This Is NOT Capitalism!

The Cato Institute is a libertarian “free market” outfit.

It houses itself in Washington, D.C. — somewhat ironically.

And according to Cato… the novel mRNA vaccines represent the peak and pinnacle of market capitalism:

It was the flow of people, ideas, capital, goods and services that made it possible to discover and produce a vaccine in record time…

Global capital markets… played a role by providing the massive funding needed for the biotech and pharmaceutical companies that developed and distributed the vaccines…

The production and distribution of the vaccine required complex international collaboration in terms of logistics, shipping, storage and supply chains that were adaptive but based precisely on the knowledge, technology and networks built up by decades of global commerce.

None of the above could have been accomplished by a preconceived government plan. The production and distribution of the vaccines really were a triumph of globalization.

All this is true — as far as it goes.

Miracles of Production

On the miracles of capitalistic production we refer you to Mr. Leonard Read’s eternal gem “I, Pencil.”

We said miracles. The production of a simple pencil tells a tale of such dizzying complexity it represents a miracle of sorts.

It is not a Christ-emulating miracle. It does not part the Red Sea. It does not feed 5,000 with seven bread loaves and a handful of fish.

It does not cure the sick or let the blind see.

It is nonetheless a minor miracle — a junior miracle.

And to produce a revolutionary vaccine product? It is an even higher miracle.

Yet is it a true miracle of free market capitalism? We take leave to doubt it.

Operation Warp Speed

Does the author of the above passage — a certain Ian Vásquez — recall “Operation Warp Speed”?

Economist David Brady Jr. does. From whom:

Operation Warp Speed, as begun under Donald Trump, “invested” $12 billion in vaccine development; $2 billion was sent to Pfizer specifically, and over $4 billion to Moderna (the rest was distributed to other vaccine companies). The U.S. government then spent $30 billion purchasing vaccines from these companies, $25 billion of which went to Pfizer.

Does the free market seize $12 billion from taxpayer wallets and empty it into the wallets of private firms?

We cannot cite a single example in which it does.

By definition it cannot. Free — after all — is free.

Free, that is, of coercion.

Yet perhaps we pick a nit. Perhaps we erect a mountain range from a meager molehill.

“This was an emergency,” you say. “We needed a sort of Marshall Plan in order to rapidly produce a vaccine. That meant government money. Sorry Larry Libertarian. Millions of lives hung in the balance.”

Just so. Yet let us be precise in our terminology.

Whatever these vaccines are… they are not products of the free market… if words are to mean something.

Their production harnesses vast market forces, it is true.

Yet so does the production of aircraft carriers.

Who among us would label aircraft carriers products of the free market?

Would the Cato Institute?

Fascism by Another Name

What we have then is a symbiosis. A symbiosis, that is, between government and industry.

By certain definitions this is fascism. Yet given the term’s sinister penumbras and emanations, we pass it over.

We will simply adopt the more benign “crony capitalism.”

Here our own Charles Hugh Smith describes the thing to its very fingertips:

What does it mean to be a crony capitalist?

It means you don’t rely upon the free and competitive market to earn your profits. You depend instead upon government support in one form or another.

Big Pharma and Big Defense are probably the most prominent examples of crony capitalism most people are familiar with. And just look at their profits over the past couple of years.

How would they make out on the free and fair market without working hand-in-glove with government?

The question is the answer. If you ask it you answer it.

You Can’t Sue

And have you ever heard of a manufacturer you cannot sue — in a court of law — if its products injure you or undo you?

If a defective chair collapses while you are sitting in it and you break your leg you may sue its delinquent manufacturer.

The identical principle applies to automobiles, children’s toys, exercise equipment, mattresses et cetera.

Yet could you file a legal claim against Pfizer if its vaccine crippled or injured you?

You could not. Why not?

Because the federal government would not let you. It granted Pfizer a waiver against lawsuit. And you could not haul it into court.

Is this the operation of the free market? Then words lose all meaning.

The abovesaid Brady:

Perhaps the most damning of them all to the “free market effort” argument is the legal immunity granted to vaccine manufacturers. Since the Reagan administration, the National Vaccine Injury Compensation Program has existed to provide compensation to those injured by a vaccine on the childhood vaccine schedule.

Rather than the traditional tort law system in which those injured would be able to bring lawsuits against the manufacturer, they are compensated out of a fund. This fund is paid for by a tax on each vaccine. Thus, so long as the vaccination is on the schedule, there is no reason for specific liability over possible damages of a vaccine.

Thus, absent true common law liability, the vaccine manufacturers are incentivized to act recklessly and get their vaccines to be granted this legal immunity.

However, the COVID-19 vaccines have not met this designation yet. These vaccines were granted special legal immunity under the PREP Act…

This special legal immunity ends next year. Thus the multitudes of previously vaccine-injured and maimed go scratching.

It is, as is said, tough luck.

Government-Granted Monopoly

Meantime, can a manufacturer on the free market enlist the government to squash competitors?

It cannot. Yet a Pfizer can.

The public health authorities — under heavy “Big Pharma” nudging no doubt — officially put agents such as hydroxychloroquine and ivermectin under the excommunication.

They were denounced as ineffective at best and harmful at worst.

Yet many, many studies indicated the opposite. Learned men of science cited these studies.

These drug agents were nonetheless denounced.

That is because the vaccines could not have been granted Emergency Use Authorization if alternate therapies proved viable.

Thus none was declared viable. And the vaccine manufacturers got their Emergency Use Authorization.

Again we ask: Is this the machinery of the free market?

It is the machinery of monopoly. And a true monopoly cannot exist on the free and open market.

That is because competitors will conspire against it — ruthlessly and ceaselessly.

Where You Stand Often Depends Upon Where You Sit

Brady in conclusion:

Every step of the manufacturing process is a deadly reminder of cronyism. It is funded by the taxpayer… The privileges of this expropriation are then given to a chosen few, and even those who would offer true market goods are prevented from providing them. Finally, it is then protected from any semblance of error by the government.

At every step the cronyists, who can lobby the government by any means they wish, protect their bottom dollar at the true expense of the citizenry. These vaccines are not a “free market miracle” but rather another sad product of cronyism.

Why would a free market think tank — so-called — argue otherwise?

Here we hazard an answer…

Where a man stands often depends upon where he sits.

And this “man” sits at 1000 Massachusetts Ave NW, Washington, D.C. 20001…

A mere 2½  miles from Capitol Hill.

The Daily Reckoning