Though the end is hopefully in sight, or at least coming into focus, policymakers are still struggling with the biggest public health crisis in a century. Impressive steps have been taken in areas such as the development of vaccines, but there have also been a series of missteps. Critics have argued that a number of these mistakes reflected an unwillingness to think hard enough about costs and benefits, and perhaps in some cases a misapplication of medical ethics.
From very early in the pandemic, economists have been criticizing our regulatory approach to testing, masks, vaccine studies and vaccine distribution. In each case, policymakers seem to have imposed significant harm in attempts to achieve a more ethical outcome.
In February, the Centers for Disease Control and Prevention (CDC) actively discouraged doctors and researchers from using locally made tests for COVID-19, as they hoped to develop a superior test. This was followed by major delays in testing, which allowed the virus to spread widely in coastal cities before there was a general awareness of the danger.
Early in the pandemic, some health care officials discouraged the public from wearing masks, arguing that they were not effective for average people. This turned out to be a white lie, partly motivated by fears that mask wearers would be overconfident and that there would be too few masks for medical personnel. Unfortunately, it made the public even less trustful of official pronouncements. Public health officials should not pretend to be social psychologists.
The mask shortage was made worse by government officials discouraging “price gouging.” Most people view price gouging negatively, as an example of companies ripping off consumers in need. Unfortunately, non-economists often underestimate the responsiveness of supply to price signals. Manufacturers respond so quickly to higher market prices that even consumers ultimately gain. The best way to address shortages in crucial areas like hospitals is with government subsidies, not price controls that restrict supply.
China quickly ramped up mask production, exporting 70 billion of them by May, more than three times global production in 2019. At the time, the United States had mask assembly lines shut down because the price was too low to justify production, even as medical personnel were short of masks. Market prices are the most effective way of allocating scarce resources, even in a crisis.
Vaccine development was slowed by a number of unfortunate decisions. Trials were temporarily suspended if a participant became sick, even though the cost of delay is huge, with thousands of deaths each day. Medical ethicists discouraged “challenge studies,” which can speed up testing by giving young and healthy volunteers an injection of a virus to test a vaccine’s effectiveness. Challenge studies are already used for less serious illnesses, and the risks of COVID-19 for young and healthy people are low enough to justify them, especially given the huge cost of delay. It was a missed opportunity.
Once the safety and efficacy trials were successfully completed, the FDA should have immediately given conditional approval to begin vaccinating health care workers, even as they deliberated for weeks over whether to approve the drug for the broader public. Instead, they needlessly delayed the rollout, as thousands continued to die each day.
Admittedly, there was a tiny risk that this approach could have led to a retreat by the FDA if the drug data ended up being less promising than the initial numbers suggested. But again, that risk must be balanced against thousands of deaths each day. Official statements kept referring to the need to go slow so that the public would be ”confident” of the process, even though there are no scientific studies to justify this sort of “armchair social psychology” by public health officials.
The rollout of the vaccine program has also been delayed as medical officials wrestled with the ethical question of who should go first. Now, vaccinations are occurring much more slowly than planned (and slower than in countries such as Israel), as thousands continue to die each day.
The economic approach to these questions is not in opposition to an ethical approach, properly understood. Economists emphasize that while we need to consider the risks of an overly hasty approach to addressing a public health issue, we also need to give exhaustive consideration to the costs of unnecessary delay. Don’t let the perfect be the enemy of the good.
Scott Sumner is the Ralph G. Hawtrey Chair of Monetary Policy with the Mercatus Center at George Mason University and a professor emeritus at Bentley University.