Colleagues, Where Is the Market Failure? Economists on the FDA
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Abstract
This article works from a point of view that holds that there is no market-failure rationale for three primary FDA-administered interventions concerning drugs and medical devices. I critically analyze the culture, rhetoric, and judgment of economists who write on those issues. I take such literature as a case study in how statist political culture degrades academic economic discourse. A finding that helps to frame what follows is that much good economic sense survives the degradations. Many economists have expressed judgments about the FDA. In almost all cases, they have supported liberalization, often dramatic. Thus I suggest that economists reach a conclusion on the first-order question. But most of the paper is devoted to second-order considerations: Do economists agree that either economists or fundamental economic reasoning favor liberalization of the restrictions? In fact, in either variation, economists do not agree on the second-order question. I explore the second-order discourse, and suggest that taboos surround the issue, taboos that shield popular political superstitions—in particular, taboos against the critical examination of fundamentals. I explore the rhetoric of economists’ writings and the political sociology surrounding research on the policies in question.