EconTalk |
John Cochrane on the Pandemic
Feb 22 2021

covid-test-300x200.jpg Would the impact of the pandemic have been different if government and policymakers had been more open to more market-based responses and less committed to a top-down approach? Economist John Cochrane of Stanford University's Hoover Institution talks with EconTalk host Russ Roberts about the pandemic and the policy response. Cochrane believes outcomes would have been much better if governments, in the United States and elsewhere, had embraced approaches that relied more on market forces.

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Explore audio transcript, further reading that will help you delve deeper into this week’s episode, and vigorous conversations in the form of our comments section below.


Stephen Gordon
Feb 22 2021 at 8:44am

I think there’s a small factual mistake early on. The FDA did not approve thalidomide for use in the US. There was a testing program in the US which resulted in relatively few children with birth defects (Wikipedia says 17) as compared to thousands in Europe where the drug was approved by authorities. So the guest is right that it reinforced the FDA’s conservative approach to licensing drugs, but it happened via a case that was seen as a big success of the FDA’s approach, not a failure.

James Bailey
Feb 22 2021 at 10:43am

Cochrane was mistaken, but the full story is even more bizarre than you indicate. The FDA did not approve Thalidomide, but the scandal of its approval in Europe did lead to the US Harris-Kefauver Amendment of 1962, a major expansion of FDA power that required drugs to be “effective” in addition to “safe” (the FDA previously only regulated safety). What’s odd about this is that Thalidomide was effective at its stated goal (preventing morning sickness) but NOT safe, and the FDA had rejected it as unsafe using their existing powers, so it made no sense as a reason to start regulating effectiveness.

Andrew Wagner
Feb 22 2021 at 9:53am

The annual flu vaccine, which is tremendously effective at preventing people from having flu symptoms, does not prevent people from transmitting the virus from person to person. Unfortunately, it’s extremely difficult to conduct a clinical trial to determine the effectiveness of a vaccine at preventing spread–not only would you have to expose people who took the vaccine, as you mentioned in the discussion–you would also have to knowingly expose a cohort of third-parties to that vaccinated group.

As a result: we still do not know if the vaccine will prevent transmission of the virus! (We might be getting our first indication of that out of Israel as we speak). And so, the decision to protect seniors instead of juniors is based on sound reasoning. We know the vaccine will prevent mortality in the most vulnerable. We do not know if vaccinating the ‘super spreaders’ will actually reduce the spread.

John Alcorn
Feb 22 2021 at 10:06am

Thank you for this helpful comment! I hadn’t come across this point, despite wide reading about the pandemic and vaccines.

Matt King
Feb 25 2021 at 8:23am

This is a critical point, which I believe is correct, and It undercuts much of the episode’s discussion.

Tanya U
Feb 25 2021 at 10:13am

Thank you! This so much!

Jonathan Seder
Feb 25 2021 at 1:28pm

The annual flu vaccine… does not prevent people from transmitting the virus from person to person.

Do you have a reference for this assertion? I couldn’t find any studies that reached this conclusion, but I did find several studies that suggest the opposite.

John Alcorn
Feb 26 2021 at 10:53am

@Andrew Wagner,


“we still do not know if the vaccine will prevent transmission of the virus!”

New research findings indicate that the Pfizer/BioNTech vaccine greatly reduces transmission. See findings (published 22 February 2021) from the SIREN study (UK):

“We have estimated the vaccine effectiveness against all (symptomatic and asymptomatic) infection for the BNT162b2 vaccine to be at least 70% 21 days after the first dose, which increased to at least 85% seven days after the second dose. [… .] We provide strong evidence that vaccinating working age adults will substantially reduce asymptomatic and symptomatic SARS-CoV-2 infection and therefore reduce transmission of infection in the population.” (p. 4)

Moreover, early findings in Israel indicate that vaccination causes sharp reduction in viral load. (Reduction in viral load is a mechanism that reduces transmission.) See “Decreased SARS-CoV-2 viral load following vaccination” (published 6 February 2021):

Beyond their substantial protection of individual vaccinees, it is hoped that the COVID-19 vaccines would reduce viral load in breakthrough infections thereby further suppress onward transmission. Here, analyzing positive SARS-CoV-2 test results following inoculation with the BNT162b2 mRNA vaccine, we find that the viral load is reduced 4-fold for infections occurring 12-28 days after the first dose of vaccine. These reduced viral loads hint to lower infectiousness, further contributing to vaccine impact on virus spread.”

For a broader overview of current findings about impact of vaccination on transmission, see Kelsey Piper, “The growing evidence that the Covid-19 vaccines can reduce transmission, explained,” Vox (23 February 2021).

John Alcorn
Feb 22 2021 at 10:01am

EconTalk at its best! John Cochrane is a treasure as a public intellectual: expert, incisive, reliable, crystal clear — and he thinks outside the box. Compliments also to Russ Roberts for a well-proportioned, probing interview about a sprawling, contentious topic.

A knee-jerk reaction: I was surprised and dismayed to hear that the interview was recorded 4 weeks ago (January 26th). If ever there was an episode that deserved immediate, accelerated release (say, just the audio recording, without the “Delve Deeper” resources and transcript), because of the topic’s urgency, this is it! (Don’t get me wrong, I devoured the EconTalks about Shakespeare, altruism, a fishing village, and poetry in the past month, but those topics are timeless and can wait a week.) On second thought, however, I see that the interview implicitly addresses my knee-jerk reaction, by pointing out that physicians have replaced economists as policy advisors for vaccine allocation. No chance of having any bite in the moment. EconTalk plants seeds that might gradually take root.

A point of substance: Prof. Cochrane insists that he has in mind market allocation “on top of” government allocation. However, the ensuing discussion reveals that he has in mind market allocation at first pass. Individuals, firms, philanthropies, all manner of organizations, and government would be potential buyers. Supply-and-demand and price would operate at first pass. Then the subset of buyers who are organizations or government would sub-allocate to individuals within their scope, using a variety of criteria (age, status, health status, opportunity cost, queue, willingness to pay, public opinion, etc). Market allocation at first pass — to be followed by ‘local justice’ or internal markets for sub-allocation by organizations — makes sense to me.

Or perhaps what Prof. Cochrane means by “on top of” government allocation is market allocation after the initial production run (200 million doses?) involved in the government’s advance-purchase agreement with pharmaceutical firms to incentivize vaccine development?

Perhaps a fuller, more specific sketch of how markets would reduce bottlenecks, increase production, and solve logistical problems in vaccine production and delivery might help and persuade more people.

A question: Given the lamentable (inexplicable?) failure to implement swift surveillance testing of stratified, random samples of individuals early in the pandemic, might prompt indirect surveillance — for example, testing of sewage or residential waste water in urban settings — have served as an effective substitute?

Skip Franklin
Feb 22 2021 at 10:45am

What a Pollyanna-ish version of a deregulated world. “Oh, if we just allowed quick tests with unproven accuracy, the pandemic would have died out!” Right after saying the biggest spread is from a few super spreader events/people, who would of course be the ones in position to refuse or ignore the tests. And “if we’d allowed every vaccine to be used without long tests, the pandemic would be over!” Maybe, or maybe we’d have killed another few thousand people with a vaccine mistake, or worse caused them long-term medical problems that would make people refuse vaccines of all kinds in the future. “If we’d just let the market set the price, the vaccine and other products would be distributed better.” But only if you ignore the massive pre-existing inequality, where a lot of people couldn’t afford a market price and those happen to be the ones who can’t work from home, or need the toilet paper most because they live paycheck-to-paycheck and buy necessities on a regular basis. (Finally got some pushback on that one late in the podcast, which I did appreciate, but there was no mention of the structural inequality at the basis of the problem.) And as for increasing production that way, all it takes is one cut corner by someone trying to go fast to ruin a vaccine batch and people are back to refusing vaccines out of fear. I know this podcast has a libertarian bent but I’m used to Russ pushing back a lot more on some very obvious negatives that are completely ignored by the guest.

There were also some good ideas brought up. Targeting vaccine at people who have to be out and about, like teachers and front-line workers, rather than those unlikely to spread the disease anyway. Also doing a better job of advancing technology in areas like tests and masks, where the negatives of failure aren’t deadly. Doing better data gathering so we can focus lockdowns properly, good idea. Even these have negatives though, mostly around public perception, which was barely mentioned, and when it was, largely dismissed out of hand.

I expect better from Econtalk.

Feb 24 2021 at 5:07pm

I do think the point about opening up and reducing controls on testing was a good, and fair, point. Simply acknowledging that more survellience, early on, even if not perfect would have been better than the almost non-existant, insanely long pole survellience we did/do have (in the US) – it’s hard to argue with that. And for me personally, I would rather let the markets and economic forces sort that out particular one out. Their incentives would be well aligned to the end customers of testing.

I took his main point on this to be that cutting the R-value by some noticable percent could have been possible if people could have detected their own infection and that would have had a dramatic impact on the outcomes that are now part of the history of this thing. Of course we can do “what ifs” all day long, but if I’m alive for another one of these pandemics, I would rather have a test that’s fast to market early on, available to everyone and fast – even if it’s only 75% accurate as that would change the course of (and impact to) people’s lives.


Alan Goldhammer
Feb 22 2021 at 10:55am

There are numerous errors in this Podcast by both Russ Roberts and John Cochrane which is quite disappointing.  It reflects significant confirmation bias and a very poor understanding of vaccine and diagnostics development.

The mRNA vaccine platform was not unknown prior to last January but had been looked at during research into the Zika virus.  Unfortunately, there were no clinical trials of a Zika mRNA vaccine that might have helped further shorten development of both the Pfizer/BioNTech and Moderna vaccines.  Professor Cochrane does not understand safety testing of vaccines.  Phase 1 trials will only reveal a small subset of adverse reactions and the safety issues of vaccines is always the 1 in 10,000 rare events which requires much larger trials than is common for pharmaceuticals.  Human challenge trials do NOT address safety issues as they use small patients in a carefully defined population (young and healthy).  Such trials do not address the dosage needed for older patients who may require a higher dose.

The other issue with mRNA vaccines is the production complexities of a new technology.  These are also sterile products that require exacting process controls.  Additionally, the starting materials for these vaccines is quite different from traditionally produced vaccines and in some cases controls how fast things can be scaled up.  Be thankful that this technology does not require eggs as is the case for the seasonal influenza vaccine.

Going forward, the mRNA vaccines will be readily adaptable to new variants of SARS-CoV-2 as the process has been validated.  Changes in the mRNA payload can be easily done and it appears that regulators will only require a several hundred patient trial to assure antibody production.

Even with a quicker development timeline, production constraints would have still limited roll out.

Professor Cochrane’s comment on super spreaders is just wrong.  While there is evidence that such events led to large numbers of infections, it is not the only means of transmission as the large morbidity and mortality toll in the US has shown.


Feb 22 2021 at 3:59pm

One of the unfortunate results of the poor discussion on this topic in the public sphere is that it’s kind of hard to hear about the counterarguments to Mr. Cochrane’s proposals. Would you be willing to elaborate a bit more on the misunderstandings you see?

Phase 1 trials will only reveal a small subset of adverse reactions and the safety issues of vaccines is always the 1 in 10,000 rare events which requires much larger trials than is common for pharmaceuticals.

I might be overlooking something, but to show safety the trial participants don’t have to get infected by the virus, right? Shouldn’t it be possible to scale this up to as many people as you want rather quickly? I see the difficulty in finding volunteers for human challenge trials, but I cannot imagine that the limiting factor is finding people who are willing to take a 1-in-10000 risk that the vaccine may be unsafe (particularly if they are at high risk of contracting COVID anyway)

Human challenge trials do NOT address safety issues as they use small patients in a carefully defined population (young and healthy). Such trials do not address the dosage needed for older patients who may require a higher dose.

But aren’t human challenge trials intended to address efficacy, not safety? I thought you would perform two trials in parallel, a small human challenge trial to check for efficacy, figure out dosage, etc., and a large traditional safety trial? As I understood it the main thing delaying the studies was to get a sufficient number of infections in the Placebo group for safety results, not the safety question.

Also, is there a reason why human challenge trials cannot be done on older patients? This makes the trials more risky, of course, but this seems to be more of a matter of degree and not of principle. Even if we postulate that human challenge trials cannot under any circumstances be done with older people, wouldn’t it be possible to start giving vaccine to younger people until the traditional trial has figured out the effects on old people?

Professor Cochrane’s comment on super spreaders is just wrong. While there is evidence that such events led to large numbers of infections, it is not the only means of transmission as the large morbidity and mortality toll in the US has shown.

I might be missing something, but how does the large morbidity and mortality toll in the US disprove the super-spreader hypothesis?

(Also, I don’t think he claimed that super spreaders are the *only* means of transmission. If we reduce super-spreader events and cut down transmission by as little as 50% that is still a major improvement and probably game-changing.)

Alan Goldhammer
Feb 23 2021 at 9:42am

I might be overlooking something, but to show safety the trial participants don’t have to get infected by the virus, right? Shouldn’t it be possible to scale this up to as many people as you want rather quickly? I see the difficulty in finding volunteers for human challenge trials, but I cannot imagine that the limiting factor is finding people who are willing to take a 1-in-10000 risk that the vaccine may be unsafe (particularly if they are at high risk of contracting COVID anyway)

COVID-19 vaccine development collapsed the development approach into a small proof of concept study and then a large efficacy/safety study. This was done to address the pandemic and is in stark contrast to traditional vaccine development programs that address non-pandemic diseases where development takes several years and safety is more thoroughly studied.

A lot of years ago when I was a fellow at NIH, our lab was studying some of the toxins from B. pertussis (whooping cough). The existing vaccine was one of the most problematic around and was discontinued in a number of countries because of side effects (the real bad side effect was a large rise in whooping cough with more health problems than the vaccine). A new version of the vaccine was developed which had a much better safety profile but as I recall needed to be tested in 50K patients to show this (this is the version used today). I raise this point because most of the COVID-19 vaccines use vector platforms that were never employed at scale. It would have been possible to so such studies several years ago as most of these were in development for prototype Zika vaccines (including one mRNA construct). When Zika went away as a public health issue vaccine development was stopped. My criticism that I voiced several months ago was that immune response and safety could have been studied in volunteers. This more than anything, might have shaved time off of COVID-19 vaccine development.

Also, is there a reason why human challenge trials cannot be done on older patients? This makes the trials more risky, of course, but this seems to be more of a matter of degree and not of principle. Even if we postulate that human challenge trials cannot under any circumstances be done with older people, wouldn’t it be possible to start giving vaccine to younger people until the traditional trial has figured out the effects on old people?

It would be very difficult to get ethical approval to do a challenge trial on older volunteers. Once a vaccine starts being used it becomes difficult to recruit older individuals into trials where a placebo is being used. I believe Novavax is having this problem here in the US right now.

Dr Golabki
Feb 24 2021 at 2:27pm

While, I agree with much of what John and Russ said about the need for a change in mindset and about this issue becoming wildly over-politicized. But the conversation had some inaccuracies and inconsistency that made it feel more like two like-minded people complaining about big government than an informed discussion, so to add to the previous posters list…


John said that the companies that created the vaccines cannot give it to their own employees. That’s not true, they can and are vaccinating their employees well ahead of current state schedules.


John also seemed to imply that manufacturing of the vaccine can’t be licensed out, but that is happen. Sanofi, for example, will be making millions of doses of the Pfizer/BioNTech vaccine. It’s going slower than we’d like because these are extremely complex medicines to manufacture and they are new, so there are not lots of contract manufacturing companies that can do it (as there are with small molecule or traditional biologic drugs).


Additionally, I was a bit surprised by the implication that the vaccine should’ve been immediately available (“over a weekend”).  I’ve heard dozens of hours of talk on this podcast about how frequently medicines confer little or no net benefit to patients, but seemingly none of Russ’s pharma skepticism applies to this case, where safety concerns were justifiably high initially. After all, you’re trying to dose literally billions of people, who aren’t sick yet, and aren’t likely to have serious complications if they do get sick, with a brand new class of vaccine, where a significant safety issue could not only hurt people today, but also damage trust in vaccines for generations to come.

John Alcorn
Feb 24 2021 at 4:12pm

Dr Golabki,

1) Re: Licensing to increase vaccine production. This EconTalk episode was recorded on 26 January, which happens also to be the date when Sanofi’s licensing agreement to produce Pfizer/BioNTech vaccines (starting in July 2021) was announced. (In my comment above, I lamented the 4-weeks delay in publication of the podcast.) Prof. Cochrane’s statement was accurate when he uttered it.

2) Re: Allocation of vaccines to Pfizer and Moderna employees. This matter requires parsing. According to a report by CNN (30 December 2020), Pfizer planned to apply to its employees standard CDC guidelines for various demographic priorities in vaccine eligibility, whilst Moderna planned to vaccinate its U.S. employees straight away. (Pfizer’s workforce is an order of magnitude greater than Moderna’s.) I don’t know how this matter unfolded between 30 December (date of CNN article) and 26 January (date of this EconTalk conversation).

Matt King
Feb 25 2021 at 8:30am

Thanks for making these points. It jumped out to me that, even if would be possible to accelerate studies proving efficacy, that would not necessarily help with the other goal of proving safety.

krishnan chittur
Feb 22 2021 at 11:25am

There is an embedded tutorial on “prices” and the role it plays in an economy – during good and bad times – it should be required listening/reading – amazing how obvious it is – the signals prices send and yet how obscure it appears to most – and how we may have reached a point when all producers simply submit to the will of the majority when it comes to sending signals about production and distribution – that during moments of stress (hurricanes or epidemics) people will suffer for all the wrong reasons. Have we truly become so prosperous that we have forgotten the role of prices and basic economics? I fear we have.

Ajit Kirpekar
Feb 22 2021 at 1:38pm

“Have we truly become so prosperous that we have forgotten the role of prices and basic economics? I fear we have.”

I think the populace has been ignorant of economics since the dawn of time. The only reason the mob has been kept at bay for so long was the period of prosperity. The minute it became vogue to blame Capitalism for recessions was the day the high priests of society declared “They knew better”.

Richie Wohlers
Mar 10 2021 at 2:35pm

A few times I have made posts on Reddit questioning the idea of prohibiting “price gouging”.  I almost always get flamed to oblivion for it.


Most people just think that “price gouging” is an absolute wrong.


The toilet paper example in this podcast is the perfect example of why it should be allowed.  I know I bought a bunch of toilet paper last year when I had the chance, because I didn’t know when I’d be able to again.  But I wouldn’t have minded to pay double, but buy smaller quantities until the supply stabilized.

Tom Jones
Feb 22 2021 at 11:42am

The guest claims at the very end that it looks like COVID was made in a lab in Wuhan. Has anyone come across any compelling evidence for this?

Alan Goldhammer
Feb 22 2021 at 3:17pm

Other than the one story that is being shopped around to right wing media, there is no scientific evidence to support this view.

Russ Roberts
Feb 23 2021 at 9:44am

Writing about it that way makes it sound like concerns on this issue are the purview of cranks and only cranks. There is some general unease as this Washington Post article suggests:

Jon Smith
Feb 23 2021 at 11:56pm

Well, that article does represent a general unease, but still, it only speculates but provides no evidence. In contrast, there have been many studies by scientists at Caltech, Harvard, Oxford, etc., showing that Covid-19 is unlikely to be lab-leaked. The recent announcement by WHO officials also confirms this, but, of course, people can always choose not to believe.

Also, it is unrealistic to request a Level 4 BioLab to provide all records regarding its studies. In fact, there are around 50 of them worldwide but none has done so.

Erik N
Feb 23 2021 at 10:08am

My inexpert opinion based on information from disparate sources is that there is a solid case that it resulted from a leak at the nearby lab during legitimate study (not bio-warfare) of these viruses.  These things happen.  Or it could have arisen naturally as well.  A lot of the scientists working for China or that China has allowed in to investigate have stated the latter.  Unfortunately, as Mr. Goldhammer’s comment indicates, these things get politicized, accusations are thrown, everyone takes up fortified positions and the chance to learn things to prevent future incidents is lost.  Xenophobes and Trump Republicans want to paint China as irresponsible and/or evil; liberals, people with economic ties to China, and people who are afraid that the name of laboratory science will be besmirched want to paint the lab scenario as irresponsible, racist, etc.  As is so often the case in current discourse, anyone with no vested interest in either narrative gets chased from the battle by the zealots.

I liked the discussion in this podcast:

Ajit Kirpekar
Feb 22 2021 at 1:36pm

This might have been the most upsetting econ talk podcast episode. Upsetting in the sense that it provides a laundry list of all of the horrible bungling that was done in this pandemic.

I would submit – the economics profession has failed. It has failed to educate the populace about the dangers of price controls. Despite a rich historical record – the public continues to remain unabashedly in favor of price controls. Minimum wages are still vociferously argued, even by trained economists.

I felt like telling him – you may discover something groundbreaking within the profession but the world as a whole simply doesn’t care. Basic economics. Literally econ 101 – is largely filled with ignorance. I blame economists.


Nitin Nair
Mar 6 2021 at 6:27am

Agree completely. For a “science” that’s been around as long as the theory of evolution it’s inane that we’ve not persuaded the public of principles covered in Econ 101. No respectable person can be a flat earther in polite company, but they can talk about the minimum wage and sound correct to others. This is a collective failure on our part.

Feb 22 2021 at 2:54pm

I am completely sympathetic to Drs. Roberts’ and Cochrane’s preference for markets over government control, but I believe they are mistaken regarding the cause of shortages.  Over the last six months I have been in the market for a telescope, a recreational vehicle and espresso machine parts.  None of these markets are remotely subject to any kind of price control or threat of such control.  But there are waiting lists of months, even years, for these things; in complete contrast to the situation a year ago when they were in stock and could be obtained immediately.

According to interviews I have heard with manufacturers and distributers, the reason is that supply chains have been disrupted because plants can’t operate, or are dramatically slowed, with their employees quarantined, hunkering, sick, or just socially distanced.  This has nothing to do with price controls.

I didn’t hear anything on the podcast that led me to believe that either of the discussants actually investigated the shortages rather than applying their priors.

Alan Goldhammer
Feb 22 2021 at 3:20pm

According to interviews I have heard with manufacturers and distributers, the reason is that supply chains have been disrupted because plants can’t operate, or are dramatically slowed, with their employees quarantined, hunkering, sick, or just socially distanced. This has nothing to do with price controls.

This is the correct assessment as there are shortages of lots of items in disparate industries right now. Just ask care manufacturers who have had to shut down assembly lines because of a lack of programmable computer chips.

John Alcorn
Feb 22 2021 at 3:45pm


Pierre Lemieux at EconLog discusses the economics of ‘shortages,’ in a blogpost posted today (22 February 2021) at EconLog,”The mysterious microchip shortage“.

Adam S
Feb 22 2021 at 10:09pm

Excellent comment, I was thinking the same thing about my quest trying unsuccessfully to find dumbbells for many months.


In addition to the sick-worker hypothesis, I’d also think toilet paper companies might calculate that the reputational damage of a stock out is less than the damage of raising prices. This has nothing to do with regulators – the free market is working as intended!

Jeff Henkle
Feb 23 2021 at 10:24am

Some companies simply do not want to increase production because the costs outweigh the benefits. In the case of dumbbells, the manufacturers are not able to ramp up production quickly. Purchasing new furnaces and equipment to pour more iron castings are huge capital investments. The spike in demand is likely temporary (e.g., a couple years) so it would not be wise to increase investment. The manufacturers may increase production such as adding another shift, but they are likely already doing that to maximize the use of their capital.

Adam S
Feb 23 2021 at 5:47pm

This doesn’t explain why they won’t raise prices, however.

Feb 24 2021 at 10:54pm

I had a similar thought.  The only thing I could come up with is that the manufacturer weighs raising prices on very scarce products in order to have market clearing.  This risks infuriating the (presumably economics-challenged) customer to the point of possibly losing the customer’s business altogether – similar to Mr. Cochrane’s mother’s reaction to the scarce hotel room situation.  The manufacturer also considers keeping the price near its “traditional” level, which is too low for market clearing, resulting in inordinate wait times for delivery but, I posit, not to the point of losing the customer’s future business.  In this case, the manufacturer might offer some future concession or promotion as a salve for the long wait.  Since it’s often easier to retain a customer than find a new one, the manufacturer chooses not to raise the price to its market-clearing level.

No idea if that’s the case, but that’s one possible explanation for not raising prices.

Todd Kreider
Feb 22 2021 at 3:57pm

John Cochrane made statements about the course the virus would have taken had their been a stronger intervention that are very unlikely:

1. “I think Paul Romer, who you interviewed, makes a case: we would not have had a summer wave and not had had this fall wave.”

2. Cochrane says this about challenge vaccinations as well: “And, we wouldn’t be here. We might’ve had a first wave, but we wouldn’t have had a second wave.

At best the summer increase may have been smaller as well as the increase this winter but there would not have been close to such a high level of immunity to come close to knocking them out.

Cochrane also made a strong point that isn’t historically accurate:

3. “So, there’s the possibility that our children could face a world where–there will be more pandemics. They will be far worse. This was the fire drill. This was–relative to historical pandemics, the death rate from this one is very small.”

Not according to the Wikipedia page, “List of Pandemics”. This coronavirus ranks #11 with 0.03% of the world killed but possibly tied with the two at #10, Asian Flu and Hong Kong flu, which  killed 0.03% to 0.1% of the world in 1957/58 and 1968/69.

Other than the Spanish Flu, which killed 1% to 5% of the world, a hundred years ago, the other large world pandemics occurred hundreds of years ago.

Harvard geneticist George Church said last year that he thinks people will get a genetic tweak by 2030 that would offer immunity to all viruses so this might be the last pandemic that humans will have to endure.


John Alcorn
Feb 22 2021 at 5:32pm

Prof. Cochrane points out what went wrong, with an eye to better performance in a future pandemic. The main culprits are bureaucracies (FDA, CDC), anti-market bias, and inadequate investment in readiness.

A comparative perspective might round out the picture. USA vs EU/EEA/UK is the aptest comparison for pandemic outcomes. Both are vast, populous, modern, wealthy, western federations (of States or Nations). Each federation has had largely decentralized pandemic-control policies, but and some centralized pandemic-relief and vaccine-procurement policies.

A striking fact: cumulative Covid-19 death rates in the USA and in the EU/EEA/UK are roughly the same. The figures are 1.4 per thousand (USA) and 1.2 per thousand (EU/EEA/UK).

Dynamics of behavioral adaptation (including also pandemic fatigue) and correlative dynamics of government action — What Tyler Cowen calls the “epidemic yoyo” — help to explain why cumulative pandemic death rates (before widespread vaccination) have been roughly the same in the two huge western federations.
A question arises: What, then, explains more substantial variance, among European nations or among American States, within each federation? For example, why has Norway fared much better that Sweden, or Germany better than the UK?
John P. A. Ioannides (Stanford U.) has pinpointed a crucial cause of variance; namely, differences in eldercare institutions and practices. See his recent study, “Precision shielding for COVID-19: metrics of assessment and feasibility of deployment,” BMJ Global Health (6 January 2021).
Dr. Ioannides provides a scorecard. What we still need, to explain the pattern in the scorecard, is a full upstream account of institutional differences among nations and among States. For example, if I understand correctly, Norway’s eldercare institutions are small and compartmentalized; whereas Sweden’s are large and are staffed by marginalized immigrants — Dr. Ioannides reports that approx. a quarter of Sweden’s eldercare staff contracted COVID-19 at the outset of the pandemic!
Here is the abstract of Dr. Ioannides’ fascinating article.

The ability to preferentially protect high-risk groups in COVID-19 is hotly debated. Here, the aim is to present simple metrics of such precision shielding of people at high risk of death after infection by SARS-CoV-2; demonstrate how they can estimated; and examine whether precision shielding was successfully achieved in the first COVID-19 wave. The shielding ratio, S, is defined as the ratio of prevalence of infection among people in a high risk group versus among people in a low-risk group. The contrasted risk groups examined here are according to age (≥70 vs <70 years), and institutionalised (nursing home) setting. For age-related precision shielding, data were used from large seroprevalence studies with separate prevalence data for elderly versus non-elderly and with at least 1000 assessed people ≥70 years old. For setting related precision shielding, data were analysed from 10 countries where information was available on numbers of nursing home residents, proportion of nursing home residents among COVID-19 deaths and overall population infection fatality rate (IFR). Across 17 seroprevalence studies, the shielding ratio S for elderly versus non elderly varied between 0.4 (substantial shielding) and 1.6 (substantial inverse protection, that is, low-risk people being protected more than high-risk people). Five studies in the USA all yielded S=0.4–0.8, consistent with some shielding being achieved, while two studies in China yielded S=1.5–1.6, consistent with inverse protection. Assuming 25% IFR among nursing home residents, S values for nursing home residents ranged from 0.07 to 3.1. The best shielding was seen in South Korea (S=0.07) and modest shielding was achieved in Israel, Slovenia, Germany and Denmark. No shielding was achieved in Hungary and Sweden. In Belgium (S=1.9), the UK (S=2.2) and Spain (S=3.1), nursing home residents were far more frequently infected than the rest of the population. In conclusion, the experience from the first wave of COVID-19 suggests that different locations and settings varied markedly in the extent to which they protected high-risk groups. Both effective precision shielding and detrimental inverse protection can happen in real-life circumstances. COVID-19 interventions should seek to achieve maximal precision shielding."

Feb 22 2021 at 7:50pm

This was a disappointing episode for many of the reasons listed by other commenters. Medicine and regulation are tricky. To hear the argument that we would be better if bureaucracy would just go away sounds wonderful until you recognize the huge asymmetry of knowledge between the consumer and the producer (in this case, vaccines). How do I know which vaccine I would choose (if I could)? Pfizer/BioNTech? Moderna? J&J? AZN? Sputnik? Regulation is there to ensure what is delivered/available to the public is of a certain quality and efficacy. To see what it could have looked like without regulation, look at the US experience with antibody testing –  Loosely regulated with wildly varying prices and of unclear accuracy and utility. Although availability was generally achieved, the number of actors (and bad actors) in that space made the entire idea of mass antibody testing unworkable. Antibody status (whether accurate or not, positive or negative) offer essentially no actionable information.

To say that it was obvious that Moderna had figured this out in January and we could have had a vaccine in a few months is disingenuous. Regulation serves a purpose. Our experience with antibody testing should inform us about what happens when the free market is opened up and regulation goes down. We probably would have had a number of “vaccines” available with questionable safety and efficacy and ultimately a public that could not discern good from bad. I doubt that scenario would be better than the current situation. For sure there are many missteps along the way in handling this pandemic, but a totally free market solution is not the answer.

Adam S
Feb 22 2021 at 10:26pm

Good conversation. I think the jury is still out on lockdowns. As we’ve seen in the US, a huge part of the population will refuse basic steps like mask wearing as matter of principal, and movement restrictions are a brute force tactic to reduce spread.


The idea that the “auto body shop” is relatively safe is also problematic – slaughterhouses have seen hundreds of cases and Tyson (among others) are facing lawsuits because of it. Plenty of facilities that didn’t need to shut down did so voluntarily both to avoid  workers comp litigation, but also to protect their workers and their brand.


Prof Cochran is also mistaken about randomized testing, his own university is conducting this in Santa Clara County, CA and I’ve participated in half a dozen tests as part of it. I’m sure other universities and governments are conducting these trials as well.


Lastly, where’s the smoking gun evidence that the virus came out of a lab? That’s quite an assertion without much evidence supporting it at this time. It could absolutely be the case but it would run in the face of pretty much all available evidence today.

John Lehman
Feb 23 2021 at 4:55pm

From everything I’ve seen, U.S. compliance with government requirements for social distancing, masks, etc. was quite good relative to the rest of the world.

I would submit that disease spread in a chicken processing plant is not strong evidence for anything having to do with auto body shops.

Prof. Cochrane said that the federal government should have engaged in large-scale testing nationwide. Your pointing to local testing performed by Stanford doesn’t address his point in the slightest.

Prof. Cochrane said it “looks like” the virus came out of a lab in Wuhan. He didn’t say there was “smoking gun evidence”. If I am asked to state my assessment of the probability that it came from that lab, it is not the case that the only two rational answers are 0% or 100%, the latter supported by “smoking gun evidence” and the latter reflecting ANY level of evidentiary support that is less than “smoking gun”. For example, my personal estimate is 60% that it came from that lab. Close enough to “looks like”, I’d say.

John Campbell
Feb 23 2021 at 2:05pm

Regarding the discussion about ongoing shortages, Cochrane and Roberts focus on a reluctance to raise prices, for fear of being branded a price gouger. But there other problems come into play right now. Many manufacturers are reporting supply chain gaps — the simply cannot source certain inputs such as chips fast enough, or reliably enough, to meet demand.

John Lehman
Feb 23 2021 at 3:19pm

Cochrane and Roberts hypothesize that fear of being branded a price gouger will lead to shortages  Te supply chain problems you note are consistent with (although obviously do not prove) their hypothesis. If demand for your product goes up and you are not willing to raise the price, you are also not likely to be willing to pay premiums to your suppliers, so any efforts to increase output at pre-demand shift variable cost will result in what look like supply chain problems. Double the price you are willing to pay and you will likely see a lot of those supply chain problems disappear.

Feb 23 2021 at 2:38pm

When economists present a more lucid discussion of the principles of pandemic control than public health  “experts” do, it is clear how broken our public health system is.  I agree with most of the details discussed in this podcast except for the discussion of testing, tracing and quarantining.

Testing to control spread is most accurate in situations where symptoms are both serious and long lasting. When symptoms are mild and/or transient, the likelihood of getting a representative sample are significantly reduced.

Contact tracing works when transmission is direct person to person or from a common source such as food or chemicals. In these cases people are more likely to be able to identify who or what  they were in contact with.  When the organism is spread via the respiratory system transmission is both widespread and amorphous. On that vase contract tracing is like herding cats.  Finally, there us neither the legal mechanism nor manpower to assure adequate quarantining. And so for these reasons the test, trace and isolate strategy has been a waste of resources.

Health care facilities and public health agencies conduct annual flu vaccine programs and so have the infrastructure for conducting COVID vaccine programs. The convoluted rules for who gets the vaccine and the paperwork needed to cover legal contingencies impose restrictions that prevent the COVID vaccine program from being a merely a ramp-up of  similar programs.  A well conceived national plan would require little more than added manpower and supplies rather than entirely new decision trees and distribution mechanisms.

Finally, the CDC has been warning of a pandemic for decades and supposedly has a national pandemic plan. The plan consists primarily of guidelines about communicating between agencies and the public. There are no scenarios about concrete steps to take if a specific type of pandemic occurs. For instance, it is common sense to close long term care facilities to new admissions until containment mechanisms are in place. Since residents are stationary, staff are the most likely transmitters and their health status and behaviors should be targeted at the outset (i.e., limit the number of different facilities staff can work at). Without these specific containment strategies in the plan, it reads as though it was written by a marketing firm.

Dr. Fauci is a lab clinician with administrative experience but little background in shoeleather epidemiology/public health. There is a world of difference between sitting in an office discussing how many angels can dance on the head of a pin and providing preventive services to those angels in the population. In its current configuration CDC cannot be held accountable for its actions except in the court of public opinion. But the public holds little sway until it rejects their counter assertions that public opinion is baseless.

Until there is a national agency with both responsibility and accountability for public health, we will have to rely on economists for pandemic management guidance. Let’s hope they gain a wider audience.

MJ Mallick PhD

Former Commissioner, Division of Health, City of Cleveland, Ohio.


Luke J
Feb 23 2021 at 10:17pm

On former President Trump and supply chain and logistics: He was no General Washington.

JK Brown
Feb 24 2021 at 4:09am

This was disappointing as neither individual has apparently done any research into the facts.

1. The “vaccines” were only proven, when approved, to have efficacy in preventing symptomatic COVID-19. It was not demonstrated to give sterilizing immunity, not shown to prevent asymptomatic COVID-19, not shown to inhibit transmission. Much more is known now and these elements are still likely. But it has not been officially approved.

So, prioritizing 20 yr olds who have very low risk of needing medical assistance even though they are more of the cases would have been foolish. Prioritizing from the very old to down is what makes since since those over 50 are not a majority of the “cases” (test positive) but make up 95.6% of deaths and a similar of those making up the hospital burden. This information isn’t hard to find if you don’t look for it in the New York Times or CNN, but rather seek out actual scientists in the field.

2. We are suppose to have the CDC and then 50 state and some hundreds of local health officials to meet these challenges. Most state and local officials have proven inadequate, if not deadly. Almost all have been passive and waiting for directives from Atlanta instead of proactive professionals. The state and local health officials were responsible for the last mile in the “vaccine” distribution but did little to organize it until the vaccine was in their freezer.

Perhaps a federal effort would have been better, but the current president and VP along with their fellow travelers were already mounting a campaign against the virus before they were elected. How would a convoy of federal troops (medics, corpsmen, etc) rolling into cities be played by the media and the Democrats prior to January 20th? Not well, requiring the bringing in security forces to keep the politically motivated “peaceful” protestors at bay.

West Virginia had their ducks in a row and got the “vaccine” in arms. But even now, the media and Democrats are going after the Republican governor of Florida for, oh my God, prioritizing the elderly, who are more likely to burden the hospital and die from the virus. Oh the humanity! Targeting those most likely to have serious symptomatic COVID and/or die with a “vaccine” that is only officially approved for preventing symptomatic Covid is apparently just plain wrong in the new reality.

Feb 24 2021 at 4:49am

In my view, this episode misses a lot of nuance. It is obviously true that some aspects of the pandemic could be handled much better than they currently are, but to blame just the (a pro free market Trump) government for the situation that we are in seems too much of a stretch.

How can someone in one sentence say that covid-19 is largely spread by so-called super spreaders, while in another sentence claiming that if only a portion of the population would test and elf-isolate we would stop the spread of the virus? It is EXACTLY those who are not rational (and who do not test and self isolate), who spread the disease and therefore the super spreader events would still occur and make the disease hard to contain. Sounds familiar? Well, that is exactly the situation the U.S. is in right now.

In stead of making fun of a lot of European countries with their slow vaccination programs, look at the data. Europe did actually quite well in containing the disease, especially in places with a strong governments (e.g. Scandinavia).

I truly believe it is time we realize it is not EITHER / OR but the free market and a solid government that create the best outcomes.

Tim Vickers
Feb 24 2021 at 11:13pm

I greatly enjoyed the conversation. I know you can’t cover everything but I was surprised you didn’t discuss the absurdity of using 1950’s style, government vaccines  rollout.   There are 88K pharmacies in US and 90% of Americans live within 5 minutes of one. At 4 doses/hr, 8 hrs/day, that’s 2.8M shots per day.  Pharmacies and doctors  could double that with supply and incentives.

Tanya U
Feb 25 2021 at 4:59am

Very disappointing episode. As others have noted, there are some serious misunderstandings or gross simplifications leading to the wrong conclusions in this episode (Thaliomide, false negatives in testing, origin of the virus, etc).

The one that irked me the most is that we don’t know if taking the vaccine eliminates the spread of COVID-19. They just talked about it as if it were a certainty, but it is NOT! It lessens it, but since you won’t have any symptoms, that effect may cancel out as you are now “out and about” spreading the disease. Hence, giving the vaccine to young people first is a *terrible* idea. The vulnerable people don’t have the protection and the not-so-vulnerable get to spread it under the so-called “we’re now safe, I’m vaccinated mantle”.

Kevin Ryan
Feb 26 2021 at 4:34am

I learnt from this interview that:-
A) COVID vaccines are 100% effective;
B) They are easy to develop and manufacture at scale;
C) Accordingly supply constraints are illusory, brought about only by poor regulation;
D) The vaccines prevent transmission of the virus;
E) All Americans are keen to take the vaccine;
F) COVID tests produce immediate and 100% accurate results – no False Positives or False Negatives

John Alcorn
Feb 26 2021 at 1:06pm

A number of commenters (above) question whether market mechanisms can remedy supply-chain bottlenecks in vaccine production. Top economists have addressed this problem in real time. See Michael Kremer & others, “Market design to accelerate COVID-19 vaccine supply,” Science (25 February 2021):


The enormous global benefits of additional vaccine capacity ($576 to $989 per annual course by our estimate) compared to prices of $6 to $40 obtained by vaccine producers in deals to date suggest a wide gap between social and commercial incentives for vaccine capacity. Economic principles of market and contract design can help bridge the gap, allowing society to realize the large potential gains at reasonable cost.

[a] Contract on capacity versus output

Contracts should include provisions for installing new capacity dedicated to the buyer rather than only specifying a quantity of vaccine courses. An advance contract for the delivery of a set number of courses for a set price may provide too little incentive for speed if not structured thoughtfully. Unless bound by an explicit capacity commitment or delivery date, the firm’s commercial incentives are to save costs by investing in smaller capacity, fulfilling the order over a longer period but generating the same revenue from the contract. Although buyers could try to eliminate delays by specifying deadlines for delivery, these may slip (as many existing contracts have) unless backed by late penalties. However, firms are unlikely to accept contracts with substantial penalties that reflect the full social cost of delay.

The danger of signing a contract on courses is that the country may find itself at the end of a queue with a long wait for life-saving vaccines. Provisions to shorten this wait may harm other countries that are pushed back in the queue. Contracts that expand capacity can benefit both the signer and other countries by increasing the rate at which the queue is served.

Paying up front for capacity may end up being cheaper for governments. Imagine a future pandemic in which firms are again striving to develop vaccines with no assurance of success. By paying up front for capacity for vaccines still at risk of failure, governments can bear most of the risk. Paying for courses conditional on success can end up inflating government expenditures owing to the private information firms have on their costs or probabilities of success.

[b] Relax supply-chain constraints

Governments should invest in supply-chain capacity for intermediate goods needed to make vaccines. Rapid expansion of vaccine manufacturing capacity creates a spike in demand for inputs like glass vials, lipid particles, and bioreactors. Meeting this demand requires an expansion of input capacity. The spike in demand may be temporary, however, after which the added input capacity may be left idle. To justify an expansion of input capacity commercially, a short-term price surge may be needed. Social constraints on pricing during a pandemic may preclude surges, however, resulting in shortages of intermediate goods. Public agencies may need to intervene in the input market, building input stockpiles in anticipation of manufacturing scale-up or signing contracts for the installation of new input capacity.

[c] Solicit bids

Some commentators contend that all feasible capacity is being brought to bear on COVID-19 vaccines; further expansion will be prohibitively expensive, if not impossible, in a reasonable time frame. The need for additional capacity is too urgent to take these contentions for granted. By soliciting bids from firms for capacity expansion (whether by installing new factories, repurposing existing ones, or finding ways to increase yield), governments could discover potential opportunities and their costs, allowing them to make informed investment decisions. Our analysis suggests that governments should aim to install substantial capacity even if they must pay a higher price for marginal units of capacity than in deals to date.”

Feb 26 2021 at 1:19pm

I’d like to say he’s right about testing, and maybe he mostly is, but my memory is there were a lot of bad antibody tests and maybe some very inaccurate infection tests too.

For sure there were many lockdown mistakes, and some continue, but that doesn’t tell us no lockdowns would be better or whether there is another option that would have been clearly better.

I don’t know how to best prioritize vaccinations but I found his discussion fell short in at least one respect. Many of those least able to pay need the vaccine in order to safely rejoin or stay in  the workforce and earn money for food and lodging. Yes, there are other ways to support them but there is no indication those support systems could be successfully implemented.

I was disappointed Russ allowed the podcast to end without challenging the claim the virus came from a lab. True or not, the evidence seems weak and the claim should not be allowed on a reputable podcast such as Econtalk without discussion.

Feb 27 2021 at 6:24pm

I found plenty to disagree with in this episode, but most of my objections have been covered by previous commenters.

What could/should we have done better?
a) With incomplete information, we had to develop policy based on hunches. Nothing wrong with that except that we communicated these hunches as “science” and then proceeded to shut down further discussion.
b) We had too much reliance on mandates which were often arbitrary and lacked nuance. The heavy-handedness of these mandates provoked a very natural reaction from “the deplorables”, who would nonetheless have been inclined to follow non-mandatory guidelines had they been accompanied by any attempt at persuasion.
c) We should not have allowed the “lockdowns” to persist for more than a few weeks without a full discussion of the tradeoffs. As Cochrane said, the $5T we’ve spent on Covid relief bills is just the tip of the iceberg. The sacrifice of an entire year’s education for our children was unconscionable in my opinion.
d) We needed a CDC/FDA that could adapt to the circumstances of an emergency. Does anyone believe we could have won WWII if the War Department had operated this way?
e) We should have used a simple age-based priority for vaccination while supplies were limited, and paid providers a bonus based on how quickly they got the vaccines into arms.
f) We should not have scheduled the pandemic for an election year.

Christian Mayr
Feb 27 2021 at 7:07pm

I really liked this episode, because it gave a different perspective on a lot of issues in this pandemic. Things worthy of discussion. However, I have serious doubts about the real world results of many of the proposed alternative ways to handle things. For example, increasing prices for toilet paper according to the increasing demand is indeed the perfect solution on paper. But in the real world, in a pandemic, people would probably revolt. I don’t know how it was done in the US, but in Germany they just limited the amount of toilet paper you could buy with each shop visit, which pretty much solved the problem without price increase and without public outrage. I think the same goes for selling the vaccine on the free market to the highest bidders. On paper it may make sense, but it feels deeply, deeply wrong. People die of Covid. So when rich people can easily afford the vaccine for themselves and their family, which may not really be at risk, others who are at risk are left behind and potentially die. I’m also not sure about the speed of production and production numbers. States order the vaccine for their whole population. Billions of doses globally. If this was left to the free market and individuals ordering it, or projections of how many people would buy it, I don’t think the production would be that high at this point in time. Plus there is immense pressure by states all around the world on those companies to produce enough of it quickly. On the other hand, the fact that we already have hundreds of millions of doses at this point in time is an amazing example of the power of markets. In this case all the markets down the supply chain from base materials, machines, vials, up to cooling, transport and syringes.

Jared Fox
Feb 28 2021 at 3:11pm

Most of the episode is based on fundamental misunderstandings of the vaccine development process. As a result, many of the conclusions are in error. For example, there were repeated assertions that the FDA process was what “delayed” the act of getting hundreds of millions of people vaccinated. Cochrane repeated several times that the vaccine was “developed” in only a week, blaming the FDA for the rest of the time (~ a year) we wait for inoculation. The reality is that even when you have the formula for the vaccine candidate, it takes a long time to build out the factories that make the vaccine, make sure the factories are working correctly, and then actually produce the hundreds of millions (and eventually billions) of doses. This takes quite a few months. Part of what Warp Speed did was to pay for that development cost so that the factories would be built and doses manufactured *before* we even knew if the vaccines worked! If the FDA had said firms could sell the vaccine a year ago, little would have changed because it would still have taken these many months to start ramping up vaccine production. Even though there is well established infrastructure to manufacture hundreds of millions of doses of influenza vaccine every year, it still take about 6 months for the production of the actual doses to complete.

Similarly, criticizing the systems for getting doses to people now because they are frustrating to people trying to get vaccinated is missing the point. The systems are frustrating because there aren’t enough vaccine doses available to satisfy demand. Once there are enough doses available (within probably 2-3 months), it will be easy to get vaccinated.

But economists like to think that a market solves everything. So they often forget about things like physics and chemistry which often play a role in limiting what is possible.

Mar 6 2021 at 3:03pm
Lucas Bertrand-Sittler
Mar 7 2021 at 2:32pm

Ivory Tower Thinking.
Many comments have already covered a number of weak claims made in this episode. I would add one more to the pile.

John Cochrane fails to take into account survivorship bias regarding the number of vaccines approved today.

Removing the efficacy hurdle for drug approvals would have resulted in a plethora of vaccines marketed to the general public. Sugar water is safe (if you don’t have diabetes).

If they were 50 safe vaccines available in July 2020, how am I supposed to know which vaccine to pick?

Wouldn’t this hurt public confidence in the usefulness of vaccination if we later find out that 40 out of 50 vaccines were not effective?

Mar 9 2021 at 1:33pm

Response lag is another dimension of supply/demand analysis that was ignored in the discussion but very obvious in the pandemic.

One well known example is the shift in demand for toilet paper.

The underlying demand was unchanged, but instead of the commercial packaging, e.g. those 1 foot diameter rolls for office facilities, the demand transfered to home retail packaging, e.g., the typical small home rolls. At the same time the delivery system shifted from demand by office supply firms to home retailers.

Shifting the production packaging takes months. The rolling and packaging machines require custom modifications that can take months.  Shifting purchasing, delivery, warehousing and other supply chain components is also slow.

The quasi equilibrium based supply and demand analysis does not describe these dynamic periods.  The podcast discussion made the mistake of using equilibrium expectations.  Another discussion that considers the difference would be interesting.

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TimePodcast Episode Highlights

Intro. [Recording date: January 26th, 2021.]

Russ Roberts: Today is January 26th, 2021 and my guest is John Cochrane of Stanford University's Hoover Institution. This is John's sixth appearance on EconTalk. He was last here in September of 2016 talking about economic growth and changing the policy debate.

I want to thank listeners who voted in our survey of your favorite episodes of 2020. That survey is now closed, results coming soon.

John, welcome back to EconTalk.

John Cochrane: It's a pleasure to be back. Anytime, Russ.


Russ Roberts: Our topic for today is vaccines and other issues surrounding the pandemic that are related to pricing, and supply and demand. You bravely argue that we should have taken and should in the future take a more free-market approach. Let's start with testing for the virus and what went wrong there and why we should have done something different.

John Cochrane: Great. And, I want to clarify, I'm not a doctrinaire only to free market. What we saw was a horrendous failure of our public bureaucracies. These are cases that Econ 101 textbooks tell you there's externalities--market failures, a wise government should fix things. But, our wise governments did a terrible job. So, the market is very much a second best--'the worst of all possible systems, except for all of the others,' as the saying goes.

And, what I actually argue for is markets at least on top of government. Let some freedom reign. The government both does what it does, but it also forbids the rest of us from doing other things. And, I think that's the real damage.

So, generalities aside, let us remember what a cacophony testing was and remains under the government control.

Tests were developed very quickly. The Center for Disease Control [CDC], however, not only bungled its own test, refused to let us use tests that had been developed elsewhere, even made it illegal for universities who know how to make tests and conduct them to conduct their own tests, putting the whole testing thing a month or two behind schedule; and the chance of handling this with competent public health--testing, tracing, isolating--then evaporated.

The FDA [Food and Drug Administration] continues to regulate tests, taking a long time to improve them. The most recent--imagine how this would have gone if you could have a little paper script test that you can take at home, costs two to five bucks, you can find out if you're sick; your employer can use this to find out if you're sick, send you home; you know who's got it, you know who doesn't.

Why don't we have that? Because the FDA refused to approve it, continues to refuse to approve it. The one that has finally after close to a year into this, let out of the barn, it does so still requiring a doctor's prescription, $50 bucks, and enrolling into an app.

Now by what possible right, you may ask, does the FDA not allow you to know what's going on inside your body and not allow a company to sell you that service? A test can not hurt you.

We can talk about medicines and vaccines--those maybe could go wrong--but a test cannot hurt you unless you take this extraordinarily paternalistic view that you might do something bad with the information that you get with the test, which is in fact the kind of view that they take.

So, how would things work in the free market? Now, free market would not be perfect. People have a tendency--we've seen people who get tests go out anyway. People might not want to pay the $2 to $5 bucks. There's an externality--if you get tested, you need to do something unpleasant: stay home.

But, suppose we could have all had whatever tests we wanted. Maybe they were imperfect, maybe not. We would know what they're--they're better than taking a thermometer and a web check of your systems, which is the testing we use now. We're allowed to use medieval technology. We're just not allowed to use modern technology, in order to test, to isolate and trace.

So, allowing the market to develop tests, send them to us, even if imperfect would have been a lot better, even on top of--eventually the government would say this test is certified and so forth.

And, I want to close with, there's a deep problem of bureaucratic mindset. The FDA is stuck in thalidomide, briefly brought out of it by the AIDS crisis. It's thinking of the test as--

Russ Roberts: Explain what that is. John, explain what you mean by thalidomide.

John Cochrane: Thalidomide was a great disaster of a drug in early 1960s, when a drug turned out to cause birth defects; and the FDA had approved it.

So, the FDA, when it thinks 'certify a test,' it thinks you're in a hospital you're sick, really sick. The doctor needs a test to know how to treat you. That test really has to be accurate and it doesn't matter if it's expensive.

The point of the test for us is to stop the spread of the disease. There's two very different philosophies of tests here. And, for that you need cheap, you need quick. Getting a test that takes three days to come back or two weeks to come back is pointless. You need cheap, you need quick, you don't need totally accurate. In stopping a disease, we just need to get the reproduction rate below 1. So, if 1 in 10 people has a false positive or false negative and goes out, that's fine: You've caught the other nine and the disease stops.

So, there's this bigger problem of a bureaucratic mentality that both the CDC and FDA have not been able to get around: we're facing exponential growth, we need to stop the spread of a disease, not certify things for use in an individual treatment setting.

I think that's a lot behind it. But, market would have served us a lot better.


Russ Roberts: And, do you think--I think a lot of the appeal of an inexpensive test, you summarized it with, I think, 'Test, trace, isolate.' I don't sense a lot of political will among a large chunk of the population for isolate.

If you go to Australia--if you're allowed to go, which is quite difficult--but if you go to Australia, they put you in a hotel for two weeks. You have to pay for it, by the way, and your food. And, you're not allowed to leave the hotel room. You don't have a dog with you, so you can't pretend you have a dog to walk. The fine for leaving the room is $20,000.

Now Australia has done pretty good at keeping the disease under control. Those strictures--which apply to Australian citizens mostly, by the way, returning home not to tourists--that wouldn't be so popular in the United States.

Do you think that--if we don't think isolate and trace, which is another thing Americans don't like so much, some Americans--do you think that the testing would have made a relatively important difference? And, do you think it would the next time given our, I think, unease and dislike of trace and isolate?

John Cochrane: Yeah. Thanks for bringing that up.

The key is a bad habit in contemporary policy discussions of sentences with no subject. 'Test, trace and isolate'--who does the isolating?

Now 'test, trace and isolate' is the command-and-control gold standard when you have a very bad disease that is just beginning to break out. So, if you've got Ebola or smallpox breaking out in a small area, you just descend doctors and public health people on it. You force people to get tested. You force the contact tracing; and you stamp this thing out.

I think it's pretty clear now that test, trace and isolate was never going to work for the United States given how quickly this transmits, given the asymptomatic transmission. So, that would have been nice. It certainly would have been nice to start it--at least, how about testing everybody who comes in on an airplane? That's an idea we're only a year into this beginning to start doing.

But, I think what certainly would have helped is access to testing. Again, test, trace and isolate is what you do to put out the final embers of a very dangerous disease. We needed to slow down the spread.

And, the one thing you have to get to mind about these disease is how nonlinear it is. If each person that gets it gives it to two people, you have exponential, out-of-control growth. If each person who gets it gives it to 0.8 people, the thing dies out on its own. Each person who gets it does not have to give it to zero people-first thing you need to understand. And, second is: this thing is mostly spread by super-spreaders. Almost all of the people who get COVID give it to nobody else. And, then a couple of people, or a couple events, a couple of circumstances give it to 20 or 30 other people.

So, we don't really need the test, trace, isolate where the implicit verb is the government. If we had had access to testing, people's own voluntary isolation and their non-governmental association isolation.

So, Stanford, if it had--right now, you have to get a test once a week if you want to set foot on Stanford's campus. Stanford would, of course, if we had paper-strip testing, would have said once a day. A bar, a restaurant, businesses, airlines, schools, all sorts of private organizations, or even government organizations would have happily said, 'You to set foot on here, you need to have a current test.' And, recommend you self-isolate. And if only half of them do it, well, you've cut the reproduction rate in half.

So, access to testing and voluntary use of it would have stopped this thing in its tracks without the need for the kind of thing we do when there's Ebola and smallpox.

Throughout this, the perfect has been the enemy of the best, many times. Our governor--our beloved governor in California--just allowed outdoor dining again. Well, you know, where's the science on how many of these things were spread by outdoor dining? Originally, they closed the parks. Now, I don't think there has been a single documented case of anybody getting COVID from casually passing by somebody else on a hiking trail in California. That is the kind of activity that has a reproduction rate of 0.00001. So, it was ridiculous to try to stop that.

And that breeds public resentment against all the other things. I was listening to the news conference--a hilarious list of the 57 different rules, which vary county by county. I don't think anybody knows even what the rules are, let alone paying attention to them.

So, yes, a voluntary use of tests and access to tests, I think, would have done enormous good. I think Paul Romer, who you interviewed, makes a case: we would not have had a summer wave and not had had this fall wave.

Remember, a vaccine is just a technology for stopping the spread of the disease. Testing is a technology for stopping the spread of the disease. People voluntarily want to do a lot of testing--maybe not perfectly, maybe not calibrate all the externalities the way our friends in Cambridge would if they only had their hands on the wheels. But it would have done enough to get the reproduction rate under 1, and we wouldn't be here right now.


Russ Roberts: So, let's turn to vaccines. One of the great triumphs, I think, of scientific progress, an entirely new technique for generating a vaccine was--I think it took two days, the lab time--back in--when you say it was 'back in January,' everyone assumes you mean this month. No, it was a year ago: January of 2020. This is, in a way, one of the most heartbreaking aspects. There are a number of aspects of this that break my heart, but this is one of them. So, 2020--12 months, a little over a year from when we're making this recording, and about 400,000 deaths ago--

John Cochrane: In the United States--

Russ Roberts: In the United States, excuse me--a vaccine was created. That it turned out was incredibly safe and appears to be quite effective. Of course, it wasn't known in January of 2020 that that was the case.

But, what that set into motion was a formal testing process with the Food and Drug Administration, the FDA, that has culminated in the marketing right now of, I think, two vaccines in the United States--Pfizer, Moderna. I think AstraZeneca, which is being used a great deal in the UK [United Kingdom]--I'm not sure it's legal yet in the United States.

And so, what went wrong there? Of course, on one level it was a tremendous success: a mere 11 months from development to approval--which, tragically, I think is probably a record of incredible amount of speed. But, it could have been better. How?

John Cochrane: It's an emergency use approval. It's not actual approval. That takes decades.

So, let's start this by celebrating the triumph of science and remembering that much of our wealth comes from science, not stimulus.

Russ Roberts: Yeah. That's a good line.

John Cochrane: And, this one in particular--the development of the mRNA [messenger RiboNucleic Acid] vaccines, it came just in time. These things didn't exist a year or two ago. In fact, it was a kind of science that was very disparaged. I remember reading that they couldn't get funding for it because it was kind of so lowly on the scientific ladder of things.

And, it came out of the failure to find an AIDS vaccine. So, it's not all good news. But that they learned so much about how not to make an AIDS vaccine that they had this thing January 21st of 2020. Before the WHO [World Health Organization] even admitted that we had a pandemic in hand, there was the vaccine, developed in one weekend.

And, let's be optimistic: after the current snafus are all over, there is a possibility that we look forward to the day when every infectious disease can have a vaccine developed in a weekend.

And, hopefully the FDA or who is in charge of the FDA will have learned the lesson; and that mRNA vaccines after the first three or four can be regarded as so successful--so sure--that they don't need extended Phase 1, 2, and 3 Clinical trials.

And, by the way the flu vaccine--so the flu vaccine is changed every year; and they don't do clinical trials on every variant of the flu vaccine. They just kind of know that this process is okay and safe.

So, there's the possibility that our children could face a world where--there will be more pandemics. They will be far worse. This was the fire drill. This was--relative to historical pandemics, the death rate from this one is very small. But, we could live in a world where vaccines are developed over a weekend and then rolled out the next week--putting a stop to one of the great tragedies.

Okay. Now, enough for cheering science--let's say 'Boo' to bureaucracy.

So, um, yes: The gold standard is the clinical trial. For ethical reasons, they decided that they would not allow challenge trials. People would volunteer.

Russ Roberts: Explain what that is.

John Cochrane: You could--so here's your problem. You develop a vaccine, you've got to give it to some people in a control group who pretend, get the vaccine and then go out; and then you just have to wait to let nature see how many get it.

Now, the problem is most people are still being careful. And, most of the people you give the vaccine to don't get exposed to the vaccine[virus?--Econlib Ed.]. So, I'm going to make up numbers here, but let's say you give it to a 1000 vaccine people, a thousand controlled people, only 20 or 30 of the people who you've given the vaccine to are actually exposed to the disease. So, now you have to see very small numbers. It takes a long time to figure it out.

So, why don't we--if volunteers are willing to take the vaccine--you know, young, healthy people--and then go out and deliberately expose themselves so you get better numbers, well, you could learn a lot more quickly.

It's a complex ethical question. But, the FDA said 'No.' We went through the full phase I, phase II, safety, efficacy, and so forth. And, then yes--only under an emergency use authorization this would never have made it even the year that it took.

Now vaccines are hard because sometimes they don't work; and people think--and again people think they're healthy and they're immune and they're not, and vaccines can harm people.

So, how would a freer market have taken this?

Well, certainly after the first stage when you know it's safe, there is a libertarian case for let people try things that we don't know if it's safe or not safe; but we don't have to go that far. You know very quickly in Phase One whether this thing is safe. Then: Can people be allowed to take it when we still don't know exactly the efficacy?

Well, had that happened--had we essentially enrolled the whole country in a clinical trial, anybody who wants it, we would have found out the safety and efficacy of this thing very quickly. And, we wouldn't be here. We might've had a first wave, but we wouldn't have had a second wave.

The FDA took a long time. It even took an extra week or two. Apparently, once it had the data, why did it--it's been watching the data all along--why wasn't it saying they're ready with the rubber stamp? 'Yes, go.' Well, they took some extra time for public relations to make it look like they were really thinking hard about this so people would have--this got politicized. A lot of people said, 'No, it's a Trump vaccine so we can't trust that it's going to be safe.'

And, there's still AstraZeneca--is legal in the United Kingdom, certified in the United Kingdom. It's better in a way because it doesn't require deep freezing, but there were some snafus involved with the U.S. clinical trials; and so even though it's legal in the United Kingdom, the U.S. FDA is not allowing it for use here.

So, they're going to have to go do a whole new set of clinical trials. And, maybe once the cow is fully out of the barn--horse--sorry, that's the wrong metaphor. Once the milk is truly spilled, the horse is truly out of the barn. They'll allow that to be sold in the United States. It's very cheap, room temperature storage. They could just mail it to you and you could take it.

And, again, this is--part of it is, you'll see this--we'll talk in a minute about the rationing scheme. But, they're thinking about a vaccine to protect an individual and is it safe to protect an individual from sort of an act-of-God disease that comes along? They're not thinking that this is a vaccine whose primary use is to stop one person from spreading it to another: But the primary use of the vaccine is not to protect you from getting it when inevitably someone sneezes on you. It's to stop the guy who's going to sneeze on you from having it in the first place. To get that reproduction rate below 1. And, that's the tragedy.

You know, again, here there's more of an argument a free market might've had people taking vaccines that might've hurt them until we found out that it were--free market with data collection. I'm all for the government collecting data and saying transparently what it knows or not. But, it exposed--these turned out to be extraordinarily effective: Had we risked some people getting vaccines that might not have worked, we wouldn't be here. It would have been over by now. We'd all be vaccinated and now going back to our bars and restaurants.


Russ Roberts: So, instead, we took a long time and we have decided to distribute this vaccine--

John Cochrane: If I may interject, we're not the worst. Europe still isn't vaccinating anyone.

Russ Roberts: Why?

John Cochrane: They haven't approved the vaccines. They don't have a roll-out plan. I'm not quite sure why, but their vaccination rates in most Europe are in the 1%-2%. Anyway, please go ahead.

Russ Roberts: Well, as of today which is the end of January the 26th, Israel is the leading vaccinator with having vaccinated 44% of their population. I think the United Kingdom is around 10% and the United States is around 7%--high 6%. So, we'll talk in a little bit if we have time, and if I remember about why Israel has done so well, but as you say, we're actually doing--we're the tallest pygmy--not quite the tallest, but one of the taller pygmies.

John Cochrane: Israel is.

Russ Roberts: Israel is the tallest pygmy. You can argue they are not even a pygmy at all, but actually tall.

But, we have decided to distribute the vaccine, I think essentially at zero price to the recipients--an act of purported compassion. And as a result, we had to decide how to hand it out.

And, we decided--and this was decided, by the way, as if it was a no-brainer--to give it to the people who were either thought to be the most vulnerable, that is old people, really old people, 75 and older, or 85 and older; and healthcare workers who tragically many died in the early stages of the disease. But, lately, my impression is not so many.

You could argue that healthcare workers deserve to have access to it. They've been suffering through emotional stress and fear of getting it.

But, many, of course, that I've talked to, they've been going about their lives. They have excellent PPE, Personal Protective Equipment. They have great masks. They have gowns. They know what to do to be careful. They have a system for keeping the disease away from them.

And, then we're giving it to the elderly who have virtually no chance of spreading the disease. They are the most vulnerable--and I'll include myself in that group in the above 65 group, being 66.

So, the alternative would have been to give it to young people. Which, it fascinates me that there was no conversation about this. The doctors, who are increasingly the high priests of the pandemic--hint or sorry, I concede that--I like to think we're the high priest, the economist, but we don't get listened to much. The doctors are considered the experts because it's a medical problem.

Unfortunately, the distribution of a vaccine is not exactly a medical problem. It's related to a medical problem.

But, at any rate, the idea that we might give to young people the vaccine to allow them to return to normal life and have a job never really got talked about here in the United States except among a few people like me and you who blog about it or put it on Twitter.

So, first talk about your view on that, and then make the case for why we should have--perish the thought--sold it in the marketplace.

John Cochrane: Or allow it to be sold in the marketplace, on top of whatever the government wanted.

Yeah. Let's review quickly. So, the government bought--one last thing they did was the Operation Warp Speed where they bought a whole bunch of doses ahead of time and ramped factories up. Well--

Russ Roberts: Sorry to interrupt, John. It's important to distinguish in this because Pfizer likes to say, 'We were not part of Operation Warp Speed.' No, what they were part of was I think a $4 or $5 billion advance purchase. So, actually there's two parts to it. There were some advanced purchase agreements, which incentivized companies to take risks because they knew they'd be able to sell it; and then the second was, I think, the government actually subsidized with advanced money, the development.

John Cochrane: Yeah. So, advance purchase: companies won't build until--but the reason was because the FDA can always pull the plug on you.

Russ Roberts: Correct.

John Cochrane: So, did we need that $5 billion? Did we really need the government to do that if it wasn't also the government decreasing all the risk? I like to point out that markets seem to be very willing to subsidize Tesla's electric car ideas and Elon Musk's moonshots. $5 billion would have been easy venture capital to get if you knew you had the right to sell it based on the facts and if you knew you had the right to sell it at the price the market would bear.

It is the absence of that right that caused the need for the government to buy [?]. But, at least they did.

But, so what happened? The government bought it and still does--bought it in a monopoly: You and I are not allowed to buy it. So, the government had a monopoly on buying it; bought a bunch of doses. At least that got the production moved up. But, then there was nobody around to think about logistics. How are we going to get it out? There was a lot of thinking about rationing schemes about who gets it, but nobody really thought about logistics.

So, we lost another month or two in the battle between bureaucracy, evolution, and exponential growth. Time is of the essence, let me remind you. There are new--evolution wants to do is find new variants that are resistant to the vaccine. And, exponential growth wants to grow exponentially. So, waiting a month or two is always very dangerous.

And, then spent all this time without really having a clue about how this was going to get from factories into arms with incredibly complex ration, not just this a rationing scheme, but an incredibly complex irrational scheme. Yes, old people first, health care workers first; but then long complicated schemes including all sorts of equity considerations.

Now again, the basic conceptual problem was this was about protecting people and about transferring income, not about stopping the spread of the disease.

I remember hilariously the United Kingdom's first patient was a 91-year-old one, very charming woman. Germany's was 101-year-old woman--again, very charming, but not very likely to go out to a bar and give it to somebody else. And, in fact protectable by just having their healthcare workers be vaccinated or wear PPE equipment.

And, giving it for free is interesting. This isn't that expensive. It's $2 bucks, $5 bucks. Old people are nice, but they're not all poor. It's not clear why people--the amounts of money that we're arguing over here are trivial compared to the $5 trillion that our government has spent handing out checks on the economic basis.

So, really funny how much of this goes around to: 'Why don't old people have to pay for it?' 'Well, we want to make it easier for them.' But, it's about giving them access to protect them without having them pay for it.

So, I do think what would have worked here was a market on top, allowing us to buy the vaccine. We have to remember this is not a disease that will come and only the vaccine will save your life. This is a technology for not getting the disease and there's an alternative: Stay home.

Russ Roberts: Yup--

John Cochrane: So, the vaccine--

Russ Roberts: It's working for me so far.

John Cochrane: Yes, me too.

Russ Roberts: I'm nervous. I'm still uneasy, but so far so good.

John Cochrane: Well, we are lucky that we can do our jobs by Zoom. Most people are not so lucky. So, most people really want the vaccine as license to go out. It's license to go out, and people who got to work for a living need to go out.

Now, if you're allowed to buy it--so, what happens if the first dose is? Yeah. They go to people whose time out is really valuable--the CEOs [Chief Executive Officers], the rich, the fat cats. So, the first week or so they pay $500 bucks to get it. And, normal people say, 'I'll spend another week at home.' Then the price goes down to $50, $100 bucks, and employers already would love to buy this for their employees.

Whole Foods at $50 bucks a shot would say, 'Yeah, I'm buying it. I'm giving it to all my employees so that they can restock.'

But, Whole Foods isn't allowed to make that decision. Even if you're just protecting people, which means even if you're buying licenses to go out, that's an economic decision. And, the government's rationing rules are just not even thinking about we're buying an economic commodity. We're buying people being able to go out and earn their livings.

Teachers should be getting it, and schools should be willing to pay the market price to get teachers to get it. Because, teachers going back to work means kids can go to school and their parents can go back to jobs.

Healthcare workers--in a totally free market, of course healthcare workers would have been first. Why? Because hospitals would have found it completely worth their while to pay whatever the price is to get their healthcare workers vaccinated, to make sure they're in there. In fact, hilariously, I just read this morning, the people who make the vaccines are not allowed to give the vaccines to their own employees and are now having a big problem because their employees are getting sick and they can't keep the employees working. If they have a couple of boxes fall off of the back of the truck and by chance should end up in their employees arms, they'll get sued. They'll get dragged into court.

And, that's an example of how rationing schemes are just ridiculous to the economic. If you're just going to protect people and all of them economically go out--and God forbid, we think about not spreading the disease--this is about if you get the reproduction rate of below one, if you keep one 20-something-year-old out of a bar that 20-something-year-old doesn't give it to 50 other people, doesn't give it to [?].


Russ Roberts: So, there's a part of this that mystifies me a little bit, which is--let me set this up in the following way. In the early days of the pandemic, the worry was we were going to run out of ventilators. And a friend of mine said, 'In America, we're really good at making stuff when we put our mind to it. It may take us a while to get started but once we get started, we're going to have ventilators coming out the wazoo.' And, we do. I think, there's 180,000 in the stock, in the inventory. There was this fear that hospitals could be overrun and we'd have a ventilator shortage. That never happened, at least in the first wave. And, then we learned actually that ventilators are maybe not such a good idea to use all the time, early on for sure. And so, that crisis was averted, but probably wasn't much of a crisis to avert.

So, then we get to the vaccine. Now, you'd think that having a President who had been in business, he would be sort of interested in sort of a private sector kind of solution like tasking FedEx to distribute the vaccine or CVS [Consumer Value Stores (a pharmacy)]. But he didn't, for whatever reason. Okay. That would have been interesting--politically, maybe non-viable, although now it's starting to look like part of what we're going to actually do. But, he didn't do that. So, I'm not going to--I don't know--we'll find out how much he had to deal with if the distribution process--history will reveal it, maybe. But, then you have this large public health bureaucracy. You have the CDC, you have Fauci, you have others. At the state level you've got all these other folks. They have known since January [January 2020--Econlib Ed.] that a vaccine is coming. They do know--they really do--that it's got to go from the lab into an arm.

It's not enough just to have it in the lab. Which means you have to have a lot of it. And, you have to have a way to get it to the people before it'll get into their arm. What the heck was going on? That's my first question.

My second question is: Right now, we've got to be spending a lot of time making--people keep saying, 'Well, we'd like to go group 1C,' which in my state of Maryland is people over the age of 65. And we did. We went there yesterday, but 'Oh, alas, there are no vaccines. There weren't enough of them. So, you're going to wait till we vaccinate every person over the age of 75 and every teacher and every healthcare worker.' Maybe. But for whatever reason there aren't enough, because right now we're rationing on queuing, getting onto the website, being lucky and punching in at the right time.

It's a horrible system. Fair--because it's equally horrible for almost everyone.

But, like--how hard are they working on getting a few more extra ones made? I mean, wouldn't you kind of want to focus on that? Like, World War II, we were the arsenal of democracy; and we made as many planes and bullets, and we just destroyed--we killed it. It was really important and we killed it. Isn't anybody trying to get Moderna and Pfizer to like--? Maybe, I don't know, are they at full speed? Maybe they already are. I heard Moderna expanded; that's great. But, I wonder if it'll expand a little bit more or maybe a little faster. And, as you say, since we've taken out the financial incentive, because they can't charge the market price for it, well, could you give them some money? I'm done. Your turn.

John Cochrane: Or how about just let us give them some money. 'Get out of the way,' is always the first response to--if, God forbid, that they do what they're talking about and invoke the Defense Production Act--which is the government--

Russ Roberts: Which they did! Which they did for ventilators.

John Cochrane: Exactly. The last thing you need--how about let's just get out of the way and let people buy. We are not allowed to buy the vaccine. Which would do a lot towards incentivizing people.

I don't know what the regulations are for you not putting up a factory that makes the vaccine. I'm going to guess that they're there.

Russ Roberts: Yes. [?] don't own it. They own it. I'm okay with them owning it--

John Cochrane: You could license it. But--

Russ Roberts: They could. Yeah, that's a good question: Why haven't they? I don't know.

John Cochrane: But, you are not allowed--you have a monopoly customer. The Federal government is the only one buying the vaccines.

It is amazing that nobody thought about the logistical. It's very easy to sit around Washington, drop lists of who is the most deserving. But nobody thought about the logistical questions, which--you know, 'We got to get flu vaccines in arms every fall,' those happen.

I do gather that Jeff Bezos called Biden a day after the inauguration and offered Amazon services. So, if it'll land and--our past President was a businessman, but he was a real estate developer.

Russ Roberts: Good point.

John Cochrane: Which is a--

Russ Roberts: It's true.

John Cochrane: a very different business from supply, logistics, rapid response, and so forth.

But, this is just part of the snafu that's been going on a long--well, let's go back to last spring. Not just ventilators. Masks. Personal protective equipment. Why a mask costs 50 cents and must cost three cents to produce. I'm talking a good N95 mask, the kind that protects you as well as protects the other person. Surgical masks--we ran out of those. How the hell can the most advanced industrial economy in the world disposed of the most flexible production capacity run out of five-cent masks that you could charge five bucks for down at CVS and make a killing?

Well, they weren't properly certified. We weren't allowed to import them from China because we don't like importing things from China. China had made a lot of masks that were certified for the European Union but not certified for the United States. Masks that are just the same, but that are certified for construction site use couldn't be used. And, it went on to this ridiculous thing. We spent three to four months--we still are using homemade cloth masks.

Just think about this. In a pandemic that's costing the government directly $5 trillion in the economy, God knows how much more, we are using the same technology that Venice used in 1350 to combat the plague, except they had much nicer noses and funny things on top of their masks. Just to make--why? Obviously, because there wasn't a free market in being able to produce and sell masks, basic personal protective equipment.

The same thing also, by the way: treatments. We stopped using ventilators because we discovered better treatments. But there's a whole raft of treatments that have been slowed down and slow to roll out like the antibody treatments. Yeah, hydroxychloroquine probably wasn't the best one. But, there's been a whole bunch more that are kind of languishing. They're not being used. Wellm again, we're all stuck in the same system.

Russ Roberts: I actually saw a fascinating article that hydroxychloroquine or however you pronounce it--

John Cochrane: Yes, sorry.

Russ Roberts: That it worked--I don't know how to pronounce it. But, that it actually--we'll put a link to it, it's an article by Norman Doidge in Tablet. I don't know if he's right, but it was provocative, suggesting that the clinical trials that were run that found that it actually reduced your life expectancy--which was greeted with great joy in some quarters because it showed that Trump was an idiot--that actually those trials were not really the right test. It should have been tested earlier in the disease where it has proved to be more effective--actually effective and not dangerous. I hope that's not true, but I just worry that it is--because it's such a tragedy of that lives could have been saved.

John Cochrane: Well, that's part of a larger drug testing problem that we face. If you have a new drug, you're first allowed to try it on people who are going to die anyway and see if you get a miracle. Well, if the drug is only effective earlier on in the course of a disease, you're not going to pick that up that way.


Russ Roberts: Yeah. But, going back to masks, there were--the Federal government was aggressive in preventing people from making any kind of so-called excessive profits from the sale of them. Which was a tragedy, obviously, because it took out any incentive to produce them at higher speed by incurring the extra costs of hiring people and the input costs of the materials and so on that would have maybe been in higher demand and might've cost you more money.

But, certainly the puzzle for me and this is a question for you, John, is that masks weren't the only things in short supply. And many things remain in short supply today, a year into the pandemic--as if we were living in wartime--where research that had to be devoted to tanks; and therefore washing machines are hard to get.

So, toilet paper was in short supply. Anything made out of paper--paper towels, toilet paper, and so on. Then there's a whole bunch of stay-at-home stuff that was in short supply for a long time. Bird feeders, jigsaw puzzles, baking equipment, anything related to baking because a lot of people got into bread. So, flour was in short supply, freezers were in short supply because people were worried they wouldn't be able to go out and they wanted to stock up.

How do we square this with your view, and my view, which I think we share, that prices prevent shortages? And, one thing I think--one possibility is that manufacturers were afraid they'd be accused of price gouging.

But, I think the other more realistic case in some of these examples--not masks, but in the rest of them--is that a lot of manufacturers and retailers did not want to raise their prices for public relations reasons, which means we don't really have much of a free market system, if that's true. A lot of places kept the prices the same, didn't want to take advantage of people in the pandemic, which meant there wasn't a bunch of it to go around. That's a different way of taking advantage of people in a pandemic except nobody benefited from it. What are your thoughts on that?

John Cochrane: Yeah. It is very interesting. So, Econ 101 says you do not screw the price system in order to transfer incomes, because for just about everything, the total amount of income isn't that big and the prices allocate the resources to where they are most valuable--

Russ Roberts: And, make sure that there's a lot of them available. That's the part people I think often forget. They think it's like a zero sum game: the rich will get it and then the poor didn't; and that's unfair. It's not attractive, for sure. But, if you don't allow prices to change, you don't create the incentive for people to make the stuff; and then no one gets it.

John Cochrane: Exactly. Which is--it's funny that people are complaining, 'Oh, the pharmaceutical companies will make $10 billion off of the vaccines'--

Russ Roberts: Please--

John Cochrane: Let them to make a $100 billion. A trillion dollars. This thing is costing us way more than that.

So, we're killing the price system and its incentivizing role in order to transfer minuscule amounts of income.

And, that's the difference between--in World War II, you need a lot of resources to build an aircraft carrier, and it might be a case for the Defense Production Act; and it puts a stress on the government's finances.

The amount of money we're talking here is just chump change in the government's finances.

Now, so toilet paper. Let's just start with a simple one. This is really your test for are you an economist or not: Should companies be allowed to raise the price of toilet paper, or should you be allowed to resell toilet paper that you've gotten during a crisis? When in a hurricane, should you be allowed to raise the price of plywood, when a hurricane is coming? Whould we be allowed to raise the price of gas when the gas isn't coming?

And, to us, this is just so obvious because--let's just review for everybody--the allocation effect. Do you really have to go? Toilet paper, if you allow the price to go up, goes to the people who really need it, which is people who don't happen to have a lot of livestock already and who really got to go.

Also letting the price go up is--if you want to stop people from hoarding--people were going down to CVS, to Costco, and buying truckloads while they could get it. Why are they doing that? Because they know it won't be around in the future and they think the price might be higher in the future. If it's available at $10 bucks a roll today, the same person says, 'Maybe I won't take it. I'll do my social thing.' Prices guide you to the socially efficient thing. 'I'll just get one roll today because I know I can come back tomorrow and the price will likely be lower tomorrow.'

It incentivizes paper companies to make more toilet paper. It incentivizes truckers.

This was perfectly clear in the gasoline case after the hurricanes. If gas prices go up, it's worth somebody who owns a truck to put gas in the truck, drive to Manhattan, and sell the gas at $20 bucks a gallon. If price is capped, then nobody can get it. Not even the ambulances can get it.

So, is this just--a lot of this is fear of the government, even when there isn't a price gouging. Government has made it very clear that--City of New York was very aggressive about closing down bodegas who dared to charge a little more for paper products than they used to. I think there is fear that ex-post, Attorneys General will come after you and make a big case out of you for price gouging. It's not just public relations, but a lot of it is public relations.

This is simply a fact that most of our fellow citizens don't understand. And, I'll tell you a quick story. I learned this--I was driving across the country with four children, a dog and my mother and we were on our way to Boston. It was about 10:00 o'clock at night. We needed a hotel. It turned out we had driven right through Woodstock [?] and there weren't any hotels around. This was before the internet. So, it was hard to know: is there a hotel around? So, we try. Four hotels were full, were full, were full. We finally go into a broken down Super Eight hotel. And, the guy says, 'Yeah, I got one room left. It's $450 a night.'

Me, the economist says, 'Hallelujah. Thank you. Sold!' I've got four kids. I've got a dog. I've got a mom and I'm so delighted that you charge $450 because I know the last 10 people who came in said, '$450? I'd rather drive through the night.' Well, it was worth it to me not to, not because I'm rich but because I've got four kids and a mom in the car. My mom was outraged. 'How dare he charge so much? This is--' 'Mom, we've got the money. We need it. If he didn't do this, we would be sleeping in the car.' No way, absolutely, could she get that. Three days later she's still, 'That guy, he was so mean. He was charging us that money.'

As far as transfers of income, $400 bucks for one night in a hotel isn't going to kill us or anyone else; isn't it worth to you? This is kind of deeply ingrained in how people think about it--when they are voting for politicians as well as when they're thinking about companies.

So, there is some public relations to it. And, I think that's why politicians--if they stood up and said free market and toilet paper, people would be mad as hell at them because, 'Why do I have to pay more than I usually have to pay?' and to explain to them, 'So that the other guy won't take it all out of the store is why you got to pay more. So that someone will get on a truck and bring it to you is why you got to pay more.' Politicians don't seem willing or able to explain that.


Russ Roberts: So, I'm going to go back to vaccines for a minute--just because I think I probably am so in agreement with you, I may not have given you a hard enough time.

John Cochrane: Please.

Russ Roberts: And, there is one little part I think you may have glossed over I want to actually give you a hard time, which is: You really would have let it be sold on the free market so poor people couldn't be vaccinated?

John Cochrane: You're trying the--poor people can't afford the toilet paper.

Russ Roberts: Yeah. But, this is a vaccine, this isn't toilet paper. Toilet paper, there are substitutes. You could try to use a little bit less; great buy, wait a little longer before you need a new roll. This vaccine is a lifesaver. 'If you let the market solve it, you're just going to let the rich people survive and the poor people are going to be the ones that die from the disease.'

John Cochrane: The right answer, which I will not offer is it's looking like the cost per dose is perfectly within the range of even poor people. But, I won't give that answer. I only argue for a free market on top of: let the government buy at market prices--which is, compared to $5 trillion budget that is nothing--let the government buy and give it out to whoever it would like to. If the government to prioritize poor people, 101-year-old people in nursing homes who have dementia and it wants to give it to them for free, fine. I'd like the government, in fact, to buy a bunch at market prices, give it to homeless people, give it to people who are wandering, and, like, prisoners. Oh my God, prisoners should have been first. They forgot about that. Prisoners should have been first on the list. Teachers. The government should be giving it to control the externality and protect the poor and the vulnerable.

I only want a free market on top of that. Because again, this is not the case--if this were a case of a disease that's going anyway and there's nothing you can do, we're not going to save your life, we might have a harder discussion. Right now, it's a case of 'Can you afford to stay home for another two weeks? Do you have to be one of the very first to get it while it's still hard?' I'm going to make up a number. 'Maybe that's going to cost $500 bucks? Or, can you wait three weeks until it costs $50 bucks?' Oh. Well, that's an economic decision and the alternative is stay home. And, 'I'm fine.'

How about instead of $2,000 stimulus checks--about the dumbest idea that a government has ever come up with and it's a mostly Republican idea--instead of a $2,000 stimulus check, how about a $2,000 stimulus voucher that you could use to get a vaccine if you'd like? The cost for the vaccine dose is going to be way under $2000. Or, if you choose to, you can say, 'I'll let somebody else have the vaccine and use that voucher to go buy, I don't know, toilet paper.'

So, the answer is always in economics: Let the price system work, transfer incomes. Usually the answer is, 'But we don't transfer the income.' Well, right now we're transferring a bunch of incomes. So, let's just make that salient. The $2,000 comes with a voucher--a resalable voucher--for the vaccine. Now you've just got rid of the 'can't afford' argument and you're back on the 'choose to' argument.


Russ Roberts: So, the only problem I have with that is you used the phrase 'free market price.' So, right now we have two companies in America--there could be three if we let AstraZeneca produce it--there'll be three companies. That might produce enough price competition to get a low price.

The reason the price is low right now, or that you think there's a low price, John, is partly because the government negotiated a low price.

I should mention: I said I'd say something about Israel. I have not told listeners yet, but I'm going to be moving to Israel soon. If you follow me on Twitter you know it. I'm going to be President of Shalem College. I'll put a link up with some information about that. But, Israel has done very well. I'm going to continue with EconTalk by the way for listeners who were hoping otherwise so they'd have more free time. But, at any rate Israel, remarkably, has done extremely well, partly because they have a semi-centralized, but not totally centralized healthcare system.

They're a small country, basically have four healthcare HMOs [Health Maintenance Organizations]. Those HMOs basically know all their patients among those four, or the population. It's a small place--about nine million people. So, among those four HMOs, they know all the people in the country; and each one I think got a lot of the vaccine and knew how to find people. They had their emails.

That isn't true in the United States. So, at the state level, which is how we've distributed it here, we've got just a giant mess of people trying to figure out something for the first time, creating websites. And, it's terrible here in Maryland. We're really ineffective and it's badly done.

But, the other thing that happened is that I understand that Netanyahu promised Pfizer a lot of data about the people who took the vaccine, which wouldn't have flown here in the United States, I don't think, quite as well.

And, I also understand he paid a little bit of a premium.

Now the United States government did not pay a premium or whatever you want to call it. They picked a price. But it was relatively low. If we had lived in your world, my fear is that we would've had actually quite a high price for the vaccine, because they would have had either monopoly or duopoly. And, now all the nice parts that you're talking about would have been a long time coming, maybe. And, it would have been politically pretty hard to do. What's your thought?

John Cochrane: We would have had a high priced vaccine and it would have happened in July.

Russ Roberts: Okay. Maybe.

John Cochrane: So, that by now--

Russ Roberts: Oh, they had them on the shelves already when the thing struck.

John Cochrane: Second, this is a vaccine that took one weekend to create, once you had an email with the genetic code for the COVID-19 in hand. So, to the extent that it's a monopoly, the intellectual property is only a monopoly if that's enforced. And, then it was designed a little bit. So, creating a competitor that--the bottleneck is getting FDA approval for the vaccine. The bottleneck is not creating the vaccine.

The bottlenecks are not about getting vaccines in arms. It's about doing the paperwork. It's about making sure that the wrong person doesn't get it. You have long forms to fill out. I've seen numbers that takes 20 person-minutes to deliver one vaccine, all of it because the paperwork. So, simply--how about government, whoever buys it, come and get it in arms? We would had a lot more done.

Now, in fact since the rationing schemes have mostly been about protecting people in nursing homes, it's not clear to me that the spread of the disease would be any slower if they had simply said, 'Come and get it.' And, even now, it's roadblocks in the way.

Virginia on Marginal Revolution [ ?], Virginia just said, 'Nope, we can't give it in hospitals. You can only get at county testing centers.' I mean, talk about getting in the way of vaccine distribution as opposed to just: We're trying to combat a communicable disease, get it in arms fast. I think that would have--you don't need to call people. So, you said, 'Yeah, Israel knows everybody's phone number.' They don't need to call people. Just say: It's available down here.

Russ Roberts: But they didn't. Yeah. They didn't. What they had available was--well, that was a couple of pieces. You're right. They didn't have to email people and say, 'It's here.' Unlike my 89-year-old, my 87-year-old, 88-year-old mom--sorry mom, revealing your age. But, she lives in Alabama. She registered for the vaccine. They told her they'd call her. I'm thinking, 'What? In 2020, you're going to call my mom?' My mom does email very well, by the way. But, then her friends, who had registered after her, got the vaccine. She thought, 'Oh, maybe they missed me.' She called them. 'No, no, we've got you on the list. You're 2500 out of 60-something thousand of people of your age group.' And, she eventually got one. So, she has gotten it. But, what a strange thing that that's how we're distributing them. Bizarre.

John Cochrane: Bizarre.


Russ Roberts: Yeah. You agree. Let's close with lessons learned. So, we've focused on a number of lessons about the use of pricing and innovation and incentives. To me, the big issue going forward, the next one of these happens, is that I think the default option is lockdown. And, my impression is that lockdown has been, if not ineffective, not very effective relative to its cost in human sacrifice and toll and despair and loss of dignity and education for young people. It's been, I think, a very expensive policy.

Many people believe it was necessary. In fact, they would argue we didn't do enough of it. We should have done more. We should have been like fill-in-the-blank, a country that has fewer cases than we do, or fewer deaths. What are your thoughts for the next time? What are the key policy levers that we ought to be doing? One that you've already identified: we should have testing available more quickly. Vaccines should be generated more quickly through incentives, distributed more quickly through incentives, and so on. What about the rest of the picture?

John Cochrane: So, sadly, there are the lessons you and I are learning, and many other people who are sort of learning factual lessons about the failures of bureaucracy and how to handle a pandemic.

There are the lessons that I think our political system is going to learn, and I think you point to the problem. Our political system seems to believe that whatever we did last time and we survived is the right thing to do.

And so, what we would recommend is an attack on the bureaucracy and making sure--people didn't discover all sorts of regulations, like: Medicare won't reimburse telehealth. That those probably weren't a good idea. Nurses can't work in a state where they don't have an occupational license--probably a bad idea. I'm hoping, at least we learned that some of those things were pointless and don't come back. But, I suspect that the forces in favor of those will come back.

So, yeah, the policy mix was bureaucratic, complete snafu, really not able to make that transition from 'Protect individuals' to 'Stop the spread of a fast communicating disease. Economic lockdown and spreading vast amounts of government money all over the place while at the same time being very chintzy about a couple billion here and a couple billion there--I'm afraid that we'll get written as what we do next time, just as all the mistakes of 2008 got written down as how we're going to handle a banking crisis forevermore in the future; and all sorts of, 'Oh, we learned how we should reform the financial system' went by the wayside.

I think the lockdown was particularly ineffective. There's enough voice in the public sphere on both sides saying that was a disastrous policy, that I hope we won't have to do it.

It is revealing about our government that our government can control economic activity very finely, but is unable to control personal activity. This is not a disease that spreads by the production of GDP [Gross Domestic Product]. This is a disease that spreads when people are inside poorly ventilated areas talking loudly. It's a disease that spreads at parties, at choir practice, at funerals, in bars, it's the only business--it's not a disease that spreads in an auto-body paint shop where everybody--but we closed down the auto-body paint shops.

So, I argued long ago for not an economic lockdown, but smart: We need a set of public health guidelines that lets the economy keep going while protecting people from the disease.

And, again, you don't have to be perfect. You just have to get the super-spreading stuff under control. As most business has worked out, people are back on construction sites. They wear masks, they mostly work outside. They take a great effort to ventilate. They try to test people. They see who's sick.

You can run things smart. So, I call that the smart reopening. And, a much more strenuous campaign: 'Guys, you've got to stop partying.'

And, it turns out masks were useful; and even when the government was saying they were not.

So, I think economic lockdown--it was a case of the perfect being the enemy of the perfectly reasonable. And, we locked down enormous amounts of GDP, and people's lives, that we're not contributing to the spread at all. You just got to get the reproduction rate under one, stop the super-spreader stuff.

The one thing I wish government would do a lot more of is information--both spreading information and science. It's amazing how little we know about this disease even now.

Russ Roberts: It's so frustrating to me. But is that just the nature of reality or do you think the government has failed to collect the data that they could have?

John Cochrane: Well--the government did not collect it.

So, let's just start with: Why did we never have random sample testing, to learn where--you just test one out of a 1000 people randomly and learn the true prevalence of it? All our test numbers are people who feel sick and call in and ask for a test. And, then all of our tiers are based on what fraction of those are positive. Well, that's a completely meaningless number.

So, just randomly test one out of a 1000 people, find out where the disease is; sequence them, find out which variants are spreading. Give that information. When I walk into the Whole Foods in Palo Alto, how many of my neighbors are actively contagious right now? That's a number I don't know.

And, basic science: Figure out where this thing spreads. Does this thing spread in parks? Does it spread by touching things? Turns out probably not, but we don't really know. Does it spread in grocery stores? Does indoor ventilation help?

The problem with our science establishment, I think--we're largely, we're based on individuals who have ideas. This needs big science. It needs established--the government needs to go out--if you want to test one in a 1000 people in the country every week and map where it is, that's something that government-run science kind of has to do, or at least an enormous philanthropic thing that then has some of the tools of government to kind of roll it out.

So, monitoring--when it was first there, monitoring where it is: which places have it, which places don't? Do we need to think about ring-fencing some places than[?] others?

We just--so both the information, random testing and sequencing to know where it really is. It seemed like an obvious thing in February [February 2020?--Econlib Ed.]. We're not even thinking about doing it.

Of course, the testing and tracing effort has been a complete fiasco. And, this is the kind of big science about learning how to quickly, how is this thing spreading? What really would--why is a restaurant outside better? It's kind of hilarious. Look at Palo Alto. There were restaurants that were outside that have plastic walls all around an indoor propane heater. Is that really better than inside where instead you've installed a high volume ventilation system with a HEPA [High-Efficiency Particulate Air] filter? I don't know. Why don't we find out before we take one third of the economy?


Russ Roberts: Let's close with this--I said we were going to close, but let's close with one more thing. Recording this in late January of 2021, there are new variants out already. There are some worries that the vaccines might have to be modified although there's some evidence that they seem to work against these new ones as well; but there will be other variations. There'll be another virus down the road. I find it extraordinary--and, this is another observation about the previous Administration that was so shocking--we had a President who was openly antagonistic to China, was happy to go to economic war with them over tariffs and the treatment of intellectual property. And, yet he did not make a campaign issue out of the fact that the virus originated in China and that China has done everything they can to stymie attempts to understand how it spread from China and where it came from within China. That the World Health Organization [WHO], which the current Administration has happily rejoined instantly, has been manipulated by China to not be able to explore those questions.

We could debate, I don't want to, whether how many lives were lost because of a failure of leadership in the White House or on 10 Downing Street or in other capitals around the world. But, China has some responsibility for this. And, is no one going to hold them accountable? Is this just a free lunch for them? I mean, a horrible free lunch, a tragic free lunch if somebody cares. But, shouldn't the world say to them, 'If you want to play with us, if we're going to have international economy, which you desperately need, you have to play by certain rules of transparency?' Instead it's like, 'Oh well, let's hope there isn't another one down the road.' I don't get that. I find that weird. What do you think?

John Cochrane: So, you brought up a couple of things which I'd like to respond to. One is, I think: Let's not fall into the trap of too much contemporary political discourse to regard the President as the god/king who is in charge of everything and he knows what goes on and directs all activity.

Russ Roberts: And, all outcomes are his blessing or his curse.

John Cochrane: Yes. 'If only the Führer had knew,' as the Germans kept saying in the 1930s. That's not how it works.

Especially in public health. It relies on bureaucracy, on a competent state capacity, on a competent Federal bureaucracy, on a competent local bureaucracy. Public health is not something well-directed by--if you've ever been in the White House, it's just shocking how small it is, how few people there are there and how little they actually know about how things run. The President--you need a DMV [Department of Motor Vehicles] to administer a Driver's License test. The President can't be in charge of that.

So, the President's job is to build a competent bureaucracy and make sure that this bureaucracy learns from its failures before the next one comes. And get that state capacity back up. And, it's also worldwide. So, I'm not a big fan of Trump on many issues; but many other countries failed, just as much as us. And, it is just a mistake to look to--the President is the central focus for how do you handle a pandemic. This is--there is a lot of them--

Russ Roberts: You're saying he shouldn't be: that it's a bigger question.

John Cochrane: You need leadership at the top and you need not scoring up at the top. But, you need competent bureaucracy to both feed incorrect information and to--the President could make big decisions, but do we approve the vaccine or not, that's not a presidential decision. How do you know? The President maybe should have said, 'Actually, how do you get vaccines in arms?' is a state and local decision. We need a competent--the President can't say 'Russ Roberts's mom needs to go next in line.' Right? You need somebody who knows that all right, the website and answer the phones and get those things working. But, building that bureaucracy, as well as--we had pandemic plans. We had stockpiles of masks and gowns. And they all kind of got forgotten and left to rot.

So, keeping that. Because there will be another one.

First, so, right now we're kind of in 'the vaccine will save us.' I remember being, in November, all skeptical of that and my fellow in another podcast I did in November. 'Oh, no, John. You're grumpy again. It'll all be done by spring.' And, then look at the snafu we had.

There will be more snafus, the unknowns will unknown. New variants, evolution, and exponential growth are there. The way diseases--this one has reservoirs. So, it's not going to go away, certainly, until the whole world is vaccinated. The way these things works, and it goes that way in the United States, we're all vaccinated--but it hides out somewhere else, either in animals or in other parts of the world. And, then somebody flies back in and then it comes back. We do not--as far as we know, this vaccine does not give permanent immunity.

So, within a year or two, everybody has lost immunity. So, even this one could well have several waves if not correctly managed. There will be another one. This is only H1N1, SARS, Ebola--every globalized world has pandemics, respiratory since--we figured out how to stop water-borne diseases, but respiratory viruses.

China is the source of this one. China has been the source of most of the other ones, too. This one is especially, it looks like it came out of the lab and moved on. Now, I want to--we don't know that, but a lot of evidence points to that, which is something that China's going to be very reluctant to admit. But, the previous ones didn't come out of wet food markets in China, or the habit of close contact between ducks and pigs and chickens where viruses move around and learn to mutate. So, yeah, it needs a competent worldwide bureaucracy that isn't completely politicized into protecting China. Keep your eyes open: another one's coming.

Russ Roberts: My guest today has been John Cochrane. John, thanks for being part of EconTalk.

John Cochrane: It's always a pleasure, Russ.

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