Greed might not be good, but does vaccine profit have to be bad?
It is wrong to attribute the creation of Covid vaccines simply to greed, argues Dr Esmond Birnie
HAVE you had your vaccine? If the answer is yes, you are probably immensely grateful.
If you are still waiting you may be looking forward to it with hope. It is remarkable that the vaccines were researched, tested and produced so quickly.
To what might we attribute this latter day miracle?
Back in March, Prime Minister Boris Johnson told a meeting of his backbench MPs that "greed" had produced the vaccines. He then retreated from that comment by saying he had been joking.
The Prime Minister's 'joke' raises some serious issues. Those of us who believe that a market economy, albeit one guided by law and ethical behaviour, is the best option for our society may feel that with friends like the PM who needs enemies.
His 'joke' may be used to support a level of state control which is neither morally right nor economically effective.
To be fair to Boris Johnson, even in his Gordon Gekko mode (the character from the 1987 film Wall Street who had the infamous line "greed is good"), he spelt out what others think.
He touched on a debate which has existed since the start of modern economic thought.
The early 18th century Dutch writer Bernard Mandeville argued that vice, and especially greed and conspicuous consumption, was a good thing in order to grow the economy.
This provoked a pained reaction from his contemporary, the Scottish philosopher (and economist) Adam Smith.
Smith, for all his affinity to the religiously agnostic David Hume, seems to have believed in something akin to the Christian concept of the moral conscience - we all have an inner guide as to the right thing to do.
In reality, the research for and production of vaccines was based on a wide variety of motivations amongst the global teams of scientists and business people who have been involved.
Many of those motivations were strongly humanitarian. Some, yes, related to a perception of business opportunities. Henry Ford once said: "...a business that makes nothing but money is a poor business."
It is notable that AstraZeneca is producing its vaccines at cost price and so will make zero profit, at least during "the period of the pandemic".
At the same time, some pharma firms are thinking about their longer term position, which isn't necessarily a bad thing given that we will probably need their research and development (R&D) resources and drug design methods to deal with future Covid variants.
If the Prime Minister had been less colourful he could have said that the production of the vaccines owed quite a lot to profit-seeking.
Profit should not be a (morally) bad word. Standard economic theory, back to Adam Smith, defines profit as a signal to produce what society finds relatively useful.
If markets sometimes fail we know from experience that governments often also fail to make wise decisions.
The experience of the pandemic is that profit-seeking firms, albeit with quite a lot of state intervention, especially in terms of funding R&D, have produced a better outcome than relying solely on state control.
After all, if we think of the classic state-run economy, the old Soviet Union during 1917-1991, this was not particularly successful at producing pharmaceutical advances.
Given the imperfections of human nature, a market economy with government interventions often produces better outcomes than the available alternatives.
The vaccine position is yet another demonstration of that.
For all the historical or contemporary failures of 'big pharma', and there is a challenge in terms of ensuring vaccine availability in the poorer countries, we should be grateful that on this occasion it delivered the goods.
Dr Esmond Birnie is senior economist at Ulster University Business School.