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Without a Debt Deal, Obama Can Make the Rich Pay
Posted on Jul 29, 2011
By Moshe Adler
If the Taft-Hartley law is detrimental to us as workers, the patent law is detrimental to us as consumers. While the Sherman Act was meant to take away the right of corporations to monopolize, the patent laws have not only returned this right, the government now enforces corporate monopoly power. The patent law is the reason that health care is so expensive that it is a major cause of the deficit, and that millions of people around the world die because they cannot afford drugs that cost little to produce and are often developed by government employees or with government financing. The patent law is also the reason that Monsanto, the agriculture giant, can sow despair and suicide among farmers around the world, with the most notorious example being the Green Revolution in India, because the law prevents them from growing their own seeds once they have bought seeds from Monsanto.
Does innovation require patent protection? George Stigler, the Nobel Prize-winning economist, researched this question and concluded that historically there were just as many innovations before patent protection as after. Stigler believed that all patents do is close entry to an industry without any benefits to society at all. What is beyond dispute, however, is that by granting a patent, the government confers on the recipient monopoly power. What is the government asking for in return? How is the government protecting consumers against the monopoly that it creates? The granting of a patent should involve the setting of a maximum price, and this should be what Democrats demand. If an agreement is not reached and the deficit is unfunded, the president should stop funding the enforcement for patents that are older than five years. This would preserve the incentive to innovate—if innovation even requires it—while lowering prices substantially on millions of products in the marketplace. With lower prices, workers will be in a better position to absorb cuts in the income security programs if these are made.
In the debate about the proper size of government, an agreement should be easy to reach: If the government stops serving the interests of the rich, the rest of us will not need to rely on it to dress the wounds that it inflicts.
Moshe Adler teaches economics at Columbia University and at the Harry Van Arsdale Center for Labor Studies at Empire State College. He is the author of “Economics for the Rest of Us: Debunking the Science That Makes Life Dismal” (The New Press, 2010).
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