voluntarily tolerate the first three, so tyranny is necessary to put them in their place.
“The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design,” the Nobel Laureate economist wrote in The Fatal Conceit. “To the naive mind that can conceive of order only as the product of deliberate arrangement, it may seem absurd that in complex conditions order, and adaptation to the unknown, can be achieved more effectively by decentralizing decisions and that a division of authority will actually extend the possibility of overall order. Yet that decentralization actually leads to more information being taken into account.” Instead of calling on the president to nationalize the medical supply chain, which is certain to exacerbate the shortages, lawmakers should be urging the president and the FDA to allow entrepreneurs like Musk to produce the equipment we so desperately need.”
We can’t leave this subject without hearing from The Babylon Bee: WASHINGTON, D.C.—Congress has asked all non-essential businesses to limit their hours or close entirely for an undetermined amount of time. But this shutdown mistakenly shut down the most non-essential entity of all: the government. For a brief period of time, all government in the United States was illegal, since it is completely non-essential to everything. “Oops,” said Senator Mitch McConnell. “We meant non-essential private businesses. Of course, the government is always essential, even when it’s not doing anything or is making things worse.”
Senators, congresspeople, and bureaucrats frantically rewrote the ban to include only businesses that actually produced something and not government agencies that just watched other people make stuff (and, I might add, take their cut off the top). Though they had dragged their feet on passing bills related to relieving the financial distress of the shutdown, they passed this revision in record speed, almost as quickly as they vote for pay raises for themselves. Speaker of the House Nancy Pelosi said she would have caught the mistake but had passed the ban in a hurry, saying, “We had to pass the ban to see what it did.”