Twitteretter

Maybe there are not enough global supplies of PPE and coronavirus tests. But why is my government not securing a bigger share? Why are we losing the race with other countries? This does not depend on competence. The ability to quickly procure these goods in a global supply market is mainly a function of the commercial contacts a country’s industry had before the pandemic. It is akin to what might happen if an effective, cheap treatment was discovered and all restrictions lifted. Imagine 500 people suddenly flocking to a bar which has 100 beers, where beer price is fixed in real time, because of excessive demand, and payment is on a loyalty card. Not everyone will get a beer, and your competence is not really an advantage. Knowing the barmen and already having an account from before lockdown will be. While other people are filling registration forms and having their credit worthiness checked, you will be happily sitting in the sun outside, drinking your cold beer, looking competent L...

I am bemused by the aggressive criticism that the public, fuelled by the media, is directing at governments because of lack of PPE and test availability. How, after weeks of going through this, can these materials still not be widely available. This is a simple problem of supply and demand, which is at the heart of economic theory, and it is global even though we think about it in national terms. Nowhere near enough of these things are manufactured in normal times, to cover a pandemic. When it comes, there are not enough factories and raw materials, no established supply chains. And these take time to set up. In normal times, we don’t buy these goods, and this explains the lack of supply. We live in a market economy and, in this system, who would invest money and effort manufacturing goods that nobody needs and nobody would buy? Let me tell you something. If each consumer had purchased, in the last 20 years, 20 KN95 masks per year, we would certainly have enough production capacity ...