Focusing Funds - The Economics of AIDS

By Michael Fumento

January 23, 1994
Copyright 1994 by Michael Fumento

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Louis Sullivan

Unless you never watch television, you’ve probably witnessed the fruit of the Department of Health and Human Services’ AIDS campaign, begun two years ago under Secretary Louis Sullivan, targeting heterosexuals, teen-agers and people in rural communities. The stated reason for targeting these groups was they feel themselves least at risk.

Yet they are least at risk. Teen-agers, adolescents and people living outside metropolitan areas make up a tiny and shrinking portion of all cases. So what is the purpose of this advertising? And why did Mr. Sullivan’s successor, Donna Shalala, make such a patently false statement to Congress last year as, "We could spend our energy on research and immunization and education and still not have any Americans left unless we’re prepared to confront the crisis of AIDS."

Why with AIDS, unlike any other discriminatory disease, such as breast cancer, prostate cancer or sickle cell anemia, are tremendous efforts made to provide warnings to the population least at risk?

The answer, say University of Chicago economist Tomas J. Philipson and law professor Richard A. Posner in their book Private Choices and Public Health: The AIDS Epidemic in an Economic Perspective, lies in — naturally — economics.

If you’re familiar with the books of Mr. Posner, who’s also a Seventh Circuit federal judge, you probably already know what to expect with this one: It is as difficult to read as it is brilliant and informative. No one seeking to formulate policy on the many issues discussed in this book — criminal punishments, quarantines, subsidizing education and research, the effects of mandatory and voluntary HIV testing — can pretend to do so wisely without consulting it. The authors have done a tremendous job in collecting the existing data, and they discuss it in a lucid, unemotional way.

"Discuss" is probably the best word here because the authors end up asking a lot more questions than they answer and raising more issues than one might have thought possible.

For example, before reading this book, one might assume that the case for widespread voluntary testing is quite clear. After all, those people who test positive are less likely to infect others if they know they are positive, right? Not necessarily. After all, some of those testing positive will abandon safe sex for risky sex since they no longer fear infection, and that could infect their partners. Some, indeed, will adopt an "eat, have sex, and be merry" attitude. For this and other reasons, the authors are skeptical that widespread testing is good.

Some of the authors’ conclusions will strike many as downright offensive: for example, that there may be an "economically optimal" level of disease that is above zero. This is not to say that any amount of the disease is good but that, as with traffic accidents, the cost of reducing the incidence to zero (easily though painfully achievable by banning motor vehicles) may be prohibitive.

As does anyone who takes an apolitical view of AIDS, Mr. Philipson and Mr. Posner conclude that the AIDS epidemic clearly has been overstated in virtually every way imaginable — in terms of financial costs, the overall number of Americans who are or will be infected and perhaps especially the impact on persons outside the high-risk groups of male homosexuals, intravenous drug abusers, hemophiliacs and recipients of blood prior to 1986.

Indeed, just weeks before the publication of their book, the federal Centers for Disease Control and Prevention announced the results of the centers’ national survey, which by their own admission indicates only about half the number of infections currently estimated for the nation, the current estimate being 1 million. Not long ago, this figure was 1 to 1.5 million.

What will infuriate the AIDS establishment most is the authors’ conclusion that the massive amount of false information we’ve been given on the scope of AIDS probably has been a deliberate effort.

The authors argue, "Pressure from small but organized groups consisting of male homosexuals, health professionals, government bureaucrats, moral conservatives [who have also exaggerated the risk of AIDS for their own reasons], and pharmaceutical companies has deflected AIDS programs from the efficient path."

They and their advocates (most notably the media, I would say) "have succeeded in persuading the public at large that AIDS is a danger to everyone, not just to discrete high-risk groups such as male homosexuals, hemophiliacs and intravenous drug users," the authors note.

This, they write, is because, "The more the public at large is persuaded that it is at risk from AIDS, the more willing it will be to support expenditures to combat the epidemic."

It’s the same pattern we see with so many transfer programs in which the recipients or their sympathizers succeed by portraying their problem as everyone’s problem equally — for example, farmers who get crop price supports by threatening the collapse of U.S. agriculture.

A closer analogue may be street people. As with AIDS, advocates for the homeless have played down their undesirable aspects and have taken a population made up almost exclusively of the mentally ill, drug abusers and alcoholics and pretended that they are really just like you and me save for being homeless. As with AIDS, the overall numbers are grossly inflated, especially regarding the most sympathetic subgroups such as women and children.

A related point is: "The more AIDS is regarded as ’our’ disease rather than just ’their’ disease, the more altruistic people will be toward the victims of AIDS."

The deflection from the "efficient path" of which the authors write not only means the relatively ineffective allocation of funds but also creates the bizarre situation in which people at almost no risk are terrified into believing their risk is great while those at great risk are led to believe their risk is much lower. One could well argue that the result of false education programs, such as the HHS campaign noted earlier, is more infections and more deaths among homosexuals, intravenous drug users and their sex partners.

Yet alarmist AIDS education campaigns accomplish their purpose because, as Mr. Philipson and Mr. Posner note, "The more the educational programs rely on scare tactics, the more they reinforce the public demand for subsidies to combat AIDS."

Even as I was finishing this piece, I heard a radio announcement that some of country music’s biggest stars are teaming up to launch warnings of a dramatic increase of AIDS in rural communities. Score another round for the AIDS establishment and against a rational and truly compassionate national AIDS policy.


Read Michael Fumento’s additional work on AIDS and on economics.