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If there’s a lesson from the pandemic, it is that the US failed not because of central planning and coordination, but lack thereof. https://twitter.com/conor64/status/1346276342027849728
Wasn't going to do this thread, but now I have to: It's true that CDC failed miserably. But the relevant question is whether the counterfactual situation would have worked. The short answer is no, since this would have only exasperated testing shortages. https://twitter.com/conor64/status/1346295810997194752?s=20
But let's start by distinguishing between bureaucratic control and central planning. These two are obviously closely related, but they have to be treated separately if we want to understand why privatization would not have solved the testing problem.
Undoubtedly, CDC's failure to roll out a test on a timely fashion was about a failure of bureaucratic control. Why? Because CDC actually had a test that actually worked as of January 17. Then, what about the faulty tests you will ask. This is where things get interesting.
Initially, CDC developed the standard test for Covid-19, with two reagents (N1 and N2). This test was used at the CDC headquarters, and it worked. But CDC also developed a second type of test to be distributed to state and local labs.
This test was supposed to detect not just the coronavirus that caused Covid, but also all other types of coronaviruses. To do this, CDC scientists added a third reagent (N3), which turned out to be the source of the problems. And CDC knew about this as early as February 8.
Why did CDC not just revert to the working test and instead kept trying to fix the more "sophisticated" test then?
This is where the libertarian claims about bureaucratic control fail. These claims make only sense if we ignore the existence of the working test.
This is where the libertarian claims about bureaucratic control fail. These claims make only sense if we ignore the existence of the working test.
A better question is why would CDC allow a scientist to run amok for weeks with a test that failed when they actually had a test that worked. The answer is in not bureaucratic control, but what we may call bureaucratic anomie.
First, CDC's top cadre was not qualified to effectively manage its "star" scientists. The political appointees miserably failed to discipline the middle-range bureaucracy, and in the absence of proper bureaucratic control, ambitions of a scientists caused a disaster.
Second, this failure at the top also meant that a bottom up narrative that underestimated the threat of the virus could dominate the organization's leadership. Weak leadership, in turn, allowed scientists to experiment with their fancy tests.
Now that we established CDC's problem is not bureaucratic control, but bureaucratic anomie, let's turn to the counterfactual about the free market (in opposition to central planing). The claim here is that if CDC had allowed private companies to step in, we would have had tests!
There are two major problems with this narrative. First of all, FDA in March did allow private companies to develop their own (antibody) tests. As libertarians would like, FDA also allowed companies to confirm their own tests' precision! Essentially, free market all the way.
So, then why don't we still have tests and had so much shortage for so long? Well, vast majority of the tests turned out to be garbage in terms of their reliability. Some were accurate only 20-30% of the time.
What is more important however is that without some sort of central planning and coordination mechanism we were doomed to have chronic and acute testing shortages first and foremost because we could not control the pandemic, which meant demand for testing rapidly increased
This meant that testing kit shortages that began in March quickly turned into testing materials bottlenecks. First it was the reagents, then the swabs, then the PPE and so on. As one bottleneck was solved, another piece of the testing *infrastructure* became constraint on tests.
So, why did this happen? Because the US abolished after the Cold War in the 1990s the institutional capacity that was developed in the wake of WWII to mobilize resources in an emergency where demand led to near-full capacity utilization in the supply chains.
In the absence of central planning mechanism that balanced production horizontally along all points of the testing *system*, we got such a degree of misallocation of resources that now allocation of reagents for testing has become a bottleneck for <<wait for it> the vaccine!
Moral of the story:
1) Bureaucratic anomie, and not control, caused the initial testing fiasco;
2) Inapt political appointees and therefore Trump is responsible for this bureaucratic failure;
3) Even if private sector would have been allowed to develop tests earlier, shortages
1) Bureaucratic anomie, and not control, caused the initial testing fiasco;
2) Inapt political appointees and therefore Trump is responsible for this bureaucratic failure;
3) Even if private sector would have been allowed to develop tests earlier, shortages
would ensue due to the absence of a state capacity to coordinate the mobilization of strategic and critical resources for testing.
