It’s always so cute to see self-proclaimed libertarians engaging in the most egregious sorts of protectionist argument when it comes to
intellectual property restrictions. Consider the recent exchange on patents and copyrights over at Catallarchy, in which we are apparently supposed to grant drug companies and record labels the power to violently halt competition because (1) they have high sunk costs, and (2) they’d have to rethink their business strategy on a free market.
For example, here’s Joseph Weisenthal:
Matt, it’s been estimated that it takes approximately $500 Million dollars to develop the average drug, although that number can swing wildly. If companies were simply allowed to copy a compound and produce it as soon as a drug became available, the cost would fall roughly to the cost ofcurrent production, but that doesn’t suffice when you have up to 15 years of previous R&D expense to recoup.
Thecost theory of valuejust doesn’t cut it, here bra, and yes, if drugs did fall to this level, there would be little reason to spend the enormous amounts of money, and spend the time to develop the compound.
And so, if patent protectionism is withdrawn, pharmaceutical research and development may have to be done by somebody other than for-profit pharmaceutical companies!
On a similar note, here’s Brandon Berg, adding an appeal to pity for the poor record companies on top of the protectionist argument:
What about the record companies who fund the production of their albums? People like to think of them as some sort of parasitic middlemen, but they’re not. They provide the capital and take on the risk that most musicians can’t afford. If profits fall, then recording studios will decide not to fund albums by musicians whom they think are less likely to be successful.
And so, if copyright protectionism is withdrawn music companies might have to rethink their current business model!
O tempora! O mores!
Economics lesson for the day: protectionism doesn’t work. Markets do.
Ethics lesson for the day: the world doesn’t owe you a living, even if you’re very smart or very creative. Honest people try to find a new way to make a living if the old way can’t work without the use of government force. Clever people find out new ways of making useful things, if they realize they can’t make an honest living in the old ways.
Logic lesson for the day: before you have a successful reductio ad absurdam the conclusion of the lemma must actually be absurd.