Libertarians for Protectionism

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 of current production, but that doesn’t suffice when you have up to 15 years of previous R&D expense to recoup.

The cost theory of value just 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And so, if patent protectionism is withdrawn, pharmaceutical research and development may have to be done by somebody other than for-profit pharmaceutical companies!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And so, if copyright protectionism is withdrawn music companies might have to rethink their current business model!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.

4 replies to Libertarians for Protectionism Use a feed to Follow replies to this article

  1. Michael Enright

    You state that “And so, if patent protectionism is withdrawn, pharmaceutical research and development may have to be done by somebody other than for-profit pharmaceutical companies!”

    Or maybe they won’t be developed at all. Or maybe there would just be a huge drop in drug research. Do you have a model as to how this would be done? Why do you believe it would be?

    As much as I find problems with intelectual property, I’m not sure that I could accept any kind of dramatic drop in the new development of life saving drugs.

    As far as the music industry goes, I thought the point that was made was that people should recognize the service that is provided for the money that is exchanged. Of course, I think it is much more clear that intellectual property in music is a bad thing.

  2. Rad Geek

    Or maybe they won’t be developed at all. Or maybe there would just be a huge drop in drug research. Do you have a model as to how this would be done? Why do you believe it would be?

    Well, I don’t know. Under capitalism, who will be in charge of making the shoes?

    I mean, there are actually lots of ways to get foundational and applied research done even without being able to lock the results down using patents (the fact that you can’t patent laws of physics or mathematical theorems doesn’t seem to have halted the aerospace industry), and people have had lots of ideas about how you might be able to make a living at the research without marketing patented results (like, creating Universities), but I don’t think I’m under any particular obligation to spell out just how people will make drugs on the free market; the burden of proof is certainly on those who want to forcibly stop market transactions, not those who want to allow them. (The thing, of course, is that patent protectionists don’t know any better than I do where the money will go in a free market for medicine, socialist calculation being impossible. It might mean a lot more drug R&D and it might mean a lot less. But I don’t need to know that to justify my prescriptions; they do. So much the worse for them.)

    And, of course, the major point here is just that the argument is textbook protectionism: point to what is seen (costly drug development); studiously ignore what is unseen (all the entrepreneurship, innovation, enjoyment, leisure, food, shelter, technology, etc. that that money could have been spent on); and act as though the obvious value of the former justifies any means necessary to keep the money flowing to it.

    Of course, Weisenthal can be a protectionist if he wants to, but if you’re going to spout textbook protectionist arguments you should probably give up on pretending to be a libertarian.

    As far as the music industry goes, I thought the point that was made was that people should recognize the service that is provided for the money that is exchanged.

    Well, sure they perform a service; so do the hard-working American family farmer and the domestic steel industry. But Brandon wasn’t just arguing that they perform a service; he was arguing that they perform a service and therefore (apparently) we’ll be better off if the government grants them special privileges to a captive market. But that’s just textbook protectionism again. And the same thing goes as before; only doubly so, because the idea that the obvious value of pervasive pop music needs government protection is (as you note) even more silly.

  3. Billy Cromb

    He doesn’t seem to understand how record deals work.

    See, companies front the money to produce the album, and promote it, then they get about 90% of the profit from sales. The band’s share is the remaining 10% (sometimes more or less depending on the deal), and they don’t see any of it until the production cost of the album is payed out of their share, so the Record company can turn a huge profit even if an album doesn’t sell enough for the band to make anything.

    I don’t know what “libertarians” (by which I mean the neo-lib capitalists that have appropriated the term) want to call Record companies, but I think “parasitic middleman” is a pretty good term.

    Also, I highly reccomend the Zine “The CIA makes science fiction uninteresting #2”, available from Microcosm publishing. It explains exactly how “life-saving” the toxic drug cocktails delivered to AIDS patients are. In a patented system, the incentive is for Pharmaceuticals to sell drugs, not to make them effective and safe.

— 2006 —

  1. Discussed at radgeek.com

    Geekery Today:

    Libertarians for Protectionism, Appendix A

    There’s been some debate recently over whether recent studies show that the lack of pharmaceutical patent laws didn’t stifle, and perhaps even accelerated, the development…

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