Read this before having an opinion on economics

[BitterTea]

Luckily, you're a smart venture capitalist, and you knew in advance there is no IP law. To that end, you had a meeting with Generica and the other pharmaceutical firms that could match your output. In return for access to all your research, you received additional funding, and a voluntarily entered into contractual agreement for 1 year monopoly rights (in return for doing the brunt of the research). Everybody wins.

Why should a smart venture capitalist pay for something he can get for free? As an even smarter venture capitalist I wait, pick up a few chemists with the proper education, build my factory and can still undercut the lot of them. After all, they all have costs that I don't.  Copying is easy. Reseach is hard.

Sure, it's always a possibility, but imagine if all of the big players pooled their resources for research like this. Let's say that your startup is profitable because you successfully engaged in corporate espionage or reverse engineering. You're not always going to be successful, and now that you have lots of extra capital, the smarter move is to pool your resources with the rest. Perhaps if you don't join them, they will put pressure on you to do so, by refusing to cooperate with you as an outside profit seeking entity.

[JA37]

Sure, it's always a possibility, but imagine if all of the big players pooled their resources for research like this. Let's say that your startup is profitable because you successfully engaged in corporate espionage or reverse engineering. You're not always going to be successful, and now that you have lots of extra capital, the smarter move is to pool your resources with the rest. Perhaps if you don't join them, they will put pressure on you to do so, by refusing to cooperate with you as an outside profit seeking entity.

The point is that I don't want to do the research. I just want the end result, a working drug, and without IP I can have it. I can just pick it up at the pharmacy. It's hard to fail in reverse engineering. And why would I want to pool resources? I don't want to do research. That shit's expensive. And even if I do, just because I'm such a good guy, there will always be another VC who'll see the opportunity to make money from someone elses research.

[Jered Kenna (TradeHill)]

Sure, it's always a possibility, but imagine if all of the big players pooled their resources for research like this. Let's say that your startup is profitable because you successfully engaged in corporate espionage or reverse engineering. You're not always going to be successful, and now that you have lots of extra capital, the smarter move is to pool your resources with the rest. Perhaps if you don't join them, they will put pressure on you to do so, by refusing to cooperate with you as an outside profit seeking entity.

The point is that I don't want to do the research. I just want the end result, a working drug, and without IP I can have it. I can just pick it up at the pharmacy. It's hard to fail in reverse engineering. And why would I want to pool resources? I don't want to do research. That shit's expensive. And even if I do, just because I'm such a good guy, there will always be another VC who'll see the opportunity to make money from someone elses research.

I could see big players pooling their research and honestly it would benefit the world but at the same time wouldn't there always be people that didn't want to participate in the research and just reap the rewards of the other groups work?


Maybe we could let the government do all the research ......haha was a joke.....

[BitterTea]

The point is that I don't want to do the research. I just want the end result, a working drug, and without IP I can have it. I can just pick it up at the pharmacy. It's hard to fail in reverse engineering. And why would I want to pool resources? I don't want to do research. That shit's expensive. And even if I do, just because I'm such a good guy, there will always be another VC who'll see the opportunity to make money from someone elses research.

I'm not saying you should have to do the research. In fact, I'm saying the opposite. The large entities will most likely find it in their interest to pool resources for research. If non-participation is beneficial to smaller entities, they will grow and participate in the research pool. If not, then we've replaced a coercive IP system with one of a voluntary nature and there is no difference in market function. In addition to that we've lowered the barriers to entry to the pharmaceutical market and increased competition.

wouldn't there always be people that didn't want to participate in the research and just reap the rewards of the other groups work?

Sure. Who cares? Small freeloader is successful and becomes large contributor. There will always be freeloaders. How can anyone advocate for the use of violence against them?

[JA37]

Maybe we could let the government do all the research ......haha was a joke.....

You might be joking, but this might actually happen soon. Doctors are running out of antibiotics and are forced to use stronger and stronger variants. There are strains of bacteria that are immune to ALL known antibiotics. People might actually start dying of things we used to be able to prevent, and in developed countries too. Big pharma are reluctant to do research into antibiotics-NG (next gen) because the research is so hard that they don't expect to be able to get their money back.
So there's talk of co-funding research between pharma and government, or to create incentives (like longer patents, or cash prizes) to get the research done.

[JA37]

I'm not saying you should have to do the research. In fact, I'm saying the opposite. The large entities will most likely find it in their interest to pool resources for research. If non-participation is beneficial to smaller entities, they will grow and participate in the research pool. If not, then we've replaced a coercive IP system with one of a voluntary nature and there is no difference in market function. In addition to that we've lowered the barriers to entry to the pharmaceutical market and increased competition.

Why do research at all? Why be in a pool? There's no profit in research anymore, or not enough to justify it.
And how have you increased competition by pushing large pharma together into a large pool?

I agree that IP law should be reformed. But in some way intellectual work needs to be protected.

[BitterTea]

Why do research at all? Why be in a pool? There's no profit in research anymore, or not enough to justify it.

Why should research be profitable? Research generally leads to profit making opportunities. That's why it's risky.

And how have you increased competition by pushing large pharma together into a large pool?

Start ups are no longer restricted by IP laws and can thus enter the market more easily, without having to worry about being sued into oblivion by the larger players for patents they may or may not have violated. More opportunity to means more players means more competition.

I agree that IP law should be reformed. But in some way intellectual work needs to be protected.

Your conclusion is that "intellectual work needs to be protected". What are your premises, and the steps that take you from those premises to the conclusion?

[JA37]

Why should research be profitable? Research generally leads to profit making opportunities. That's why it's risky.

Start ups are no longer restricted by IP laws and can thus enter the market more easily, without having to worry about being sued into oblivion by the larger players for patents they may or may not have violated. More opportunity to means more players means more competition.

Your conclusion is that "intellectual work needs to be protected". What are your premises, and the steps that take you from those premises to the conclusion?

Except in the case we're discussing where it doesn't lead to profit making opportunities. At least not for the ones doing the research. They just have costs.

Who would fund the start ups? It wouldn't be anyone who expected to make money from the investment. Especially since big pharma is now pooled together and have all the infrastructure in place to copy your invention.

Work is work, regardless if you use muscles or brain. If you have to compensate me for my physical work, you should for intellectual work too.

[BitterTea]

Except in the case we're discussing where it doesn't lead to profit making opportunities. At least not for the ones doing the research. They just have costs.

Who would fund the start ups? It wouldn't be anyone who expected to make money from the investment. Especially since big pharma is now pooled together and have all the infrastructure in place to copy your invention.

In this hypothetical scenario, I posit that there will be a significant incentive for large pharmaceutical organizations to pool their resources for research. They do research, even lacking IP law, because they want new treatments to sell. They pool their resources because otherwise their large competitors would use their work without any compensation. This way, they all get access to the research and they all share its costs. Perhaps the ones furthest along take the lead and thus get some form of monopoly rights inside this pool. The agreements made by these entities do not bind, in any way, entities (I posit it will be the small to medium size ones) that are not part of the agreement.

Another thing you overlook is the role of trade secrets. Any entity is free to try to keep any or all information secret. Corporate espionage is still a violation of property rights, and I feel you underestimate the time and effort required to reverse engineer a drug. Even if it's only a matter of months, that's still a huge advantage for the initial developing entity.

Work is work, regardless if you use muscles or brain. If you have to compensate me for my physical work, you should for intellectual work too.

The justification for compensation derives from consent, not work. If you dig a hole in my lawn, I owe you nothing and in fact you may owe me damages. If I hire you to dig a hole in my lawn, I owe you whatever amount I agreed to pay you.

[Jered Kenna (TradeHill)]

When I laugh about the government doing the research I'm more laughing at it from the "less government is good" perspective not that it might be the best answer.
The government can (and does) take a loss all the time where private companies wouldn't. If something affects 1 in 1000000 people the government could lose money researching it while the private pharms might ignore it. Obviously this is good and bad. If they handled the research then we might have better antibiotics but no viagra. So I guess you'd be guaranteed to get old and not enjoy it.

[MoonShadow]

When I laugh about the government doing the research I'm more laughing at it from the "less government is good" perspective not that it might be the best answer.
The government can (and does) take a loss all the time where private companies wouldn't. If something affects 1 in 1000000 people the government could lose money researching it while the private pharms might ignore it. Obviously this is good and bad. If they handled the research then we might have better antibiotics but no viagra. So I guess you'd be guaranteed to get old and not enjoy it.

You assume there would be better antibiotics, but in my opinion you are more likely to just end up with a lot of academic researchers chasing grants, not producing useful research.  The most likely outcomes of government managed scientific research is either focused towards developing more effective ways to kill brown people or an accidental viagra, which then gets buried in paperwork only to be rediscovered by some paper-miner in two decades and bought up by a private company anyway.

[BitterTea]

When I laugh about the government doing the research I'm more laughing at it from the "less government is good" perspective not that it might be the best answer.
The government can (and does) take a loss all the time where private companies wouldn't. If something affects 1 in 1000000 people the government could lose money researching it while the private pharms might ignore it. Obviously this is good and bad. If they handled the research then we might have better antibiotics but no viagra. So I guess you'd be guaranteed to get old and not enjoy it.

Should the government (or anybody) be in the business of taking money from everyone, by force if necessary, in order to spend it on research for a disease which only affects 1/1,000,000th of the population? In what way does that even make sense? Do you realize that by saying government should not only do this, but accept a loss in doing so, you are saying that your money should not only be forcefully taken from you and distributed to causes which net little gain?

Government has no incentive to provide quality, cost effective service, since they can never go out of business.

[kiba]

All this debate about the merit of IP is a whole bunch of useless talk.

I make money and I don't need IP. End of debate.

[sonega]

Economic Policy, Ludwig von Mises

http://mises.org/etexts/ecopol.pdf

[Jered Kenna (TradeHill)]

When I laugh about the government doing the research I'm more laughing at it from the "less government is good" perspective not that it might be the best answer.
The government can (and does) take a loss all the time where private companies wouldn't. If something affects 1 in 1000000 people the government could lose money researching it while the private pharms might ignore it. Obviously this is good and bad. If they handled the research then we might have better antibiotics but no viagra. So I guess you'd be guaranteed to get old and not enjoy it.

Should the government (or anybody) be in the business of taking money from everyone, by force if necessary, in order to spend it on research for a disease which only affects 1/1,000,000th of the population? In what way does that even make sense? Do you realize that by saying government should not only do this, but accept a loss in doing so, you are saying that your money should not only be forcefully taken from you and distributed to causes which net little gain?

Government has no incentive to provide quality, cost effective service, since they can never go out of business.

Honestly I think helping one out of a million people is a waste of money (unless it's me) but society doesn't view it that way.
How many times have you heard people cry about not having a cure for xyz disease that affects 1000 people a year or whatever.
Seen fundraisers to help research a rare disease? Personally I'd prefer to worry about the big stuff and have a bigger impact.
I still think there are advantages to gov research though. Some say that pharmaceutical companies would rather treat than cure because they sell more products.
I'd assume the gov would prefer to cure than treat.

Now if we could just get bitcoin bounties together to cure diseases and open source the drug formula then maybe we'd have something.
I'd be all for that. I'll give a healthy contribution.

[NghtRppr]

I'll give a healthy contribution.

People like Bill Gates and Warren Buffet, when allowed to spend their money as they please, do engage philanthropy. Who knows how many billionaires would feel more generous towards society if they weren't being robbed at gunpoint.

[estevo]

Aren't Bill Gates and Warren Buffet paying taxes?

[NghtRppr]

Aren't Bill Gates and Warren Buffet paying taxes?

That was my point. Even while being robbed at gunpoint, they are generous enough to give away their money. How many more billionaires would feel generous if they weren't already being forced to give away their money? We will probably never find out.

[The Script]

All this debate about the merit of IP is a whole bunch of useless talk.

I make money and I don't need IP. End of debate.

Kiba, it's a debate.  The whole point of a debate is to discuss.  We know your opinion, but if we want to discuss this issue why do you care? If you don't want to participate, don't.  The fact that you make money off a business with no IP protection is a valid point, but in no way is the last word on the matter. 

[MoonShadow]

Aren't Bill Gates and Warren Buffet paying taxes?

Relatively speaking, this is questionable.  Warren Buffet has been quoted as saying that he pays less in federal income taxes than his own secretary.  The point he was trying to make was that the tax code is so complicated that one needs a professional in order to utilize it to one's full advantage, which he can afford and his secretary cannot.