So, as an AnCap, I reject the idea of intellectual property being that it is an action of the state. My background, however, thoroughly ingrained in me that, even if you are for limited government, IP is property and therefore protecting it (if you are a minarchist) would fall under the one role of government: protection of private property. Obviously, today, I reject this idea on two counts: (1) government can not protect private property, and (2) IP is not property at all.
However, my years as a music business undergraduate have set up some serious roadblocks in my understanding many of the details against the case for IP law. Strangely, I pretty well understand most arguments against copyright laws. While I think I have found good arguments against patent laws, I do not feel I have found great ones. So, before I ask, and before you blast me for being a statist, let me preface the question by saying: I am simply short on understanding. I just want to know the argument better. I am not trying to say that patents are a good thing, just that, as the argument for them stands now, it appears to make sense on some level. However, there was a time in my life when i would have thought that breaking windows would be good because the glazier gets business. This level of sense the pro-IP argument stands on does not necessarily render it infallible, just harder to persuade someone against, so my question will end up being one of persuasion more than anything.So, help me understand this one... For the purposes of this question, I also want to get rid of the FDA and all of their policies that favor big pharma. Lets just say the drug market is totally free, and there are no artificial barriers to entry. So, here is how the question is always framed as I have heard it, and I am having difficulty understanding the answer from an Austrian perspective.
As I understand it, Investing in research for the curing of diseases like AID's is a very risky investment. It costs a lot of money and the odds of the research you are funding finding the cure are highly unlikely, if the cure is ever found at all. So, lets say that you are a billionaire, and you are contemplating investing some of your money in finding research for a cure for AID's. Sure, you know its risky, but if the cure is found, you stand to gain multiple (maybe hundreds of) times what you invested, and if not, you still have plenty of money. "but," you think, "what if the research I funded does find the cure. Yes, I'll have a short time of holding the monopoly over the drug we produce, but any chemist could easily reverse engineer my drug and sell it. The time it would take him to do that would not be long enough for me to even recoup my initial investment, so this would be a bad investment."
I see nothing morally wrong with the chemist reverse engineering the product and selling it on the market to compete with the original creator. This would, after all, be good for the consumer with AID's. How I have understood the patent argument is the following: "sure, it would be good for the consumer to have prices lowered from competitors entering the market, but because there is no patent for the original inventor, this may keep him from doing the research necessary to concoct the cure in the first place. Instead of many people throwing their money at the research in competition to get the patent, everyone will assume someone else will put up the money for the cure, and when they find it, we will simply reverse engineer the drug, sell it, and never have to risk putting up the money to find the cure."
On the one hand, I view the patent with moral contempt because it is just another monopoly granted by the government. At least, though, that monopoly would have likely occurred anyway in a free market cure, just probably for not as long. On the other hand, there does appear to be at least some grain of truth in the claim that investment in the curing of these mysterious diseases will drop considerably. I think it must because investment in the music industry has dropped considerably since Napster emerged (which, by the way I think is a good thing). However, music is music, and no one's life is drastically altered by there being less investment in it. After all, we have seen that people will still create it, even if they aren't paid. Less investment in music (in the traditional sense) has meant that we get less mainstream music, and at cheaper prices.
However, AID's research seems a little bit different. Less investment in AID's research is certainly bad for people with AID's. while, I don't think we should focus just on the one group that benefits, or as Hazlitt put it, "the seen", I do worry about how this looks as a persuasive argument. Of course, some replies to the statist might be "If the risk vs reward is as you've described it, then this just means that the market is telling us that resources used to find a cure for this disease would be better allocated somewhere else. However, when patents are put in place, an artificial demand is placed on that research being performed which makes the market less efficient." I think this is totally valid.
Another answer might be "We would just rely more on private charity, who's concern is not profit maximization. Thus, any monetary reward in funding this research would inconsequential to the investor. The investor's reward would be seeing the cure to a disease that the members of that charity hate in particular." If these answers are the best and only answers that is fine I guess. They are valid and present a clear case against patent laws. However, to me, they lack something to be desired. However, these answers beg another question. The impression we like to give about IP laws (just like all other arguments against the state) is that without them, artists, scientists, researchers, and any other parties who benefit from IP laws, would actually make more money. In the case of research for cures, we will see that investment in research will tend to rise, and the efficacy of that research will be much better than in a society with IP laws." So, while we cannot know for sure how a free market would function in detail in any specific sector of the market, in your opinion, do you believe the above statement would be true?
The main reason I ask is because I know the common person will use the logic I've stated above and, thus, say, "without the patents, how will we ever cure AID's? What about all the homosexuals and the people in Africa dying of this dreadful disease? What about Cancer, even?"
I want a more persuasive answer than, "the market does not value helping them as much as helping someone else." This reply, while perhaps valid, does not seem very persuasive. Am I simply going to have to explain to the person every single time that "while the AID's carrier may lose out without IP laws in place, society as a whole will be better off"? Or, is there a solidly grounded Austrian case made that claims that without IP laws, even the AIDs patient will be better off? I hope my question is clear. Thanks.
"If men are not angels, then who shall run the state?"
I don't have any arguments as of now, really, but I found this and this, from Stephan Kinsella (as you would probably have imagined). I didn't even read them, sorry about that, it's really late in my country, but I wanted to (try to) help. As I am really interested on the subject, I'll probably read them later. Hope it helps.
Abolishing IP laws just means that people have to learn to make money in different ways. First, let's look at the music industry. Historically, how did musicians make money? Well, one could be a bard and sing at a tavern, or one could be a court musician or work for the church. Composers such as Bach, Beethoven, and Mozart were all either employed by the church or the aristocracy. With the rise of the middle class, you had composers such as Schubert composing chamber music and art songs. Composers weren't only writing for the elites. But also look at who taught at conservatories. Most of the big composers and the lesser composers taught at conservatories. Then there were people like Tchaikovsky who in his time would get commissioned work, but he also taught.
Now look at composers today. It's very similar. Composers teach at conservatories or universities and some are famous enough to get hired to write commissioned works. Some of the more classical composers will be commissioned by the BSO or the New York Philharmonic, but the movie score composers get commissioned all the time to write for movies. Sure, movies would lose the IP protection, but they would still have to hire a composer.
Now what about the mainstream music industry? Don't bands and singers make most of their money from performances? They don't really make much money from the recordings - the record companies make money from the recordings. Abolishing IP laws will probably hurt the record labels more than the artists themselves. So what would probably happen is record labels would just have to get more creative if they don't want to become obsolete.
Second, let's look at the airplane. Apparently, the Wright Brothers actually slowed down progress regarding the airplane. This Mises Daily article, The Fight against Intellectual Property, talks a little about this towards the end, but the rest of the article is really quite good. Anyway, the point is that there is no evidence that progress would not occur absent IP laws. In fact, IP laws actually slow progress down, as people cannot improve upon products for X amount of years after something is patented.
Third, regarding pharmaceuticals, I'm just going to cut and paste this excerpt from the article I linked to above:
What about pharmaceuticals? Some people argue that we need pharmaceutical patents because drugs require expensive R&D to develop, but then can be cheaply reverse engineered. So, the thinking goes, if we don't give drug makers patent protection, they won't bother to produce drugs in the first place. Numerous facts undermine this argument. Boldrin and Levine have found that the pharmaceutical industry historically grew "faster in those countries where patents were fewer and weaker."[29] Italy, for one, provided no patent protection for pharmaceuticals before 1978, but had a thriving pharmaceutical industry. Between 1961 and 1980, it accounted for about nine percent of all new active chemical compounds for drugs. After patents arrived, Italy saw no significant increase in the number of new drugs discovered there — contrary, one supposes, to the IP advocates' predictions.[30] Another fact the conventional view overlooks is that patentable drugs are not the only medical innovations possible. Boldrin and Levine looked to a poll of the British Medical Journal's readers on the top medical milestones in history, and found that almost none had anything to do with patents. Penicillin, x-rays, tissue culture, anesthetic, chlorpromazine, public sanitation, germ theory, evidence-based medicine, vaccines, the birth-control pill, computers, oral rehydration theory, DNA structure, monoclonal antibody technology, and the discovery of the health risks of smoking — of these top 15 entries, only two had anything to do with patents.[31] Similarly, nothing on the US Centers for Disease Control's list of the top ten public-health achievements of the 20th century had any connection to patents. And even a review of the most important pharmaceuticals reveals that many came about without the motive and/or possibility of acquiring a patent, including, for example, aspirin, AZT, cyclosporine, digoxin, ether, fluoride, insulin, isoniazid, medical marijuana, methadone, morphine, oxytocin, penicillin, Phenobarbital, prontosil, quinine, Ritalin, salvarsan, vaccines, and vitamins.[32] Patent law does create one incentive for researchers: to pursue more of the kind of research that will lead to patentable drugs, and less of the kind of research that might lead to other types of breakthroughs that cannot be patented — even though, as we've just seen, the latter kind may be some of the most important.[33] If patent law were abolished, we would probably see fewer artificial chemical drugs and more discoveries related to remedies from natural substances such as vitamins, minerals, and plants. Given the harmful side effects of many prescription drugs, it is not at all obvious that this would be a bad thing.
What about pharmaceuticals? Some people argue that we need pharmaceutical patents because drugs require expensive R&D to develop, but then can be cheaply reverse engineered. So, the thinking goes, if we don't give drug makers patent protection, they won't bother to produce drugs in the first place.
Numerous facts undermine this argument. Boldrin and Levine have found that the pharmaceutical industry historically grew "faster in those countries where patents were fewer and weaker."[29] Italy, for one, provided no patent protection for pharmaceuticals before 1978, but had a thriving pharmaceutical industry. Between 1961 and 1980, it accounted for about nine percent of all new active chemical compounds for drugs. After patents arrived, Italy saw no significant increase in the number of new drugs discovered there — contrary, one supposes, to the IP advocates' predictions.[30]
Another fact the conventional view overlooks is that patentable drugs are not the only medical innovations possible. Boldrin and Levine looked to a poll of the British Medical Journal's readers on the top medical milestones in history, and found that almost none had anything to do with patents. Penicillin, x-rays, tissue culture, anesthetic, chlorpromazine, public sanitation, germ theory, evidence-based medicine, vaccines, the birth-control pill, computers, oral rehydration theory, DNA structure, monoclonal antibody technology, and the discovery of the health risks of smoking — of these top 15 entries, only two had anything to do with patents.[31]
Similarly, nothing on the US Centers for Disease Control's list of the top ten public-health achievements of the 20th century had any connection to patents. And even a review of the most important pharmaceuticals reveals that many came about without the motive and/or possibility of acquiring a patent, including, for example, aspirin, AZT, cyclosporine, digoxin, ether, fluoride, insulin, isoniazid, medical marijuana, methadone, morphine, oxytocin, penicillin, Phenobarbital, prontosil, quinine, Ritalin, salvarsan, vaccines, and vitamins.[32]
Patent law does create one incentive for researchers: to pursue more of the kind of research that will lead to patentable drugs, and less of the kind of research that might lead to other types of breakthroughs that cannot be patented — even though, as we've just seen, the latter kind may be some of the most important.[33] If patent law were abolished, we would probably see fewer artificial chemical drugs and more discoveries related to remedies from natural substances such as vitamins, minerals, and plants. Given the harmful side effects of many prescription drugs, it is not at all obvious that this would be a bad thing.
Hope this gives you some ideas.
Well, if I recall correctly, Mises was not against IP, so you will not have a unified Austrian case against IP.
As to cures for diseases like AIDS (not AID's - sorry, apostrophes are a pet peeve of mine) - let's first remember that a libertarian society would be a lot more prosperous. Why? For 3 reasons I can think of off the top of my head:
1) Taxation draws property away from those who use it best to satisfy customers. As such, this distorts production
2) Government spending also distorts the market by expanding sectors of the economy that wouldn't otherwise have expanded
3) There wouldn't be such silly regulations
Hence, as the society is more wealthy, there would be a lot more interest in spending in research.
Furthermore, one of the reasons medical research is so expensive is that all the tools cost so very much. Why? Patents! Remove the patents and you're probably going to see an explosion is scientific research due to firms bringing down the price of research equipment.
Also, it turns out that drug research isn't as expensive as big pharma wants to make it out to be. As in significantly not as expensive. I can't find the numbers right now, but according to the article I was reading, it was a whopping large amount.
For more info, see the apparently insanely-amazing Mises Wiki pages on IP:
http://wiki.mises.org/wiki/Costs_of_Intellectual_Property
http://wiki.mises.org/wiki/Without_Intellectual_Property
I hope I've strengthened the case for a society without patents. I'm sure there are many other obvious things I'm not saying.
Email libertarian intellectual property attorney Stephan Kinsella at nskinsella@gmail.com
... for a free consultation to schedule YOUR defense in court.
First off, thanks for paragraphs!
Second, I wouldn't recommend trying to email Kinsella. He's pretty busy, and he's basically dedicated a large portion of his professional life publishing and popularizing material to tackle this question...so it would be much more tactful to simply read the resources yourself.
Luckily for you, patents are in my opinion actually an easier case to argue than copyright. Indeed, even people who insufferably argue in favor of "IP" sometimes admit patents are overused and even should be abolished.
You can get an enormous amount of resources from Kinsella's archives. See the links here (in particular his Mises blog archive and resources at C4SIF.org)
Also check his lectures here. This one is quite good. And interestingly enough, the topic of "science as a public good" was recently brought up here. Definitely check out Kealey's lecture.
And obviously do a search on the main mises.org page for the word "patent".
To see a real world case study, showcasing the problem with patents in the very field you're talking about, in this thread (where this topic of medicine was brought up) I mentioned a great documentary on Australian television that covered this very issue, called Patently a Problem. Check out the links there.
@gotlucky
Third, regarding pharmaceuticals, I'm just going to cut and paste this excerpt from the article I linked to above: What about pharmaceuticals? Some people argue that we need pharmaceutical patents because drugs require expensive R&D to develop, but then can be cheaply reverse engineered. So, the thinking goes, if we don't give drug makers patent protection, they won't bother to produce drugs in the first place. Numerous facts undermine this argument. Boldrin and Levine have found that the pharmaceutical industry historically grew "faster in those countries where patents were fewer and weaker."[29] Italy, for one, provided no patent protection for pharmaceuticals before 1978, but had a thriving pharmaceutical industry. Between 1961 and 1980, it accounted for about nine percent of all new active chemical compounds for drugs. After patents arrived, Italy saw no significant increase in the number of new drugs discovered there — contrary, one supposes, to the IP advocates' predictions.[30] Another fact the conventional view overlooks is that patentable drugs are not the only medical innovations possible. Boldrin and Levine looked to a poll of the British Medical Journal's readers on the top medical milestones in history, and found that almost none had anything to do with patents. Penicillin, x-rays, tissue culture, anesthetic, chlorpromazine, public sanitation, germ theory, evidence-based medicine, vaccines, the birth-control pill, computers, oral rehydration theory, DNA structure, monoclonal antibody technology, and the discovery of the health risks of smoking — of these top 15 entries, only two had anything to do with patents.[31] Similarly, nothing on the US Centers for Disease Control's list of the top ten public-health achievements of the 20th century had any connection to patents. And even a review of the most important pharmaceuticals reveals that many came about without the motive and/or possibility of acquiring a patent, including, for example, aspirin, AZT, cyclosporine, digoxin, ether, fluoride, insulin, isoniazid, medical marijuana, methadone, morphine, oxytocin, penicillin, Phenobarbital, prontosil, quinine, Ritalin, salvarsan, vaccines, and vitamins.[32] Patent law does create one incentive for researchers: to pursue more of the kind of research that will lead to patentable drugs, and less of the kind of research that might lead to other types of breakthroughs that cannot be patented — even though, as we've just seen, the latter kind may be some of the most important.[33] If patent law were abolished, we would probably see fewer artificial chemical drugs and more discoveries related to remedies from natural substances such as vitamins, minerals, and plants. Given the harmful side effects of many prescription drugs, it is not at all obvious that this would be a bad thing.
In addition, I think this apply to every good. Computers, TVs, electricity, beds; almost everything is patentless, yet the production continues to grow. What drives the market is demand, not a monopoly promise (even though many entrepreneurs seek this very thing, as predicted, for humans respond to incentives).
Let's stop and ask whether this same reasoning then couldn't be applied to all property in general. Technically, if we remove property people will still do stuff (because they need to live, and they might get the chance to use the stuff they make before it gets stolen).
Wheylous,
Michel was responding to a utilitarian argument. Many libertarians find IP laws to be morally wrong because they violate the NAP. Most people who support IP seem to respond to this claim with a utilitarian argument, that without IP laws, we wouldn't have progress. Michel was responding to a section that demonstrated that this was not true, and he expanded it to include things other than pharmaceuticals.
It is strictly a response to show that the utilitarian argument is false.
@Wheylous
There's a distinction between physical property and intelectual property. Both parties (for IP and against) acknowledge physical property as property. The whole argument about IP is if IP is in fact property, nobody have doubts about physical property (even socialists, after all, public property, as ineffective as it is, is still [physical] property).
Wheylous, Michel was responding to a utilitarian argument. Many libertarians find IP laws to be morally wrong because they violate the NAP. Most people who support IP seem to respond to this claim with a utilitarian argument, that without IP laws, we wouldn't have progress. Michel was responding to a section that demonstrated that this was not true, and he expanded it to include things other than pharmaceuticals. It is strictly a response to show that the utilitarian argument is false.
Exactly.
Yeah, these two parties. But try to defend it against left-libertarians. You usually end up either making moral or utilitarian arguments (apologies to Nielsio who might very well here insert that link about utilitarian morals).
Who cares about AIDs?
The guys who make anti-retroviral drugs.