it costs a lot of money and many years to build factories that produce toothbrushes/cars/anything complex that relies on lots of capital
you probably doubt that i personally would pay for all that.
you are right. i dont.
i just buy toothbrushes.
A) We’ve asked you several times to back up your claims.
B) It doesn’t change from the fact of Bawaa’s point that those costs are only high due to state involvement.
C) I already made a point that a unregulated IT industry does the same thing from an R&D standpoint and can function just fine.
Do you understand that the point of an economy is to distribute goods and services that people actually want/need.
If an organization must use force/subsidization to produce a good or service than it’s an organization wasting precious resources. It’s an organization that people don’t want to buy shit from. I seem to remember someone asking you if you knew what a monopoly was.
If an organization cannot produce a good or service and sustain itself than it is because consumers don’t want it. Why do you want to force people into buying things they don’t want? Why do you want to promote inefficient business that wastes the limited resource pool?
oh please, who is believing in a fairy tale here? you think a free market and no state will give us paradise. Too bad nobody listens to you (not even now in the largest crisis of all times). Which is actually a shame because you (that is Peter Schiff) make some valid points. Sadly though guys like you cover them with the most obnoxious attidue i have ever encountered.
And by the way … you do realize Austrian Economics is a theory right and not proven fact?
That is a strange. What do you imply by making such a statement?
You will only be permitted to write so much entirely unsubstantiated nonsense before you are censored. Feel free to substantiate as much as you like. There is no penalty enforced for referencing actual facts or using logical arguments.
why don’t you google for “clinical trial”?
sure i never disagreed with that taxes etc. rise the cost of all products. But aside from demaning certain statistical significance in the results of a clinical trial (which determines the size of the study) the FDA itself does not drive up the costs.
the difference is, in most cases your life will not depend on the quality of your computer.
Are you trying to make a point? I didn’t think we were talking about market anarchy, thats another discussion.
I’m not sure if there’s a point to this either. I don’t recall asking for your opinion about Peter Schiff and who listens to what.
Austrian economics itself is no theory.
Why don’t you let your emotions go and read some books on the subject? Some of them are downright entertaining.
Austrian Economics isn’t a theory at all, it’s a school of thought. There are some theory’s inside of it sure, just like any school of thought. Austrian’s, unlike other school of thoughts, builds its foundation in logic. SO when you try to refute it’s ‘theory’s’ your trying to disprove logic and reasoning. It’s a fruitless task and sometimes comical task to perform.
So I’ll ask again, can you substantiate anything you’ve claimed on this thread?
well obviously some people get offended if one questions certain aspects of Austrian Economics. Communists also get offended when questioning their theories…doesn’t make them true though. Frankly i don’t see where all the emotion comes from. Its a subject that i thought could be discussed in a civilized manner without getting bombarded with condescending babble.
Counter to your point, presently my life does not depend on an arbitrary drug either.
On the flip side the quality of my living does depend on the existence and low cost availability of computers.
Still one must ask, why does a ‘clinical trial’ cost so much. What standards are inp lace that drug company’s must adhere to before a drug is considerd ‘adequately tested’.
Well in theory, a government regulatory agency that regulates exactly the way a free market would (by lucky coincidence) wouldn’t raise prices above market levels. Note that any it cannot be said a priori what a regulation’s effect on price/quality will be. For example, if I am in a primitive society and make a regulation that forces cavemen to fashion spears before attacking large animals, they might have a better chance of making the kill.
In practice, government regulation is open to special interest groups, which is really how the FDA drives up costs and reduces quality. See here. There is a reason that the pharmaceutical industry is grows faster than any others at a rate of 17%.
Actually in businesses it can make a huge difference. The entire oil industry relies on complex 3d-mapping of seismic data and other complex whots-its. Without the right computers and software, the industry would be in a wheelchair. This isn’t quite life or death… or maybe it is, seeing as we’re currently shedding blood for oil [:P]
Mathematicians get offended when you assert that ‘Western Mathematics’ is racist and patriarchal. people who know what they are talking about often get offended by loudmouths who just say whatever pops into their unenlightened heads.
Back to Drug Prices. and the FDA
When testing first begins, the individual gains a definite mar-ginal utility, denoted MUW, from acquiring the information yielded
by the test about the drug’s efficacy, its toxicity, and other side effects.One is reassured to know, for example, that the test subjects did not
drop dead after taking the drug on day one. As the duration of the testing increases, then eventually if not immediately the marginal
utility of the information gained from the last day of testing declines: MUU) is a decreasing function of t.
Wardell (1979, p. 33) notes that “current Phase 111 trials [the final stage of the clinical testing], although the most costly and time-consuming
part of the clinical development process, add very little to what has already been learned about a drug’s efficacy and toxicity by the end of Phase 11.” Conceivably, MU(I)might increase in the early stage oftesting, but eventually it must decline, if only because the human lifespan is limited. In using the model, nothing is gained by considering an initially rising portion of the MUU) function.
FDA regulations raise the cost of introducing new drugs. Not just ineffective or dangerous drugs, but good drugs as well.5 As a result, less drugs make it to market. But that’s not the end of the story. Less drugs on the market can only mean one thing. Higher drug prices. When drug prices are higher, consumers will take fewer of them, which means that consumers will miss out on the health benefits of drugs that they would have taken in the absence of the FDA regulations. Once again, we are left with an unintended consequence: FDA regulation may lower the health of the very population that the agency is entrusted to protect.
http://www.ou.edu/class/econ3003/book/area1c28.html
So the FDA, by forbidding the use of Beta-blockers before 1981, was responsible for something close to a hundred thousand unnecessary deaths."4
D Friedman - Machinery of Freedom
Perhaps I missed it but who is becoming offended?
Well I don’t think anyone is saying ‘What we say is truth simply because we say it’
Realize that everyone’s reactions are different for we are all individuals.
here are my original points:
fact: developing a new drug costs ~1billion.
fact: pharma companies are not intentionally investing into developing drugs against diseases with a small market because they will not make a profit.
fact: companies are not investing into drugs for which there will be no patent due to prohitive prior publications (usually from academic groups).
Its up to you to refute these points based on your (infallible?) Austrian logic.
From these two wiki articles
http://en.wikipedia.org/wiki/Clinical_trial_protocol
http://en.wikipedia.org/wiki/Clinical_trials
From Protocols
This is an example of a barrier to entry. Partnership drug legalization agency’s and cartelization of drug companies in the form of ‘standards’.
State is involved in Clinical Trials. Extensively.
More beauacracy.
Look I could scour the whole page but the point is clinical trials are not a free-market operation. They are bloated in costs due to various criteria they must make to deem them ‘satisfactory’.
That would be you. And your trolling.
No, but it would certainly be better than what we have now. There’s a word you should also learn: strawman.
You do realize that you have no clue as to what you’re talking about, right? After all: your ignorant rantings make it quite clear that you just want to troll. Something can be done about that, you know.
This is not because of the market, but due to the state and it’s sponsorship.
Non-sequitur and pointless. And it’s not a fact, but conjecture on your part. To have knowledge of this point requires omniscient knowledge of the drug industry as a whole. Something I doubt you have, Now you may be able to present empirical evidence such as statistics to try and substantiate it but that doesn’t make it a fact like greater mass = more gravity kind of fact.
Again another conjecture though may be partially true. To know this point requires knowing the investments of all drug companies, and the future investments of drug companies, something you cannot do. Again you would have to be omniscient to know this as a fact.
But those 3 points are really non-sequitur from your most important first point.
without patents no pharma company would invest ~1 billion dollars to develop a new drug.
Lets get all the fluff aside and get to the point. What your arguing here essentially is that without IP laws capitalism would essentially stop. Your also arguing that despite consumer demand somehow capitalists would beleive they would be unable to receive a profit from it’s business.
To give credit to your claim you cite the present cost of manufacturing drugs based on our current system, and not of a system in the absence of IP laws. This is a form of circular reasoning.
IP laws do not build a foundational frameowrk for capitalism to exist. What it does is change the strucutre of manufacturing and grants a legal monopoly of production to various firms. All that would happen in the absence of IP laws is a re-structuring of the production process.
Now we argue that this re-structuring would be more beneficial to the economy as a whole. It would produce a higher economic output for medecine. The economic result of IP laws is whats knwon as a false scarcity. We know that the less of a good there is the less there is to go around. The less there is to go around the poorer everyone is as a result.
if the government says that all toothbrushes should be made out of 24 carrot gold. you would need to get a secured loan to brush your teeth.
what’s a small ‘market’? do you propose to point guns at and enslave researchers to make them develop the drugs you think they should be making?
if you give me a monopoly to produce a kooky haircut, maybe i will spend my time cutting more hair that way than other ways that you don’t grant me special privileges in. now prove that creating artificial scarcity by passing laws to hinder entrepreneurs from delivering what consumers desire them to deliver, does not disrupt consumer sovereignty… There could be a nobel waiting for you. I’m sure the Swedish Central Bank would get off on that.
i am working in the pharma industry and i can assure you that we would rather put the drug on the market without first having to pay a 1billion $ trial. The adventage of large pharma companies comes already from the cost that goes into the actual research (~100 million) … it doesn’t require the clinical trial to drive start ups out of business.
One of the guys made the point that the FDA killed people by not allowing a certain drug to enter the US market. That may be true. However it doesn’t say how many people were safed by blocking drugs after it turned out during the clinical trial that they are dangerous. For instance, VIOXX likely caused > hunderd thousand heart attacks. Take away the FDA trials and such cases would happen all the time. These tests are in place because of very valid safety concerns.
Say, didn’t the FDA approve VIOXX? So that kinda means you’ve shot yourself in the foot. Further, you act as if businesses wouldn’t grasp that killing customers is a bad thing without a government to tell them. Are you really that stupid? Seriously.