I’m sorry this response has taken so long; I’ve been doing a few other things and thinking a few other thoughts. Well that’s the only apology I’ll give in this post, so now to business. Respective links are here
to previous installments to our saga.Perspective or Focus?
While I appreciate Not My Real Name’s view that our disagreement is about perspective I don’t entirely agree with it. Yes, I am trained as an economist and yes NMRN is a budding lawyer. While these are two different starting points to analyze things from I don’t see the disagreement as one entirely of perspective. I see it more of focus. NMRN is a budding lawyer, and in my opinion I think he’ll make a good one, so he’s “zoom lenses” is on the law and its respective letters. On the other hand I try to take a wider angle view of things (fish eye lenses). I want to see how things interact with each other, how changing one element of situation changes the results across the situation. So while we may have different perspectives, we also have different lenses attached to our respective cameras. NMRN focusing on the law and yours truly, trying desperately to see bigger game. Neither method is right nor wrong, good nor bad, each only showing it’s superiority given what you want form the analysis.
If you want to use a law, understand a law or get around one, ask a lawyer. If you want to change a law and have an understanding of the effects of that change better ask an economist (a new Beckeresc, game theorist type economist).Respective Disagreements with what NMRN said
Ok it's best if I deal with this in numbered point.
1) My objective is not economic growth per se; my objective is the progression of the human race. Economic growth is the bed rock on which all our great accomplishments as primates have been founded. Without some degree of economic wealth we would still be banging rocks together and howling at the moon. More on this to come.
2) So lawyers, when thinking about the law don’t think it necessary to look and try to understand the effects of changes in law? In my opinion anyone who has a hand in writing new or amending old laws should have done some study in game theory / mechanism design. I have another name for these two things; I call it structured common sense. If you don’t have the tools to analyze and understand the effects of changes have as a whole YOU HAVE NO BUSINESSS MAKING LAWS! If you do not have access to these tools of analysis your combination of power and ignorance makes you a liability to everyone. Starting out with good intentions will not instantly get you a pass on this blog.
3) Quote “It allows infringment of those rights, but that is not theft. It is best illustrated by those video piracy ads, which say 'Piracy is stealing'. That, unfortunately, is complete rubbish. Piracy is a copyright infringement and subject to economic damages, not a criminal offence as is made out by the media. Small differences, but important. I am the first to admit I am not one to talk about loose use of language and I have been critisised before. However, it is important to see what my perspective is.”
While this is an important legal distinction to make perhaps too fine a hair to split in a 30 second ad. Also, while being a legal distinction in my eyes it’s still taking something that not yours, call it what you like.
4) NMRN stands by his assertion that sick people would never have purchased a medicine that made them well at any price. I stand by my assertion that this is a question of PRICE. If anyone has an illness I can assure you that they are in the market for a cure. The question is totally one of price. Would they have purchased if the treatment cost them $10, $1 or 10cents? I think to assume or assert otherwise is defining people as ignorant or stupid rather than poor.
5) NMRN fops off my use of terms like perfect price discrimination but perfect price discrimination is the answer to ALL of the problems here. If drug companies who own the IP could some how ensure that the persons who need the drug, and only those people, were administered the drug and they paid a price just above cost then there would be no issues. However this is not the case the Brazilian government wants to force a license at as yet at an unknown price and manufacture the drug themselves. Given that Brazilian government is ranked at 59 of 146 governments for transparency I can see that anyone having their IP rights forced away form them would not to too crazy of the about the idea.
6) Quote “My further point in response to Dash's post is that, whilst I understand the link between growth and IP protection, there is little examination of the proper balance point.”
This is absolutely incorrect. There are extensive theoretical economic models which talk about the optimal length of a patent. Even though I haven’t access to empirical material on this I would assume it exists (econometricians seem to test every bit of theory economists come out with. It’s the stuff PhD’s are made of). Also I don’t quite understand what you mean by “proper” balance point. This would be definitely be a question of opinion, if you buy medicines the
7) Now there is limited protection of IP, it comes in the form of time. If I own a turnip, I have rights to that turnip for that turnips existence. However if I take out a patent on some something I developed how long does that patent last? I don’t have perpetual rights over this do I? That’s the ONLY way you can relax property rights since time is such an objective measure (although Einstein told us otherwise… had to make a joke, sorry).
8) Quote “As another side issue, you are right in terms of FDI going elsewhere when countries don't provide proper legal protection and sound legal institutions. It is interesting that nowadays, least developed countries tend to negotiate at the WTO as a big block, probably for that exact reason.”
I doubt it is for this exact reason it’s so they have a group of votes when making treaty decisions. On a practical level this situation is a classical prisoner’s dilemma where there is a much higher incentive for a country to break away from the group. Think about it, if developing countries say as a group “We will enforce IP the way we want”, companies lose out. However this won’t happen. What will happen is that one of these countries will say to the companies “We will enforce IP to protect any investment you make in our country”. So what happens then is you may have several countries in this block defect because they have a whole bunch of FDI poured upon them and their cheap labour pool. The irony is the bigger the block, the bigger the rewards for defecting. Mmmmmm game theory.
Ok that’s my main parries and counters to your intellectual thrusts.Growth is a path not a destination
Although you do not deliberately represent me as such it feels like I’m being interpreted as someone whose focus is solely on economic growth for its own sake. While I am focused on economic growth I don’t see it as an end but rather as the beginning of a great many things.
We have been discussing basically the trade off between enforcement of IP vs. access to cheap advanced medicine. That to me seems like what this all boils down to. I see IP as essential for not only growth but perhaps the next step in the progression of our society.
The thing is, the concept of IP was and is essential in the development of our society. All of a sudden ideas became excludable (an economic term) allowing them to take on marketable value. This means that you can concentrate resources on finding the answer to a given question, like “How do we cure aids” or “how do we cure cancer”. By allowing the answer to have value, you can devote time, effort and money to the question.
All of this had led us to a state of vast economic wealth. This wealth has allowed us to further invest in both answer questions and developing ourselves enough to ask better questions and get better answers through education.
Economic growth has been the soil out of which these many great things have come to be. Economic growth is not an end but a beginning, one great perpetual beginning. Think about it, the very drugs we are talking about would not have happened without both wealth and protection of the idea. I remember a great piece of wisdom “YOU DO NOT KICK OUT THE LADDER THAT GOT YOU WHERE YOU ARE, PARTICUARLY WHILE YOU ARE STANDING ON IT!”
Quote "Does the greatest economic growth come in the profit flowing to the IP holder due to high drug prices, or the production created when sick people are made well by drugs which have been manufactured contrary to patent rights?"I don't know the answer, but I sure as hell would like to find out.
If you would really like to find out, we can figure this one out together if you like. Doing a quick bit of thinking I have an idea of the methodology used to answer such a question. I don’t have the numbers but I had an idea of what numbers we need.
So if you want we can try and work this out together, just let me know because I already have several ideas on how to work this out. So if you really want to know tell me and we can get to work on thunking this one out.