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On a sunny day in June 1924, a young man developed a blister on his toe after playing a game of tennis. A week later, he was dead from a bacterial infection. The young man had been given the best medical care possible: He was the son of the president of the United States. President Coolidge wept when he learned that all the “power and the glory of the presidency” could not prevent the death of his son from a simple blister.

The president’s son, Calvin Jr., was probably killed by a bacterium called Staphylococcus aureus or staph for short. Penicillin could easily have cured him, but penicillin was not discovered until 1928. When penicillin and other antibiotics became widely available in the 1940s, they were hailed as miracle drugs. Dying from a blister became a thing of the past—until recently.

Staph has evolved. Today it is resistant to penicillin and some “superbug” strains are resistant to almost all antibiotics. The Centers for Disease Control estimate that at least 11,000 people in the U.S. are killed every year from staph infections that are resistant to antibiotics. Staphylococcus aureus is now spreading around the globe.

Antibiotic resistance is a product of evolution. Any population of bacteria includes some bacteria with unusual traits, such as the ability to resist an antibiotic’s attack. When a person takes an antibiotic, the drug kills the defenseless bacteria, leaving the unusually strong bacteria behind. Without competition for resources, these stronger bacteria multiply. When the same antibiotic is applied again and again, the stronger bacteria get even stronger until after many generations of bacteria, the antibiotic loses its power to perform miracles.

Evolution is a powerful force so it was inevitable that staph would grow resistant to penicillin eventually, but staph has grown more resistant more quickly than was necessary. The problem is that antibiotics are overused.

Antibiotic users get all the benefits of antibiotics but they do not bear all of the costs. The person who demands an antibiotic must pay a private cost for the antibiotic, the market price. But because bacteria spread widely, each use of an antibiotic creates a small increase in bacterial resistance, which raises the probability that other people could die from a simple infection. For example, when a teenager takes tetracycline for acne, there is an increase in antibiotic-resistant bacteria on the skin of other members of his or her family. Antimicrobial detergents that are washed down the sink enter into the environment where they increase the proportion of resistant bacteria for us all. Almost half of all antibiotics are used on farm animals, not to treat disease but primarily because they accelerate growth (the FDA has recently begun to phase out some antibiotic use in animals to help prevent resistance). Bacteria that develop resistance on the farm travel onto and into human beings, where they may cause incurable infections.

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In a sense, each use of antibiotics pollutes the environment with more resistant and stronger bacteria. Thus, each use of antibiotics creates an external cost, a cost that is paid not by the consumers or producers of antibiotics but by bystanders to the transaction. The social cost of antibiotic use is the cost to everyone: the private cost plus the external cost.

Since the external cost is not paid by consumers or producers, it is not built into the price of antibiotics. So when patients or farmers choose whether to use more antibiotics, they compare their private benefits with the market price, but they ignore the external costs just as a factory will ignore the cost of the pollution that it emits into the atmosphere (assuming there are no regulations forbidding this). Since antibiotic users ignore some relevant costs of their actions, antibiotics are overused. Alternatively stated, since the price of antibiotics does not include all the costs of using antibiotics, the price sends an imperfect signal—the price is too low and so antibiotics are overused. Thus, the problem of antibiotic resistance is about evolution and economics. Evolution drives antibiotic resistance, but the process is happening much faster than we would like because antibiotic users do not take into account the external costs of their choices.