Noah Smith on port backlogs; John Cochrane on fiscal inflation; Heather Heying on damsels in distress; Scott Alexander on epistemology; Default Friend on Internet harm
Heather Heying referring to the formidable Robert Malone. Despite his claims, Malone is a bit player in a RNA story dating back to 1961. He was one of hundreds of people working in dozens of labs for over 50 years. Patents are assigned to corporations and universities, no longer to any key player. They are no longer used to foster innovation but as veto points on competitiors.
Quite so, but, from what I heard in a recent conversation with the CEO of a small company, the very expense of litigation is prohibitive for smaller companies (i.e. future competitors). "$150k just to walk in the door" is one figure I've encountered elsewhere. Even if the smaller company is able to hire an enterprising lawyer on a commission basis, they still bear the risk of getting saddled with the defender's legal fees if they lose (which may just bankrupt a startup or small company), and on top of that the larger patent-holder company can delay and appeal the case for longer than the smaller claimant can afford to wait, both financially and on the business side of things.
That's true, but the trouble is the selection effect: people are most likely to go to the trouble of making a challenge in cases when the stakes are high but also when the patent at issue is weakest. It's kind of like saying that bison are weak because a pack of wolves is usually able to make a meal out of them. But only the old, juvenile, sick, etc. The average member of the herd can stomp the wolves into pulp.
"I am wary of his ideas. He seems to believe in a top-down, centrally planned approach."
That's being unfair to Peterson, who has been consistently sane, effective, savvy, and market-oriented. He's been as clear as he can be that this is a "government failure" and, unfortunately, resolving certain government failures in the short term requires government solutions, especially when it's a matter of a need to change bad rules and remove government-imposed obstacles.
His business depends on the goodwill and cooperation of many layers of government entities, with overlapping jurisdictions and each jealous of their own status and authority, who he is trying to nudge out of their comfort zones into making big changes quickly. That's really hard, and requires some social media-era PR genius (I think Zvi would agree with that) and gentle diplomacy as he can't afford to piss these people off, make enemies, or provoke them into the stubborn entrenchment and circling of the wagons that would be caused by an antagonistic framing of the problem which assigns blame from the outside and, let's face it, implies a lot of the people he needs to persuade shouldn't have their jobs.
Calling for a dedicated federal team to focus on an issue and coordinate the interagency towards implementing reforms in the government's own bad policies which might help the situation is just not at all the same as "believing in central planning." It is really hard to incentivize bureaucrats to listen to businesses and be bold in helping out unless someone can be blamed at least a little bit for future failure. Without a team, there is dispersed responsibility and everyone can point the finger at someone else, often with justice. Creating a team sets up a better, internal blame game dynamic that in the final analysis points right back to the President, which secures the possibility of White House involvement and intervention when necessary. Without that, you won't get the market answer of new port capacity, but just every layer of bureaucracy freezing in place, and having their media friends effectively get the public to blame the price rise pain on evil, greedy big business.
I was re-reading Michael Crichton's The Andromeda Strain last year. It is his first, an uneven, but ultimately an entertaining and enlightening read. Was struck by the idea of an efficient, techno- and solution-centric, technocratic response. And -- was struck how different and inept our elites are now - image- and message-centric. Not sure a centralized team of today's inept, message-oriented expects can solve any problem.
The greatest indictment of our society is precisely the fact that we are lucky enough to have truly tremendous reserves of human capital to complement our other advantages, and that we are so clearly awful at cultivating it while terrifically effective at neutralizing it.
The good news is that there are still plenty of people who can still get amazing things done well when brought together and with enough support. The bad news is that this almost impossible to make happen in government anymore.
Is it plausible that the reason that inflation has only started to accelerate recently is productivity gains were substantial and undercounted, thus creating a disinflationary release valve?
(Re Heather Heying:) Most of the members of society are weak and confused. That is why *we* [i.e., society] are acting on the delusions of our weak and confused members; they are (most of) *us*.
I think Cochrane is slightly off. Inflation is above the Fed's target because they were using their instruments (mainly asset purchases) without taking account of the supply constraints. Presumably they have now corrected by enough to bring expectations of inflation and the consequent demand for money to achieve their target of 2% PCE growth. Time will tell if additional (or less) correction is necessary.
I see no reason that the City of Oakland could not and would not want to make strategic investments in its port. Presumably it is or should be a money-making asset. Might it be sold off to a private firm? Yes, and maybe that's a good idea, but that should not be the only way to achieve efficient operation of a port.
Yeah, but also, no one would choose to expand in Oakland if they could expand almost anywhere else. Try getting approval to build another port somewhere else on the west coast though - maybe Arcata or Morro Bays - and the fact that this is clearly impossible to get done in the current political environment is obviously a big part of the problem.
Modern American sea ports are also weird places that have lots of private and public actors. Maybe the port is 'owned' by a city or state, but operated in large part by a private company on a for-profit basis, with everything being regulated by international and federal law, and run through federal employees. Some of the necessary infrastructure like rail, highways, electricity, pipelines, is run and regulated by yet other companies and various government entities. Everybody's got an effective veto option, and it's a nightmarish coordination problem.
Anybody trying to expand any port can only deal with their own piece of the puzzle, and they will be dependent on other actors being ready, willing, and able to expand at pace, or else it's all for nothing. And this is by no means a safe assumption.
For example, customs is a huge job at big ports. But consider, the COLA for the bay area is only 7% higher than it is for DC. I was just there, let me tell you, bay area prices aren't even close to just 7% higher than in DC. Gasoline alone is 50-75% more. Same for a comparable dine-in restaurant meal. Housing ... forget about it. As a result, it is very, very hard to recruit and retain customs agents and a host of other types of government employees to work in such a location.
Theoretically that should be fixable. Practically, even though it shouldn't be that big a deal in the scheme of things, nevertheless, when you imagine what actual laws have to be passed to make it happen ... then again, forget about it.
Perhaps, so, but mayors like to do big infrastructure projects and a port expansion would be that(assuming there is real market demand for the increased services) so its not an outlandish idea.
Port backlogs are locally-caused but have impacts that are in effect central, thus Noah Smith’s call for a central policy solution. If there’s model for global transportation infrastructure that is completely privately capitalized and thrives without government rules and subsidies, maybe we could look to it for a price-based off-ramp for the current port backlog and while we’re at it, the hellscape of passenger air travel. But in the world we live in, central governance and public support of transportation infrastructure are the levers we actually have. Application of orthodox price theory to the port problem presupposes that an entrepreneur will go out and dig another port, overcome labor and capital goods scarcity to make the port functional, and then offer competitively price port services (and that’s presuming no exogenous hurdles like zoning, permits, and regulations)—in short, a a Suez Canal-scale private-sector mega project.
I don't think Peterson has thought deeply about this particular issue and is just talking vaguely to try to appeal to what he thinks will get his company more free national air time. Even China privatized COSCO (no relationship with Costco). Washington DC muppets will smash that 'like' button on anything that provides more control the the muppets, regardless of whether or not it's a good idea.
This is sort of common among contemporary American talking heads, where they just pick some random idea that sounds like it will get likes without really thinking much about it. There's a lot in the interview that is accurate; so accurate analysis is in this case paired with an ignorant and destructive recommendation. CTRL-F "Jones Act," zero results. Instead he just vaguely hand-waves about regulations, likening them to ad spending in which it is hard to identify which portion is wasted. As he knows, identifying waste in ad spending is actually eats up more labor than almost anything else in modern digital advertising, so the metaphor is stupid even as a metaphor, but also quite wrong as it relates to regulation. Economists and others routinely create models to attribute waste to specific regulations. Such models are often core to leaning on the government to fix problems in laws and regulations.
If an engineer analyzes a problem with an existing bridge, but then recommends constructing a replacement bridge that is actually worse and will fall down, that's malpractice. The accuracy of the analysis is better than an inaccurate analysis, but if the credibility generated by the accurate analysis results in a terrible recommendation being accepted, on net it's worse than if the person had never spoken at all.
From the clips I've seen, and the reviews, people are taking entirely the wrong lesson away from Don't Look Up. When the President-character dismisses the scientist-activist-expert-characters, it is done on wholly reasonable grounds. There have been a string of similar scientist-activist-characters who have come through the same office regularly and routinely proclaiming imminent doom and a need for immediate federal or worse, global-government, action to address existential threats.
This cannot be anything other than a toxic scenario. One cannot address that number of global level existential threats; so if they are real, the exercise is pointless; and if not, then the right assumption is to continue concluding that the so-called experts are useless. But the reviewers keep up a drum beat that the President-character is not listening to the scientist-activist-characters and by analogy, the real political leaders should be judged wanting for not listening to their own scientist-activists.
The real lesson is - actually, this is pretty much how it looks in real life, and it teaches leaders that those experts are somehow all very very wrong by the time they get a voice in that venue.
Ian Martin & Robert Pindyck suggest an alternative to listening to "scientist-activist-expert characters [...] routinely proclaiming imminent doom". See their article, "Averting Catastrophes: The Strange Economics of Scylla and Charybdis," AER 105:10 (October 2015) 2947-85, available un-gated at the link below:
"Unlike Odysseus, we cannot turn to the gods for advice. We must turn instead to economics, the truly dismal science. [... .]
We will see that deciding which catastrophes to avert is a much more difficult problem than it might first appear, and a simple cost-benefit rule doesn’t work. Suppose, for example, that society faces five major potential catastrophes. If the benefit of averting each one exceeds the cost, straightforward cost-benefit analysis would say we should avert all five. We show, however, that it may be optimal to avert only (say) three of the five, and not necessarily the three with the highest benefit/cost ratios. This result might at first seem 'strange' (hence the title of the paper), but we will see that it follows from basic economic principles. [... .]
Conventional cost-benefit analysis can be applied directly to 'marginal' projects, i.e., projects whose costs and benefits have no significant impact on the overall economy. But policies or projects to avert major catastrophes are not marginal; their costs and benefits can alter society’s aggregate consumption, and that is why they cannot be studied in isolation. [... .]
For instance, one apparently sensible response to the non-marginal nature of large catastrophes is to decide which is the most serious catastrophe, avert that, and then decide whether to avert other catastrophes. This approach is intuitive and plausible—and wrong. [... .]
The contribution of this paper is largely theoretical: we provide a framework for analyzing different types of catastrophes and deciding which ones should be included as a target of government policy. Determining the actual likelihood of nuclear terrorism or a mega-virus, as well as the cost of reducing the likelihood, is no easy matter. Nonetheless, we want to show how our framework might be applied to real-world government policy formulation. To that end, we survey the (very limited) literature for seven potential catastrophes [mega-virus, climate, nuclear terrorism, bioterrorism, floods, storms, earthquakes], discuss how one could come up with the relevant numbers, and then use our framework to determine which of these catastrophes should or should not be averted."
We're back to something like Scott Alexander's question about heuristics. How would a President (or other relevant decision-makers) know to start by asking Martin & Pindyck how to frame the problem?
I definitely appreciate your comment. I've worked around DTRA quite a few years and understand the kinds of things that Martin and Pindyck are suggesting - and believe they are essentially wrong because the magnitude of national cost/benefit accounts is insignificant compared to conflicting/orthogonal cost/benefit accounts. In short, the national level isn't the right level of analysis and won't be the locus of effective action. At best it will be a marionette or perhaps a façade. The people who appeal to it are either fatally naïve or operating at the place they themselves maximize their own leverage, insufficient though it may be.
Thanks for your reply. What (in a nutshell) would be the right level of analysis and locus of effective action? For example, I am sympathetic to market solutions, but am also interested in what Arnold says about State-capacity libertarianism. On the other hand, Bryan Caplan says the issue isn't State capacity, but State priorities:
The market (at best) doesn't provide a locus of action. The market integrates diverse (perhaps divergent) analyses and allows for coordination of actions. For example, individuals, government organizations, collectives, families, and corporations, can engage in the market as a clearinghouse for activities and express their interests. The market is only one such clearinghouse, but it tends to be pretty transparent compared to alternatives (such as policy discussions or personal emotional appeals).
The question of who has the locus of effective action is answered differently in each case; it might be a vaccine producer, a military organization, a legislature, a family, etc.
State capacity libertarianism, properly formulated, merely is the demand that when the state has a monopoly on a type of activity, it be competent to perform it. This can be achieved several ways...
'State priorities' concerns how the government exercises its representative function in the cases where the unitary state is the effective level of concern.
For existential threats impacting the whole of humanity, the response should actually be integrated across many domains and not monopolized. Almost never will a single action be enough to cope - which is why the 'mega-asteroid impact' and the 'global thermonuclear war' scenarios are so appealing - they are almost unrealistically simplistic.
We could use early COVID-19 as a primary example, frankly. I'd argue that the worst problems were caused by the Federal Gov't and the WHO each attempting to exert monopoly authority on response. Each of these needed to cede wide swathes of legitimate action to other entities and allow them to have legitimate evaluations of the risk, to become loci of activity in the service of themselves and others. However, it was not in their own best organizational interest to disintermediate, presuming that the threat wasn't actually existential, but instead that it provided a soapbox and platform for forward looking self-aggrandizement.
Heather Heying referring to the formidable Robert Malone. Despite his claims, Malone is a bit player in a RNA story dating back to 1961. He was one of hundreds of people working in dozens of labs for over 50 years. Patents are assigned to corporations and universities, no longer to any key player. They are no longer used to foster innovation but as veto points on competitiors.
I recently had a conversation with a patent attorney who claimed that hardly any patents hold up in court.
Exactly. That's why someone claiming he is a 'key player" in whatever because he hold a patent show that he is not a key player.
Quite so, but, from what I heard in a recent conversation with the CEO of a small company, the very expense of litigation is prohibitive for smaller companies (i.e. future competitors). "$150k just to walk in the door" is one figure I've encountered elsewhere. Even if the smaller company is able to hire an enterprising lawyer on a commission basis, they still bear the risk of getting saddled with the defender's legal fees if they lose (which may just bankrupt a startup or small company), and on top of that the larger patent-holder company can delay and appeal the case for longer than the smaller claimant can afford to wait, both financially and on the business side of things.
That's true, but the trouble is the selection effect: people are most likely to go to the trouble of making a challenge in cases when the stakes are high but also when the patent at issue is weakest. It's kind of like saying that bison are weak because a pack of wolves is usually able to make a meal out of them. But only the old, juvenile, sick, etc. The average member of the herd can stomp the wolves into pulp.
"I am wary of his ideas. He seems to believe in a top-down, centrally planned approach."
That's being unfair to Peterson, who has been consistently sane, effective, savvy, and market-oriented. He's been as clear as he can be that this is a "government failure" and, unfortunately, resolving certain government failures in the short term requires government solutions, especially when it's a matter of a need to change bad rules and remove government-imposed obstacles.
His business depends on the goodwill and cooperation of many layers of government entities, with overlapping jurisdictions and each jealous of their own status and authority, who he is trying to nudge out of their comfort zones into making big changes quickly. That's really hard, and requires some social media-era PR genius (I think Zvi would agree with that) and gentle diplomacy as he can't afford to piss these people off, make enemies, or provoke them into the stubborn entrenchment and circling of the wagons that would be caused by an antagonistic framing of the problem which assigns blame from the outside and, let's face it, implies a lot of the people he needs to persuade shouldn't have their jobs.
Calling for a dedicated federal team to focus on an issue and coordinate the interagency towards implementing reforms in the government's own bad policies which might help the situation is just not at all the same as "believing in central planning." It is really hard to incentivize bureaucrats to listen to businesses and be bold in helping out unless someone can be blamed at least a little bit for future failure. Without a team, there is dispersed responsibility and everyone can point the finger at someone else, often with justice. Creating a team sets up a better, internal blame game dynamic that in the final analysis points right back to the President, which secures the possibility of White House involvement and intervention when necessary. Without that, you won't get the market answer of new port capacity, but just every layer of bureaucracy freezing in place, and having their media friends effectively get the public to blame the price rise pain on evil, greedy big business.
I was re-reading Michael Crichton's The Andromeda Strain last year. It is his first, an uneven, but ultimately an entertaining and enlightening read. Was struck by the idea of an efficient, techno- and solution-centric, technocratic response. And -- was struck how different and inept our elites are now - image- and message-centric. Not sure a centralized team of today's inept, message-oriented expects can solve any problem.
The greatest indictment of our society is precisely the fact that we are lucky enough to have truly tremendous reserves of human capital to complement our other advantages, and that we are so clearly awful at cultivating it while terrifically effective at neutralizing it.
The good news is that there are still plenty of people who can still get amazing things done well when brought together and with enough support. The bad news is that this almost impossible to make happen in government anymore.
Is it plausible that the reason that inflation has only started to accelerate recently is productivity gains were substantial and undercounted, thus creating a disinflationary release valve?
(Re Heather Heying:) Most of the members of society are weak and confused. That is why *we* [i.e., society] are acting on the delusions of our weak and confused members; they are (most of) *us*.
The Heather Heying quote does not have enough context for "us" to discern who the “we” are or exactly what it is that we are doing that upsets her so.
I think Cochrane is slightly off. Inflation is above the Fed's target because they were using their instruments (mainly asset purchases) without taking account of the supply constraints. Presumably they have now corrected by enough to bring expectations of inflation and the consequent demand for money to achieve their target of 2% PCE growth. Time will tell if additional (or less) correction is necessary.
I see no reason that the City of Oakland could not and would not want to make strategic investments in its port. Presumably it is or should be a money-making asset. Might it be sold off to a private firm? Yes, and maybe that's a good idea, but that should not be the only way to achieve efficient operation of a port.
The mayor of Oakland has less of an incentive to engage in profit-maximizing behavior than a private port owner.
Yeah, but also, no one would choose to expand in Oakland if they could expand almost anywhere else. Try getting approval to build another port somewhere else on the west coast though - maybe Arcata or Morro Bays - and the fact that this is clearly impossible to get done in the current political environment is obviously a big part of the problem.
Modern American sea ports are also weird places that have lots of private and public actors. Maybe the port is 'owned' by a city or state, but operated in large part by a private company on a for-profit basis, with everything being regulated by international and federal law, and run through federal employees. Some of the necessary infrastructure like rail, highways, electricity, pipelines, is run and regulated by yet other companies and various government entities. Everybody's got an effective veto option, and it's a nightmarish coordination problem.
Anybody trying to expand any port can only deal with their own piece of the puzzle, and they will be dependent on other actors being ready, willing, and able to expand at pace, or else it's all for nothing. And this is by no means a safe assumption.
For example, customs is a huge job at big ports. But consider, the COLA for the bay area is only 7% higher than it is for DC. I was just there, let me tell you, bay area prices aren't even close to just 7% higher than in DC. Gasoline alone is 50-75% more. Same for a comparable dine-in restaurant meal. Housing ... forget about it. As a result, it is very, very hard to recruit and retain customs agents and a host of other types of government employees to work in such a location.
Theoretically that should be fixable. Practically, even though it shouldn't be that big a deal in the scheme of things, nevertheless, when you imagine what actual laws have to be passed to make it happen ... then again, forget about it.
Perhaps, so, but mayors like to do big infrastructure projects and a port expansion would be that(assuming there is real market demand for the increased services) so its not an outlandish idea.
Port backlogs are locally-caused but have impacts that are in effect central, thus Noah Smith’s call for a central policy solution. If there’s model for global transportation infrastructure that is completely privately capitalized and thrives without government rules and subsidies, maybe we could look to it for a price-based off-ramp for the current port backlog and while we’re at it, the hellscape of passenger air travel. But in the world we live in, central governance and public support of transportation infrastructure are the levers we actually have. Application of orthodox price theory to the port problem presupposes that an entrepreneur will go out and dig another port, overcome labor and capital goods scarcity to make the port functional, and then offer competitively price port services (and that’s presuming no exogenous hurdles like zoning, permits, and regulations)—in short, a a Suez Canal-scale private-sector mega project.
I don't think Peterson has thought deeply about this particular issue and is just talking vaguely to try to appeal to what he thinks will get his company more free national air time. Even China privatized COSCO (no relationship with Costco). Washington DC muppets will smash that 'like' button on anything that provides more control the the muppets, regardless of whether or not it's a good idea.
This is sort of common among contemporary American talking heads, where they just pick some random idea that sounds like it will get likes without really thinking much about it. There's a lot in the interview that is accurate; so accurate analysis is in this case paired with an ignorant and destructive recommendation. CTRL-F "Jones Act," zero results. Instead he just vaguely hand-waves about regulations, likening them to ad spending in which it is hard to identify which portion is wasted. As he knows, identifying waste in ad spending is actually eats up more labor than almost anything else in modern digital advertising, so the metaphor is stupid even as a metaphor, but also quite wrong as it relates to regulation. Economists and others routinely create models to attribute waste to specific regulations. Such models are often core to leaning on the government to fix problems in laws and regulations.
If an engineer analyzes a problem with an existing bridge, but then recommends constructing a replacement bridge that is actually worse and will fall down, that's malpractice. The accuracy of the analysis is better than an inaccurate analysis, but if the credibility generated by the accurate analysis results in a terrible recommendation being accepted, on net it's worse than if the person had never spoken at all.
I'm glad you're still willing to Heather-post.
From the clips I've seen, and the reviews, people are taking entirely the wrong lesson away from Don't Look Up. When the President-character dismisses the scientist-activist-expert-characters, it is done on wholly reasonable grounds. There have been a string of similar scientist-activist-characters who have come through the same office regularly and routinely proclaiming imminent doom and a need for immediate federal or worse, global-government, action to address existential threats.
This cannot be anything other than a toxic scenario. One cannot address that number of global level existential threats; so if they are real, the exercise is pointless; and if not, then the right assumption is to continue concluding that the so-called experts are useless. But the reviewers keep up a drum beat that the President-character is not listening to the scientist-activist-characters and by analogy, the real political leaders should be judged wanting for not listening to their own scientist-activists.
The real lesson is - actually, this is pretty much how it looks in real life, and it teaches leaders that those experts are somehow all very very wrong by the time they get a voice in that venue.
Ian Martin & Robert Pindyck suggest an alternative to listening to "scientist-activist-expert characters [...] routinely proclaiming imminent doom". See their article, "Averting Catastrophes: The Strange Economics of Scylla and Charybdis," AER 105:10 (October 2015) 2947-85, available un-gated at the link below:
https://www.aeaweb.org/articles?id=10.1257/aer.20140806
Excerpt:
"Unlike Odysseus, we cannot turn to the gods for advice. We must turn instead to economics, the truly dismal science. [... .]
We will see that deciding which catastrophes to avert is a much more difficult problem than it might first appear, and a simple cost-benefit rule doesn’t work. Suppose, for example, that society faces five major potential catastrophes. If the benefit of averting each one exceeds the cost, straightforward cost-benefit analysis would say we should avert all five. We show, however, that it may be optimal to avert only (say) three of the five, and not necessarily the three with the highest benefit/cost ratios. This result might at first seem 'strange' (hence the title of the paper), but we will see that it follows from basic economic principles. [... .]
Conventional cost-benefit analysis can be applied directly to 'marginal' projects, i.e., projects whose costs and benefits have no significant impact on the overall economy. But policies or projects to avert major catastrophes are not marginal; their costs and benefits can alter society’s aggregate consumption, and that is why they cannot be studied in isolation. [... .]
For instance, one apparently sensible response to the non-marginal nature of large catastrophes is to decide which is the most serious catastrophe, avert that, and then decide whether to avert other catastrophes. This approach is intuitive and plausible—and wrong. [... .]
The contribution of this paper is largely theoretical: we provide a framework for analyzing different types of catastrophes and deciding which ones should be included as a target of government policy. Determining the actual likelihood of nuclear terrorism or a mega-virus, as well as the cost of reducing the likelihood, is no easy matter. Nonetheless, we want to show how our framework might be applied to real-world government policy formulation. To that end, we survey the (very limited) literature for seven potential catastrophes [mega-virus, climate, nuclear terrorism, bioterrorism, floods, storms, earthquakes], discuss how one could come up with the relevant numbers, and then use our framework to determine which of these catastrophes should or should not be averted."
We're back to something like Scott Alexander's question about heuristics. How would a President (or other relevant decision-makers) know to start by asking Martin & Pindyck how to frame the problem?
John;
I definitely appreciate your comment. I've worked around DTRA quite a few years and understand the kinds of things that Martin and Pindyck are suggesting - and believe they are essentially wrong because the magnitude of national cost/benefit accounts is insignificant compared to conflicting/orthogonal cost/benefit accounts. In short, the national level isn't the right level of analysis and won't be the locus of effective action. At best it will be a marionette or perhaps a façade. The people who appeal to it are either fatally naïve or operating at the place they themselves maximize their own leverage, insufficient though it may be.
Ben,
Thanks for your reply. What (in a nutshell) would be the right level of analysis and locus of effective action? For example, I am sympathetic to market solutions, but am also interested in what Arnold says about State-capacity libertarianism. On the other hand, Bryan Caplan says the issue isn't State capacity, but State priorities:
https://www.econlib.org/state-priorities-not-state-capacity/
(Note: Bryan isn't specifically addressing catastrophes.)
The market (at best) doesn't provide a locus of action. The market integrates diverse (perhaps divergent) analyses and allows for coordination of actions. For example, individuals, government organizations, collectives, families, and corporations, can engage in the market as a clearinghouse for activities and express their interests. The market is only one such clearinghouse, but it tends to be pretty transparent compared to alternatives (such as policy discussions or personal emotional appeals).
The question of who has the locus of effective action is answered differently in each case; it might be a vaccine producer, a military organization, a legislature, a family, etc.
State capacity libertarianism, properly formulated, merely is the demand that when the state has a monopoly on a type of activity, it be competent to perform it. This can be achieved several ways...
'State priorities' concerns how the government exercises its representative function in the cases where the unitary state is the effective level of concern.
For existential threats impacting the whole of humanity, the response should actually be integrated across many domains and not monopolized. Almost never will a single action be enough to cope - which is why the 'mega-asteroid impact' and the 'global thermonuclear war' scenarios are so appealing - they are almost unrealistically simplistic.
We could use early COVID-19 as a primary example, frankly. I'd argue that the worst problems were caused by the Federal Gov't and the WHO each attempting to exert monopoly authority on response. Each of these needed to cede wide swathes of legitimate action to other entities and allow them to have legitimate evaluations of the risk, to become loci of activity in the service of themselves and others. However, it was not in their own best organizational interest to disintermediate, presuming that the threat wasn't actually existential, but instead that it provided a soapbox and platform for forward looking self-aggrandizement.
Ben, Thank you for your full, helpful reply.