From: Matthew Gingell (gingell@gnat.com)
Date: Tue Nov 12 2002 - 15:53:38 MST
Damien Sullivan writes:
> But now vancomycin bacteria are cropping up -- vancomycin being the antibiotic
> of last resort. Your use of antimicrobial soap or bad use of medical
> antibiotics increases my risk of dying. Sounds like a real market failure to
> me. Anders, you might think about staying in Sweden -- at least they seem to
> be taking the problem of hostile replicators seriously. Our new government
> here would probably rather subsidize use of antibiotics by agribusiness than
> ban and regulate their (mis)use.
This is an interesting example, but I don't think it differs a great
deal from any other behavior which generates externalized costs.
While the tragedy of the commons is often used as a justification
for regulation by the state, David Friedman (www.daviddfriedman.com)
has made an argument it can be more efficiently addressed by a well
defined system of property rights.
In this case there are two possible scenarios, two differant
definition of property. You can either use Vancomycin without my
consent, or the rights conferred by "owning" the antibiotic do not
extend to using it indiscriminately. In either case, we can negotiate
an equitable outcome:
1.) If you need my consent, you buy it from me. I determine what
your usage actually costs me in terms of how much more risk it
forces me to assume and I offer to sell you my permission for,
say, $1,000. If your life is in danger and Vancomycin will save
it, that's a great deal for you, or more likely your life or
health insurance provider, and you pay. If you're not
particulary sick but you'd feel slightly cleaner with
Vancomycin soap, it isn't worth it and at $1,000 you buy a new
TV instead.
2.) You don't need my consent, so I pay you not to use Vancomycin.
Your decision process is the same: If you really need it, it's
worth more to you than I want to spend having you abstain. If
you don't need it, you'll happily take my money and do
something else.
I want to point out I don't necessarily buy the argument, my biggest
reservation being the enormous transaction costs involved in coming
to arrangements like this. It may well be cheaper, globally, to have
some external agency simply tell you you're not sick enough to merit
such a scare resource. Never the less, it's still possible to imagine
a system in which freely negotiated contracts arrive at an equitable
and efficient outcome. Perhaps insurance agencies or health care
providers act as brokers: I agree not to use antibiotics
unnecessarily as part of a standard policy agreement, or I agree to
allow my doctor to prescribe antibiotics to my fellow patients as he
sees fit as a standard part of my agreement with him.
I am not a libertarian or an economist, but it's food for thought.
Regards,
Matt
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