In the wake of the Covid-19 crisis, and the production of several vaccines against coronavirus, the Canadian government is now signaling that it will consider waiving intellectual property protections on those vaccines.
This news comes two-and-a-half years after Canada placed a 270% tariff against the importation of foreign milk into Canada. Canada, like the nations of Europe, had recently become caught up in a trade war, which arguably began when then-president Donald Trump increased tariffs on foreign steel.
Those steel tariffs caused America's farmers to demand a bailout, due to: 1) the fact that the tariffs on foreign steel arguably functioned as a protection for American steel in the process; 2) the increased cost, to farmers, of farm equipment which is made out of cheap foreign-made steel, after tariffs; 3) agricultural exports from the U.S. to China declined significantly after the tariffs were applied; and 4) the fact that the farm industry hadn't yet been bailed out, and seemed to need a bailout, in proportion to the protection afforded to U.S. steel workers.
http://www.theatlantic.com/politics/archive/2019/03/tariffs-drive-farm-income-down-and-equipment-prices/583 This phenomenon has been commented on, in such great detail, that it was arguably predicted; by the economist Henry Hazlitt, in Chapter 11 of his 1946 book Economics in One Lesson.
It is too bad that Canada isn't considering waiving I.P. protections on all medications, rather than just the coronavirus vaccine.
If free-market economic theory is correct, then as long as sovereign governments respect the limitations put on them by the people, and take a more non-interventionist role in the economy, then a move towards zero tariffs, and the reduction of the length of patent terms, will result in a freeing of trade and price competition, which itself will lead to dramatic reductions in the prices of all goods.
And if Medicare for All or universal health care isn't on the way, then cheaper medical prices is something that Americans - and people all over the world - need badly right now.
So the free-market theory goes: If the state didn't (or couldn't) rescue or bail-out failing firms - and didn't hand taxpayer money over to politicians' corporate cronies - then failing firms and large monopolies could easily be competed-against; whether out of existence, or just out of their monopoly status.
Auto plant workers, farmers, and people in the pharmaceutical industry, each have their own distinct ways of evaluating the comparative value of the quantity and quality of steel, cars, farm equipment, food, pharmaceuticals, medical devices, and so on. Their subjective preferences, professions, and relative needs for each of these items at different times, strongly influence the way that these people will interact, and what they will buy, and when.
Just as farmers will want to either optimize quality and cost of the steel that goes into their farm equipment, or else sacrifice quality for cost or vice-versa, the same question exists in medicine. Obviously, high-quality, low-cost medication is the most desired outcome, but that doesn't seem realistic. So, then, should medications be low-quality yet widely available? Or should they be high-quality yet restricted to the few?
Instead of assuming that either quality or affordability must be sacrificed, and mandate that one firm should produce a good at a particular price, it is perhaps best to give the consumer the choice in the matter. And that can be done; through allowing multiple producers of similar goods to exist, and distribute different numbers of goods at different prices from other firms, so that individual consumers can choose whether they want a lot of the cheap stuff, or a little of the high-strength stuff, or something in between.
The economic coordination between the customer and the firm he wants to go out of business, would be done not by a government that can keep that bad business afloat, but would instead be done through the consumer calling the firm to complain, or through refraining to purchase the product. Thanks to taxation and subsidization, and the limitations upon boycotts which are imposed by the Taft-Hartley Act of 1947, the freedom to refrain to purchase a product, is limited. Thus, the right to boycott, and the right of each consumer to play his role in regulating the economy, are limited as well.
Just as people's professions and subjective preferences influence their demands in term of price and quality, those factors will also strongly influence their vote, as well as their demands from government.
People in the pharmaceutical industry will, naturally, vote and buy as if the labor of doctors and pharmaceutical engineers are - at least on a metaphysical level - somehow intrinsically more valuable than the labor done by the people who grow and harvest our food, and who build and maintain our cars.
And maybe health is more important than transportation. But on the other hand, you can't be healthy if you don't eat, and you can scarcely enjoy your health if you can't travel anywhere. In fact, not being able to travel much, can have a negative impact on your mental and emotional health, by causing you to feel cooped up and trapped. But then again, some cars pollute. But some cars pollute less.
The point being: Life is complicated. Economics are complicated. But coordination and economic planning are possible without government. So why unnecessarily involve the government in coordinating international trade, when it can barely facilitate international trade? Government's primary role should be to facilitate non-violent productive behavior, rather than to promote the production or sale of any law-abiding particular person or firm over any other.
Tariffs, and trade policies - sadly - are often enacted in order to supposedly correct for some "crime" which a foreign country is perpetrating on either American consumers, or its own people, or both.
China is supposedly "flooding" America with cheap products. But it's not like America is producing many of the same products. So where else are we going to get them from?
Moreover, America levies tariffs "against" Chinese exporters, supposedly because their client firms are exploiting their workers. And many of them undoubtedly are. But does everybody in China deserve to pay the price for the behavior of exploitative firms? Additionally, those tariffs do not help those Chinese workers, because the costs of the tariffs are not footed by the Chinese exporter, but through wage-theft from the workers. That's what happens when there is nothing in the tariff law to stipulate that the exporter must charge only his most exploitative C.E.O. clients for the cost of the tariffs. There is nothing to ensure that the tariff will have the desired and intended effect.
Additionally, China's Company Law requires foreign firms that set up shop in China, to share their technology with Chinese firms active in the same industries, as a cost of doing business in China. This cross-cultural sharing of technology, is unfortunately labeled by American capitalists, as "intellectual property theft". That's right: What China considers to be its intellectual property law, is described by America as intellectual property theft.
This fight - between every firm and government, to produce something, and then profit through resting on their laurels leveraging the value of the product, by hoarding it and sitting on it - must end. The trade war must end, before it accelerates into trade blocs, a cold war, and hot wars.
Do we really need tariffs in the first place? Before continuing, let's review some basic facts about tariffs.
To be clear: tariffs are distinct from inspection fees.
Since the government port authority is inspecting goods, the inspectors deserve to be compensated for the costs that went into inspecting those goods. It is only appropriate that the people exchanging the goods, pay for inspections (to make sure there are no slaves or stowaways on board, and to make sure there are no illicit materials) when goods cross international boundaries. Thus, customs inspection fees are not a tax, but more accurately, a use-based fee, built on a fee-for-service model.
But customs inspection fees can be justified, without justifying tariffs along with them.
Tariffs are unnecessary, competition-reducing, price-increasing taxes, which - like sales taxes, and for a lot of the same reasons - should not exist. If more efficient taxes could replace tariffs - and they could - then we can agree that tariffs add to the final price of the product unnecessarily. Increasing the final price, in turn, makes it more likely that those who foot the cost of the tariff, will purchase less of the product as a result.
Additionally, tariffs - like sales taxes - can be passed-on to market actors whom were not intended to bear the burden of the taxes. This is what is meant when politicians like Donald Trump assure us that "China will pay for the tariffs" and "we (Americans) don't pay for those tariffs, they'll get passed on to China." That is only true until tariffs beget retaliatory tariffs.
Moreover, tariffs inhibit international trade, or at least make it more expensive and complicated. Lastly, import tariffs are paid by domestic American importers.
http://www.reason.com/2021/05/24/china-is-paying-about-7-percent-of-tariff-costs-americans-are-paying-the-rest/ While increasing tariffs may achieve one of its desired results (namely, punishing domestic civilians and foreign producers for trading with each other), it has multiple negative effects as well. The cost of making trade more expensive, is arguably not worth the cost involved in choosing winners and losers in the market (in this case, American producers winning over foreign producers, as the result of import tariffs).
That's why a move towards zero tariffs, for both importing and exporting, is the way to go. And the more countries that do this, the more money can be saved by the people of all countries that trade with us.
If the cost of importing and exporting would be reduced to the price of inspection fees, then nobody's fingers would have to be worked to the bone, to generate large amounts of value that allow exporters and importers to pay their tariffs.
If neither the U.S., nor any of its trade partners, levied any duties on the importation and exportation of goods, then there would be no need to create trade policies which take tariffs into account.
Think about it. Modern U.S. trade policies regarding the production of automobiles, for example, mandate that at least a certain percentage of a car must be made in one country, while a different percentage of a car must be made in another country.
Domestic producers fear zero tariffs because they would cause the price of foreign-made goods to drop. But zero tariffs would also cause price decreases of products (namely, cars) which are assembled in multiple countries, and made of parts that come from multiple countries.
Thus, decreasing tariffs will make it easier (and cheaper, via both government and private avenues) to trade any and all pieces of equipment which are so complex that they cannot be built within a single country. This category consists of a lot more goods than we might suspect, and to things that seem much simpler than machines. This fact is illustrated by economist Leonard Read, in his essay "I, Pencil".
Hopefully, by this point, it should be clear to the reader that tariffs are useless (in terms of facilitating non-violent trade and production), and why.
In my opinion, sales taxes, and government-conducted trade policies, are equally useless. So are intellectual property protections, when they are too strong and too long.
That is why, in 2020, I ran for the U.S. House of Representatives, on a platform of medical price relief, which I called "E.M.P.A.T.H.I.C.". "E.M.P.A.T.H.I.C." stands for "Eliminating Medical Patents to Achieve Human Immortality Cheaply".
So the idea goes: If reducing the duration of medical patents, will allow cheap generics to enter the market sooner - resulting in cheaper medical prices - then eliminating medical patents altogether might cause prices to drop even more quickly than shortening them.
Naturally, some on the economic right are concerned that eliminating medical patents, or reducing patent terms too drastically, will result in less investment in expensive pharmaceutical research. And maybe that is true. And new vaccines always need to come out, when viruses mutate again and again.
But vaccines aren't the only type of medication; there are also pharmaceuticals. And disease prevention isn't the only type of medical relief; administering cures and relieving symptoms exist too. More than sixty-five medications existed in early 2020, which could be used to treat the symptoms of Covid-19. Instead of shortening their patents, or distributing them to the people, our lawmakers were more focused on profiting off of medical stock, and on promoting the development of new medications which could be used to combat Covid-19.
The same exact thing happened during the H.I.V./A.I.D.S. crisis in the early 1980s; promotion of new medications whose development meant profit for pharmaceutical developers, over previously existing medications whose sale wouldn't "stimulate the economy" as much. Coincidentally, this was largely due to the action (or inaction) of Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases (N.I.A.I.D.).
It seems that Canada - a country known for its cheap medications and their easy accessibility to any foreign tourist - has finally grown tired of the trade war.
For intellectual property protections to be waived on coronavirus vaccines, will cause large companies to lose profits. But those companies do not deserve those profits; they have not earned those profits yet. Government trade policies that rig international trade, and the legitimate violence that governments threaten in order to extort unjustifiable taxes (such as tariffs), are the only reasons why large pharmaceutical companies "stand to" reap so much profit in the future.
Such companies have grown so entitled to this potential future money, that some of them have begun suing governments for loss of profit, for having the audacity to pass laws punishing fraudulent, exploitative, and irresponsible behavior.
This insanity must end.
China - and India, which was recently hit with high Covid death tolls - each have more than a billion people. To paraphrase Mao Tse Tung, considerations must be made for the fact that hundreds of millions more people live in China (and India) than in any other country on Earth.
We cannot pretend that the difficulties obtaining medications, which are faced today by people in foreign countries, will not affect us in the United States tomorrow. Our health is tied to the health of every other people who participates in global trade. This fact does not mean that we have to submit to unreasonable government restrictions regarding health and trade, though. It just means that we should stop protecting property rights so strongly.
America cannot go on for much longer, pretending that the reason why it is enforcing intellectual property protections for longer and longer every decade, is due to its desire to be "exceptional"; distinct from the other, more "socialist" nations.
"Socialism" doesn't mean "government doing stuff", but even if this simple definition of socialism were true, then protecting I.P. rights so strongly, is actually more "socialistic" than doing nothing.
If capitalists insist on defining "socialism" and "redistribution" in such generalized ways, then why wouldn't it qualify as "redistribution" to extort money from taxpayers to pay for the apprehension and prosecution of I.P. violators (a/k/a pirates)?
Why should the cross-cultural exchange of information, regarding Covid-19 and coronavirus vaccines, continue to be limited by law, when those limitations increase the prices of those goods, and when there are so many people on the planet who need an affordable vaccine?
The solution is not to rush the vaccine. The solution is to decrease intellectual property protections, and trade barriers, which keep vaccines and medications expensive, until investment in pharmaceutical and vaccine R&D (research and development) begin to noticeably decline, and result in a level of medical production and innovation which is widely considered unacceptable.
Until that problem appears, decrease the length of medical patents - and decrease tariffs unilaterally - and hope that other countries will follow suit. We must stop pointing to other countries, and saying "they have higher tariffs than we do, so they should lower them first", nor "they don't respect our patent laws, so we shouldn't have to respect theirs".
Dying sick people and steel producers alike, cannot afford to play the "whataboutism" game anymore. They need affordable medicine, food, and transportation. There is no need to heap political barriers, to accessing and owning those resources, on top of the economic and social barriers to owning them, which already exist.
The tools it takes to help people afford the needs of life, are political, but only to the extent that the politicization of the problem is the problem. Without all of the political tools like I.P. and tariffs and trade deals, the problem would be easily recognized as more economic than it is political. But only when economic exploitation ceases, will it become obvious to all, that the lack of access to human needs, is in fact a social problem; a humanitarian problem.
It is one thing to say that a certain good shouldn't be owned. But it is another thing entirely, to say that a whole civilization should not have access to the technology necessary to produce, for themselves, what others refuse to produce for their benefit. Depriving people of technology, makes them into slaves to the technocratic productive class; just as depriving them of education makes them slaves of those who withhold information from them.
It's time to liberate information and technology.
Internet entrepreneur Kim Dotcom said "information wants to be free". This is true of damaging information about governments, and it is true about pieces of art which nobody would see without either money or the mass distribution allowed through filesharing. It is also true of information technologies, like assembly instructions, and the shapes of parts.
Three-dimensional printing has not only liberated production; the production of printed guns has even empowered those wishing to defend themselves from corrupt government with the help of the Second Amendment and the Supreme Court case of D.C. v. Heller (which finds that the amendment protects the individual right to bear arms).
Just as plans for guns can be sent over the internet, so can plans for cars. The more parts that people can produce in their own homes, the less they will have to rely on large companies to overcharge them for replacement parts.
Considering that the current "fourth industrial revolution" is giving us technologies that fuse biological and digital technology (i.e., "Bio-Tech"), it is hard to wonder how long it will be before a poor sick person, in China or America, will be able to "download" a medication over the internet. Or at least a surgery program that they can upload to their robotic surgeon.
The 2010s and 2020s are bringing humanity amazing medical innovations. A baby lamb was grown in a plastic bag, used as an artificial womb. A spinach leaf was grafted onto a piece of human heart tissue, and the blood made to run through the stalks of the spinach. Cloning technology and stem cell technology is developing all the time. Moreover, adult stem cell research is developing, which means that more medical advances can be made without controversially harvesting embryos.
Why should any of this mind-blowing, life-expectancy-increasing technology, be any more expensive than it needs to be?
Lowering sales taxes and tariffs - and the length of intellectual property protections - for any and all kinds of goods - can only result in longer, more comfortable, affordable lives for people, with less pressure to work long hours.
Ironically, it is not the desire to remain faithful to the Constitution, which has caused this problem. Refraining from obeying the Constitution's limitations upon government, caused this problem.
Obeying the Constitution's call - to secure rights to authors and inventors "for limited times" [emphasis mine] - would have prevented the current state of high prices and few competing producers. Allowing patents to get longer and longer all the time, with no limit in sight, is helping nobody but the government, profiteers who have long since stopped producing, and the grateful dead whose numbers are growing all the time.
Zero tariffs and limited I.P. would thus hurt nobody, except for the "producers" that corrupt our government, take advantage of us by stealing our money, and then stop producing.
Written on May 6th and 7th, 2021
Published on May 7th, 2021
Edited and Expanded on May 8th and 12th, 2021
Link Added on May 25th, 2021
