Home > Uncategorized > Is it impossible to envision a world without patent monopolies?

Is it impossible to envision a world without patent monopolies?

from Dean Baker

Apparently at the New York Times the answer is no. Elisabeth Rosenthal, who is a very insightful writer on health care issues, had a column this morning warning that we may face very high prices for a coronavirus vaccine. She points out that this is in spite of the fact that the government is paying for much of the cost of the research. Rosenthal then argues we should adopt a system of price controls or negotiations, as is done in every other wealthy country.

While her points are all well-taken, the amazing part is that she never considers the simplest solution, just don’t give the companies patent monopolies in the first place. The story here is the government is paying for most of the research upfront. While does it have to pay for it a second time by giving the companies patent monopolies.

There is no reason that the government can’t simply make it a condition of the funding that all research findings are fully open and that any patents will be in the public domain so that any vaccines will be available as a cheap generic from the day it comes on the market. Not only does this ensure that a vaccine will be affordable, it will likely mean more rapid progress, since all researchers will be able to immediately learn from the success or failures of other researchers.

It is amazing that this obvious route is not being considered in public debate. Government-granted patent and copyright monopolies are one of the main ways in which we generate inequality. Bill Gates would still be working for a living without them.

At a time when the country is newly focused on racial inequality, it is striking that reducing the importance of the factors that generate inequality in the first place is not even up for discussion. This is fitting with the good old “White Savior” theory of politics.

Rather than changing the government-created structures that generate inequality, they would rather have the beneficent government push policies that reverse some of the inequality government structures created in the first place. I suppose this route is more appealing to the liberal psyche, but it ignores economic reality, and also at the end of the day, is likely to be less effective politically.

  1. July 6, 2020 at 5:45 pm

    But this is al part of the problem of the Great Transformation to Neoliberalism fuelled by the Libertarian philosophy of James McGill Buchanan for which he was awarded the faux Nobel Prize in 1986 and which was funded by the Koch brothers — now one.

  2. Edward Ross
    July 8, 2020 at 7:05 am

    As a non academic citizen i find it, incomprehensible that apart from Dean Baker their appears to be very little little recognition that solving the covis 19 problem is both a human and an economic problem because of the effect the pandemic has on the pandemic. Dean Baker raises the question? July ” Is it impossible to envision a world without patient monopolies”. in my humble opinion antifier correctly blames it onto the GREAT tRANSFORMATION OF NEOLIBERALISM, where many economists and academics realise it as the tool. of the elite rich and powerful. Consequently I think this is where i think the economic conversation needs to start. Not on .what amounts to abstract theory and false axiomatic assumptions but on the needs of all people. Here i remember something like this,, The greatest challenge to preventing something terrible happening , is not the bad intentions of a few but but on the fact that good men do nothing. I make this statement statement not because i am against theory or maths but because they generally make their claims without any connection to the empirical evidence in the real world. I do not make this claim thinking i have some great insight into slolving the problem , but to support those who are aware of the need to refocus economic thinking.

    NOW BACK TO the important subject of solving the covid economic crisis. WITH dean Baker June 30 , “Incredibly, while the piece complains repeatedly about protectionism it does not mention the most important forms of protectionism of all, copyright monopolies . This is especially bizarre in the context of the pandemic, since of the big questions is whether treatments or vaccines that are developed will be available or whether companies will use government granted patent monopolies to charge high prices.,HERE I REMEMBER their was an earlier article that described how speculative corporations were buying up potential patients then reselling them on to the pharmaceutical giants. A process that obviously eliminated cooperation in finding solutions to the virus and the growing economic crisis. RIDICULE ME IF YOU LIKE but please let us have sme strong constructive conversations aimed on solving the crisis.Ted

    • July 8, 2020 at 10:53 am

      Dear Ted, it’s a pity the academics and Adam Smith got in first, destroying common sense by turning even most non-academics into specialists unable to see beyond the end of their own noses. If Michael Monterey (writing about RWER 59) is to be believed (and unfortunately there is good reason to be believe him), the war is already over. We are in the situation of Nevil Shute’s Australians in “On the Beach”, waiting the the fallout from a nuclear war in the north to reach them. After what the tsunami did to the nuclear power station in Japan, it was almost unbelievable that the British government approved the building of a new nuclear power station on the Severn estuary near here, which fortunately the builders decided would not be profitable. After what Covid has done here, it was almost unbelievable to see young people and drunks milling around en masse the day lock-down was (supposedly cautiously) lifted. Even our noble leaders lack the good sense to follow their medical experts’ advice, so what hope is there of getting sensible leadership from them on economic reform or even survival?

      Which (with sincere apologies, Ted) is not a “strong constructive conversation”. I am reduced to reflecting on our little prayer for Happiness, which begins “I asked God for strength that I might achieve … I was made weak, that I might learn humbly to obey. … I was given weakness, that I might feel the need of God”. Here’s how this ends in a joyful thought: “I got nothing that I asked for, but everything I had hoped for. Almost despite myself, my unspoken prayers were answered. I am [we have been?] among all men, richly blessed”. What that means I found in a book worth googling for: Karl Muller’s “De Profundis: Ranulph Glanville’s Transcendental Framework for Second Order Cybernetics”. Cybernetics is about control, but second order cybernetics is about being able to learn from each other.

      How, then, to turn a far-reaching thought into a “strong constructive conversation”? If mankind can now only think of one thing at a time, that one thing had better be the one at the root of all the others, reflected in what we can all see now! Starting from the Big Bang, I can see the evolution of Cybernetics, but most of us can see credit and well as debit cards, and an interest-free credit card as a way out of post-Covid economic recession. What most people can’t see is their communal responsibility for regenerating the goods we need to survive, including replanting vegetation to absorb the energy of the sun that is currently overwhelming us. Can we do that in time? None of us knows, but we will do nothing unless we trust God.

  3. Ed Zimmer
    July 8, 2020 at 9:03 pm

    I favor replacing the monopoly on intellectual property with a mandated royalty on sales of goods/services using that property. This could adequately reward the property’s creator (maintaining incentives) while eliminating further-development roadblocks by others as well as the opportunity for financial abuse. I’d also like to see review of the law’s ‘reduction to practice’ provision . Initially, the law was intended to reward the initial creator (the individual inventor/author) – not a corporate development program.

    • July 9, 2020 at 10:03 am

      Ed, while you are clearly more on-topic than Ted and I, we were agreeing with antireifier’s argument that the topic is too narrow. Still, you make a positive and practical proposal. My argument against it is that a royalty on sales doesn’t get rid of unsustainable exponential growth if the population and sales grow exponentially.

      Back in the 1860’s, John Ruskin addressed the same problem with the concept of merely honorary rewards: “The Crown of Wild Olive”, which seems to motivate Olympiads and competitors in flower shows well enough. In my “credit card” economy that would recognise credit-worthiness by increasing the credit limit by a fixed amount: the two together being not dissimilar to the Nobel award being accompanied by a once-for-all monetary prize.

      Reading the comments on use of corporate credit cards in the Sudan, let me point out that logically it is we who ask for credit, and we are given it by traders, not usurious banks and credit card companies. The true business of banking is earning a living by keeping accounts of debits (sales) and credits (having sold goods), not by making money. Before an decision is made to mass-produce goods, these need to be tried out locally. All this is more interactively and securely done with local banking, based on a constitutional right to our own interest-free credit card, not owned by faceless international corporations. So we’re comparing concepts, not describing facts; but that is because the current set of facts are unsustainable.

  4. July 11, 2020 at 10:11 pm
  5. Ken Zimmerman
    July 25, 2020 at 4:46 pm

    But the story is even worse. A while back I consulted for big companies, e.g., Honeywell, Microsoft, Sun Microsystems, etc. Mostly in their technology sections. Many small companies and individuals held patents on devices and technologies desired by these big companies. Between bullying, lawsuits, and payoffs the big companies almost always won the transfer of the patents to themselves. So, patent monopolies are secure only for the big companies. Smaller companies or individual inventors could not stop their patents being infringed. They sold them for pennies on the dollar or had them taken away without compensation. As the technology head at Honeywell once told me — we get what we want, always.

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