Pfizer's vaccine is something of a blow for the Mariana Mazzucato thesis

Mariana Mazzucato tells us that technological advance comes from wise investments by the omnisicient and beneficial state. Her proof is that some technological advances have come from investments by the state. One answer to this is that given the state’s appropriation of 30 to 40% of everything we’d rather expect to gain the occasional snippet of a public good in return. That not in fact being a reasonable justification, instead we want to know whether state directed research and development is an efficient manner of gaining those desirable technological advances:

“If it fails, it goes to our pocket. And at the end of the day, it’s only money. That will not break the company, although it is going to be painful because we are investing one billion and a half at least in COVID right now.

But the reason why I did it was because I wanted to liberate our scientists from any bureaucracy. When you get money from someone that always comes with strings. They want to see how we are going to progress, what type of moves you are going to do. They want reports. I didn’t want to have any of that.

Basically I gave them an open chequebook so that they can worry only about scientific challenges, not anything else. And also, I wanted to keep Pfizer out of politics, by the way.”

Pfizer’s vaccine is the first to show decent results. It’s also the one that entirely rejected government funding through the emergency “let’s make a vaccine” fund.

There are costs and benefits to everything. As Bastiat pointed out, to be an economist is to search for that which is hidden in such calculations. The costs of - in part, only part of the costs - government direction of research include the costs of government oversight and management of research. It often enough being true that the costs of the bureaucracy are greater than the benefits of the aid.

Or, to repeat the point, we cannot look at technology and ask whether some of it was government funded and thus decide that said funding is a good idea. We must balance that with asking what didn’t we get because of the funding and also, well, would we have got it faster without the government bureaucracy?

At a more basic level we - our opinion, only our opinion - think that Mazzucato’s original research was funded in order to produce a justification for the European Union to own portions of the patents, technologies and companies that were funded by European Union funds. The political desire being to create a flow of “own funds” for the EU, a stream of future cash that did not depend upon recalcitrant national governments.

The model was Darpa, the American military funding agency. The problem with this being that Darpa, by design and specifically, does not take equity or other stakes in the things investigated or designed with its money. Precisely and exactly on the basis that having the bureaucrats trying to claim a portion of those cash benefits means a stultifying bureaucracy which limits, even prevents, the technological advance the money is being deployed to gain.

But there we are, commissioned research does often come up with the right answer, doesn’t it?