November 30, 2010
Nearly all economists speak derisively of tariff barriers that raise the price of imported goods above their marginal cost. In addition to the inefficiency this causes, tariff protection also invites corruption as the protected industries try to maximize the value of the rents they receive.
The identical logic applies to patent protection, except patents can raise the price of goods by tens or hundreds of times the competitive market price, not the 15-30 percent that would be more typical of tariff protection. It would be useful if this point was made in the context of an article reporting on how a drug company had ghost authored a textbook for two medical researchers.
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