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.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.
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.
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Filed Under: economics, globalization, intellectual property, joseph stiglitz
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Ya Know
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Re: Ya Know
WTF dude ???
Children (mine included) know nothing about patent rights
It's a game for adults
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Re: Re: Ya Know
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Re: Ya Know
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hypocrits
Shame on cotton subsidies, shame on sugar subsidies and restrictions, shame on producer subsidies for rice, shame on corn subsidies.
Western governments should stop all agricultural subsidies and liberalize international trade in agricultural products immediately.
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Re: hypocrits
how bout your little arse lemonade joe ?
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Re: Re: hypocrits
No, just drag them squealing from the public trough.
We subsidize millionaire Western farmers out of some romantic attachment to our great-grandfathers having been farmers ignoring that most of our ancestors fled the farms as soon as they could.
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Re: hypocrits
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Re: Re: hypocrits
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There is a follow up, which outlines some of the tactics of contestation at: http://www.ksgcase.harvard.edu/casetitle.asp?caseNo=1736.3 - you will enjoy the part, where the U.S. government argues against generic AIDS medicine to save millions of lives in South Africa, but for mandatory licensing of CIPRO during the anthrax scare.
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Free trade
In the end he was confused that the world is based on redefining everyday terms to have nothing to do what they actually mean, while still pretending that they hold the actual meaning. And I feared for his future and the need for better " keys on keyboards.
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"west" is relative
I suppose, although the US certainly considers itself a Western country, Japan lies to the "West" of the U.S and Europe is to the "West" of Japan. :-)
Substitute "large economically advanced" for "big Western" if that makes my point clearer.
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So when they were signing that agreement in Marrakesh, they were signing the death warrants for thousands of people in sub-Saharan Africa.
Since when did the corp thugs care about anyone but themselves ?
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Economists
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Re: Economists
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Re: Economists
Hmm. I've read an awful lot of the economic research, and I haven't seen too many that don't understand what the patent system represents. A few do, certainly, but not many.
I'm curious which economists you think misunderstand the purpose of the patent system.
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This is really not what I said or even meant to suggest. What I did say is my wish that they would take the time to learn what a patent acutually is. They come in various flavors (plants, designs, utility) and each have specific features about what you can do and not do with them that in large measure ameliorate much of the criticism leveled against them. So many critics seem to believe that they are a direct descendant of the Statute of Monopolies Act of 1623. In truth, what was adopted in the US starting with the Patent Act of 1793 is significantly different.
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Re:
Really?!? I've yet to see an economic study of patents that looked at patents in such a manner. Most of them look at the specifics of the patent system we're dealing with today, and even take into account more recent changes such as the 1952 act and Bayh-Dole.
Which research are you aware of that uses the definition of patents as established in 1623?
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http://www.patenthawk.com/blog/2005/04/patent_economics_part_1_market.html
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Re:
What's that got to do with anything?
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I could more easily respond to questions you pose if you would conform your comments to what was actually stated.
P.S.- The 1952 Act did not amend the law. It was a statutory compilation of both prior legislation and judicial decisions interpreting same. As for Bayh-Dole, I am curious why you even mention it.
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Patent pools and Prizes
The most interesting part of the article was his solutions to some of the issues discussed previously here at techdirt.
It was especially nice to see innovation described as something that is not free. For those who didn't rtfa
"In the book I describe an alternative system for financing innovation. Innovation doesn't come costlessly, so you can't just say, "Let's just have people innovate." It requires incentives; it requires finance."
It's nice to see that historically patent pools have worked.
Also the prize idea is really novel. The only problem is who decides how big the prize should be and how does this distort the market.
"But a far better system is a prize system, where you ascertain what are the diseases that we care about, malaria and diseases that affect hundreds of millions of people, and you say, "If you discover that, you'll get a big prize. If you discover something less important, you get a small prize."
If you take compulsory licensing and cap the amount of money then it starts to look an awful lot like a prize. The only difference is that instead of having someone in advance decide what is or is not worthy of a prize, you let the market decide. If a patent is useful people will use it, if not they won't. It's often hard to tell a priori what will end up being the most useful basic research. Just the nature of things. As Henry Ford said, "If I asked my customers what they wanted they would have told me they needed a faster horse".
The prize idea is pretty interesting thought. Maybe several companies will pool resources and offer a prize for certain types of basic research which they will then put into a patent pool.
Lots of interesting ideas out there other then just get rid of patents.
Just my USD 0.02 worth.
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