The existence of – prompted by the idea that it is subsequently used – a covid vaccine has value. You know, nice to be able to go for lunch with the old folks without killing them.
OK, but what is that value? One way we can do this is by asking how stock markets have moved as the news about vaccines, their successes, failures, has worked through the system. Unsurprisingly, markets fell when the pandemic and lockdowns arrived. They’ve then risen as the rollout of the vaccine has got closer. It’s possible to pull this apart and get an estimate of the wealth we’d be willing to gain to have a vaccine – or, if we prefer, how much wealth the existence of the vaccine has created:
Quantifying the economic damage caused by the COVID-19 pandemic and the worth of a cure can assist cost-benefit analyses of potential public-sector investment to alleviate the impact of the current pandemic. By reflecting forward-looking expectations, stock prices should indicate the economic value of progress being made towards vaccine development. This column estimates the value of a COVID-19 cure using the behaviour of stock prices and a novel vaccine progress indicator. The value of a cure is worth between 5% and 15% of wealth and rises substantially with uncertainty surrounding the frequency and duration of the pandemic. Understanding the fundamental biological and social determinants of future pandemics may be as important as resolving the immediate crisis.
OK, call that 10% then. And global wealth is around $320 trillion. That’s not human capital – a far larger sum – nor the amount that governments are sitting upon and wasting. That’s property, pensions and financial assets – $320 trillion. The vaccines’ worth 10% of that or $32 trillion.
Which means that some people have some ‘splainin’ to do out there. Those idiots (Well, Hellooo there Prof Mazzucato!) shouting that Big Bad Pharma doesn’t deserve anything. This is public health, there should be a public solution and anyway, it’s all based on government paid research anyway.
And, well. Pfizer might make a billion or two off this. AstraZenaca another such. Hell, let’s be generous here, let’s say they’ll all, together, make $10 billion.
So, we out here gain $32 trillion – trillion – of wealth. The capitalist bloodsuckers over there are going to get $10 billion – billion.
And people are complaining about our being on the right end of the greatest bargain in all history? They’re idiots, aren’t they?