There is a very strong argument that government should – or at least could make life better for us all if it did – get involved in the production of public goods. The problem being that public goods are, by their definition, difficult to make a profit from. Thus a profit driven private sector might leave us with fewer such public goods than we’d benefit from.
This is not, within economics, controversial in the slightest. Nor is the next step, that there are many ways that government could get involved. Maybe solve the public goods part of the problem, as with patents and copyrights, then leave the market suitably adjusted to get on with it. Possibly that won’t work, or we’d just prefer to do it another way, so government actually pays for the public good. The correct answer here being that what we do about them depends upon the specific circumstances of what is being talked about. Copyright obviously works for novels – there’s no need to imagine what the output of a State Novel Service will be like, the Soviets already showed us that one.
All of this does, obviously enough, depend upon our getting the definition of public good correct. Exactly what is not being done here:
Vaccines are a classic case of market failure. It takes a lot of research and testing to develop a vaccine. But the retail market is literally a one-shot, unlike pharmaceutical drugs that enjoy repeat profits from endless refills. It’s also unprofitable for the for-profit sector to maintain enough production capacity to meet peak needs, as in a pandemic.
So vaccines are public goods.
No, vaccines are not public goods. For a public good is not something good for the public, not something that is a good provided to the public. A public good is something that is non-rivalrous and non-excludable. If I use one unit of whatever it is then that doesn’t diminish the units available for other people to use and also that we can’t stop someone using one unit.
Clearly, vaccines are not public goods. One shot given to one person cannot then be given to another, we can stop someone from getting the shot too. Vaccines are not public goods.
The herd immunity that comes from enough of the population having had the vaccine, that is a public good and is one of the canonical examples used. This is an important distinction. The private sector is just fine at developing and producing and selling vaccines. It’s the making sure everyone gets it where the possible falter is. And thus there’s a very good argument for government to be involved in making sure everyone gets it in order to produce that public good, the herd immunity.
Britain’s NHS pays for all the vaccines for everyone. The American system more usually says that you can’t send the kids to school until they’ve been vaccinated. Either seems to work well enough, vaccination rates aren’t all that dissimilar in each place. Myself in this particular case I prefer the British method but that’s largely just that personal taste thing. But do note, government action aids in gaining that public good but there are different government actions which still manage to gain that public good.
Seriously folks, let’s get this right. Vaccines are not public goods. The herd immunity resulting from widespread use is, but not the vaccine itself. After all, we’ve got the example of The American Prospect right in front of us here so we know, absolutely, what the bad economics is and we should try to do better, no?