EconomicsNotes

  The world since 1987 has become remarkably less unequal than it was. This is because of sustained growth in areas which had traditionally been rich in human history but which two hundred years of Imperial inequality had destabilised, such as South America, the Middle East, India, and East Asia. In those countries and areas, incomes have generally risen along with GDP/GNI, wages have increased, land value increases have provided one-off but huge benefits to many who were formerly peasants, and living standards have increased (at the temporary expense of the environment.) By contrast, Western countries have seen the opposite since 1973; their real wages and purchasing power have declined, their domination of world markets in a growing number of sectors and services has come under challenge, their national debts (since 2000) have generally grown, and their economies and supply chains have become globalised and financialised. This has not resulted in more unemployment, but has fo...

  Vaccines are a merit good. They are excludable (they can be charged for) and are rivalrous, in that different companies can produce different versions. The market could in theory therefore produce a vaccine. Start up costs are however very high, so initial average and marginal costs would be high. This is because fixed costs are high, and also because safety measures, tests, and liabilities if things go wrong, are expensive and take a long time to work through under normal   safety protocols. Vaccines have high positive externalities and to really work require widespread coverage. This generally means that the social optimum for their provision will be different from the market equilibrium. This is because in a market, people will pay for the drug or vaccine up to their own marginal private cost, at the point where that meets marginal private benefit (equal to marginal social benefit.) For society, it would be better for the provision to be at the social optimum, where m...