The 2008 crash tested financial globalization. In 2020, the chaos of the early months of the COVID-19 pandemic led many to question the world’s dependence on complex global supply chains. These last few months, however, as vaccination programs have taken off in some parts of the world and stalled in others, have raised even deeper doubts about globalization and the capitalist system. Unless governments act soon, capitalism itself could face a crisis of credibility.

The greatest argument in favor of regulated markets is that they manage production better than any other system. Done properly, regulated market capitalism is supposed to match supply and demand, and provide the right incentives. Productive capacity is built, not wasted. Buyers and sellers are connected. Innovation thrives and benefits everyone.

But, right now, that’s not the case. This isn’t about inequality, which we always knew capitalism could create. It’s about inefficiency, which capitalism is supposed to avoid.

When it comes to desperately needed COVID-19 vaccines, capacity is being wasted and innovation isn’t benefiting everyone. Twelve billion vaccine doses could be produced this year, if all current projections are aggregated. But we’re nowhere close to that in actuality. And the doses that are available have largely been gobbled up by rich countries.

Can more be produced? In many developing nations, pharmaceutical manufacturing capacity is being under-utilized. One Bangladeshi company says it could churn out 600 to 800 million doses annually if granted the appropriate licenses and know-how. Even if that’s an overestimate, too many such factories stand idle, waiting for a nod from regulators and patent-holders.

It isn’t surprising, therefore, that multiple countries have demanded intellectual property rights essentially be suspended for the duration of the pandemic for COVID-related drugs and vaccines. That sounds like a tempting — even satisfying — solution. But, as my colleague David Fickling has pointed out, if getting new vaccines out the door was as simple as ignoring IPR rules, then we would see developing countries doing just that by issuing what are called “compulsory licenses.” They haven’t.

Something as complex as a COVID-19 vaccine cannot be easily reverse-engineered. Simply telling companies they’re free to try won’t do much good.

But the disincentives for Big Pharma to expand production even further are considerable. It isn’t that all of them are greedy capitalists. Some have, after all, agreed to give up on profit-making while the pandemic rages — so it’s in their interest to ensure that COVID-19 switches from pandemic to endemic as soon as possible.

More likely,  every new licensee that they sign up would add another location they’d need to carefully scrutinize to ensure that it meets good manufacturing practices. As Rajeev Venkayya of Takeda Vaccines Inc. argued on Twitter, “every aspect of vaccine manufacturing is tightly controlled,” and “70% of manufacturing time is spent on quality control.”

Rich-country governments should, in particular, consider how to pay for the renovation and expansion of facilities in the developing world to prepare them to make vaccines under license. Developing-country governments should strengthen their own commitment to regulation and to intellectual property, in order to ensure that their own manufacturers look attractive as licensing partners.

If both sides don’t meet this challenge, people are going to wonder if a system that leads to wasted capacity and market failure even during a global pandemic is all it’s cracked up to be. Global trading rules, basic respect for intellectual property and much else hangs in the balance. Unless we can scale up our response soon, capitalism’s reputation could take a bigger hit in 2021 than 2008, or 1929.

Mihir Swarup Sharma is a Bloomberg Opinion columnist. He is a senior fellow at the Observer Research Foundation in New Delhi. © 2021 Bloomberg. Distributed by Tribune Content Agency.