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Government BenefitsStrangely enough, today we are also going to be looking at an article from the Wired Magazine titled "The Once Powerful Antibiotic Goes the Way of All Flesh". This article deals with an antibiotic called Colistin. This antibiotic was discovered in 1969 but it was never used in humans because it is so toxic. However, this did not stop Chinese farmers from using it in pigs. Yes, the antibiotic is also banned in China for human use but not in pigs. In low doses this antibiotic was used to fatten pigs for human consumption. So massive is this use that China uses about 12,000 tons of colistin every year. As it could not be otherwise, the bacteria in pigs developed resistance which then they proceeded to pass on to human bacteria. This is very bad news indeed. This is so because as you may know we are running out of antibiotics that actually work. Colistin was in the short list of potential antibiotics that we may still use if we get desperate enough. But not anymore. Thanks to Chinese farmers now we have Colistin resistant bacteria all over the world.

As it could not be otherwise, we now have to put up with standard nonsensical rambling from the article along the lines off "banning the widespread use of Colistin in farming, could have slowed its demise". Essentially what this means is that should the Chinese government had banned the antibiotic we would still have it at our disposal. Thus, what is left hanging in the air is the notion that through regulation we could have avoided this problem. The moral of the story, if any, is that we need more government regulations. Government regulations are good. Some governments are not so good at government regulations thus you should probably pressure your government for better regulations. It is interesting to notice that the article automatically assumes that the solution to such problems is more regulations. However the author never bothers to scratch the surface. But we do.

The first thing that we would point out is that the Chinese government indeed failed to prevent this problem. And let's not forget that the Chinese government is not exactly democratic. It is a communist dictatorship. It's not like Chinese politicians feel like they need to explain themselves to the Chinese people. Furthermore, according to Chinese politicians, the political system in China is scientific and it is based on the best that the rational human minds can provide. Yet, they failed miserably in prevent this problem. And let's not forget, that this is not an unforeseeable problem. This is something that any student of microbiology in the first year knows; low levels of antibiotic eventually force bacteria to develop resistance. This is not rocket science, this is just plain routine science. Yet again, the Chinese government failed miserably in their task to prevent the Chinese people from screwing themselves and humanity. So much for governments.

The second thing that we would like to point out, is that a great deal of this antibiotic was actually manufactured in the West. At least originally. Which means that Western laws never prevented companies from manufacturing a product whose use was banned in the country of origin. So, it is okay to manufacture a product that is highly toxic and then sell it to other people who are actually going to use it so long as it is not done in our own jurisdiction, right? So much for the ethics and morality of laws!

And now what? Who is going to pay for all the damage that Colistin resistant bacteria will cause in the future? Because obviously the Chinese government will wash its hands. Obviously, the Chinese farmers will do the same. So, who is going to pay?

Answer?

Nobody!

Nice!

Score one nonsensical point for governments!

Of course, we are not so hypocritical. What we say is that it is up to you to manufacture anything that you may possibly want and to sell it to any person that may want to buy it and use it in any manner that they see fit. And when put it that way we have to ask ourselves would this process have prevented bacteria from developing resistance? And the answer is yes! Why is it so? Because in a libertarian system although your rights are absolute and you are thus entitled to do anything you may want with your property, you are not entitled to do absolutely anything with other people's property without their voluntary consent. As such, in a libertarian system, all the pig farmers who used Colistin will be liable for all the damage that Colistin resistant bacteria will cause in the future!

And yes, this is actually quantifiable. If you don't believe us, just ask any lawyer!

When people understand that their actions have consequences and that they cannot hide behind laws or governments from those consequences then they become naturally cautious. As such, Chinese farmers would had to weight the benefits of fattening the pigs versus the certain knowledge that eventually they will have to pay for massive damage at the global level. If you would be in their position, what would you do? Would you just blindly use the antibiotic and hope for the best? Literally betting the farm and your entire future? Of course not! Most people are not that stupid.

Fair point.

But this is all hypothetical right?

What matter is what do we do now. Right?

Excellent question, grasshopper.

Unfortunately the answer the governments will provide is really really bad. What's going to happen next is something that we already forecasted before. Governments will go into high gear to subsidize pharmaceutical companies to come up with new antibiotics. And this is going to be very very expensive… To your pocket. And for what? Why should governments subsidize pharmaceutical companies "for the greater good" with your money? Just because we need new antibiotics? No. This is not the way to go, this is not nearly enough!

The fact that we need antibiotics, new antibiotics, means that there is a huge potential market out there. It means that whoever comes out with a brand-new drug is going to become very very rich. Huge markets imply huge profits. Even more when your market is the entire population of the world. What do you think that pharmaceutical companies will do? Will they just sit quietly in a corner and say oh well? Of course not! They will gear up and spend considerable amounts of money in R&D to be the first ones in the market with a hot new product.

Of course, most people don't understand this. This is so because they have been trained to believe that solutions must be planned ahead of time. But this is not the way of the market. Markets operate in a "Just in Time" mode. Markets need to see potential customers before they provide the product. Governments on the other hand, assume that customers do exist out there, somewhere, and proceed to rob you of your money, and create a product that probably nobody would want at the price that nobody can afford.

The fact that we are running out of antibiotics it's a huge opportunity. However, governments will take this opportunity and scrap it. How do we know this? Because this is exactly what they are doing today. They are not only going to subsidize pharmaceutical companies, with your money, but then they will force pharmaceutical companies to spend a large amount of this subsidy money in dealing with regulations! Regulations that for any intent and purpose, will add exactly zero to the overall effort of creating a new antibiotic.

Think about it!

How many pharmaceutical drugs do you know that have actually been developed because governments planned for their existence? Not too many. As a matter of fact so few that is quite difficult to even begin to make a list. Almost all of the pharmaceutical drugs that we use today came out of private pharmaceutical R&D. Some of these drugs were indeed planned by pharmaceutical companies, but many of them were found by mistake.

People will now argue that most of these drugs would not exist if governments would have never paid for basic R&D. This is partially true, but we must also remember that the very reason why we don't have enough R&D is precisely because in general terms we are poor!

Poor you said?

Yes, poor!

Governments have been destroying our capital for so long that by now we're used to that. We are used not to be able to grow our wealth because of government action. And we believe this to be a natural phenomenon. But this is not the case. Should governments had not existed, all that capital would have had to find an outlet to make profits. And this outlet would have partially been R&D. Thus, the fact that we don't have enough R&D money can be traced back directly to government action!

So you see, it does not matter where we start if follow the train of events sufficiently back in time we eventually arrive at the root cause of the problem and this root cause is government action! The fact that most people don't see this process is not strange because most people can't remember a few hundred years back in time. However, this does not make it less true.

As we mentioned in our previous article there is no free lunch. You can use your money for this or that but not for both. If in this process of choosing somebody comes along and steals your money, then guess what, you won't be able to choose neither this nor that.

Please try to remember this fact when you lie in a bed in a hospital and the doctor brings you the bad news that your bacterial infection is out of control and you will die a horrible horrible death. But that's okay. You will die happy in the knowledge that this kind of government action was undertaken "for the greater good". Enjoy!

Note: please see the Glossary if you are unfamiliar with certain words.

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