Nobel Prize Winners Continue To Explain How IP Hurts Innovation

from the time-for-a-change dept

We've discussed multiple times in the past about how economics Nobel laureate Joseph Stiglitz believes that patents hurt innovation. Michael Geist points us to Stiglitz's latest speech, where he teamed up with John Sulston, a 2002 Nobel Laureate in Physiology/Medicine, to point out how the patent system is stifling innovation. It's great to see Stiglitz continue to point out the problems caused by the patent system (and great to see other Nobel winners noticing as well). While Stiglitz has normally focused on pharmaceutical patents, in this speech he also touched on software patents. While Stiglitz hasn't yet come around to believing that patents should be abandoned, he is quite convinced that they're doing plenty of harm in many cases, often locking up innovation and costing society a lot more than they benefit it.

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Nobel Prize Winning Economist Explains How IP Rights Are Part Of The Globalization Problem

from the not-the-solution dept

Kevin Donovan writes in to point us to the transcript of a fascinating speech by Nobel Prize-winning economist Joseph Stiglitz on Making Globalization Work. We've written about Stiglitz in the past, for his explanation of how patents often do more harm than good economically. In this speech, which is covering a much broader topic (globalization), he makes a few really good points about why what politicians put in place as "globalization" isn't matching what economists say should happen in a globalized economy -- and intellectual property comes into play. The main point is just that most "free trade" agreements have absolutely nothing to do with free trade. While they're labeled as such, they're usually filled with restrictions on trade that benefit the bigger countries. A true free trade agreement would, as he notes, be short and sweet and easy to write: basically, there are no restrictions on trade. Instead, what we get are supposedly "free trade" agreements that are really pushed by industry representatives for certain industries to benefit themselves.

In particular, he points out how this is done with intellectual property. This is something we noted last year when we couldn't understand why a "free trade agreement" would guarantee monopolies on intellectual property. That seemed like the opposite of free trade. As Stiglitz notes:

"The Uruguay Round TRIPs Agreement, which is Trade-Related Intellectual Property, has nothing to do with trade. They just put "trade-related" because they had to put that in there to have it in a trade agreement. That was the real ingenuity.

There was already an intellectual property organization, called WIPO, the World Intellectual Property Organization. But they wanted the trade ministers to do it because the trade ministers didn't know anything about intellectual property, and that meant they were much more vulnerable to the influences of the special interests."

They put in provisions that were explicitly designed to reduce access to generic medicines. Just to highlight why that's important, a generic AIDS medicine, for instance, costs under $300 for a year's treatment. The brand name is $10,000. If your income is $500 a year or $300 a year, or even $5,000 a year, you can't afford $10,000 a year for the brand name. So when they were signing that agreement in Marrakesh, they were signing the death warrants for thousands of people in sub-Saharan Africa. That was the consequence.

The entire piece is a good read, but as Kevin pointed out, it's interesting to see how Stiglitz fits some of these pieces together to show why globalization hasn't lived up to its promise.

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