Source Newsroom: Swarthmore College
Newswise — What does the flu vaccine shortage have in common with the September 11 terrorist attacks? They are both the consequence of America's aversion to "big government," says Swarthmore College economist Mark Kuperberg.
The way to avoid future repeats of the vaccine shortage, Kuperberg argues, is government action on two fronts: one, extending to flu vaccine manufacturers the protection afforded to makers of childhood vaccines under the National Vaccine Compensation Fund and, two, mechanisms similar to those used in agriculture that protect manufacturers from getting stuck with unused supplies.
"In the public discussions about September 11, one important fact that has been lost is the extremely lax passenger screening system that existed prior to the attacks," says Kuperberg, who teaches macroeconomics and is co-editor of Law, Economics, and Philosophy: A Critical Introduction with Applications to the Law of Torts. "Why was it lax? Because the screening system was run by the airlines, and they had an incentive to spend as little as possible. This was a failure of the private sector.
"The idea of 'big government' has very negative connotations in today's political climate," Kuperberg adds, "but as I have taught my students for 27 years, there is a role for government in correcting market failures. There are things that the private sector can do better than the government, and the private sector should be doing those things; but there are things that the government can do better than the private sector, and the government needs to be doing them."
The flu vaccine situation, Kuperberg says, is a prime example of the latter. Left on its own, the private sector is bound to under-provide for public health. One factor, as argued by President Bush in a recent debate with John Kerry, is the threat of lawsuits. "While I believe the President greatly exaggerates the economic impact of lawsuits, they certainly are a problem for vaccine manufacturers," Kuperberg says. "However, there is no reason why they cannot be covered by the federal government's vaccine compensation fund, which compensates victims of childhood vaccines for their injuries if they give up their right to sue manufacturers."
Another problem is uncertain demand for vaccinations, which makes it risky for manufacturers to get into the flu vaccine business, the Swarthmore economist notes. To overcome this disincentive, he says, the government could set a price at which it would buy unused vaccines, similar to the way agricultural price supports work. Alternatively, the government itself could produce and distribute the vaccine.
"The problem with these approaches," Kuperberg says, "is that they're likely to get tagged with those two fatal words " 'big government.' That's unfortunate, because many of the problems facing us today require solutions that transcend the senseless debate between small-government and big-government ideologues. Sure, 'big government' can cost you. But as the September 11 attacks and the looming flu vaccine shortage demonstrate, small government can kill you."
Located near Philadelphia, Swarthmore is a highly selective liberal arts college whose mission combines academic rigor with social responsibility. Swarthmore, with an enrollment of 1,500, is consistently ranked among the top liberal arts colleges in the country.