Archive for the 'Asides' Category

The economics of Ebola

[link] Sunday, August 24th, 2014

As someone who has written 50 newspaper columns a year for as long as I can remember, I know a really skilled practitioner of the columnist’s art when I see one. And one of the best is James Surowiecki of the New Yorker whose weekly ‘Financial Page’ is one of the wonders of the journalistic world. It’s not only unfailingly intriguing and informative, but it’s also clear and beautifully written.

Last week’s page on the economics of Ebola (and the economics of drug-discovery generally) is a typical gem. Surowiecki starts from the puzzle that while Ebola is one of the deadliest diseases known to mankind, nevertheless the pharmaceutical industry has developed no serious tools to combat it.

He then goes on to point out that this is only a puzzle to those who do not understand how the pharmaceutical industry works. “When pharmaceutical companies are deciding where to direct their R.& D. money”, he writes

very naturally assess the potential market or a drug candidate. That means that they have an incentive to target diseases that affect wealthier people (above all, people in the developed world), who can afford to pay a lot. They have an incentive to make drugs that many people will take. And they have an incentive to make drugs that people will take regularly for a long time – drugs like statins.

This system does a reasonable job of getting Westerners the drugs they want (albeit often at high prices). But it also leads to enormous underinvestment in certain kinds of diseases and certain categories of drugs. Diseases that mostly affect poor people in poor countries aren’t a research priority, because it is unlikely that those markets will ever provide a decent return. So diseases like malaria and tuberculosis, which together kill two million people a year, have received less attention from pharmaceutical companies than high cholesterol. Then, there’s what the World Health Organisation calls “neglected tropical diseases”, such as Chagas disease and dengue; they affect more than 1 billion people and kill as many as half a million a year. One study found that of the more than fifteen hundred drugs that came to market between 1975 and 2004 just ten were targeted at these maladies. And when a disease’s victims are both poor and not very numerous that’s a double whammy. On both scores, a drug for Ebola looks like a bad investment: so far, the disease has appeared only in poor countries and has affected a relatively small number of people.

This is, of course, bad news for people in poor countries. But Surowiecki goes on to point out that the business model of pharmaceutical companies poses serious risks for those of us who live in rich countries too. The case study he picks is the looming problem of diseases that have become resistant to our current arsenal of antibiotic drugs. The need for new, more powerful antibiotics grows with every passing day, but it’s not need that the industry – left to itself – will be able to address.

The trouble, again, is the business model. If a drug company did invent a powerful new antibiotics, we wouldn’t want it to be widely prescribed, because the goal would be to delay resistance. Public-health officials would – quite properly – try to limit sales of the drug as much as possible. Otherwise its efficacy would follow the same downward path as conventional antibiotics.

Which leaves us with a difficult public-policy problem: how can we get the drugs we will need without radically transforming the industry that makes them? The answer has to be some way of incentivising companies to do the research necessary to create substantial public-health benefits. And the only idea we seem to have for doing that at the moment is by going back to what the Board of Longitude did in the 18th century — getting governments to offer massive prizes for drugs that we may need but for which there is only a limited immediate market.

It’s a great column, worth reading in full.


[link] Saturday, August 23rd, 2014


Last week’s New Yorker cover.

What SIlicon Valley chooses not to know

[link] Sunday, August 17th, 2014

This morning’s Observer column.

It is difficult to get a man to understand something,” wrote Upton Sinclair, the great American muckraking journalist, “when his salary depends on his not understanding it.” That was in 1935, so let us update it for our times: “It is impossible to get an executive of an internet company to understand anything if the value of his (or her) stock options depends on not understanding it.”

There are two things in particular that the various infant prodigies, charlatans, megalomaniacs, sociopaths and venture capitalists who run our great internet companies have a vested interest in not understanding…

Read on…

Increasing returns

[link] Friday, August 15th, 2014

In 1984, you could have bought a single share in Warren Buffett’s investment company, Berkshire Hathaway, for $1,300. Yesterday, you could have sold that share for $200,000. Sadly, in 1984 I didn’t have $1,300 to spare. And I’d never heard of Berkshire Hathaway.


Or this?

[link] Wednesday, August 13th, 2014

We’ve lost a genius. May he rest in peace.

Robin Williams on golf

[link] Tuesday, August 12th, 2014


Advancing hordes

[link] Monday, August 11th, 2014


This extraordinary snapshot showing German infantry advancing through crops in a Belgian field captures something of the shock of warfare that — for most people — came more or less out of the blue. I came on it (of course) while I was looking for something else. That’s the Web for you.

Source: Alex Selwyn-Holmes

Google knowledge

[link] Sunday, August 10th, 2014

Nice cartoon in the New Yorker. Wife is mopping up pools of water created by her husband, who is (incompetently) washing up: “Do you really know what you’re doing” she asks, “or do you Google-search know?”

Oh what a complicated war

[link] Friday, August 8th, 2014

I’ve just finished Christopher Clark’s remarkable book about the origins of the First World War. It’s very well-written but it’s not an easy read because Clark’s mill grinds exceedingly fine and he has an astonishing capacity for archival research across a range of languages. So the reader winds up knowing far more than he bargained for about the detailed intricacies of foreign policy and what passed for strategic thinking in a whole range of European governments.

Given that, the sales of the book are nothing short of extraordinary. The Economist claims that it has sold over 300,000 copies, for example. What’s even more extraordinary is that it has sold 130,000 copies in Germany.

This has puzzled some commentators, but I think I know the reason for its popularity there. It is that, whereas the conventional wisdom about responsibility for the war has generally pointed the finger at Germany, Clark’s analysis is more nuanced. One way of interpreting his analysis is that the urge to war was the emergent property of a complex, interactive system, the actors in which were confused, riven by internal contradictions, and had poor information about the intentions and deliberations of all the other players in the game.

Here’s how he puts it in his conclusion:

“The outbreak of war in 1914 is not an Agatha Christie drama at the end of which we will discover the culprit standing over a corpse in the conservatory with a smoking pistol. There is no smoking gun in this story; or, rather, there is one in the hands of every major character. Viewed in this light, the outbreak of war was a tragedy, not a crime. Acknowledging this does not mean that we should minimise the belligerence and imperialist paranoia of the Austrian and German policy-makers that rightfully absorbed the attention of Fritz Fischer and his historiographical allies. But the Germans were not the only imperialists and not the only ones to succumb to paranoia. The crisis that brought war in 1914 was the fruit of a shared political culture. But it was also multipolar and genuinely interactive – that is what makes it the most complex event of modern times and that is why the debate over the origins of the First World War continues, one century after Gavrilo Princip fired those two fatal shots on Franz Joseph Street.”

How Hamas does rocketry

[link] Thursday, August 7th, 2014

Interesting video by a journalist with more courage than sense.