"Nobel Prize Winning Economist: Intellectual Property Reinforces Inequality, Hurts The Economy"

[applegrove]

Nobel Prize Winning Economist: Intellectual Property Reinforces Inequality, Hurts The Economy

at tech dirt

http://www.techdirt.com/articles/20130715/01343223799/nobel-prize-winning-economist-intellectual-property-reinforces-inequality-hurts-economy.shtml

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Some of the most iniquitous aspects of inequality creation within our economic system are a result of “rent-seeking”: profits, and inequality, generated by manipulating social or political conditions to get a larger share of the economic pie, rather than increasing the size of that pie. And the most iniquitous aspect of this wealth appropriation arises when the wealth that goes to the top comes at the expense of the bottom. Myriad’s efforts satisfied both these conditions: the profits the company gained from charging for its test added nothing to the size and dynamism of the economy, and simultaneously decreased the welfare of those who could not afford it.

While all of the insured contributed to Myriad’s profits — premiums had to go up to offset its fees, and millions of uninsured middle-income Americans who had to pay Myriad’s monopoly prices were on the hook for even more if they chose to get the test — it was the uninsured at the bottom who paid the highest price. With the test unaffordable, they faced a higher risk of early death.

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And, while you can argue that the poor always have it tougher, and if they can't afford the test, that's an unfortunate part of life, Stiglitz has a detailed response to that as well. The question is not just whether or not the Myriad tests for BRCA1 and BRCA2 are helpful in their own right, but what would have happened in the absence of the current situation. And Stiglitz argues, compellingly, that Myriad has actually made things much worse. Without such patents, it's likely that the same genes would have been discovered anyway and we'd have more, better and cheaper genetic testing for a much wider selection of the population.


Advocates of tough intellectual property rights say that this is simply the price we have to pay to get the innovation that, in the long run, will save lives. It’s a trade-off: the lives of a relatively few poor women today, versus the lives of many more women sometime in the future. But this claim is wrong in many ways. In this particular case, it is especially wrong, because the two genes would likely have been isolated (“discovered,” in Myriad’s terminology) soon anyway, as part of the global Human Genome Project. But it is wrong on other counts, as well. Genetic researchers have argued that the patent actually prevented the development of better tests, and so interfered with the advancement of science. All knowledge is based on prior knowledge, and by making prior knowledge less available, innovation is impeded. Myriad’s own discovery — like any in science — used technologies and ideas that were developed by others. Had that prior knowledge not been publicly available, Myriad could not have done what it did.



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[frazzled]

1. Only if you think of intellectual property as the province of the big corporations

But intellectual property laws are vital to the millions of visual artists, writers and poets, composers, etc. who depend on intellectual property laws not just for their meager livelihoods but for their artistic integrity and legacy. These are the people among who I live: painters, composers, writers.

Let's separate out the issues of Disney and Big Pharma from the real needs of our cultural creators to have rights to make sure their work is not abused.