Bob and All,
So my conservative friends are always shouting about returning America
to Free Enterprise. That, they tell me, is what will make America
"Great Again".
When you look at how the laws have been devised to protect the
"freedom" of the Ruling Class, Free Enterprise becomes a big joke.
Carl Jarvis
On 7/12/17, Bob Hachey <bhachey@xxxxxxxxxxx> wrote:
Hi Miriam,
Frankly, I never considered how much patents contribute to our horrible
income inequality. Baker has really hit upon something heer.
Bob
-----Original Message-----
From: blind-democracy-bounce@xxxxxxxxxxxxx
[mailto:blind-democracy-bounce@xxxxxxxxxxxxx] On Behalf Of Miriam Vieni
Sent: Monday, July 10, 2017 10:16 PM
To: blind-democracy@xxxxxxxxxxxxx
Subject: [blind-democracy] How Rich Would Bill Gates Be Without His
Copyright on Windows?
How Rich Would Bill Gates Be Without His Copyright on Windows?
Monday, July 10, 2017
By Dean Baker, Truthout | Op-Ed
Bill Gates, chairman and founder of Microsoft Corp., listens during the
Clinton Global Initiative (CGI) meeting on September 24, 2013 in New York
City. (Photo: Ramin Talaie / Getty Images)
Suppose we lived in a world where Bill Gates could not get copyright or
patent protection for Windows and other Microsoft products. Anyone who
wanted could duplicate these products without charge, sending Bill Gates a
thank you note, if they were so inspired.
In that world, Bill Gates would certainly not be the world's richest human
with a fortune of more than $70 billion. Even without copyright protection
Mr. Gates would probably still be doing fine -- he seems reasonably bright,
works hard and comes from a wealthy family -- but he would not have amassed
his huge fortune if he could not get government granted monopolies on his
software.
This simple and obvious point matters because it is popular in many circles
to claim that income inequality is just an inevitable, even if unfortunate,
result of technology and globalization. In fact, there is nothing
inevitable
about patent and copyright protection; these monopolies exist as a result
of
government policy. The fact that Bill Gates and many others have gotten
hugely rich as a result of these protections is a result of government
policy, not an inevitable outcome of technological progress.
And, there is a huge amount of money at stake here. The fortunes going to
Bill Gates and other beneficiaries of intellectual property protection come
out of the pockets of the rest of us. The clearest case is prescription
drugs where we will spend over $440 billion this year for drugs that would
likely sell for less than $80 billion in a free market.
The difference of $360 billion a year is a bit less than 2 percent of GDP.
If we carry this out over the course of a decade we're likely talking about
more than $4 trillion. By comparison, the battle on repealing Obamacare
largely boils down to a fight over $600 billion in tax cuts for the rich,
an
amount that is less than one-sixth this size.
And this is just the money at stake with prescription drugs. Patent and
copyright protection also hugely inflate the cost of medical equipment,
software and computers, pesticides and fertilizers, video games, and
recorded movies and music. Adding these all together, we can easily be
talking about an amount that is more than twice as large.
While it is not really debatable that Bill Gates is immensely rich because
of a government policy that has allowed him to become immensely rich, the
relevant question is whether there are alternatives. We have copyrights and
patents to give people an incentive to innovate and do creative work.
Even if we decide these government granted monopolies are necessary, we
could still make them shorter and weaker. In the last four decades, policy
has gone in the opposite direction. We have made patents and copyrights
both
longer and stronger.
This has not produced a noticeable payoff in productivity growth.
Productivity growth has moved along at just over 1 percent annually in the
last decade, roughly one-third of the pace in the long Golden Age from 1947
to 1973.
So we are clearly paying a big price for this increase in protection in the
form of greater inequality, with no obvious benefit in more rapid economic
growth. Of course even if we did see evidence of more rapid growth it would
still be reasonable to ask whether it was worth the price in higher
inequality. But we can't have that discussion until we stop pretending that
it is technology causing inequality rather than policy.
The other factor that needs to be brought into the discussion is that we do
have alternative mechanisms for financing innovation and creative work. The
federal government spends more than $32 billion annually on biomedical
research through the National Institutes of Health. There is no reason in
principle that we can't double or triple this spending to replace the
patent
supported research done by the pharmaceutical industry. (We likely would
want to change the government's funding structure also.)
The great advantage of direct funding is that all research findings would
be
fully open to other researchers, physicians and the general public. And
drugs would be cheap. The next life-saving cancer drug would sell for a few
hundred dollars instead of a few hundred thousand dollars.
Much creative work is already supported now by the tax deduction for
charitable contribution. When a wealthy person gives money to support an
orchestra or art museum, the government picks up 40 percent of the tab by
reducing the person's tax liability. We could have a different structure
under which everyone gets a modest credit to support whatever creative work
they value. This work would then be in the public domain, free of any
copyright restrictions.
There are many other ways to support innovation and creative work; we don't
have to decide on the best path here. The point is that we have a policy
that involves one particular path, which has very questionable merits on
efficiency grounds, and looks really bad in its impact on equality.
It is understandable that the people who have gotten rich from our policies
on patent and copyrights would not want to see them at the center of public
debate. But what is the excuse for everyone else who is not talking about
them?
Copyright, Truthout. May not be reprinted without permission.
Dean Baker
Dean Baker is a macroeconomist and codirector of the Center for Economic
and
Policy Research in Washington, DC. He previously worked as a senior
economist at the Economic Policy Institute and an assistant professor at
Bucknell University. He is a regular Truthout columnist and a member of
Truthout's Board of Advisers.
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