April 06, 2017
The Washington Post is always open to plans for taking money from ordinary workers and giving it to the rich. For this reason it was not surprising to see a piece by Robert Atkinson, the head of the industry funded Information Technology and Innovation Foundation, advocating for more protectionism in the form of stronger and longer patent and copyright monopolies.
These monopolies, legacies from the medieval guild system, can raise the price of the protected items by one or two orders of magnitudes making them equivalent to tariffs of several hundred or several thousand percent. They are especially important in the case of prescription drugs.
Life-saving drugs that would sell for $200 or $300 in a free market can sell for tens or even hundreds of thousands of dollars due to patent protection. The country will spend over $440 billion this year for drugs that would likely sell for less than $80 billion in a free market. The strengthening of these protections is an important cause of the upward redistribution of the last four decades. The difference comes to more than $2,700 a year for an average family. (This is discussed in chapter 5 of Rigged, where I also lay out alternative mechanisms for financing innovation and creative work.)
Atkinson makes this argument in the context of the U.S. relationship with China. He also is explicitly prepared to have ordinary workers pay the price for this protectionism. He warns that not following his recommendation for a new approach to dealing with China, including forcing them to impose more protection for U.S. patents and copyrights, would lead to a lower valued dollar.
Of course, a lower valued dollar will make U.S. goods and services more competitive internationally. That would mean a smaller trade deficit as we sell more manufactured goods elsewhere in the world and buy fewer imported goods in the United States. This could increase manufacturing employment by 1–2 million, putting upward pressure on the wages of non-college educated workers.
In short, not following Atkinson’s path is likely to mean more money for less-educated workers, less money for the rich, and more overall growth, as the economy benefits from the lessening of protectionist barriers.
Comments