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.