Central purchasing and PPE in the time of coronavirus

We’re in The Times talking about the purchasing of PPE in these troubled days:

Given official intransigence, it is Edmund Burke’s little platoons who save the day. The website PPE Exchange has been cobbled together by the publicly minded, as distinct from the publicly employed, and does just what it says on the tin: it is an exchange for these necessaries, and one that claims to have two billion pieces of equipment available at time of writing.

The correct governmental solution to many problems is less of it, not more. Who knows, trusting the people might even catch on as an idea.

An argument against our preferred decentralised preference turns up in the comments. Not to particularly pick on this individual for it’s an idea we’ve seen in many another place:

In the USA states and federal government are getting played against each other in bidding wars instead of negotiating at scale.

Well, yes, but that’s rather the point. We not just want but should actively insist that the various people desirous of the thing be played against each other. This is what a market means.

At any one moment in time of course there is only some - unknown but fixed - amount of PPE in the world. If that moment were to last forever then the monopsonist buyer argument might have a point. But that moment is as long as it takes to retask a seamstress. Or, if you prefer, a plastic cutting machine, repurpose the output of an ethylene plant, pick your own example.

We have a rise in the demand for these varied things that we call personal protective equipment. None of them are hugely difficult to produce, an increase in production does not require the building of a new factory. The necessity is the repurposing of already extant trained labour, fairly low tech machinery, commonplace enough raw materials and a certain gumption and energy to make it all happen.

We’d also like people to be pondering whether they do truly need it. Perhaps the supermarket checkout can manage with a plastic visor to show willing, while a nurse on a ward requires full facial covering, possibly even a clean air supply. Who knows, who among us out here knows that is? This is something those directly involved will know better than anyone else.

So, how do we call into existence these two desirable behaviours? A consideration of what is to be used by whom and a scramble to produce more to be used by all?

We change the price. At which point it all happens as if by magic - any sufficiently advanced technology is indistinguishable from magic and the price system combined with markets is a technology, most advanced and thus indistinguishable from magic. We most certainly, from the above example, get all too many people asking “Well, how does that work then?”

The point being that it does. Further, it’s the only technology we’ve got that does.

We wish to increase the supply of PPE in this time of coronavirus. Would be purchasers of PPE being played against each other in bidding wars is not a problem, not something to be avoided, it’s the point, for it is the solution. Both supply and demand being elastic with respect to price, d’ye see?

If you’d prefer the “Shazzam!” explanation, the idea that there really is a wizard, then don’t look behind the curtain, it works all the same.