Another Call For Abolishing Patents, This One From the St. Louis Fed 315
New submitter WOOFYGOOFY writes "The most recent call for curtailing patents comes not just from an unexpected source, the St. Louis Fed, but also in its most basic form: total abolition of all patents. Via the Atlantic Monthly: a new working paper (PDF) from two members of the St. Louis Federal Reserve, Michele Boldrin and David Levine, in which they argue that while a weak patent system may mildly increase innovation with limited side-effects, such a system can never be contained and will inevitably lead to a stifling patent system such as that presently found in the U.S. They argue: '...strong patent systems retard innovation with many negative side-effects. ... the political demand for stronger patent protection comes from old and stagnant industries and firms, not from new and innovative ones. Hence the best solution is to abolish patents entirely through strong constitutional measures and to find other legislative instruments, less open to lobbying and rent-seeking.' They acknowledge that some industries could suffer under a such a system. They single out pharma, and suggest other legislative measures be found to foster innovation whenever there is clear evidence that laissez-faire under-supplies it."
Levine and Boldrin (Score:2, Informative)
This is not actually new, by the way -- Levine and Boldrin have been making this argument for years. I had Levine for a seminar on this matter four years ago when I was at Washington University, and it seemed like this was already a well-grooved line of rhetoric for him. Heck, they've even got a book that's been out since 2005. Here are some of the places where they're making this argument:
http://levine.sscnet.ucla.edu/general/intellectual/against.htm
http://www.againstmonopoly.org/
Re:there's a reason for patents (Score:5, Informative)
The ideal system of government is a benevolent dictator. One person acting with consistent policy and absolute power putting the interests of the majority above special interests and himself. While it is possible to find such a person once every few centuries, it is impossible to maintain this system of government because a bad dictator will inevitably rise and send everything to hell. Every society in the world has gone through the motions of trying to "fix" their monarchy, and suffered revolution after revolution "fixing" their system trying to find a better single ruler. But now, we have realized it was always a losing battle and abandoned the monarchy altogether. Representative governments may be inefficient and suboptimal, but they are stable for the long term and do not require violent "fixes" periodically.
The argument presented by this article is that patent systems behave in the same way. While a "fixed" patent system would be ideal, its corruption inevitably recurs no matter how many times we actually manage to "fix" it because of how it inherently distributes money and influence among the concerned parties. The only solution, therefore, is to abolish the system entirely and use a completely different paradigm to produce suboptimal but stable results. In many industries that may in fact be laissez-faire, while in others we may need different, more targeted approaches.
Re:big obstacle (Score:4, Informative)
Re:Drug Patents (Score:4, Informative)
And then, since nobody will bother inventing new drugs
May be wrong, but I keep hearing that most new drugs are invented by academics, not Big Pharma.
Re:If abolishing patents won't happen... (Score:4, Informative)
'Trade secrets lead to a closed, uncooperative system"
I think we can trace the roots of non-cooperation back to a competitive marketplace. Competition leads to trade secrets..
The question is whether innovation would flourish more with patent protections, or without.
With them, competition is forbidden until they expire, then they're public domain.
Without them, competition is allowed immediately, everything is public domain for the reverse-engineering of it, and competitors are free to invent their own, possibly similar, designs.
Re:Drug Patents (Score:5, Informative)
Boldrine and Levine have show rather conclusively that drug development tends to go where the patents are not in their book, Against Intellectual Monopoly (http://levine.sscnet.ucla.edu/general/intellectual/against.htm). They also effectively demonstrate that the introduction of new drugs actually slowed with the introduction of patent protection in any country where patent protection is introduced.
For some reason, the assumption that patents foster innovation is taken as a fact without looking at the evidence amassed so far. I think it's grand that Boldrine and Levine lend a voice to skepticism of the "patents foster innovation" mantra, but I wonder, just how did they get on the board in a district of the Federal Reserve?
Re:Drug Patents (Score:4, Informative)
You're missing a few things. The fact is that the NIH doesn't pay for clinical trials and development, and this is where most of the costs of drug development come from. The NIH might pay for the underlying idea, and that idea might even be the most important part of the whole thing, but the fact is that the other stuff still costs a lot of money.
Then there is the issue that most of the NIH leads don't pan out - but they still cost a lot of money. So, companies plow a lot of money into duds that have to be made back on successes.
If you made NIH funding contingent on royalty-free results then nobody would make use of anything the NIH produces, unless the NIH funded the trials as well. Now, I think that is actually a perfectly valid model, but don't be under any illusions that drugs would be cheaper if that were done. The only thing that might change is how those costs are recovered (maybe the pills would be cheap or free, but the taxpayers would bear the difference).
People talk about the costs of drugs, but I think what really bothers people is the regressive way that those costs are recovered. There isn't much you can do about the total cost (that isn't to say that we can't continue to research ways to reduce it), but there is a lot that can be done to change how it is paid for.