Reply #14: "this is not a complex issue" -- actually it is, and your own post shows why [View All]

[HamdenRice]

I agree completely that "Without vaccines a large group of people would pay large costs." I also agree that "Society benefits from vaccines, and society is made up of individuals..."

But here is why it is a complex problem. The economic calculation and optimal solution for society is different from the economic calculation and optimal solution for the individual. This is a classic problem of economics in the field called "collective action" problems.

These occur when the optimal solution for the individual is different from the optimal solution for society. The optimal vaccination solution for society is often (but not always) that everyone gets vaccinated. But if everyone gets vaccinated, the disease disappears or becomes very, very rare (eg introduced only by immigration). If the disease is very, very rare than the individual does not benefit from getting the vaccine, but runs a small risk of paying very high costs in terms of a serious adverse reaction, and has the certainty of a small cost in terms of the normal immune reaction which is often uncomfortable.

So, the optimal solution for the individual is: that everyone else gets vaccinated, but I do not. If we are talking about children, whose health parents often have even greater concern for than their own health, the outcome is magnified: the optimal solution is that everyone else's child gets vaccinated, but mine does not. That's called the "free loader" problem. Despite its name, it is not a moral condemnation of the freeloader, but an objective observation of what is actually in the individual's best interest and what he is likely to do. As you yourself point out, since no one has a crystal ball and can tell who will have the adverse reaction, that's all the more reason that the individual, facing the decision for his/her child, has a legitimate incentive to freeload. Economic theory recognizes the insoluble fact that optimal individual outcomes are often different from optimal social outcomes -- a fact that you seem to be trying to avoid or deny.

Collective action problems are widely studied and come up in a wide variety of situations. For example, a village in India might try to get everyone to contribute to building a canal to connect their local irrigation system to a larger water source. But the optimal outcome for the individual farmer is for everyone else to do so except him. In Botswana a village may decide that the pasture can support 10,000 cattle and divide that by 10 families allowing each to pasture 1000 cattle, or else the pasture will become degraded. But the optimal outcome for an individual herder is that everyone else limit themselves and that he adds two or three extra cows.

These individual optimal outcomes are unstable because if everyone does what is optimal for himself or herself, the collective good is lost. But the collective outcome is not optimal for the individual, which means that some form of coercion is necessary -- whether its having doctors "push" vaccines, or making the threat sound more dire to the individual than it is, or the kind of hectoring arguments you see on this board. It's all an attempt to overcome the obviously optimal outcome for the individual. But the collective outcome is also sub-optimal because the sum of the perceived utilities of the individual optimal outcomes is higher than the sum of the actual individual utilities of the collectively optimal outcome.

Moreover, it may not even be the case that the optimal outcome for society is "everyone gets vaccinated"-- which is reflected in the advice given by medical organizations like the CDC. It depends on the disease, the vaccine, the cost of the vaccine and the vaccination campaign, and the amount and severity of adverse reactions. If for example a particular disease becomes very rare when vaccination rates reach 80%, it may be that some rate around 80% is optimal for society because the same societal objective will be reached at a lower cost, and those who want to opt out may do so without coercion. For some diseases, the optimal rate may be even lower. So, for example, the major medical organizations do not recommend that everyone get the flu vaccine. We also have to provide assurances, to those who are trying to decide whether to get the vaccine, and cannot know ex ante the risk, that if they have an adverse reaction, they will be compensated from a pool of money drawn from the good that the vaccine does for others -- hence the Vaccine Court, which functions in the place of a market such that those who benefit "purchase" their benefit from those who were injured.

In the case of every vaccine, complex collective and individual decision making takes place, and conflicting outcomes are inevitable. That's why it is, in fact, a complex problem.