In the above bags, the prices of other antiviral drugs have also risen sharply, far from the normal market prices; In Beijing in late April, the government took some measures because of the early lessons of Guangzhou market. Although the retail price of drugs in Beijing market has not risen sharply, the intermediate links of drug circulation are completely different from before and become extremely lively. Under normal circumstances, some drugs that can be sold below 50% of the wholesale price should be sold to retailers (pharmacies, hospitals) at a lump sum of more than 90% of the wholesale price or even the retail price. If it is directly sold to relevant groups and units, the drug price will be out of range. I call it "drug dealer" here because in the middle and late April, many drugs were not transferred to consumers through formal pharmaceutical commercial enterprises, but some drug dealers who speculated in the market.
The theory of economics holds that in a fully competitive market, due to the role of market mechanisms such as price and competition, manufacturers and consumers voluntarily reach a mutually acceptable contract in the process of maximizing their own interests, commodity prices reach a balance, and the market is clear. Under the adjustment of "invisible hand", scarce resources are rationally allocated, "automatic" reaches "Pareto optimization", and the welfare of the whole society is maximized. The prerequisite of market regulation and price mechanism is a complete and fully competitive market, but it does not exist in reality and the conditions for achieving full competition are not available, so the market itself in reality is not omnipotent. Guangzhou in mid-February, Beijing in April, the drug market and even the vegetable market all showed obvious failures. The supply of drugs in some areas can not solve the balance of market demand, which leads to a sharp increase in the price of drugs in some markets (in fact, the supply of many drugs exceeds demand in the national market); There are many fake and shoddy products in the market to prevent and treat SARS, including unqualified masks, disinfectant, thermometers, protective clothing and even expired drugs. In order to reduce costs, some enterprises do not take relevant SARS prevention and control measures, which poses a threat to the whole society; Similar phenomena have seriously damaged the interests of ordinary consumers and led to the reduction of the overall welfare of society.
Stie Grize demonstrated that "market failure" is based on "information asymmetry". In the SARS market, it is precisely because of the serious information asymmetry between consumers, drug retailers, drug wholesalers, manufacturers, raw material suppliers and our government that the market fails. Consumers' lack of knowledge about SARS, coupled with the spread of rumors, have a sense of fear, relying on their own experience or limited information learned from some media, blindly follow their feelings and "snap up"; At the same time, there is a lack of understanding of the market supply, and the illusion of price increase and shortage intensifies the psychology of "snapping up", so the higher the price, the more you have to buy in large quantities. Drug retailers and wholesalers also lack an understanding of the overall market supply of drugs, so they pay first and then pick up the goods, and also purchase when the price rises, so as to meet the needs of customers as soon as possible. In this case of serious information asymmetry, there are many illegal "individual drug dealers", which further aggravates the deterioration of the market. So in Guangzhou, there is a phenomenon that each bag of semi-orchid stems costs more than 50 yuan.
Invisible hand failure needs visible hand to correct, that is, the government adjusts the market mechanism, makes up for market defects and corrects market failure. The market failures in Guangzhou and Beijing were quickly controlled by the government through timely notification of various information, price control, government procurement, and ordering relevant units to enforce measures to prevent SARS. It can be said that the government's control measures are quite effective. From the initial establishment of the socialist market economic system to the improvement of the socialist market economic system, this is a new historical leap and a difficult and great practice. Eliminating the institutional obstacles to the development of productive forces requires us to change government functions, improve macro-control and solve the problem of market failure. Let the economy allocate resources with the market mechanism as the main body, but it can't run completely spontaneously. The government should do something. The key to transforming the government's economic function is to deepen the reform of the administrative examination and approval system and effectively transfer the government's economic management function to serving the market players and creating a good development environment. Macro-control should grasp two principles: first, the government should try not to participate in resource allocation; Second, once you participate, you must use market means. In view of the three manifestations of market failure, governments at all levels, as economic subjects, can take the following countermeasures to give full play to their due economic functions and solve the problem of market failure.
First of all, the government should do a good job in the provision of public goods and infrastructure construction to ensure a good "hardware condition" for the entire national economy. At the same time, the government should also undertake those projects with large investment scale and long payback period, which have a significant impact on economic development, such as national defense construction, education, medical and health care, South-to-North Water Diversion, West-to-East Power Transmission, West-to-East Gas Transmission and Three Gorges Project. In this way, it not only solves the problem that the market cannot provide effective supply of public goods, but also ensures the normal operation of the national economy; At the same time, government investment can also solve the re-employment problem of a considerable number of laid-off workers in this process, and can also promote investment and production in other related industries, thus promoting economic prosperity. In recent years, our government has issued national debt year by year to promote infrastructure construction and achieved good results. Some commercial industries with administrative monopoly, regardless of government and enterprise, use administrative power to prevent commercial competitors from entering their market monopoly. Its high economic return is related to the administrative monopoly position of the industry, which contains a lot of unfair competition factors. In the long run, this market failure will seriously hinder the operation of market economy and the promotion of market-oriented reform. For monopoly and other unfair competition problems in economic development, the government should stand on the position of arbitrator and solve them by establishing and perfecting various laws and regulations and strictly enforcing the law. Second, the government should establish good political, economic and legal systems and specific operational systems, formulate medium-and long-term development plans at all levels, reduce transaction costs and create good "software conditions" for economic development. System or institution is the basic guarantee for the normal operation of a country's economy. If there is no good incentive system, the efforts of individuals or enterprises will not be rewarded, which will reduce the initiative of work. In short, it is the loss of the enterprise. If the social atmosphere is like this, it is the country that loses. If someone is robbed and nobody cares, and there is no sound system to guarantee their property safety or property ownership, it is impossible for this society to form a good economic order and economic security. North, the winner of the Nobel Prize in Economics, even regards institutional change as the cause of economic growth, which shows the importance of institutional construction to economic development. Judging from the current situation of China's economic development, it is imperative to improve the property right system and market economy system. The "Decision" also pointed out that it is necessary to strengthen the formulation and research of long-term plans for national economic and social development, put forward major strategies, basic tasks and industrial policies for development, and promote the all-round development of national economy and society.
Market failure of medical industry
Third, the government also needs to use economic control measures such as interest rate, national debt, exchange rate, taxation and budget to "iron out" the economic cycle, so as to make the economy develop continuously and steadily. Keynes's state intervention made the western world out of the nightmare of the Great Depression in the 1930s. Since 1998, China government's proactive fiscal policy and prudent monetary policy have supported China to successfully survive the Asian financial crisis, and maintained a GDP growth rate of more than 7% in the past five years, making it a "standout" in the world economy. The formulation of fiscal policy and monetary policy should be based on the macro objectives and overall requirements of the country, give full play to the function of fiscal policy, promote economic growth, optimize structure and adjust income; Give play to the role of monetary policy, maintain the stability of currency value and balance the total supply and demand of money.
Fourth, the government should strive to narrow the gap between regions, between urban and rural areas and between residents' income levels through income policies, tax policies and other related policies. It is necessary to strengthen coordination and guidance on regional development, actively promote the large-scale development of the western region, give play to the comprehensive advantages of the central region, support the central and western regions to accelerate reform and development, revitalize the old industrial bases in Northeast China, and encourage the eastern regions with conditions to take the lead in basically realizing modernization. At the end of 1990s, the background of China's western development strategy was to consider the problems caused by the widening economic development gap between the eastern, central and western regions and the income prospects caused by the narrowing of the gap, seize the historical opportunity at the turn of the century, and promote the coordinated development of population, resources, environment, economy and society in the western region in a targeted and phased manner. Recently, the central government once again made a strategic decision to revitalize the old industrial base in Northeast China, which is also a correct decision made by seeing the backward system, backward technology and a large number of laid-off workers in Northeast China and seizing the opportunity of the arrival of the era of heavy industrialization. In terms of income distribution, the government should give consideration to efficiency and fairness, and evaluate and adjust the fairness among different regions and members of society through the tilt of policies. Through transfer payment, perfecting the tax system, establishing and perfecting the social security system, we can support the disadvantaged groups, adjust the psychological balance of the public, and achieve the goal of maintaining stable economic development.
Finally, while realizing the supervision function, the government should pay attention to continuously improving its rapid response ability in the face of emergencies. The spread of SARS is a test of China government's ruling ability. SARS has a great impact on the economy for many reasons. One of the most important reasons is people's psychological "uncertainty", that is, they don't know how to prevent, how to treat, when to end, when to make a comeback and so on. The reason for these uncertainties is that information has not been disclosed and communicated timely, accurately and effectively. Facing the current society of economic globalization, open system and behavior liberalization, the standard to measure government efficiency is whether the best solution to the problem can be obtained in the shortest time and at the least cost, and effective macro-control can be realized. Therefore, regardless of medical and health issues, financial crisis, economic security issues, and even national defense security issues, we should constantly improve the efficiency of the government. China is in the best period of development in history. Under the guidance of the decision of the Third Plenary Session of the 16th CPC Central Committee, we should speed up the transformation of government functions, constantly improve the government's ability of regulation and response, make up for the defects of market failure, and ensure the normal operation and healthy, stable and sustained growth of China's national economy.