Solutions
It is hard to find a voice among today’s economists advocating anything other than market-led solutions to problems. “The market can solve problems better than government can,” they will say with a conviction as stalwart as if they were decrying racism, or proclaiming the world is round, or stating a preference for either David Lee Roth or Sammy Hagar as the lead singer for Van Halen.
The issue becomes, when the market realizes profits by *not* solving a problem, and the problem needs to be solved, who does the responsibility fall to? The answer is government, and the specific problem in question is something that every human being ever to walk the earth has suffered from at one time or another.
The common cold.
Pharmaceutical companies sell billions of dollars of cold medicine and other sniffling, sneezing, coughing, aching, stuffy-head, fever necessities per year. The common cold virus is a cash cow the likes of which mankind has never seen: unlimited and unending demand, almost no cost of production, cheap and universal distribution, and high profit margin. For the market, i.e. the businesses that profit from this, they would be stupid to even consider finding a cure.
But it is in the interest of every person and business (other than the drug companies) to find a cure. American businesses lose billions of dollars per year in worker productivity and absenteeism due to the common cold. And the public is the unwitting accomplice in a massive scheme to funnel wealth from our pockets into the bank accounts of drug companies. We have to put an end to it.
Because the pharmaceutical industry, who has the power to find a cure, profits from *not* finding a cure, they will never attempt to find one. The market has failed at solving this problem, and without intervention it will never succeed.
So why doesn’t industry band together and pool their resources to fund research? It costs them incalculable losses every year, it would seem logical that they invest in finding a means to avoid such losses. Industry will never band together because of the cheater effect. If there was a way to ensure that *every* business contributed in a manner consistent with their resources, that would be great. But greed turns people into cheaters, and many businesses will refuse to participate, figuring that others will pick up the slack, and allowing them to reap the benefits while incurring none of the costs. That, in turn, causes businesses that were originally on board to back out, not willing to make up the difference for the cheaters. In the end, nobody contributes, and the problem persists.
But there is a way to ensure that everybody contributes in a way consistent with their resources: it’s called ‘taxes’. The government collects taxes from every business in the country. It can collect a special add-on tax in the amount of (for instance) one dollar per employee. Even for the largest employers in the country this is a paltry sum. Add on a fifty-cent tax on individuals for each member of their family. Again, even for the lowest wage-earners, this is nothing. But in total the government would now have close to $250 million dollars each year to put towards funding a cure.
The question then becomes, how do you do it? How do you motivate researchers to develop a safe, effective, and low-cost cold vaccine? Offer the whole sum as a bounty. Collect the tax every year, the pot keeps growing until somebody puts a vaccine into human trials. If it turns out to get FDA approval, the whole pot goes to the winner.
This concept has been used in the private sector already, with great success. The X Prize Foundation offered the sum of $10 million to the first group to develop their own “space shuttle”. The rules were a little more detailed of course, but what is curious is the winner ended up spending almost ten times the amount of the prize on R&D. That alone should show that motivation exists to solve these types of problems regardless of the financial reward. There’s a new contest just underway as a matter of fact: put a rover on the moon, move it 500 feet, and return data, photos, and e-mail to the earth. The contest was just announced, and there are 13 teams already registered. That’s how to motivate people. Make it a race, turn it into something that the winner can boast about, and you’ll find you have many more contestants than you ever thought could exist. It’s the maverick American spirit: bigger, faster, better than the next guy.
The same thing needs to be done here. Savings to the consumer (from not buying $100 in cold medicine each year) and to the business community (in having more workers on the job more often) will run into the billions per year in perpetuity. You know as well as I do that the drug companies will scream bloody murder, but hey: they probably have the best chance of anybody of finding a vaccine. They can take a shot at winning the prize just like anybody. It’s about time we held their feet to the fire and got them moving on a solution to this problem.










