Market Thinking

making sense of the narrative

It would help if they understood markets

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Captain Mainwearing: Private Pike, kindly report back on the situation regarding gas masks for the platoon.

Pike: I couldn’t get any Mr Mainwearing

Captain Mainwearing. Whyever not boy? I gave you a chit for 17 shillings and told you to go and buy a dozen gasmasks at one and fivepence each

Pike: But Mr Mainwearing, the price had gone up and I didn’t have enough money. Mum says that the Americans are buying them all.

Captain Mainwearing: Stupid Boy! Walker! you’re the sort of fellow who is good in these circumstances, can you help?

Private Walker: I’ll do my best Captain Mainwearing, but as Pike says, prices are going up.(draws heavily on cigarette)


Captain Mainwearing; Now gather round men and listen carefully. As Private Walker warned us, the price of gas masks has been going up, so with a classic display of British ingenuity we have come up with a new drill for the platoon. You will see here that Corporal Jones is wearing the platoon gas mask, which now cost 15 shillings each. On my command, Corporal Jones will engage with the enemy and fire one round. He will then carefully throw the mask to Sgt Wilson, who will quickly put in on and fire a second round at the enemy. And so on.

Private Frazer: We’re doomed!

With apologies to Jimmy Perry and David Croft

This is of course almost exactly the situation in the NHS with Personal Protective Equipment. (PPE) The irony is that the procurement side of the NHS has historically been seen as the gold standard globally since its very size means that it is able to strike a very hard bargain on drug pricing. Indeed, it basically sets the base price for other countries to work from. By contrast, the atomised nature of the US drug purchasing is a major reason why drug companies are able to charge, quite literally, ten times the price in the US for the same drugs. Discussing PPE with a supplier to the NHS yesterday, he pointed out that there is basically no shortage of PPE, it’s just that there is none available at the old price of 17p a mask that the NHS used to pay. As with Mainwearing and his platoon, the Americans are basically buying everything they can get their hands on and the price has gone up tenfold. It’s simple supply and demand and the obverse of the collapse in Oil prices. Unfortunately, the NHS doesn’t seem to understand how markets work and has acted like Private Pike. They didn’t engage as the price was rising and are now caught the wrong side of the price spike.

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