Walter Block – November 1, 2021
President Joe Biden has been roundly condemned as a socialist. Bernie Sanders is supposedly his puppet master, pulling communist strings. But there is at least one area where not only is Joe a free enterpriser, he out free-enterprises virtually all of his conservative critics: patents.
Our president, the only one we have at this particular moment, is intent on encroaching on the COVID vaccine patents of the various drug companies. Ironically, this humanitarian effort has been met by howls of outrage and disparagement from those who consider themselves advocates of capitalism.
For example, Michael M. Rosen of the American Enterprise Institute characterized this policy as “Biden’s Patent Madness” in Commentary magazine.
An editorial in the Wall Street Journal considered the president’s initiative as “Biden’s Vaccine IP Debacle.” It went on to aver: “His patent heist is a blow to the Covid fight and U.S. biotech.”
A more measured but still highly critical response came from Andrei Iancu, a former Trump administrator, who said “If you want a lot of innovation surrounding any product or technology, then a lot of patents go hand and hand with that.”
Why does Biden want to rescind these drug patents? Obviously, to save lives. He knows full well that demand curves slope in a downward direction. The higher the price, other things equal, the less of anything that can be sold, and this most certainly includes COVID vaccines and any other drug. Without patents in operation, the ensuing competition will mean the price will fall and more will be purchased. Thus, assuming these pharmaceuticals work, many lives will be saved, particularly in poorer countries.
One argument against this initiative of his is the pragmatic one: to do this is to kill the golden goose. Take away the profits that patents bring, and the drug companies will have less incentive to bring their wares to market. What about the next plague that comes down the pike? From whence will the cures, or preventions, emanate? Not from the drug companies, it is alleged.
But whether this would actually be the case is an empirical issue. Yes, when the patent system first began, there was a modicum of truth to the criticism. Supply curves slope in an upward direction, after all. Thus, the more (monopoly) power you give to industrialists, the greater will be their incentive to bring forth a given product. However, after patents are in operation, a new phenomenon tends to arise: people take out patents not so much with the intention of protecting their ideas, but so as to be able to sue others for patent infringement. Then, a whole host of very intelligent, articulate, accomplished people – scientists, engineers, and chemists, to be sure, but also lawyers, doctors, and judges – spend a lot of time and effort determining just who is guilty of patent breach and who is not. Without the patent system, these folk could busy themselves with more productive endeavors. And, as that aphorism goes, “wealthier is healthier.”
Then, too, money is not the only motivation to wrestle to the ground the next pandemic, or to cure cancer or other such dreaded diseases. Jonas Salk could have made billions for his work on polio, but did not patent his vaccine. His name is widely known today pretty much as a secular saint. So, yes, maybe the patent system will help with pharmaceutical innovation, and maybe it will not. The point is, it is not at all clear that Biden is giving away the store. There are multiple factors that influence development, and it is not pellucidly clear which will dominate.
But utilitarian considerations are not the only ones to take into account in assessing the president’s free enterprise credentials and the justice of his policy. There is also that little matter of deontology. And here, when it comes to private property rights, Biden is unambiguously on the side of the angels of the free marketplace, not his conservative critics.
At first glance, this sounds wrong. By removing patent protections, isn’t the president seizing the rightfully owned property of the drug companies? No, they have no such rights in the first place. If I steal your coat, I now have it, you don’t, and I am a thief. But suppose you’re the first one to create a bicycle. I see it and copy it. Do you still have that bike? Of course you do. I have stolen nothing that you can properly own. If the two-wheeler idea could really be your property, why don’t patents last forever? Why do they end after a few decades? That coat of yours is forever; you can give it to your children, and they can pass it along to their progeny. If we really could own ideas, property rights in them would be permanent, just like coats.
There is thus a bit of a logical contradiction in the patent supporters’ claim. Every word is the embodiment of an idea. Someone, way back in the past, created each and every word. They are therefore, according to the patent “logic,” the rightful owners of them; that is, their grandchildren now are.
Those who favor the patent system use language with which to articulate their views. In so doing, given that ideas can be owned, and permanently so, they are contradicting their own position. They are using the property of other people to express themselves. They are a bunch of robbers!
President Biden’s policy may or may not promote life. Only time can tell. But as a matter of rights, his position is clearly the correct one. No, he does not wish to banish patents in their entirety; just on this one occasion. But in so doing, he is more of a free-enterpriser than his supposedly free enterprise critics.
Image Credit: Gage Skidmore-Flickr | CC BY-SA 2.0